Created: 2/1/1966

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DIRECTORATE OF INTELLIGENCE Office of Research and Reports




Soviet military authorities have reason to regard the5 asropitious beginning for the post-Khrushchev era in Soviet military policy. ear before, the prospects had been uncertain: the budget announced in4 had calledut in overt defense expenditures, and statements by the leadership on the accompanying economic plan seemed to reflect greater concern with the needs of economic growth and consumer welfare than with the needs of the armed forces. Equally ominous from the military standpoint was the failure by the regime to declare its intentions regarding Khrushchev's troop-culn issue which held the key to the new leadership's attitude toward military interests. If highofficials were participating in the regime's policy councils at the time, there was little evidence that they wereonvincing case for the interests they represented.

A year later the situation had changed visibly. The new budget announced in5 signaled an increase in defense expenditures, and the new economic plan is clearly tailored to the expectationontinuing heavy defense drain on national resources. Khrushchev's troop-cut policy has evidently been settled to the satisfaction of the military. Soviet officers have indicated as much in private disclosures, and the trends in doctrinal literature support these indications. The question of the military's role in these policy developments is harder to assess, but itotable feuture of the current political scene in the Soviet Union that no political leader has put himself forwardpokesman on military policy, as Khrushchev did. and that the public discussion of military matters is being left to the military itself.

* The estimates and conclusions in Ihis memorandumthe best judgment of this Office as of

These indications of change in Soviet policy can bain part by factors which have little to do with military considerations and which are independent of any influence that the military as an institution may have exerted. The disappointing harvestor example, undoubtedlyto the depression of economic growth rates registered in tlie current economic plan.

Nevertheless, there is also evidence thatpecific role in these developments. What this evidence is, and what it implies for Soviet policy, is the subject of this memorandum.

1. The Resource Allocation Problem

The new leadership, having criticized Khrushchev for poor management of economic affairs, was under strong pressure to improve the performance of the economy, uhich was faltering badly on the eve ew five-year plan. Improvement of performance was to be effected on three fronts: managerial reform, administrative reorganization, and econoniic proprams designed to Improve the flow of output of agricultural and industrial The managerial reforms and reorganizations, while politically significant and potentially somewhat disruptive, were not directlyto the problem of resource allocations. This particular problem cameesult of economic programs that threatened to cut into the limited supply of national resources available to support existing programs.

As always, the "guns versus butter" issue lay at the heart of the problem, for whether the question was viewed as choosing between civilian and military productionurrent basis or choosing to invest for economic growth rather than current consumption, it came downatter of assessing the urgency of the military's claims on national resources Thus the principal issue facing the Soviet leadership at the beginning5 was whether military requirements could be keptevelwith its other goals and commitments.

^ udSinfa'osygin's speech to the Supreme Soviet inhe Soviet leadership5 with optimistic assumptions on this score. In words reminiscent of Khrushchev's last speech before hisKosygin asserted that the development of heavy industry in the Soviet Union hadtage at which it was capableonsiderably greater extent than before" of supporting agriculture, light industry, and the other branches of the economy serving the consumers' welfare. He also calledpeedup in the growth rate of the light industry side of the economy so that it could be brought closer to the traditionally favored heavy industry Sector. While there was nothing radically new in these proposals they were politically bold,illingness on the part oi tne leadership to undertake necessary measure? in the economy even at the risk of violating shibboleths dear to the military heart.

A more concrete expression of the approach the leadership waseconoDlic problems was contained in the agricultural program which Brezhnev unveiled at the Karch Plenum. The significant features of the program from the standpoint of the resource alioculior. question were the Size o: the investment involved and thera nature of the The investmentoubling of slate capital expenditures compared with the average of recent, years, and the underwriting ofsubstantial expenditures In the form of state subsidies for higher agricultural prices. The timespan of five years over which the program waso run implied that the rcgine had arrivedairly firm determination that the rieede of defense were not likely to grow inordinately and that long-term commitments could be made on belmlf of economic That, the program would involve aosse sacrifices for other claimants

on national resourcea was implied by Breshnev's statement that aof budgetary means would be required to support it.

There was no explicit indication that the leadership expected to find the naco unary funds for agriculture at the expense of the arood forces. Indeed, Brezhnev Ignored the subject of defense entirely in his long speech outlining the agricultural program, as did Kosygin in his speech to the plennors some days earlier. Yet the prospect of additional heavy state expenditures for agriculture nay have forced the issue of defense requirements to the forefront. In any event, it soon became evident that strong pressures on behalf of defense interests were being brought to bear on the leadership. These pressures were no doubt also related to the darkening of the international outlook associated with the Soviet Union's involvement in the Vietnam war. By late spring, It was apparent that the regime's economic programs had run into trouble.

For tho first time since the beginning of the now regime, Soviet leaders began to speak of the burdens imposed on the economy by defense. These statements attraot attention. If for no other reason than that the subject of defenuo expenditures had rarely been presented ln this way before in Soviet public statements. All of themefensive attitude regarding the size of defense expenditures. Some of then implieddirectly or Indirectlythat the size of these expenditures required some sacrifice of other goals.

Brezhnev wae the first to raise the subject with hisin his Victory Day speech thatonsiderable part of our national budget" went for defense expenditures. "Ue do notthee asserted, "and tho Soviet people understand well the need for suchHikoyan followedpeech onay in which he stated, "Our state spares nothing to produce new kinds of weapons in largeto replace those which become obsolete." Admitting that this was expensive, ha added) "It would be even mora expensive if uo failed to do this."

Suslov oumo noxtpeech in Sofiauno in which he pointedirect relationship between defense expenditures and welfare goals. "Of course we would like the life of the Soviet people toe said, "but we are compelled to take into account objective reality which forces un to allocate considerable funds for the defonso of our country." Kosygin carried thistep further in his speech in Volgograd onuly. He pointed out that the maintenance of up-to-date armed forces demanded "very large sums which we would gladly direct to other branches of the national economy." This could not be done, however, he said, because "to economize on defense would mean acting against the interests of the Soviet state, against the interests of the Sovietinally, as if to odd the credentials of collective authority to this official apologia, the theoretical journal of the Party, Koamunlat. came out in the following month with en editorial which reiterated the substance of the abovo remarks.

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These events marked the turning point in Soviet policy5 on the military issue. It is rtill uncertaininal resolution of the issue was achieved at that time or whether fundamentalcontinued throughout the subsequent plan and budget deliberations. But it is apparent that the disposition of the Soviet leadership manifested at that time prevailed and that the policy orientation it expressed affected the decisions that axe now embodied in the plan and budget for the cosing year. It is also apparent that tho changes In resource allocations that were adopted to accommodate military requirements did not reduce theto agriculture undertaken at tho March Plenum.

ear after the leadership had started out with tho evident intention ofew impetus to the growth of the econony, it has found itsolf frustrated by the requirements of defense. Judging by the evidence citod above, this dilemma was one which had been unanticipated by the leadership at Uie beginning of the year. Hence the cause of the problem must ba sought in some new development during the year which increased pressures for military spending beyond tho limits that could be accommodated within the existing framework of expectations and.

2. Military Claims on Resources

There wore many indications in the public commentary at tho tine that ono sourco of these pressures waa the military establishment. Not only was there tho indirect ovldence provided by the renewed assertions of tho need for "strengthening" the armed forces that punctuated publicduring the spring and early summer, but also there vas both direct and Indirect evidence that demands were boIng put forward regarding some special issuos concerned with military industry and military manpower.

That the subject of military Industry had acquired some nowin the regime's policy considerations was indicated In severaloon of the speeches mentioned above, as well as other speeches and articles, contained phraseology which scorned to imply some purticular solicitude for militarypecification which attracts attention because of its relative infroquoncy in genoral statement military policy. Mikoyan, for example,peech delivered to Tank Academyune described the development of military indu. "extremely" necessary. In his spooch onay he had also referred to military requirements ln terms of the needteady flow of armaments production. Shelepin, in his speech in Soverooorsk onuly, also took pains to mention military industryin two placesIn his otherwise standard assertion that the government intended to dovote untiringto the strengthening of the anted forcoB.

More spooific indications concerning the nature of the issue were provided by the military press. Ar. articleolonel Miftiyev, which appeared in Red Starune, for exampla, put the issue in terms of tho proper allocation of manpower between civilian and military production.

He argued that in the conditions of the- nuclear age tho need for manpower in military industry was higher than ever before. Whereas states could previously count on transferring industry to military production after the startar, this might no longer ba feasible. Hence the "stocks of materiel, in particular, of armament androduced before the outbreak of hostilities have acquired "groater if not primary importance" among the factors which will determine the outcomeuture war. He argued that the problem of insuring adequate labor resources for military industry would not ba eased spprociably by automation, because production of advanced weapons did not lend Itself to mess-production techniques. High-quality labor was particularly necessary for theof modem military equipment, he asserted.

A different argument was advanced by Gennral Kurochkin in the same newspaperuly. Addressing the question of the nature of thethreat at the present stage in history, Kurochkin sought to make tho point that the theoretical possibility of svertlng war did not lessen the possibility that war might nevertheless be thrust upon the Soviot Union. In'developing this argument, he adduced figures to show that military expenditures In the NATO countries had risen continuously in the postwar period and tha^ In the United States atavored component of this rising investment was research and development. The implied lesson was that the Soviet Union should match the efforts of Its potential adversaries.

These indications taken together suggest that one of the issues brought to focus in Soviet policy during the period in question was the level of effort to ba devoted to the development and production of military hardware. Whether this was brought about by the necessity of deciding on one or another weapons program or whether it reflected merely the Insatiable appetite, of tho military establishmentonstant flow of economic resources into military production cannot be determined. Some now light on this question may be shod as evidence on the course of Soviet weapons programs is accumulated.

Another issue on which military presnures were brought to boar on Soviot policy during the your was the question of tho ground forcon1 share of money, manpower, and hardware. While much of the cvidenco on this subject Is Indirect, it adds uponvincing case that changes were adopted in Soviet policy during the year aimed at Improving the Soviet Union's capabilities to engage in conventional warfare. , The implications of such Changes for the problem of resource allocation would lio not only in the direct costs involved in maintaining and equipping higher manpower lovoia but also in the indirect costs to the economy involved in the diversion of additional resources of manpower and materials from other programs.

Tha ovldencehange in Soviet policy on this Luna is derived both l'ron the trends in doctrinal literature and from private disclosures

by Soviot mililary officers. On tho doctrinal side, there were scattered indications during tho early part of the year that the question of the roloze of tha ground forces had again beubject of olemical exchange between Marshals Shteoenko and Rotmietrov over the question of whetherf an try still warranted the title "queen of theas one manifestation of this development. Another was an article by Karshal Rotmistrov in (Communist, in March, which indirectly arguedtrong ground force by disparaging tho' opposlto policy which had been espousod by Khrushchova policy which Rotmistrov described as setting off one branch of tha armed forces against another on tha basis of "subjective opinions." Another was an article by Marshal Malinovskiy in the restricted theoretical Journal, Military Thought, in May, which included the assertion "Ue consider it premature to 'bury' tho Infantry as some people do."

More direct evidence was providoderies of statements bymilitaiy officers. Theas bytmi9trov in June.on the balance of strength between the United States andUnion, Rotaistrov emphasized tMat the Soviet Union was aand that it would maintain tha capability to overrun Europethe employment of nuclear weapons. It would be foolish, hethink that in thla situation the Soviet ground forcos would betho contrary, he said, they havo boon strengthened, for bothnon-nuclear war. The second was by Marshal Chuykoy in August. that he had been reinstated asof the Groundadded: "Some people thought they could do away with the groundfound out they couldn't do this." The third was hy MarshalOctober. Commenting like Rotaistrov earlier on the "nuclear"sTa 1Uie United Stales and the Soviot Union, he asserted that aof views was noccssary on thu relative roles of missilesforces. The views on thin quostion expressed In tho bookhe said, were being refined to include the possibility of*

As with the question of military Industry, lt is difficult tothis evidence into terms of the specific resource-consuming programs which may have been involved. It seoma probable that the enhancement of statua of the ground forces reflects soma decision to increase military manpower beyond thenticipated by Soviet planners at the beginning of the year. Itrobable, also,orresponding increase in planned procurement of ground force equipment has accompanied thii

In sua, many steal] pieces of evidence can be assembled to show that pressures for military spending ware intensifying at approximately the time that the .Soviet londarshlp was indicatingurn in economic policy had occurred.

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3. Conclusions arid Implications

The ovidonco adduced above tells its oun story concerning theSoviet policy The Soviet leadership began the yearevident expectation that military expenditures could be. kept atan acceleration of'the growth of the economyholo. which aro not entirely clear, but partly, al least, becausefrom thu military quarter, this expectation was changed! far as tho ovidonco goes, this is the end of tho

But Soviot policy ia moreere technical response toand needs. Decisions taken in one or another area of policy tend toonoral orientation relevant lo Soviet policyhole. Hence it Is often possible to infer changes affecting tho whole range of Soviet policy from changesarticular area.

Seen in this light, the developments of the past year my be regarded as carrying imp11cations extending beyond the range of the particular issues involved. They suggest, for example,o norally conservative tendency may now be gaining dominance in the leadership, that leadersto stress military considerations in the formulation of policy arc enjoying greater influonce. Mire particularly, they point tb anin tho influence of professional military leaders in the formulation of policy. The brooder oconomic implications are less clear because it is uncertain whether the decisions taken over the past year Involve short-terra or long-term commitments. But it seems reasonable to njiBurae that military requiromontn are nowhsrpor inHumim on foononic planning and that tho oconomy will be constrained for some time by the choices that havo now been made.

It would be premature to go beyond this, however, snd to conclude that the Soviet Union is now definitely setard-line course. The process of power readjustments characteristiceriod oftransition is still going on in the Soviet Union. In this procest, policy commitments tend to become negotiable. Apart from this, there is the manifest factoften acknowledged by the Soviet leadershipthat shortcomings ln the economy and unsatisfied consumer demandserious political problem for the Soviet Union. ommitment to satisfy consumer demands hasasic plan of every political programln the Soviet Union over the past ton years. Given the expectations that have boon thus aroused, the pressures on the leadership for effective remedial measures are strong and unrelenting. Hence the Soviet Union is unlikely to abandon the drive toward oconomic expansion, and, sooner or later, will probably resume the momentum in this direction that wae apparent earlier in tho year-

Whethor it will bo sooner rather than lator will depand In large part on the International situation. The present mililary accent in Soviet policy is almosteflection of genuine apprehensions

arousod in ihe Soviot regime by tho war in Viotnam and the detsrlorati of relations with tho Chinese. But lt also registers the enhancedof those elements in the regime who derive strength from an atmosphere of international tension. ilder international climate might create the conditions in which the Soviet Union would feel confi dent In resuming vigorous measures of domestic reform. It wouldeast undermine one of the arguments which consorvative political leadors could use to inhibitevelopment.

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