ORR'S RESEARCH EFFORT ON THE USSR AND COOPERATION BETWEEN ORR AND EMBASSY MOSCO

Created: 11/8/1966

OCR scan of the original document, errors are possible

a CJ f CIAREVIEW PROGRAM

RELEASE AS8

ORB'S RESEARCH EFTORT OSHOOPEBATIOA' BFIWEEB ORR AiTOCOW PEOPLE

I. Introduction.

Kr.ould like to deecrlbe the direction of our economic and mlary-economic reecarch on the Soriet Union and to give aome Ideas on how the staffs of ORR end Bdmsey Koecow can expand their cooperation even further.

- A. The DSSR coatlnuea to be the aeuka target of our economic intelligence.

Co" therofeaalonal xeeoarchera ln ORR,ercent work e

on the USSR, notwithstanding the recent expansion of our research on Vietnam and on Africa, Southern Asia, and Indonesia. Our effort on Coseuailst China la growing and would be expanding even More rapidly were it not for the extrcnely aamll nawnt of datafrom China.

B. Our worldwide core rage givesnique ability to Interpret the Borlet economic and military presence ln other parte of tbe world. You amy recall that at the tine of tha Cuban Missile crisis In the fall ofour analysts contributed heavily to the Identification of the avmsemt of Soriet ehlpe to Cuba, their cargo, and the deployment of the nlsallea.

B the figure wasercent, accordingurrey for the DC

C. The subjecto-6orlet ecoooalc relations illustrate* the iaportsace of having within ORB analysts experiencedide range of geographic areas and problem. ight mention our deep lnrolrenent ln tbe specific issues of tbe extent to which Chi con nuclear and apace derelopnent* depend on KH outside support fronH, Japan, and other industrialised countrlea. II. Tbe Mrpction of Our Jbeearch on the OSSR.

Ve continue to hare primary responsibility within tbe intelligence

coamnity far research ln depth on tha florist economy. Thla research

Includesi

aggregative research and research on speclfle Industriesspecific production plants]

economic and military-economic researehj the Becretaryreliesurprleing degree on the Agency and ORBon weapons production, coating, and deployment)

c. both Long-term research (the scholarly monograph) and abort-tern policy-oriented rcsaaxchj there has been over tbe past feweceded swing ln emphasis to the policy-oriented memorandum;haveew phase in tha development of thee are fortunate In baringairly large group of senior analysts who can be assigned abort-tern policy support probleaa and who conuick but authoritative assessmenturrent Isaua because of their background experience.

HI. Specific Atm* of Research on the USSR.

I vouln like to giveeneral Idea of what arena ve are currently enphoilrlng in our reaearch on the USSR, inclullng acme Idea of the tlnlng of najor publication* expected froa ORR-A. over-ell esse assent of allocation of raaourcea.

in oar eerlea of generel aasetaamU of theBoononlc Problena and Proepoett lnbouldlnonth. Oar cautious concloBloni that nowthe near future, tbe forces that brought Sorietdownercent la*tbaa vlll persist. Ve are especiallyhowoergln are going to honor thato 1

(great new investment)

(nodernltation and Doanetlc KUltary (graving etreagth)

Militarybnothar countrle*)

utoa)

Thia kind of generalla ande annually aad force tba baala for our aupport to the Office of national latlaates. (The next Soriet eoonendo HIE probably will be written In Second)

bare aacnotinnlnc Intareat ln tba lapact of Soviet Militaryprograse on the Soriet ecouoay. Proa tlea-to-tiaeserve ae consultants to the Area Control andby furnishing then nateriel on Soviet military prograna

by renewing contract research performed for ACTA. As port of our concern with military-apace programs our raits and bolts research people eramtrw the military drain In particular areas auch aa highly-skilled nanpover and the moat technologically advanced aachlnery eeciore. den we (our long-haired research people) try to estlnmte the burden of alternative allltary-space program in taraa of Its lapaet on future eocaonle growth and on the share of tbo national pie left over for ccsa?uaption and lnveataent reouli These judgments provide part of the OSS input to tba cauTtructlon of national eatlaatea on Soviet Military policy. Bark on tba Soviet -national account*"

1. Ve have over last several years Bade atep-by-atep advances ln Soviet national acoounts field. Our accounts areup to this point but we expect over next several yeera to sake laportant advanoea.

providing aore detail on the production sectorseconomy i iner breakdown lnand accurate pricing ln agriculture) aunderstanding of ths "private- portions of(private plots, privately builtervices).

analysing the "end uses" of OTP In finer detail,

Identifying sore closely the flow of final product. In

and refining eoaparlaons between the US and

Soviet oconomles. In the springe. -

to publish an uuclesoifled report,nd USSR: Comparison of airee and Oaca of GrossProduct,

s

Ve expect to get Bore involved In "Input-output"ne Soviets near are starting to publish Input-output tables which In rove and coinage give tbe sales of each sector of tbe economy to erery otter aector and tbe purchases of each sector from every other aector.

Possibility ever the oear future of getting this aggregativela the Agency computer system. Already veairly elaborate uorlet Indue trial production Index that laomputer.

Prise attention to Soviet agriculture.

attempts to

Assess acreage and productionaccurately,

Inputs carefully (land, labor,etc.).

tbe chances of Increased productivity,

the ability of Soviet agricultural institutions to

promised

absorb tbe great new inrestsenta/by8

oo* ve areajor report on Thefertlliter Industry. Our analysts saecurrent status of construction of Individualvith plansheir general conclusion ls thateffort to meet the plan ia underway. However, ve

are taking not* oT itnn in the winduggeet investoent In support of agriculture la being trimmed. /

lhe ay* tea of dlatributlon of fertllixer la alio treated in thla report, which should case out In the first quarter

3. ould recommend for your reading the paper

done by one of our aanlorproductivity

ln Sot let agriculture. Thla waa one of aaveral papers that our QER people furnished ror the recant Joint Kcoocaaic Coanlttee.cxanpendlua,irections In the Soviet teemxaj".

Study of the problem ef tbe modernization of Soviet Industry.

1. He will continue to follow tbe attempts of tha Soviets, led ln this esse by Koeygln, to acdernlse Soviet Industry and make it more efficient. Thla topisf tbe major issues considered in our forthcoming general assessment of the Soviet economy, previously mentioned. Ve find It difficult to believe that the Soviets can in the near future removebarriers to improvement in quality of products, shifts in product mix, and allocation of investment toward the more efficient firms. All these things the "market" In tbeandles vith unse If -conscious aplomb* Perhaps Soviet economists are beginning to realise the virtues of tb* market) ve doubt that thlaation is going to be turned into gains in efficiency or modernization ln the near future.

paper ln the JZC compendivm, The Soriet Economic Bytem

In Transition,hcnght-pnrroklng but peaeimlatic dincus -

alon of the prospects for Um aucceaa of the refonwj"

I

2. Special parts to this problem:

The derelopmant of tba auto Industry.

for laiports from the Vest of advancedtechnology ud potential for exports to Heat.

whole area of OS trade controls.

of computers In the Soviet economy! here we are onof publishing an unclassified paper, Qae ofMethods andIn Soviet ManageaanrU resamdous lag In Sovietcomputers la ths civilian economy.

Soriet pa muss for automatic control af basicia preparing

a paper neatgnetl to distinguish between fact and fiction ln this laportant prograa (achednled for Spring.

K. rroblema of military production, coating, deployment, cciaaunieatlons networkssnterlsl for this to be supplied by MRA.

7. Icoocmlc relations with tha Chinese Commmlats

bold thateooncadc relations have been of

rfBBI

enorsous aVarbaaa to ths Chinesebut only of fringe lnpartanee to tha Soviets.

to current economic relations, the SovieU in adenouncing the "great proletarian culturalthat trade la now the only form of economic contacttvo countries. This la true. Tlie volune of tradedwindle:

Soy

rem

ail

all

Trade0 Is likely to proven* Tbe Soriet Union continues tospare parte, nechlnery,

ferrous metale, end other anoufacturos to China. China exports vool and silk textiles, non-ferrous ores, and specialty foods to the USSB.

Our research on Slno-Soviet economic relations Is carriedpresent, the

annual DC Ecoocelc Intelligent* Conslttee (SIC) rerlav of Chinese trade la being readied for publication, and basic informationlno-Sorlet trade vlll be included. In addition, Slno-fiorlet economic relations vlll be parteport, Impact of foreign Trade on Ocmaunlst China's Economy, scheduled for publication ln April of next year.relations vith underdeveloped countries. Ve have been preparing studies on Soviet relations vith such underdeveloped countries aa Egypt, India, aad Indonesia. Just published Is Soviet Military Aid toeport that ve feel vlll greatly assUt our policy officials ln planningelations vith ths Bub-continent.

m^vooxeUtm still hold back Borltt economic praeUca. If ve are right, the problem of Quality, assortment, thi proper penalising of the Inefficient, etc* amy be longer-lived than night be suspected'. These issuesearing on whether ths Soviets canractical matter aspireegaining of past high rates of growth. We don't think so.

Original document.

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