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Analyzing Soviet Defense Programs, 1951 1990.PDF


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'."""J'"'"i!> •JV••et Defense Programs, 1951-1990 (U)

http://www.csi.cia/studies/vo142no3/art7.html

Figure 1. Soviet GNP and defense outlays, 1950-90 (1982 rubles). (U)

What the Estimates Showed
It is instructive to review what CIA's defense spending and GNP estimates, as they matured in the late
1980s, suggest about the relation between defense and the economy in the postwar USSR. The first thing
to look at are the estimates of Soviet defense spending and GNP in 1982 rubles (Figure I). If prices of an
earlier year are used, the rates of growth of both defense and GNP would be marginally lower and the
ratio of defense to GNP a bit higher, but the overall picture would be much the same. In constant 1982
prices, the share of defense in GNP declines from 24 percent in 1951 to 14 percent in 1959. It then varies
only within the range of 14 to 16 percent between 1960 and 1990. This calculation provoked a good deal
of controversy over the years as it was taken to represent the burden of defense on the Soviet economy.

One can isolate different stages in the growth of Soviet defense spending and relate them to
developments in the economy generally. The building-block estimates set out in considerable detail the
changes in the composition of GNP or defense spending. This detail permitted analysis of changes in the
USSR's economic policy--the third of Max Millikan's objectives for US foreign economic intelligence.
The average annual rates of growth shown for defense in Figure 1 certainly do not reflect the monotonic
rapid growth that is perhaps the prevailing public perception. Meanwhile, the continuous decline in the
rate of growth of GNP suggests the underlying forces that led Soviet leaders to constrain defense
spending and finally caused Gorbachev to introduce his ill-fated reforms.
The immediate explanation of the changes in the growth of defense spending are complicated, but a few
of the prime movers can be identified. In the 1950s, Khrushchev's demobilization was the major factor.
In the 1960s, defense spending grew rapidly, propelled by growth in procurement of missiles, ships and
submarines, space vehicles, and aircraft as well as the post-Khrushchev buildup in general purpose
forces. Thereafter, the growth of defense subsided as procurement increased less rapidly in 1970-74 and
then leveled off in 1975-84. Outlays for O&M and R&D continued to rise, although at a slower pace
then formerly. After Gorbachev came to power, there was a three-year acceleration in defense spending
marked by a spurt in outlays for aircraft and missiles, and then a sharp decline in defense, spurred by a
downturn in outlays for aircraft, land arms, and space-related equipment.
Figure 2. Dollar cost of US and Soviet military programs, 1951-64 (1972 dollars}. (U)
At minimum, the trends described in Soviet defense spending suggest some questions for historical
research on Soviet military policy during the Cold War. For example:
• Was the slower growth in real defense spending after 1975--and the plateau in procurement--the
result of conscious policy decisions? If so, what was the cause?
• What role did the US defense buildup beginning in the late 1970s play in the spurt in Soviet
defense spending in 1985-87?
Interest in CIA's estimates of Soviet defense outlays and GNP within the US Government and in
Congress, however, centered more on the dollar comparisons than the ruble measures. Unfortunately, the
records necessary to put the defense comparisons on a single-dollar price base are no longer available.
Figure 2 shows the comparison of the dollar cost of Soviet and US defense programs from 1951-64
expressed in 1972 dollar prices, and Figure 3 covers the period 1965-89 in 1988 dollars. According to
these comparisons, the cost ofUS defense programs exceeded the dollar equivalent of Soviet programs
by roughly one-fifth in the earlier period, while the dollar equivalent of Soviet military spending in
1965-89 was slightly greater than US spending.
In the 1980s, some variants of these comparisons were constructed--one to take in a broader definition of
national security outlays and another to construct a NATO- Warsaw Pact comparison. The comparison
expanded to include the so-called cost of empire, civil defense, and the like pushed up Soviet spending
relative to US outlays by a couple of percentage points in the 1980s, but the NATO-Warsaw Pact