ECONOMIC INTELLIGENCE SURVEY OF THE SINO-SOVIET BLOC

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A000600060002-6
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• Document Page Count: 81
• Document Creation Date: December 23, 2016
• Document Release Date: April 9, 2013
• Sequence Number: 2
• Publication Date: December 15, 1955
• Content Type: REPORT

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SECRET
ECONOMIC INTELLIGENCE REPORT
ECONOMIC INTELLIGENCE SURVEY
OF THE SINO-SOVIET BLOC
CIA/RR 68
15 December 1955
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
r
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ILLEGIB
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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ECONOMIC INTELLIGENCE REPORT
ECONOMIC INTELLIGENCE SURVEY OF TBE SINO-SOVIET BLOC
CIA/RR 68
(ORR Project 13.427)
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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FOREWORD
This report is designed as a concise, general statement of the
position and the development of the economies of the Sino-Soviet
Bloc.
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50X1
It is intended to be a brief survey of the principal characteris-
tics of each of the economies of the members of the Sino-Soviet Bloc.
In general, it covers the economic policy of these countries; the
magnitude, uses, and trends of production; the pattern of resource
allocation; and such political, geographic, and demographic data as are
necessary to an understanding of the economies. It must be borne in
mind that the descriptions and analyses of each of the economies of the
Sino-Soviet Bloc have been abbreviated considerably. The condensation
does not do justice to the wealth of economic data which have been
gathered and the economic analysis which has been performed in
CIA/ORR. It does provide, however, a highly simplified characteri-
zation of these economies.
The content of this report conforms in general to the contributions
of ORR to National Intelligence Estimates. For a detailed discussion
of any of the particular points alluded to in this report, the reader
is referred to the many research reports emanating from this Office.
50X1
Appendix A is a summary tabulation of production data for the Sino-
Soviet Bloc and the North Atlantic Treaty countries.
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CONTENTS
Summary
I. USSR
Page
1
9
A. Introduction
9
B. Regional and Geographic Characteristics
11
C. Structure and Growth of the Soviet Economy
?
?
?
?
13
D. Population and Manpower
14
E. Agricultural Production
16
F. Industrial Production
19
G. Foreign Trade
21
,II.
European Satellites
22
A. Introduction
22
B. Geographic and Regional Characteristics
24
C. Structure and Growth of .the Economies
26
D. Population and Manpower
28
E. Agricultural Production
29
F. Industrial Production
30
G. Foreign Trade
31
III.
Communist China and the Asiatic Satellites
34
A. Introduction
34
B. Geographic and Regional Characteristics
35
C. Structure and Growth of the Economies
36
D. Population and Manpower
37
E. Agricultural Production
38
F. Industrial Production
39
G. Foreign Trade
4o
IV.
East-West Comparison
40
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Appendixes
Appendix A. Gross National Product, Population, and
Production of Selected Items in the Sino-
Soviet Bloc and NATO Countries
Page
45
Tables
1. Gross National Product of the USSR, by End Use, 1948
and 1954-55
14
2. Gross National Product of the USSR, by Sector of
Origin, 1948 and 1954 15
Illustrations
Following, Page
Figure 1. The Sino-Soviet Bloc (map) 2
Figure 2. USSR: Production of Selected Commodities,
1954 (chart)
Figure 3. USSR: Production of Selected Commodities, by
Regions, 1954 (chart)
Figure 4. USSR: Gross National Product, by End Use,
1954 (chart)
Figure 5. USSR: Labor Force, 1938 and 1947-54
(chart)
Figure 6. USSR: Agricultural Production, Major
Commodities, 1938 and 1948-60 (chart)
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14
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Following Page
Figure 7. USSR: Industrial Production, 1948
and 1954 (chart) 20
Figure 8. USSR: Geographic Distribution of the Volume
of Foreign Commodity Trade, 1948-54
(chart)
22
Figure 9. European Satellites: Production of Selected
Commodities, 1954 (chart) 26
Figure 10. European Satellites: Percentage Distribution
of Gross National Product, by Country, 1938,
1948, and 1954 (chart) 26
Figure 11. European Satellites: Per Capita Gross
National Product, 1938, 1948, and 1953
(chart) 26
Figure 12. European Satellites: Percentage Distribution
of Gross National Product, by Sector of
Origin, 1938, 1948, and 1954 (chart) . . . 28
Figure 13. European Satellites: Distrtbution of Labor
Force, 1948, 1950, and 1954 (chart) . . . . 28
Figure 14. European Satellites: Indexes of Industry
Subsectors, 1938 and 1953 (chart) 30
Figure 15. European Satellites: Geographic Distribution
of Trade Turnover, 1936-38 Average, and
1948-53 (chart) 32
Figure 16. Communist China: Production of Selected
Commodities, 1954 (chart) 36
Figure 17. Communist China: Gross National Product,
by Sector of Origin, 1954 (chart) 36
Figure 18. Communist China: Food Production,
1951-56 (chart) .38
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Figure
Figure
Figure
Figure
Figure
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Following Page
19. Communist China: Index of Industrial
Development, 1949-57 (chart) 40
20. Communist China: Production of Selected
Commodities and Services, 1949-54
(chart)
40
21. Communist China: Index of Production
of Agriculture l Forestry, and Fishing,
1949-57 (chart) 40
22. US and USSR: Comparison of Gross National
Products, by Sector of Origin, 1954
(chart)
23. Soviet Armament Production, 1950-54, and
US Armament Deliveries, Fiscal Year,
1951-54 (chart)
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ECONOMIC INTELLIGENCE SURVEY OF THE SINO-SOVIET BLOC*
Summary
Between 1953 and 1955, three economic developments of particular
interest have taken place in the Sino-Soviet Bloc.** First, there
has been a shift in Soviet economic policy, in recognition of the
extent to which the continued forced growth of the Soviet economy
depends upon a more efficient use of labor and capital and upon more
flexible leadership. Second, there have been various indications
that the economies of the European Satellites, with which relations
have been normalized in most respects, are becoming more closely
associated with the Soviet economy, not only in terms of economic
policy but also in respect to the actual integration of plans and
production. Third, the Chinese Communists have shown growing con-
fidence in, and considerable evidence of their ability to carry out,
their ambitious programs of industrial expansion, in spite of the
pressure of a huge and growing population upon an agricultural economy
which at best is barely able to keep pace with population growth.
These developments should be viewed, of course, in the perspective
of the parallelism and continuity of economic policies within the Sino-
Soviet Bloc. The chief objectives of these policies remain the rapid
development of heavy industry, which has been pursued with sustained
success, and the operation by the state of all economic activity, which
has been achieved in large measure, except in agriculture. As a logi-
cal condition and practical result, the welfare of the population has
been treated as a minimum requirement in planning and as a residual in
practice, except in such fields -- notably education -- in which the
welfare of the population happens to be essential to the realization
of the aims of the state.
* The estimates and conclusions contained in this report represent
the best judgment of ORE as of 15 December 1955.
** The Sino-Soviet Bloc consists of the USSR, the European Satellites
(Albania, Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and
Rumania), Communist China, North Korea, and North Vietnam. (See the map,
Figure 1, following p. 2.)
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Since 1948 the ratio of Soviet to US gross national product (GNP)*
has changed from 1 to 4 to about 1 to 3. In the foreseeable future,
Soviet growth will continue at a more rapid rate than that of the US.
Even so, in absolute terms, the disparity between the US and the USSR
will continue to increase.
The economic contribution of the remainder of the Sino-Soviet Bloc
to the economy of the USSR is approximately the same as the economic
contribution which the remainder of the NATO countries makes to the
economy of the US. The NATO countries exceed the Sino-Soviet Bloc in
the production of nearly all major commodities. For example, energy
consumption by TO is 4 times that of the Sino-Soviet Bloc, and steel
production is about 3 times.
The economic superiority of the NATO area is less clear cut when
only those resources which contribute to the national security are
considered. A substantial proportion of the wealth generated in the
West is consumed in maintaining and increasing living standards. The
Sino-Soviet Bloc, on the other hand, is not compelled to allocate as
much of its resources to household consumption. The aggregate
comparison of economic power must be modified by a consideration of
the fact that, for example, I the Soviet machine tool industry is equal
in size to that of the US and that in the postwar (World War II)
period Soviet steel capacity has increased as rapidly as that of the
US. Even though the aver-all economic predominance of the US over
the USSR is obvious, the USSR presents an economic and industrial
threat more formidable than any faced by the US since the early
nineteenth century.
The Soviet economy emerged from the hesitation and confusion of
the 1953 shift in economic policy to show an impressive increase in
over-all production in most sectors (investment, light and heavy
industrial output, and trade turnover) of the economy in 1954 and
1955. The GNP increased by more than 6 percent. Despite a severe
drought in the principal grain-producing regions of the USSR, in 1954
grain production as well as total agricultural production increased
slightly over 1953, probably by from 2 to 4 percent. The resultant
* Gross national product is the sum of all goods and services pro-
duced for final consumption -- household consumption, capital for-
mation, and government (including defense) -- during a 1?year period.
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THE SINO-SOVIET
BLOC
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increase in food production, along with increases in other consumer
goods and services, brought an increase in the standard of living of
the Soviet population of about 5 percent.
Despite the general success of the Soviet economy in 1954 and 1955,
there remain some major unresolved problems yet to be faced. During
the latter part of 1954 and the early part of 1955 the emphasis in
public announcements turned from the 1953 consumer goods program to a
continued reliance on heavy industry and increased attention to agri-
cultural production. Initially it was difficult to determine whether
this change was a product of the failure of agricultural production or
whether the change indicated a new revision of the Soviet economic
program.
Only the planned 1955 expenditures for defense offer definite
evidence of a significant departure from the Soviet operation under the
1953 Plan revision. Actual expenditures for defense in 1953 probably
were about equal to the planned expenditures for 1954. If the 1955
allocation to defense is fully expended, it will represent an increase
of more than 10 percent in military procurement and become the largest
allocation in a single year for total military expenditures since World
War II. This increase in military expenditures apparently is to be
brought about at some expense to the rapid rate of expansion and invest-
ment allocations for recent years, and perhaps by a reduction of the
production of consumer durables.
Planned capital expenditures during 1955 are slightly below the
planned figures for 1954. The planned increase in investment in heavy
industry is less than 4 percent in 1955, compared with an increase of
12.5 percent in 1954. Planned investment in other sectors of the
economy is reduced slightly.
The agricultural program, which was the cornerstone of the 1953 Plan
revision, has been revised and enlarged. Continuation of the agricul-
tural commitment carries with it the implication that the processed
food and consumer goods program (with the exception of the durable con-
sumer goods) will continue to be emphasized. The principal commitments
of the 1953 Plan revision apparently are to be continued into 1955 and
beyond.
The production of consumer durables is uncertain. Produced in
large part by defense industries and heavy industrial establishments,
the production of these commodities may be squeezed in the process of
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meeting the 1955 adjustments. Consumer durables, excluding housing,
represent an almost negligible portion of the total output of consumer
goods (less than 5 percent), yet these commodities have constituted
one of the most concrete illustrations of the intent of the Soviet
government to improve the position of the consumer. A considerable
effort probably will be made to maintain the increased production of
these commodities. To theextent that the production of durable con-
sumer goods conflicts with the revised defense program, however, the
former assuredly will be sacrificed.
The total volume of Soviet foreign commodity trade increased by
about 15 percent in 1954 over 1953. Trade with the Free World
increased more rapidly -- by about 35 percent -- than did trade with
the Sino-Soviet Bloc, which was up about 12 percent in 1954. Sino-
Soviet trade changed little, but there was about a 15-percent
increase in Soviet trade With the European Satellites.
The most dramatic change in Soviet foreign trade has been the
development by the USSR of a sizable import surplus with the Free World.
In addition, the composition of Soviet imports in 1954 appears to have
shifted to more consumer goods, especially foods and fibers. The com-
position of Soviet trade with the rest of the Sino-Soviet Bloc changed
little.
The main features of the economic achievement of the USSR in 1954
and 1955 were the high rates of growth (about 10 percent) in industrial
production, which permitted the general fulfillment of the original
goals of the Fifth Five Year Plan (1951-55) before mid-1955; a notable
increase achieved under the "new course" in the production of manu-
factured consumer goods (though not necessarily in the availability of
quality foodstuffs and housing); and the successful inauguration of a
large-scale program for increasing the quantity and quality of the pro-
duction of basic foodstuffs, centering on the use of fallow lands with
insufficient rainfall. The most significant actions taken in 1955 are
the financial measures to ease the inflationary pressures resulting
from the employment of a larger labor force than planned, which in turn
reflects a lagging in the growth of industrial productivity, and the
rise in planned defense expenditures, which is believed to reflect
mainly increased procurement of military end items. The difficulty of
reducing labor costs (particularly in agriculture, construction, and
the extractive industries) and the heavy burden of defense are the
principal factors inhibiting even more rapid Soviet industrial growth.
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Despite the difficulties of agriculture, labor productivity, and
the investment-consumption-defense conflict, it is obvious that the
Soviet economy is essentially sound, capable of supporting its
population, growing rapidly, and that it represents a potential enemy,
both offensive and defensive, of the first magnitude.
The Eastern European countries which have been incorporated into
the Soviet sphere of influence since 1945 represent a considerable
augmentation of the economic strength of the USSR. Their development
is an important part of the economic policy of the USSR.
Taking into account both the tasks which the European Satellites
set for themselves in 1954 and the actual changes in economic con-
ditions since 1953, developments in these countries during 1954 and
1955 may be characterized as combining modest successes with serious
shortcomings. There was, for example, a further small improvement in
living standards, and there was some easing of the strains and bottle-
necks which had developed within the industrial sectors of the economies.
The structural readjustments in the industrial sectors did not, however,
prevent sharply declining rates of economic (especially industrial)
growth. Each country has expanded its industrial output rapidly since
1948, but the rates of industrial growth have slackened markedly in
recent years, particularly in 1954. The agricultural stagnation of
recent years also has continued. There has been no significant
increase in total European Satellite agricultural output since 1950.
Production has remained well below the prewar achievement in all of the
major countries.
In the industrial sectors of the economies the scheduled reallo-
cation of investment expenditures in favor of the energy and basic
materials industries, on the one hand, and the consumer goods
industries, on the other, was carried out to a substantial degree,
although such plans were not realized completely. The proportion of
total state investments which was allocated to heavy industry declined
in most, if not all, of the countries in 1954, and the proportion of
such expenditures probably also declined substantially in several of
them. The shift in investment priorities made possible small improve-
ments in living standards and brought the energy and industrial raw
materials industries into better balance with engineering and heavy
industrial plant facilities. Some of the Satellites reported larger
percentage gains in consumer goods output than in producer goods out-
put, but the latter continues to predominate in the more industrialized
countries. Moderate in extent as this structural realignment in
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industry was, it appears to have reduced considerably the aver-all
rate of growth as well as the growth of industrial output in 1954.
Only Poland was able to fulfill its initial industrial production goals
for the year, and in all seven European Satellites the announced per-
centage gains in output over the previous year were smaller than in
1953. In Hungary and Czechoslovakia, increases in gross industrial
production were only 3 and 4 percent, respectively.
The failure of the European Satellites to increase agricultural
production materially must be regarded as the most serious shortcoming
in the implementation of the "new course" in 1954. This failure
occurred despite large increases in agricultural investment, reflecting
not only weather factors and. the lag between investment and increased
output but also the very low level of agricultural investment before
the "new course." Because of the conversion of some plants to con-
sumer goods production and the effort to increase production of con-
sumer durable goods, there was a small reduction in the agricultural
labor force, despite the urgency of the "new course" agricultural
program. Policies designed to extend the cultivated area have met with
only limited success. Total Satellite production of agricultural com-
modities was about the same in 1954 as in 1953. Unfavorable weather
caused a reduction in grain production by from 5 to 15 percent in
Czechoslovakia, East Germany, and Hungary. There were no increases of
significance in livestock numbers for the area as a whole. Production
of industrial crops, on the other hand -- particularly of textile
fibers -- fared somewhat better in 1954. In 1954, Satellite consumers
benefited somewhat more than during any of the years immediately
preceding the "new course." Although the Satellite government adopted
resource allocation policies more favorable to consumption, the improve-
ments in living standards which were possible during the past 2 years
were relatively small. Only if these gains are continued for several
pore years will some of the austerity of recent years be removed and
prewar standards of living be regained or exceeded.
Production of manufactured consumer goods, particularly the more
expensive type, has increased considerably during the "new course" and
in most categories now exceeds prewar levels. Investment in residen-
tial housing has been increased substantially. The least successful
feature of the consumer program for 1953 was the failure to increase
food supplies. Despite efforts to get foodstuffs in foreign trade,
food consumption per person did not improve significantly in 1954,
remaining below the postwar level for all the countries except Poland
and Bulgaria.
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Although direct Soviet control over enterprises in the European
Satellites has been reduced somewhat during the past 2 years, this
reduction does not appear to be particularly significant, because of
the pervasive indirect controls which are exercised by the USSR over
Satellite economic development. The extent of Soviet direction of
Satellite economic policies has not lessened under the "new course"
and may have increased slightly because of the growing coordination
activities of the Soviet-dominated international organization, the
Council for Economic Mutual Assistance (CEMA). Control of Satellite
policies probably has continued to be exercised primarily through
Party and governmental channels, however, as illustrated by the
country-by-country adoption of the "new course" during the latter
half of 1953. There is some evidence, on the other hand, that the
USSR has dictated, or that various pairs of Satellites have agreed
upon, coordinated production and investment plans for selected
products or industries through the medium of CEMA.
Analysis of the 1955 economic plans and budgets and of recent
statements by Satellite leaders indicates that the "new course" is
being cont;aued this year, despite the emphasis in official speeches
upon the primacy of growth in heavy industry.
The value of Satellite trade with non-Bloc countries was greater
in 1954 than in any year since 1951. The direction of Satellite trade,
however, has not been altered fundamentally since the introduction of
the "new course" in 1953. About 75 percent of Satellite trade is
accounted for by other Bloc countries with the USSR -- the foremost
trading partner for each Satellite. Satellite dependence on foreign
trade, as measured by the ratio of trade turnover to GNP, was less
than that of France, West Germany, or Italy in 1951 but was con-
siderably greater than that of the USSR.
The European Satellite GNP in 1954 was about 40 percent of that
of the USSR. The Satellite economies have grown rapidly since 1948,
but the rate of increase in GNP, like that of its most dynamic com-
ponent, industrial output, has been declining. This slackening in
the pace of Satellite economic development generally parallels that
in the USSR, so that the ratio between Satellite and Soviet GNP has
not changed materially in the postwar period.
The contribution of the Far Eastern Communist nations to the
economic strength of the Sino-Soviet Bloc has been limited. These
nations are at the very beginning of their industrial development
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stage and have found it necessary to rely upon the Bloc for support,
especially for capital goods.
Communist China, now in the third year of its First Five Year
Plan (1953-57), has a good chance of achieving the ambitious planned
goals for industrial production of a 100-percent increase over 1952,
the year in which the prewar level was reached. Since the summer
of 1954 the Chinese Communist regime has issued several announcements
of its goals, which are high, and its accomplishments, which are
impressive. Both goals and accomplishments must be considered in
relation to the small indUstrial base of China in 1952, which was
roughly equal to the prewar industrial base. Chinese agriculture,
moreover, is at best barely able to keep pace with population
growth, and for workers and peasants there is even less prospect of
material gain than in the USSR and the European Satellites. The
Communist regime has consolidated its control over the economy, though
it is still in the process of liquidating the private sector, notably
in agriculture, in which the pressure for collectivization was
increased in 1954 and 1955.
Industrial production Increased about 16 percent in 1953 and 1954.
The success of the Chinese Communists in developing heavy industry at
the expense of light industry is indicated by a rate of growth for
producer goods approximately double that for consumer goods.
The average increase in total output (GNP) from 1950 to 1952 was
about 12 percent. The increase in output for 1953 was about 6 percent
over 1952. Setbacks in agricultural output in .195)-I- reduced the
increase in GNP in 1954 to 4 percent over 1953. In the absence of
floods affecting agricultural output, the 1955 GNP is expected to
increase by 8 percent over 1954.
With increases in industrial output exceeding the increase in
output in the agricultural sector, the general trend and structure of
the Chinese economy show a steady increase in the proportion of
national output originating in the industrial sector. Modern indus-
try is expected to rise by one-third in its contribution to GNP in
the period of the First Five Year Plan, and the modern industry
sector will rise from 16 to 24 percent of GNP.
The incidence of crop disasters, such as the 1954 flood, results
in serious food shortages such as that currently being experienced,
which has lowered the average daily caloric intake per capita in 1955
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to about 1,800 calories, compared with 2,000 calories in the prewar
period. Communist China has the lowest caloric intake per capita
of the Asian countries, with the exception of India and North Vietnam.
Foreign trade amounts to about US $3.5 billion per year. The bulk of
this trade continues to be with the Soviet Bloc, with the Free World
portion being about 20 percent. Military supplies and producer goods
constitute nearly 90 percent of 1954 imports, whereas, in pre-Communist
days, consumer goods dominated the import side. Chinese exports con-
sist primarily of foodstuffs and raw materials, although the Chinese
Communists are trying to develop light industrial exports.
The economies of the other Asiatic Communist countries, North
Korea and North Vietnam, remain disorganized and dependent upon
Communist China and the Soviet Bloc for assistance. Industrial pro-
duction is quite small, and agricultural production is barely enough
to meet the needs of the population.
I. USSR.
A. Introduction.
The making of economic decisions in the USSR is almost
exclusively a function of central political bodies. Economic policies
laid down in quite specific terms by the central authorities to channel
economic activity toward the attainment of the long-run goal are
implemented directly by the state planning organs. The attainment of
the state's goals is not left to the market place. A wide gap between
the interests of the population and the government, a result of the
policy of a high rate of investment and a low rate of household con-
sumption, has necessitated the extension of centralized control over
an ever-increasing number of commodities and activities. For example,
pricing policy is designed to ration Scarce consumer goods by means
of a very large tax component in the price, whereas the absence of the
tax in the prices of producer goods provides the state with a
relatively cheap supply of industrial materials. Collectivization in
agriculture, by making deliveries of produce to the state obligatory
at low prices set by the state, has had the parallel effect of de-
pressing the real income of the rural population.
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At the apex of the economic administration of the USSR is the
presidium of the Communist Party. On the basis of the presidium's
policy decisions, general directives are issued by the State Planning
Commission (Gosplan), a staff of the Council of Ministers. Gosplan,
with the assistance of other agencies, translates these directives
into Five Year Plans and subsidiary plans, which become effective
upon the automatic approval by the Supreme Soviet.
The responsibility for implementation of the plans resides in
the economic ministries subordinated to the Council of Ministers and
by the various staffs attached thereto. The three basic types of
ministries are (1) the Alli-Union ministries of overriding national
significance, such as the Ministry of Defense; (2) the Union-Republic
ministries, such as the Ministry of Agriculture for each of the
republics and for the USSR; and (3) the Republic ministries, such as
the various ministries of local industry, which are concerned with
the local affairs of each republic and for which there is no
corresponding aver-all ministry.
The principal development to take place in the Soviet insti-
tutional structure in 1954 was the reestablishment of the pattern of
ministries that prevailed during Stalin's last years. From 1939
until Stalin's death in March 1953, that pattern was characterized by
a large number of relatively small and specialized units. Within
several days after Stalin died, these had been consolidated into a
much smaller number of larger units with a broadened scope for each.
Later in 1953 the number of ministries was increased, and in 1954 it
was increased still further. At the beginning of 1955 the Soviet
government consisted of approximately the same number of ministries
as 2 years earlier.
Virtually all economic activity of the USSR is included in the
state plan. The only economic activities of any importance not
included are the collective farm market, where the state does not con-
trol the price and only indirectly controls the supply, and the dis-
position by farmers of produce grown on their own individual plots and
of income in kind which they receive from the collective farms.
With the important exception of agriculture, virtually all
production in the USSR is carried on directly by state-owned enter-
prises. In agriculture, about 85 percent of production is carried
out by the collective farms, which are government-imposed associations
of the peasantry for communal cultivation of land assigned for use in
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perpetuity. Direct production by the state is limited to the state
farms. The state owns and operates the machine tractor stations,
which control the entire agricultural tractor park and the bulk of
all other agricultural machinery. Although productive activity on
collective farm land enters into the state plan, planning in this
sector is less precise because of the greater difficulty of control
and the uncertainty of agricultural production.
Most raw materials, important intermediate products, invest-
ment goods, and military end items are allocated directly by the
Council of Ministers in physical units. Each producer receives an
allocation based upon the centrally established norms. In order to
direct labor into the industries and locations necessary to fulfill
the state plans, various direct manpower controls also are employed.
The relationship of the USSR to the Sino-Soviet Bloc is one
of marked dominance in the production of most goods and services. A
quantitative comparison of the extent of the supremacy of the USSR is
shown in Figure 2.*
B. Regional and Geographic Characteristics.
Soviet economic policy has been influenced to a considerable
degree by the disadvantages associated with the immense size of the
Soviet land mass and a relatively unfavorable distribution of economic
resources within that area. The policy of regional self-sufficiency in
the postwar period undoubtedly has been to some extent a response to
this problem, although the influence of strategic and military con-
sideration has also been great. The high proportion of productive
effort which must be expended in the USSR to overcome space barriers has
caused the central authorities to lay great stress on minimizing the
transport component of total costs. In the USSR, about 30 percent of
total coal production is consumed by the transportation effort, where-
as in the US about 15 percent is so consumed. Postwar economic policy
is concentrated on the reduction of this transportation burden by
developing local sources of energy and by reducing regional inter-
dependence. Maldistribution of high-quality energy resources, however,
has hindered the implementation of this policy. Soviet industriali-
zation has increased the average length of haul of coal from 485
kilometers in 1913 to 695 kilometers in 1946. The 1950 plan called
for a reduction to 650 kilometers.
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The two older regions of the European USSR have dominated
historically and continue to dominate as the most industrially pro-
ductive regions of the USSR. In 1954, approximately 40 percent of
manufacturing activity, 50 percent of agricultural activity, and 50
percent of services (including transportation, communications, trade,
and construction) were located in the central industrial district
(including Moscow) and in the Ukraine. Forty-five percent of the
GNP of the USSR was accounted for by these two areas.
The regional pattern of production is indicated in Figure 3.*
The dominance of the European USSR is clearly evident, as is the rela-
tive state of underdevelopment of the Far Eastern regions.
Much of the territory of the USSR lies north of latitudes in
the UB and includes vast areas of little or no productivity. Actually,
only 10 percent of the land is available for cultivation -- only 16
percent if meadows, grasslands, and pastures are included. West of
the Urals, 40 percent of the land is utilized for agriculture. In the
Ukraine, 60 percent of the land is under cultivation. In Soviet Asia,
only slightly more than 5 percent is farmed at all because of perma-
frost conditions. There are large areas of poor agricultural lands
adjoining good agricultural lands into which cultivation could be
expanded if sufficient investment were made. Some of these lands are
included in the present land program. The chestnut soils on the
northern periphery of the USSR can be dry-farmed or irrigated, and the
gray podzolic soils on the northern periphery can be made productive by
drainage and fertilization. The USSR has the largest area of fertile
chernozem in the world -- 754,000 square miles. These soils are rich
and deep. Humus is high and the soils are leached only slightly, because
of their location in regions of moderate or light rainfall. Crop yields
are not so high as they are in the US, and in the area of dry-farming
they are appreciably lower., Timber resources, on the other hand, are
the largest in the world; it is estimated that they cover 2.45 million
square miles. The mineral resource base of the USSR is second only to
that of North America. Large supplies of minerals are accessible and
in general (with the notable exception of coal) have good locations in
relation to one another.
The USSR has a large inland waterway system built upon an
extensive natural hydrographic net. Because most of the Siberian rivers
flow north, a more extensive use is made of the European than the
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USSR
Production of Selected Cornmodities
1954
Each circle represents total
Sint:I-Soviet Bloc production.
The percentage shown is that
produced by the USSR.
POTATOES ELECTRIC POWER
37% if 67.2 m
metriillion
c tons 6!ZoY4r /47 billion
kilowatts
WOOL
235,000
metric tons
410 HARD COAL
243 million
----- my metric tons
? ?
CRUDE OIL
53.6 million
metric tons
BAUXITE
20 880,000
41, metric tons
OD_
REFINED LEAD
/93,000
metric tons
NITRIC ACID
million
metric tons
00 MACHINE TOOLS
92'000 units
06 GENERATORS
5.6 million
kilowatts
ELECTRIC LOCOMOTIVES
88% 225 units
? ?
Fiaure 2.
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-If 4
26 9 20 16
A
52 12 43 33
)
4 10 96 10 33 42
//**1
7 5 5 It
'f) 111.4
20 26 23 26
\ A
80 3 10
---f
(retiiTA
w /EB
,j
,**4L111
10 3 7 33 6 5
XI
7"?
7'2
7 81 12
X
Numbers under symbols represent the region's
percentage of the total production.
BREAD GRAINS 14. MEAT
56.6 MILLION 3.95 MILLION
METRIC TONS METRIC TONS
COTTON FIBER
1410 THOUSAND
METRIC TONS
+ ELECTRIC POWER
14.7 BILLION
KILOWATT HOURS
11
4 A
5 5
CRUDE OIL
53.9 MILLION
METRIC TONS
USSR
Production of Selected Commodities
By Regions?I954
NICKEL
45 THOUSAND
METRIC TONS
IRON ORE
64 MILLION
METRIC TONS
Ai GENERATORS
3.6 MILLION
KILOWATT HOURS
CHLORINE
296,000 METRIC TONS
TRUCKS
313,000 UNI TS
MARITIME (Kerber and ocean)
/37,000 GROSS
REGISTER TONS
14731 7-55
CCO.EICT Figure 3.
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Asiatic rivers. The spring thaw differential melting time between
north and south causes much flooding and limits the use of Siberian
rivers for navigation. The USSR has only one-third of the mileage
of the US rail network, although the extent of the Soviet land mass
creates a very serious transportation problem for Soviet planners.
C. Structure and Growth of the Soviet Economy.
The rate of increase in the GNP of the USSR has been declining
since 1949. During the 6-year period 1948-54 the average annual rate
of growth was about 8 percent, whereas the GNP of the US rose by about
3.4 percent per year. If the 3-percent increase for 1953, the year of
transition, is excluded, annual rates fell from nearly 11 percent in
1950 to an average of 8.2 percent in 1951-52. In the next few years
the Soviet economy will continue to grow rapidly, but by about 1960
the annual rate of increase of GNP should have fallen to about 5 per-
cent per year.
Historically there have been and will continue to be differen-
tial changes in the manner in which the USSR spends its product.
Between 1948 and 1954 the portion of the total production available
for personal and communal consumption rose more slowly than did total
GNP. As a claimant on production, consumption fell by almost 4 percent.
The shares of total production expended for defense purposes in 1948
and 1953 are almost the same. During the postwar period until 1952 the
military establishment was acquiring an expanding share of resources.
Since that date, defense has received a declining portion. Investment
has been the only end use to gain relatively during the entire postwar
period, a fact which underscores the emphasis on growth by the Soviet
leaders. During the next few years it is anticipated that consumption
will obtain a very slowly declining share of the total, and defense
expenditures, if the present policy is continued, will require a much
smaller share of total resources than at present. Investment will
receive an ever rising share of total GNP. The end use breakdown of
the Soviet GNP in 1954 is shown in Figure 4* and in Table 1.**
Differential growth trends are evident in the historic com-
parison of sectors of origin of the GNP. The industrialization of the
economy proceeded at a rapid pace from 1948 to 1954, industry being
responsible for almost 33 percent of GNP in 1954 compared with 25
* Following p. 14.
** Table 1 follows on p. 14.
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percent in 1948. (See Table 2.*) Over the period, agriculture
surrendered first place to industry, originating 28 percent of GNP
in 1954 compared with nearly 36 percent in 1948. The construction
component, as would be expected in an economic policy emphasizing
investment, rose as a percentage of the total. Transportation was
also of growing relative importance, as the expanding regions of the
country became increasingly interdependent. The role of trade also
bulked relatively larger in the economy, as consumer goods production
was completing its recovery and trade was being channeled into state
and cooperative retail outlets and away from collective farm markets.
The trends which the sectors of origin had shown between 1948 and
1954 probably will continue for the next few years but to a somewhat
lesser extent.
Table 1
Gross National Product of the USSR, by End Use
1948 and 1954-55
Percent
End Use
1948
1954
1955
Consumption
64.7
59.9
59.5
Administration
3.2
2.5
2.4
Defense
10.1
10.0
9.9
Investment
22.0
27.6
28.2
Gros's National Product
100.0
100.0
100.0
D. Population and Manpower.
The population of the USSR was about 217 million in mid-1955.
It is growing at a rate of slightly less than 2 percent per year. Of
the total population, about 60 percent are between 15 and 59, and
about 27 percent are males between 15 and 59.
* Table 2 follows on p. 15.
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USSR
GROSS NATIONAL PRODUCT
(By End Use)
1954
(1230 Billion 1951 Rubles)
CONSUMPTION
737
59.9%
ADMINISTRATION
25209 12-55
DEFENSE
123
10%
INVESTMENT
339
27.6%
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Table 2
Gross National Product of the USSR, by Sector of Origin
1948 and 1954
Percent
1948
1954
Industry
,
24.4
32.1
Agriculture
35.7
28.2
Construction
5.0
6.9
Transport
5.8
7.1
Communications
0.9
0.9
Trade
5.5
6.3
Services
22.7
18.5
Gross national product
100.0
100.0
The Soviet labor force ptobably will grow more slowly than
total population. In recent years, about 50 percent of the Soviet
population has been in the labor force, when forced labor and
military personnel are included. During most of the postwar period
the demand for labor in the USSR has been exceptionally high because
of reconstruction and military requirements, and in 1953-54 because
of the need to adjust to the new economic program. In 1938 the
participation ratio was about 47 percent.
The nonagricultural labor force has been a rising trend
during the entire postwar period, as is shown in Figure 5.* The
present and planned expansion of grain acreage and animal husbandry
is expected to raise agricultural production by more than 20 percent.
This probably will involve an increase in labor requirements in
agriculture, despite continued attempts to replace agricultural labor
through mechanization.
The rapid growth of Soviet education, which has been one of
the principal characteristics of Soviet socioeconomic development in
the postwar period, probably will continue into the future. High
school attendance, involving 10 years of schooling, is to be compulsory
by 1960; and the character of Soviet high schools also is changing and
will in the future include many more technical courses.
* Following p. 16.
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E. Agricultural Production.
Soviet agriculture has been the problem sector in the Soviet
economy from the very beginning of the Communist regime. With a
rapidly growing population and with the soil and climatological con-
ditions prevailing in the USSR, it has been a constant battle to
maintain food production at a level sUfficient to prevent caloric
intake per capita from falling. The emphasis upon heavy industrial
investment and upon industrial production in general, to the relative
neglect of agriculture, has worsened the relative position of agri-
culture over a long period of time. It has been only since about
1953 that Soviet leaders became sufficiently concerned over agri-
culture, and specific programs have been initiated to expand agricul-
tural production through greater investment in agriculture and through
expansion onto marginal lands. Despite all efforts, agriculture
remains and probably will continue to remain the weakest part of the
Soviet economy.
Soviet agricultural growth is circumscribed by certain limiting
factors which have combined in the last 25 years to retard the expan-
sion of output to a rate which generally has been below the population
growth rate. Figure 6* indicates the increases in agricultural pro-
duction between 1938 and 1960.
First, crops normally can be grown on an area covering only
10 percent of the country as compared with 25 percent in the US. Of
this 10 percent, land and climate are favorably united for potential
growth in yield per acre, without large investment, on only a fraction
of 1 percent. The areas of adequate precipitation are also the areas
of poor soil and short growing seasons. Practically all of the USSR's
good soils, the famous chernozems, are in an area of uncertain or de-
ficient precipitation. Whereas rainfall and soil belts in the US are
generally in east-west gradations, cutting across zones of equal
temperature that are generally latitudinal, the USSR labors under the
handicap of a latitudinally inverse temperature and rainfall zone --
that is, as the temperature rises from north to south the rainfall
decreases. The USSR has also an acreage limitation to increasing
output. The present program of expanding the acreage of small grains
by 20 percent in 3 years is being carried out primarily on land that
normally would be classified as untillable because of unfavorable cli-
mate or poor soil.
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FIGURE 5
7
6
4
2
U.S.S.R.
LABOR FORCE
(Millions of Workers)
r
-\
\
) \
\
?
AGRICULTURAL
/
......---
.-----
/
tioN?AGR
ICOLTURAL
I
1938 47 48 49 50 51 52 53 54
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FIGURE 6
140
130
120
110
100
90
80
70
SECRET
U.S.S.R.
AGRICULTURAL PRODUCTION
MAJOR COMMODITIES
1938, 1948-1960
(INDEX 1953-100)
????????1
.0`
???
00
1938 1948 49 50 51 52 53 54 55 56 57 58 59 60
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Second, the present institutional arrangement in the agricul-
tural sector has remained basically unchanged since the advent of
collectivization. The three primary organizations -- the collective
farm, the state farm, and the machine tractor station -- are immense
in size, inefficient in operation, and more suitable as organs for
state control of the peasant than for the production of agricultural
products. The collective farm, almost 25 times the size of the
average US farm, appears to be anathema to the peasant. The peasant
is repelled by this impersonal giant and the heavy hand of the state,
which has organized production allocation to make the peasant a
residual claimant to production.
Third, the agricultural investment policy in the USSR has had
a depressing effect upon agricultural production. The principal
characteristics of this policy have been (1) the parsimony on the part
of the government in allocating funds for state investment to agri
culture and in paying the collective farm a price for its products
that would result in accumulation of funds for investment by the
collective from its own means, and (2) a lack of rationality in state
investment. Billions of rubles have been poured into schemes such as
the projects for the transformation of nature -- shelter belts and
grandiose irrigation projects -- with little success. Even when
investment has been applied directly to production purposes, such as
the state farm investment, there has been little return. The state
farm has proved to have an insatiable appetite for funds, resulting
in constant complaints from the government about the waste and un-
profitableness of the system.
Fourth, the passive resistance of the peasant has been woven
so tightly into the fabric of the agrarian system since forced
collectivization that it may be the most difficult handicap to over-
come. The antipathy on the part of the peasants has had its most
avert expression in the livestock sector, where peasant reaction to
government measures can be graphically shown by the simple display
of the livestock number cycle. The depressing effect on crop pro-
duction has been less spectacular, mostly made evident in the large
differential between the actual crop yield and that which would be
obtained if no losses were suffered.
These limiting factors form a series of links in a chain, a
chain which the USSR has tried to break by successively testing this
or that link, attempting to find the weak one, the areaf where invest-
ment or reform would cause the shackles of secular stagnation to
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break. Since 1953 there has been a frontal assault on all these
limiting factors. It is not possible to translate accurately the
effect of these new measures upon production in agriculture; but, given
relatively favorable conditions and general success with the programs,
it is likely that during the next few years agricultural production
will increase somewhat and command a slight lead on population growth.
The year 1954 was the first agricultural year of the "new
course." The first year, from a production performance point of view,
was characterized by (1) a 3-percent increase over 1953 in the out-
put of 10 major commodities, but only 2 percent above the average of
the first 4 years of the Fifth Five Year Plan; (2) the continuation
of the deplorable livestock situation, with the exception of a reversal
of the downward trend in swine numbers; (3) a 6-percent increase in
crop acreage, exceeding the increase in acreage of the last 3 years
and signaling the beginning of the most dramatic land expansion pro-
gram of this century; and (4) an estimated increase of 40 percent in
agricultural investment, attributable both to a large increase in
collective farm money income and to increased investment allocation
from state sources.
The increase in agricultural production was a result of an
increase in area under crops and moderate increases in livestock
numbers rather than a change in productivity of land or animals.
Although poor weather conditions may explain part of the stagnation
of growth in yield per hectare and livestock products per head, the
most evident reasons for no change in secular trends are the lack
of time to translate investment plans and Physical input and an
apparent lack of any notable change in the peasant's attitude toward
the collectivized system in spite of material incentives and other
concessions.
There is indicated a continuation of a poor-quality national
diet during the 1954-55 consumption year, a diet probably sufficient
in calories but heavily weighted with starchy foods, grain products,
and potatoes, and deficient in proteins and fats.
In the livestock economy there were no significant trend
changes either in numbers or in productivity per animal. An increment
in livestock numbers of 7 percent reversed a downward trend in the
rate of increase in the previous 3 years, but cattle and sheep numbers
continued at a low rate of increase. Despite measures to encourage
rapid increases in privately held livestock, the gains in this sector
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were small and uneven. The persistence, perhaps worsening, of poor
performance in animal husbandry is the natural result of very little,
if any, strengthening of the three weak links in this sector --
feeding, shelter, and management. Despite attempts to improve the
situation in these areas, no significant improvement is expected in
the short run, although in the period 5 to 10 years from now some
improvements may take place.
It may be expected that the USSR will make desperate efforts
to enhance the position of the agricultural sector over the next few
years. A steady stream of new policy directives has been forthcoming
since 1953. There is every indication that the USSR at last intends
to do something about its agricultural situation, primarily by
investing more in this sector and by increasing incentives to the
agricultural labor force.
F. Industrial Production.
Soviet industrial production, traditionally the point of
emphasis in the USSR, has been increasing rapidly in the postwar
period, and in 1954 it increased by about 9 percent. This rate com-
pares favorably with the increase in 1953 of 7.5 percent. Recovery
from the dip in 1953 suggests completion of the major adjustments
made necessary by the "new course."
During the entire period 1948-54, industrial production
increased by more than 100 percent. Annual increases have became pro-
gressively smaller, however. This declining trend is expected to
continue during the next few years.
Figure 7* indicates the growth of industrial production in the
USSR between 1948 and 1954 and the components thereof. Production of
energy has expanded step by step with industry as a whole. Annual
increases averaged about 12 percent from 1948 through 1954. Although
the rate of growth declined slightly toward the end of the period, it
stayed at a relatively high figure of 10 percent in 1954. Of the
three major components (coal, petroleum products, and electric power),
production of electric power has expanded the most rapidly. Production
in this field reached twice the 1948 figures in 1953. Production of
coal and petroleum have grown substantially and steadily. Production
of ferrous and nonferrous metals rose by 9 percent and 20 percent,
* Following p. 20.
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respectively, during 1954. Production of metals kept pace with over-all
industrial production in 1948 and 1954 and is expected to continue to
do so during the next few years. The 1955 steel production plan prob-
ably will be fulfilled, and the USSR is expected to fulfill the 60-
million-ton goal by 1960. The USSR is not expected to fulfill its 1955
production plan in the case of copper and zinc. In 1953 and 1954,
production lagged substantially behind plan. Production of aluminum
has been increasing rapidly and will continue to do so.
The output of fabricated metal products and machinery rose by
14 percent in 1954. The fastest growing items in this group are
expected to be consumer durables and other complex manufactures such
as electronic equipment and electrical equipment. Production of
automotive equipment, tractors, agricultural machinery, and machine
tools has been increasing rapidly, but the rate of increase is expected
to decline.
The chemical industry, although comparatively new, has grown
rapidly. Gross output has more than doubled in the period 1948 to 1954.
Certain important products, notably ammonia and nitric acid, have grown
more slowly than the aggregate. It is expected that chemical pro-
duction will continue to increase at rapid rates in the near future.
The construction materials industry has expanded at a rate
appreciably greater than that for industry as a whole. By the end
of 1954, output had grown to 2-1/2 times that of 1948. Although
declining slightly during the course of the 6-year period, annual
increases averaged about 17 percent. Cement production grew somewhat
more rapidly, and brick production somewhat less rapidly than the
aggregate. Both cement and brick production, however, chronically
have fallen short of plan. They have been insufficient to meet plan
construction, particularly the recent requirements for housing and
for building in agriculture, trade, and the light and food industry.
The construction materials industry is expected to continue to grow at
a rate greater than that of industry as a whole. Even so, it is likely
that plans will not be met in this area and that the fulfillment of
construction plans, therefore, will not be completely achieved.
The transport and communications industries have continued to
grow in 1954 at a rate somewhat greater than that of the aver-all
economic activity in the USSR. The Fifth Five Year Plan target for
rail freight turnover (the major indicator of transport activity in the
USSR) was fulfilled before the end of 1954. Motor carrier and maritime
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FIGURE 7
U.S.S.R.
INDUSTRIAL PRODUCTION
(INDEX 1953 = 100) A 1948
1954
TOTAL INDUSTRY
ENERGY
METALS
METALWORKING
AND MACHINERY
CHEMICALS
CONSTRUCTION
MATERIALS
FOREST PRODUCTS
FOOD PRODUCTS
MANUFACTURED
CONSUMER
GOODS
DEFENSE INDUSTRY
A
53
A
A
50
48
A
51
45
57
A
A
A
49
72
66
100
35 98
109
110
113
114
114
114
110
104
100
111
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transport facilities produced increases in ton mileage which were 2 to
3 times as great as over-all economic growth. Availability of com-
munications media in the USSR during 1954 increased more rapidly than
requirements upon these media for the first year during the Fifth Five
Year Plan.
In 1954, Soviet production of military end items was approxi-
mately 3 times that of 1948. Budgetary allocations to defense in 1954
were 18 percent of total budget expenditures. During the period 1950
to 1954 the value of Soviet production of military end items rose from
US $5.6 billion to US $10.2 billion (1951 prices).
G. Foreign Trade.
Soviet foreign trade during the period 1948 to 1954 was notable
for its growth and shift in geographic distribution. In terms of con-
stant 1951 US dollars, Soviet foreign trade increased from about US
$2 billion in 1948 to approximately US $7 billion in 1954. Figure 8*
indicates the change in magnitude and composition of Soviet foreign
trade. Trade with the Free World countries accounted for only about
16 percent of Soviet foreign trade in 1954 compared with almost 60 per-
cent in 1948. In absolute value, Soviet trade with the Free World
fluctuated roughly between a 1940 low of US $700 million and a 1954
high of US $1,200 million. Communist China has become the USSR's most
important trade partner, accounting for about 20 percent of Soviet
trade in 1954. The European Satellites as a whole have expanded their
share in Soviet trade considerably since 1948.
Whereas traditionally the USSR is a heavy exporter of agri-
cultural products, Soviet grain shipments to the Free World have
declined in recent years. This decline has been caused in large part
by increased domestic requirements in Soviet exports to the Satellites.
As a substitute for grain, the USSR has turned to larger exports of
other goods, especially petroleum and manganese, and to the sale of
gold in order to pay for imports from the West. Recently the USSR has
made overtures to export capital goods to the West, particularly to
underdeveloped areas, but so far there have been relatively few
actual shipments. Manufactured goods, especially high-quality machinery
and transportation equipment, remain high on Soviet procurement lists
from the West, although relatively larger food imports have been in
evidence since 1950.
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From the more industrialized European Satellites -- East
Germany, Czechoslovakia, and Poland -- the USSR in 1954 received
machinery, transportation equipment, and raw materials, and supplied
food, industrial raw materials, and industrial equipment. Soviet
trade with Communist China consists largely of Chinese exports of
agricultural products, nonferrous metals, and ore in exchange for
military and industrial equipment and assistance for China's
industrial development program.
II. European Satellites.
A. Introduction.
The European Satellites were brought into the Soviet sphere
of influence gradually during and after World War II. Military
occupation made it possible for the USSR either to set up puppet
governments or to insure dominance by the Communist Party in the
leftist coalitions that controlled these countries. Since 1948 the
governments of all the present European Satellites -- Albania,
Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and Rumania
have been firmly under Communist control politically, and the economic
resources of these countries have been at the disposal of the USSR.
In general, the Soviet course of action with respect to these
countries has been to encourage the rapid growth and industrialization
of the economies and to maintain the several national regimes in
effective control of their economies. The policy has resulted in
supporting the population, generally at levels above that of the USSR,
maintaining and expanding the industrial base of each country, and,
within the restrictions made necessary by forced industrialization,
adhering generally to the principle of comparative advantage. The
USSR insists upon adherence to Communist dogma, retains political
control, and regards the economies of each of the Satellites as
supplementing its own.
The Communist Parties in the Satellites are the primary
instrument for implementing Soviet aims in this area. In addition,
various categories of Soviet personnel operate within the Satellite
countries as inspectors to check production for conformity with Soviet
specifications and as members of economic or commercial missions to
maintain close liaison with the appropriate Satellite ministries. In
the past the USSR has exercised some direct control through the joint
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FIGURE 8 U.S.S.R.
GEOGRAPHIC DISTRIBUTION OF THE
VOLUME OF FOREIGN COMMODITY TRADE
1948-1954
7.5
7
(millions of 7957 dollars)
Communist China
European Satellites
Free World
1948
1949
1950
1951
1952 1953
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ownership of industrial property in these countries. This form of
control, however, has been gradually disappearing in the Satellite
countries.
The Council for Economic Mutual Assistance (CEMA) provides the
USSR with an important mechanism of coordination and control over the
Satellite economies. CEMA was created in 1949, apparently in part to
counter the psychological effects of the Marshall Plan for Western
Europe. Its stated purpose is to channel Soviet aid to the people's
democracies of Eastern Europe and to promote cooperation among equal
partners of the Soviet Bloc. It has a Council and a Secretariat
located in Moscow to which each country sends a permanent delegate,
typically a high official in its national planning commission. CEMA
probably has furthered the economic integration of the USSR and the
European Satellite countries and is a potential instrument for
coordinating the economic plans both within the European Satellites
and between the USSR and the European Satellites.
Since World War II, each of the countries in Eastern Europe
has undergone drastic changes in its internal political and economic
structure. The immediate postwar years found the European Satellites
engaged in political revolution and internal changes and, until 1949-
50, concerned with the reconstruction of their war-ravaged economies.
It was not until 1952 that the output of goods and services in the
European Satellites achieved prewar levels.
From 1950 to late 1953 the story of economic development in
each of the European Satellites was one of continued high investment
in heavy industry and a continual prodding of agricultural production
Late in 1953, greater emphasis was placed on the production of con-
sumer goods, in imitation of the "new course" pronouncements
emanating from the USSR.
Although European Satellite leaders have made numerous
statements during 1955 about the importance of rapid industrial growth,
the national economic plans and state budgets of the various countries
do not show any substantial changes in economic policy from that of
1954. The policies currently being followed may therefore be charac-
terized as generally continuing the "new course" as it was carried
out in 1954. Some modifications of this policy are evident in 1955,
but they are neither great in extent nor applicable to more than 1 or
2 of the countries. Although the economic programs put into effect
in 1954 departed somewhat from the orthodox Stalinist economic policies
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followed until late 1953, the changes were not so extensive as those
outlined in the initial "new course" announcements.
Official Satellite statistics indicate a slackening in the
rates of industrial growth in recent years, and the economic plans for
1955 make it clear that this trend will continue in some of the
countries. The new plans for 1955 indicate recognition of the diffi-
culties and shortcomings experienced in 1954 and of the factors which
underlay them, notably the raw material shortage, the declining rates
of increase in labor productivity, and the inadequate allocation of
resources to agriculture.
B. Geographic and Regional Characteristics.
The European Satellites form a strategic buffer zone between
Western Europe and the USSR. The seacoasts of Poland, Rumania, and
Bulgaria have important ports that are available to the USSR, and
command of these coasts has increased Soviet control over the Baltic
and Black seas. The USSR has attained at last warm-water ports,
although the Satellite coastlines are on interior seas, and the
USSR continues to be without warm-water frontage on major oceans.
The lowlands of Southeastern Europe -- Poland, Hungary,
Rumania -- are suitable to large-scale, mechanized agriculture. In
fact, the lowlands of Poland and Rumania are westward extensions
of the plains and steppes of Russia and provide easy access to and
from the USSR. The central mountain belt of the Carpathians (the
Beskids, the Tatras, and the Sudetens) and the Balkans form a protec-
tive barrier for the USSR against easy invasion routes from the West.
At the same time, the mountainous terrain in the center and south makes
transportation difficult both within individual countries and between
the USSR and the Satellites. For instance, Czechoslovakia and Hungary
have only one direct rail line each to the USSR.
Numerous rivers and lakes provide adequate water supply and
cheap transportation for goods among the Satellites. The important
systems of the European Satellites, except for that of Poland, however,
do not connect directly with the USSR, being oriented either north-
south or westward. Poland has an east-west canal system which con-
nects with the USSR. Yugoslavia is astride the Danube waterway and
severs the direct connection between Rumania and Hungary.
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Although the Rumanian and Hungarian plains are subject to
periodic drought, most of the region receives sufficient precipitation
and has a growing season long enough to be generally favorable to
temperate zone crops and livestock production.
Despite historic antagonisms among various religious groups
and socioeconomic groups, the forced migrations of the war and the
postwar period have resulted in a more homogeneous population within
the different European Satellite countries than existed before the war.
The rural areas contain a surplus of unskilled labor, although there
is a shortage of skilled and managerial labor. .
Bauxite, uranium, lead, zinc, coal, and oil are of special
importance to the economies of the European Satellites. Timber
resources are sufficient for domestic needs and some export. The
region is relatively poor in ferrous metals and in some minerals basic
to the industrial economies. Furthermore, minerals and fuels are not
evenly distributed among the countries.
The European Satellites have rich soil, particularly in the
plains areas. Grains, sugar, tobacco, and some other crops are the
major products. Agriculture in the Eastern European area, however, is
at a low state of technology, despite attempts by the Communist regime
to mechanize production. Furthermore, low productivity is found in
many areas, necessitating heavy fertilization and calling for improved
methods of cultivation.
Although the European Satellites have a well developed
standard-gage rail net in some areas -- western Czechoslovakia, Hungary,
and parts of Poland -- the difference in gage between the Satellites
and the USSR involves time-consuming interchange for through shipments.
The rail systems in Rumania, Bulgaria, Albania, and eastern Czechoslo-
vakia are not fully developed.
The relationship of the European Satellites to one another and
to the USSR in terms of the production of important commodities is given in
Figure 9.* It is to be noted that the concentration of industry is in
Czechoslovakia, East Germany, and Poland, whereas agriculture pre-
dominates in Rumania, Bulgaria, and Hungary.
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C. Structure and Growth of the Economies.
The GNP of the European Satellites in 1954 was about US $50
billion in 1951 US prices. The total Satellite GNP was about two-
fifths that of the USSR in 1954. This is the same ratio as in 1948,
the first postwar year for which estimates are available. In 1938,
before World War II, Satellite GNP was almost three-fifths that of the
USSR. The decline in this ratio from 1938 to 1948 is evidence of the
extent of wartime destruction in the Satellites and of the burden of
reparations and the postwar confiscation of property by the USSR.
Nevertheless, during the postwar period, even though the USSR has
been developing very rapidly, the rapid rate of growth of the Satellite
economies has enabled them as a group to maintain the same relative
position in terms of their economic output.
In 1954, Poland generated the largest economic output of all
of the European Satellites, with East Germany running a close second.
Figure 10* shows the present position of the Satellites in terms of
GNP by country and over time. Whereas in 1938 East Germany clearly
had the edge on the other countries which now compose the European
Satellites, Poland now holds that position. The failure of East
Germany to recover its position by 1948 was the result of extensive
war damage and of reparations which included removal of whole plants.
In both 1938 and 1954, Poland, East Germany, and Czechoslovakia
accounted for about 85 percent of the GNP of the present Satellite
countries.
Each of the European Satellites except Bulgaria suffered a
diminution of output in 1948 relative to 1938. This reduction in GNP
ranged from 45 percent for East Germany to 7 percent for Czechoslovakia
and averaged 27 percent for the Satellites as a group.
The per capita GNP of the European Satellites in 1948 was lower
than in 1938. Despite a decline in population for the Satellites as
a group, Bulgaria and Poland had about the same per capita GNP in 1948
as in 1938. Czechoslovakia was able to increase its per capita GNP.
Hungary and Rumania suffered moderate drops in per capita GNP. In
East Germany a large drop in GNP and a sizable growth in population
accounted for a substantial drop in that country's ability to support
former living standards. Figure 11* shows for 1938, 1948, and
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EAST
? GERMANY
Berlin?
*--- ?,44.
Prague?
* sdv
EUROPEAN SATELLITES
Production of Selected Commodities
1954
0
4011P ?
WOOL BREAD GRAINS COAL CRUDE OIL BAUXITE
54,600 metric tons 19.4 million metric tons 376 million metric tons r2.3 million metric tons 1,360,000 metric tons
Each circle represents total Soviet
? Bloc production. The percentage
shown is that produced by the
European Satellites.
ELECTRIC POWER
66 billion kilowatts
mi Int
Ms= Cit
RAW STEEL SYNTHETIC AMMONIA GENERATORS
/2 million metric tons 5/2,000 metric tons 2.2 million kilowatts
TRUCKS
40,000 units
_-_
POLAND
oWarsaw
IN of,.
ap
CZECHOSLOVAKIA
Budapest
* kii
HUNGARY
ALBANIA
Tirane
RUMANIA
.1
Bucharest?
BULGARIA
Sofia
14728 7-55
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Figure 9.
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EUROPEAN
b!Ialleaj Figure 10
PERCENTAGE DISTRIBUTION OF GROSS NATIONAL
PRODUCT, BY COUNTRY, 1938, 1948, AND 1954
Bulgaria
Hungary
2.2%
3.2%
2.6%
5.6%
6.2%
6.1%
Rumania
7.0%
8.0%
6.1%
Czechoslovakia
16.4%
18.6%
20.9%
Poland
32.6%
34.6%
34.0%
East Germany
36.2%
32.0%
27.7%
13946 9-55
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FIGURE 11
SECRET
EUROPEAN SATELLITES
PER CAPITA GROSS NATIONAL PRODUCT
1938 AND 1948-1953
(hundreds1951 US dollars)
10
8
6
4
1938
10
8
6
4
2
Bulgaria
10
8
6
4
2
1938
10
8
6
4
2
Czechoslovakia
10
8
6
4
2
1938
10
8
6
4
2
East Germany
So//
-.Not
48 49 50 51 52 53
Hungary
48 49 50 51 52 53
Poland
48 49 50 51 52 53
Rumania
????????
1938 48 49 50 51 52 53 1938
48 49 50 51 52 53 1938 48 49 50 51 52 53
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subsequent years through 1953 the course of per capita GNP for each of
the European Satellites. Between 191.1.8 and 1953, as can be seen in
Figure 11, all the Satellites gained in their abilities to support
higher standards of living. The East Germans realized the greatest
relative increase, followed by the Hungarians, Poles, and Czechoslo-
vakians in that order. All these increases resulted in large measure
from gains registered by productive activities, but in East Germany
a population decrease was also a contributing factor. As a result
of the changes since 1948, the individual European Satellites have
resumed their prewar ranking in terms of GNP per capita, with East
Germany, Czechoslovakia, and Poland at the upper end of the scale and
Hungary, Rumania, and Bulgaria at the bottom of the scale.
The effects of World War II and postwar recovery in the
European Satellites are indicated in Figure 12.* In Czechoslovakia,
Poland, and Hungary increased shares of GNP were generated by the
industrial sector, and decreased shares were generated by agriculture.
In Rumania and Bulgaria the share of GNP originating in the industrial
sector remained relatively constant between 1938 and 1948, whereas in
East Germany, probably because of the tardy recovery of its industry,
the share coming from the industrial sector fell sharply between 1938
and 1948.
Between 1948 and 1954, however, the European Satellites dis-
played substantial progress toward industrialization until, in 1954,
all except Bulgaria had attained an economic structure in which indus-
trial activity predominates, although the agricultural labor force is
still substantial in many countries. In East Germany, Hungary, and
Czechoslovakia, industrial production represents about one-half of the
economic output. Since 1948 the Satellites have changed from economies
which, with the exception of East Germany and Czechoslovakia, could be
characterized either as predominantly agricultural in orientation or
as economies which are for the most part industrial in orientation or
industrial with sizable agricultural components.
The GNP of the European Satellites probably will increase over
the period of the next 5 years at rates slightly higher than in the US
and Western Europe but less than that which is estimated for the USSR.
Poland probably will continue to be the country with the largest GNP
and will increase the margin between its GNP and that of East Germany,
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which ranks second. Agricultural production will increase but much
more slowly than total production. Over-all agricultural production
probably will continue to be somewhat below the prewar level for several
years. The largest increases in agricultural production will be in
Hungary, Rumania, and Bulgaria. Industrial production will increase
more rapidly than total production. The largest gain probably will be
registered in Bulgaria, Rumania, and Czechoslovakia.
D. Population and Manpower.
The population of the European Satellites has been increasing
since 1948 at a rate of about 1 percent per year and now exceeds 93
million persons. During the 1948-54 period, growth was most rapid in
Albania and Poland, with increases of 11 and 12 percent, compared with
5 to 8 percent increases in other Satellites. The only exception is
East Germany, which suffered a decline in population up to 1953 because
of large-scale defections to the West. Since that time it has had an
almost stationary population. The most populous of the European
Satellites is Poland, with a population of nearly 27 million people.
East Germany has nearly 18 million people, and Rumania slightly more
than 17 million. Czechoslovakia ranks fourth, with almost 13 million
people; Hungary is next with almost 10 million; and Bulgaria has almost
7.5 million.
The total labor force of the Satellites in 1954 was 43,720,000
persons, or about 66o,000 more persons than in 1953. The labor force
was about 47 percent of the total population in 1954, /compared with
42.6 percent of the total in 1948. The labor forces of Rumania and
Poland were the largest in relation to their populations in 1954,
amounting to over 49 percent of their respective populations. In East
Germany, Hungary, and Czechoslovakia the ratios approximated 44 percent,
whereas the remaining countries fell below this figure. Figure 13*
shows the distribution of the labor force from 1948 to 1954 between
agricultural and nonagricultural employment. As the European Satellite
countries pushed toward industrialization at a rapid pace, the non-
agricultural labor force also increased rapidly, and the agricultural
labor force decreased somewhat. There has been a transfer of agri-
cultural labor to the nonagricultural labor force. The nonagricultural
labor force in all of the Satellites increased by almost 50 percent
between 1948 and 1954, whereas during the same period the agricultural
labor force decreased by about 5 percent. The emphasis on agriculture
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EUROPEAN
SATELLITES'
PERCENTAGE DISTRIBUTION OF GROSS NATIONAL PRODUCT,
BY SECTOR OF ORIGIN, 1938, 1948, AND 1954
100% -
Trpnsportation and
Communications
Trade and Services
Industry
Construction
Agriculture
0
100%
4.8%
5.7%
6.8%
28.0%
3.8%
4,8%
4.9%
7.2%
9.0%
5.7%
6.1%
6.7%
3.2%
3.0%
3.3%
4,1%
5.2%
6.5%
4.3%
5.1%
7.1%
0
25.01
30.3%
20,7%
30.6%
27.6%
23.2%
35.0%
35,8%
39.2%
31.2%
35.3%
36.5%
24.3%
31.6%
25.1%
41.4%
21.6%
27.7%
25.8%
23.4%
50.7%
19.0%
32.0%
52.8%
32.5%
45,1%
18.1%
47.0%
47.1%
35.9%
38.2%
36.3%
33.5%
21.9%
40.8%
39.9%
32.0%
22.7%
21.3%
36.6%
30.9%
26.41
-?-
1.0%
52.0%
31.7%
-
1.0%
49,5%
39.2%
2.8%
36.5%
2.7%
34.7%
4.2%
3.5%
3.0%
2.8%
26.9%
3.8%
4.4%
27.3%
26.4%
3.7%
27.8%
6.0%
23.1%
4.51
23.7%
6.2%
23.35
4,3%
4.8%
5.5%
19.3%
5.6%
19.3%
17.01
15.7%
16.0%.15.3%
13.3%
139489.55
1938 1948 1954
'38 '48 '54 '38 '48 '54 '38 '48 '54 '38 '48 '54 38 '48 '54
'38 '48 '54
ALL SATELLITES* BULGARIA CZECHOSLOVAKIA EAST GERMANY HUNGARY POLAND RUMANIA
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*Excludes Albonio
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100% -
Agricultural
Non-
Agricultural
1948 1950 1954
ALL SATELLITES
13951 9-55
CRUG:@f7-CW,Ukr
DISTRIBUTION OF LABOR FORCE, 1948, 1950, AND 1954
'48 '50 '54
ALBANIA
7x
,
15%
25%
3%
12%
28%
34
66%
70%
73%
48 '50 '54 '48 '50 '54 '48 '50 '54,
BULGARIA CZECHOSLOVAKIA EAST
GERMANY
'48 '50 '54
HUNGARY
'48 '50
POLAND
Figure 13
-100%
'48 '50 '541 0
RUMANIA
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which came as a part of the "new course" in 1953 served only to halt
the decline in the agricultural labor force in 1953. The nonagricul-
tural labor force continued to rise in 1954, although at a slower
rate. In 1954, in the Satellite area as a whole, the labor force was
divided equally between agricultural and nonagricultural employment.
This is to be contrasted with 1948, when 61 percent was engaged in
agricultural employment. The change toward a larger proportion
engaged in nonagricultural eMloloyment is evident in all the Satellite
countries.
E. Agricultural Production.
Following the example set by the USSR, the Communist regimes,
upon their ascendancy to power in the European Satellites, immediately
instituted a program of rapid development of the hitherto relatively
retarded industrial sectors of their economies. After several years
it became apparent that an imbalance had arisen -- development of the
agricultural and consumer goods sectors had not been commensurate with
the needs of the expanding Satellite econamies. In the fall of 1953
the Satellites inaugurated a program designed to redress the structural
imbalance by substantially increasing the output of the agricultural
sector and by increasing the share of agricultural production reaching
the consumer.
The governments of the European Satellites under the "new
course" have had to try to counteract the declining trend in the
agricultural labor force resulting from the adoption of forced collec-
tivization immediately following the war. They approached the problem
by trying to raise productivity of the existing agricultural labor
force, through greater use of equipment and more effective farming
methods and by attempting to halt and reverse the exodus of farm labor
into industry. The agricultural program has not had any notable effect
upon efficiency. Fertilizers have been produced in greater amounts,
and there have been increases in the number of tractors and other farm
implements, but Satellite officials consider that the progress made so
far has been unsatisfactory. Policies designed to get people back to
the land also have met with only limited success. In most Satellites
the only tangible consequence of this drive has been to stop the rate
of decline of the agricultural labor force. Only Czechoslovakia has
been able to bring about an actual increase.
For the European Satellites as a group, agricultural production
in 1954 was the same as or only slightly above that in 1953. In Czecho-
slovakia, Hungary, and Rumania, agricultural output in 1954 was less than
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in 1953. Production of grain, especially bread grains, was affected
adversely by weather conditions in 1954. Potato production in the
Satellites increased in 1954, but its quality was below that of 1953.
No significant gains were evident in animal production except in
numbers of sheep. The plan for livestock was underfulfilled in every
Satellite. Although livestock numbers were generally still above pre-
war level, there was a depletion in the inventory of swine, which, in
view of the meat consumption pattern in the Satellites, determines meat
availability. Numbers of cattle and horses, which have yet to surpass
prewar inventories in most of the Satellites, also failed to register
any significant gains.
The output of industrial crops such as wool, cotton, and flax
made a better showing than did the production of food crops in all of
the European Satellites except Poland. The explanation .appears to be
that the intensive program to raise the output of textile fibers
adopted in 1950 was beginning to have some success.
On balance, it would seem that the agricultural sector in 1954
and 1955 is still acting as a depressant to the economic growth of the
European Satellites. The quantity of foodstuffs which can be supplied
domestically has been insufficient to satisfy requirements.
F. Industrial Production.
By 1954 the annual rates of increase for the total industrial
production of the European Satellites had begun to decline. This
decline reflects mainly the fact that the period of recovery with its
characteristically high rate of increase had passed.
Compared with prewar output, the most dramatic rates of growth
in the industrial sector of the European Satellites have been in the
fields of energy, chemicals, machinery and equipment, metals, and
building materials. Figure 14* shows a comparison of output in 1938,
1950, and 1953 for the major sectors of the industrial economy. The
growth in the output of forest products, food processing, and light
and textile products has been smaller. The trends in the indexes of
the industrial subsectors show that the economies of the European
Satellites are unmistakably moving toward industrialization.
* Following p. 30.
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FIGURE 14
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EUROPEAN SATELLITES*
INDEXES OF INDUSTRY SUBSECTORS
1938 and 1953
INDUSTRY SUBSECTORS
Energy
Metals
Machinery and
Equipment
Chemicals
Building Materials
Forest Products
Food Processing
Light and Textile
EAST
Energy
Metals
Machinery and
Equipment
Chemicals
Building Materials
100
EMMRMEM 94
, 129
279
370
418
( 1950 =100 )
FM 987
EMENEMMENEMEMININNAMI
A7
MEINSEMENIEN
240
224
A 211
96
EMMEN=
r dr A 149
ENNOMME=EMS 183
161
REMINErl 104
/ 98
EXIMIERMMI 124
v A 05
ISEUV
GERMANY
100
173
152
158
34
AV
**
*
* *
AV
MONA
VA
Forest Products
v , 136
=211111
Food Processing
Light and Textile
7 125
111
99
ErnammigNIE 113
131
BULGARIA
KEY
E:Ka 1938
1953
SECRET
IMMENEVE
1,
%
AV A
=NM
ErM11M
A?
taninnIM
100
84
125
125
30
144
132
18
150
101
MWMINgal
BRENNEN=
POLAND
66
113
103
100
A r
7
4
MIT=v
A
135
159
MMU
A'
aus=m !!!.
AV
EMEMENEE
INEMENEMEN
smassai
97
95
101
HUNGARY
119
118
108
153
178
71
194
64
44
100
68
/
r/ // /
23
121
80
/
-93
99
8
85
,/ /,
99
CZECHOSLOVAKIA
100
MINENESERM
v
93
130
126
130
100
**
A'
ImmIlleran
136
172
159
111035101!!.
A A
MINENNEENNEMMENEM
181
FBEEINEINEN
PENIMMEMEN
AV A
101
98
116
119
RUMANIA
150
136
* Excluding Albania
**Zero or negligible
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The drive toward industrialization at a rapid pace is indi-
cated by expenditures in the European Satellites, which show that
annual fixed capital investment was increased in each country from
1950 to 1954, that administrative and other governmental expenditures
were held relatively constant, and that the consumption share de-
clined relatively.
The production of military end items in the European
Satellites is small compared with that of the USSR. Czechoslovakia,
Poland, and East Germany, in that order, are the chief producers of
military end items. The aircraft effort is virtually all concen-
trated in Czechoslovakia. East Germany is the only producer of naval
vessels, and the output is small. In ground ordnance the most
significant development has been the entry of Czechoslovakia and
Poland into the field of tank production. Budgeting expenditures for
defense, like those for heavy industry, were planned to increase during
the period 1950 to 1955. By 1954 the Satellites were allocating about
9 to 11 percent of GNP for defense expenditures.
G. Foreign Trade.
The two most important phases of the evolution of the postwar
international trade position of the European Satellites have been the
rapid intensification of commercial ties between the Satellites and the
USSR and the gradual alteration of the prewar commodity composition of
Satellite trade.
The value of the total trade turnover of the European Satellites
in 1953 was about US $6.5 billion, or slightly more than the value of
the foreign trade of the USSR. In current prices, Satellite foreign
trade in 1953 was 2.5 times greater than in the prewar period, but in
real terms it showed little increase. Before the war the Satellites
accounted for about 6 percent of world trade. In 1953 their share had
fallen to about 5 percent of world trade, in absolute terms, which was
substantially larger than before the war.
The trade pattern of the European Satellites in the postwar
period has exhibited a progressive increase in the concentration of
trade within the Sino-Soviet Bloc and, correspondingly, the rapid
diminution of the relative importance of trade with countries outside
the Bloc. More than 80 percent of the prewar trade of the countries
now constituting the European Satellites was with countries which do
not now form a part of the Bloc, and most of the remainder of their
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trade was with one another. At that time the USSR accounted for less
than 3 percent of their total trade, and commerce with China was
negligible. By 1953 this: prewar geographic pattern of trade had been
altered radically. Trade with the West had fallen to about 24 percent
of the total trade turnover of the European Satellites; trade among
the Satellites constituted about 32 percent; and 44 percent was with
the USSR and Communist China -- with Communist China sharing a small
but growing proportion of this amount.
Figure 15* shows the changes which have taken place since the
period 1936 to 1938 in the proportion of Satellite trade with the
rest of the world.
This redirection of European Satellite trade was already
apparent in 1948, and until recently the trend had continued along the
same lines. Since the announcements of the "new course," however,
there is evidence of a minor resurgence of trade with countries out-
side the Bloc. For example, East Germany's total trade turnover with
non-Bloc countries increased by about 50 percent in 1954 over 1953. In
1954 the value of Satellite trade with non-Bloc countries was greater
than in any year since 1951. Data for 1954 show that the value of Bloc
imports from the US was the largest since 1951, and statistics for the
first quarter of 1955 point to at least a doubling of the 1954 value.
The USSR in 1953 was by far the most important trading partner
of each of the European Satellites. The value of the trade between the
USSR and even the smallest of its Satellite trading partners, Bulgaria,
was barely exceeded by the value of trade between the two most impor-
tant intra-Satellite traders. During most of the postwar period the
Soviet share of Satellite trade has been growing steadily, though with
some fluctuation. China, whose prewar trade with the European Satel-
lites was of relatively minor importance, has been gaining an
increasing share of the total Satellite trade turnover. In 1953, Com-
munist China was a more important trading partner of Czechoslovakia,
East Germany, and Poland than was Hungary, Rumania, or Bulgaria.
As in the past, Western Europe continued to absorb the greatest
share of European Satellite trade with the non-Bloc area. In 1953,
Western European trade with the Satellites constituted about 81 percent
of their total non-Bloc trade. Western Europe's share of the imports
of the European Satellites as a whole has risen significantly since
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100%
80
60
40
20
EUROPEAN SATELLITES*
GEOGRAPHIC DISTRIBUTION OF TRADE TURNOVER
1936-38 Average and 1948-53
(In percent)
100%
80
60
40
20
100%
80
60
40
20
0 i. 0 0
1936 38 '48 '49 '50 '51 ?52 '53 1936 38 '48 '49 '50 '51 '52 '53 1936 38 '48 '49 '50 '51 '52 ?
ALL SATELLITES* BULGARIA CZECHOSLOVAKIA
100%
80
60
40
20
/
100%
80
60
40
20
0 I 0
1936-38 '48 '49 '50 '51 '52 '53 1936 38 '48 49 50 51 52 '
EAST GERMANY HUNGARY
13957 9-55
100%
80
60
40
20
100%
80
60
40
20
0 0
1936-38 '48 '49 '50 '51 52 53 1936-38 '48 '49 '50 '51 '52 '53
POLAND RUMANIA
Figure 15
USSR and China
Rest of Sino-Soviet Bloc
Non-Bloc
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1948, whereas its share of the Satellite exports has fallen moderately.
The next most important Satellite trading area was the Near East and
Africa, with which the Satellites have been able to maintain a rather
large favorable balance of trade. Seven percent of Satellite trade
was transacted with this area in 1953. For the Satellites as a whole,
the least significant non-Bloc trading area was the US and Canada.
The recent increased European Satellite activity, including
trade agreements with non-Bloc areas, is perhaps indicative of future
trends. Before 1953, most of these agreements were concluded with
Western European countries. In 1953 and 1954 the Satellites greatly
increased the number of commercial agreements with countries of the
Near East, Asia, and Latin America. It appears that the Satellites
have undertaken to increase their trade with the less developed areas
outside the Sino-Soviet Bloc.
The commodity composition of European Satellite trade has been
transformed extensively in the postwar period. This transformation has
the following characteristics: (1) the impOrtance of trade in
machinery and equipment has expanded, along with the increased develop-
ment of heavy industry and the growth of both the demand for and the
ability to supply these goods; (2) although there has been a continuing
demand for raw materials for consumer goods production, semifinished
materials and raw materials for consumer goods as well as industrial
production have been increasingly required; (3) fuel resources have
been consumed in growing quantities, leading to new international flows
of coal and petroleum;-and (4) the Satellites as a group are now net
importers of grain and perhaps of foodstuffs in general.
In the case of Czechoslovakia and East Germany, the above
changes were only extreme accentuations of the previously existing
product mix in foreign trade. Bulgaria and Rumania displayed a con-
trasting commodity configuration in the prewar period, exporting
chiefly foodstuffs and raw materials and importing mainly manufactured
items. In Bulgaria the prewar pattern has been essentially maintained,
although with two important exceptions: grain has almost disappeared
as a commodity on the export list, and the share of tobacco, fruit, and
vegetables has increased, whereas machinery and equipment have over-
whelmingly replaced consumer goods in Bulgarian imports. In Rumania,
imports of investment goods have largely superseded imports of con-
sumer goods; exports of industrial products now have assumed some
importance; and the large prewar export of grains now has became only
occasional and of little significance. Poland and Hungary have had
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the most sweeping changes in the commodity composition of their trade.
Both countries now import rather than export grain, and products of
heavy industry enter much more heavily than before the war into both
their imports and exports.
III. Communist China and the Asiatic Satellites.
A. Introduction.
The Chinese Communist economic policy is directed toward the
rapid development of industrial and military power, generally on the
Soviet model. The Communists consider that the present economic
organization of their society represents a period of transition
toward socialism, in that cooperatives and private enterprises con-
tinue-to function, under the general direction of the state, along
with state-operated and joint state-private enterprises. While
Communist China is still far behind the other countries of the Sino-
Soviet Bloc in this regard, state control over the economy has
increased rapidly in the few years since 1949, when the Communists
took over the whole of the China mainland.
The difficulties which the Chinese Communists have faced in
undertaking their program of industrialization are considerable. In
1949 they were confronted with an economy which had been strained and
disrupted, not only by 4 years of civil war but also by the earlier
Sino-Japanese War. From 1945 to 1949, for instance, production in
Manchuria was far below the level that prevailed during the period
of the Japanese occupation, as a result of the Soviet removal of key
items from industrial equipment as well as the destruction and
disorganization during the civil war. A period of hyperinflation
also had had serious effects upon the economy. By the end of 1950 the
Chinese economy was subjected to the additional strains of the Korean
War and the drastic reduction in trade with non-Communist countries.
These difficulties, however, have not proved insurmountable. After
1950, for the first time since the early 1930's, Communist China
experienced the relative political stability of a single government.
The Communists, moreover, have had the benefit of much of the large
investments in heavy industry, transportation, and electric power that
the Japanese had made in Manchuria, together with important assistance
from the USSR. By 1952 the industrial production of China had
recovered to prewar levels.
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By all economic measurements, and despite the fact that
Manchuria was industrialized by the Japanese before World War II, Com-
munist China is predominantly agricultural. Most of its income is
derived from agricultural production and from processing and trading
in agricultural products. The Communists began not only with a
relatively mall and incomplete industrial base but also with very
limited experience in technology and management. Soviet assistance,
which has been on a considerable scale, has been particularly impor-
tant in helping to make up for the latter deficiency. Without such
help, the Chinese Communists would not have achieved so rapid a
recovery in industry, the basis for their first Five Year Plan
(1953-57). Figure 16* shows the relationship between China and the
rest of the Sino-Soviet Bloc in terms of the production of selected
products.
The Asiatic Satellites, North Korea and North Vietnam, which
are at an even earlier stage and smaller scale of development, face
much the same problems and have the same general objectives as Com-
munist China.
B. Geographic and Regional Characteristics.
Successful industrialization in Communist China must confront
certain natural geographic and sociological factors of limitations.
Great distances, difficult mountain barriers, arid climatic conditions,
and unevenly distributed and frequently unsympathetic populations pose
particular difficulties for the development of the industry, agriculture,
and transportation of Communist China, particularly in the west. In
addition to these factors, rugged terrain and mountain barriers on the
western borders of China proper separate China from India. Latitudinal
barriers divide China proper into distinctive northeastern, northern,
central, and southern geographic regions. Interregional water routes
are relatively scarce, and this difficulty, in addition to the cost of
developing land transportation routes, has contributed to the historic
isolation of certain regions in China. This regionalism is a hindrance
of important magnitude to the successful integration of a national
economy in China.
The major rivers in Communist China have a general east-west
alignment. Internal land transportation routes, historically, have
been subservient to water routes, but under the Communists rail
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transport connecting China to the USSR has taken on increased impor-
tance. Relatively few coastal ports are available to serve the
economy, and those that exist are underutilized.
The great variability in rainfall in Communist China limits
the capabilities of Chinese agriculture. The high percentage of hilly
and mountainous land is a further limitation to agricultural expansion.
In western China the development of agriculture is made almost impossible
by the arid climate of the region. Although China's mineral reserves
are generally considered to be high, mineral deposits are widely
scattered and are not easily accessible. The northeast region
(Manchuria) is the most advanced industrial area in China.
North Korea, like Manchuria, has the advantage of a considerable
industrial development made by the Japanese, none of which, however, is
of vital economic importance. Both North Korea and North Vietnam have
predominantly agrarian populations.
C. Structure and Growth of the Economies.
The GNP of Communist China stands now at approximately 78 per-
cent above what it was in 1949 and 21 percent above what it was in 1952.
It is expected that the present rapid growth will continue and that by
1960 total production will stand at half again as much as what it was
in 1952.
Investment is by far the most rapidly growing end use of
Chinese GNP. By the end of the First Five Year Plan, in 1957, invest-
ment will have nearly doubled over 1952. During this same time, however,
consumption will have gone up only about 19 percent. The very clear
emphasis upon investment in the Chinese economy is evidence of the
strenuous efforts which the Chinese are making to industrialize their
economy rapidly and to build a sound industrial base.
The exact value of Chinese Communist GNP is difficult to
measure not only because of lack of data but also because of uncertainty
as to the meaning of certain aspects of the measurement. It is esti-
mated that in 1954 Chinese GNP is about US $50 billion at 1951 prices.
The composition of the GNP of Communist China is shown in Figure ,17.*
* Following p. 36.
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COMMUNIST CHINA
Production of Selected Commodities ?1954
,
ELECTRIC POWER TUNGSTEN ANTIMONY
10.9 billion /7,000 metric tons /2,000 metric tons
kilowatt boors
sis% ' t 1 ' 8 % ..iii.
w A
POTATOES HARD COAL IRON ORE
62.8 million 80 minion 8.4 million
metric tons metric tons metric tons
FISHING VESSELS
26,000 gross
register tons
Each circle represents total
Sino-Soviet Bloc production.
The percentage shown is that
produced by Communist China.
1
14730 7.55 Figure 16.
E 04E6 ICIP
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25208 12-55
COMMUNIST CHINA
GROSS NATIONAL PRODUCT
(By Sector of Origin)
1954
MISCELLANEOUS CONSUMER
GOODS AND HOUSE RENT
GOVERNMENT
Figure 17
STATE
CONSTRUCTION
TRADE AND
NATIVE
TRANSPORTATION
16%
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D. Population and Manpower.
The population of Communist China at mid-year 1953 was
582.6 million people, according to the official Chinese census. Only
summary figures have been released, so that the accuracy and reli-
ability of the data cannot be checked. The organization of the census
generally followed modern techniques, and specific reasons have not
been advanced explaining why the figures should be disbelieved. The
new figure, however, is 20 percent higher than the officially reported
figure in 1950. The sharp change cannot be attributed to natural
increase. Hence it must be explained in terms of statistical
inaccuracies either in the 1950 or 1953 figure.
The predominantly rural character of the population of Com-
munist China is indicated by the classification of 505.3 million people
as rural inhabitants. Urban population included 77.3 million people,
or 13.3 percent of the total.
The Five Year Plan and accompanying official statements pro-
vided the first labor force data available for Communist China. It is
estimated that the labor force participation rate is about 50 percent
of the population, or about 291 million persons as of mid-1953. The
high rate of participation is a result largely of low incomes,
requiring family members to enter into the labor force.
In addition to the urban labor force, estimated at 40 million
persons, it is believed that 17 million persons in the rural areas are
principally engaged in nonfarm occupations. Thus 57 million people
are engaged in nonfarm occupations, representing 20 percent of the
total labor force and leaving 80 percent of the labor force in agri-
cultural and farm handicraft employment.
One of the principal manpower problems in Communist China has
been the tendency for the cities to become overcrowded with peasants.
The persistent recurrence of this influx reflects the rural-urban
income differential and persistent chronic underemployment in the
rural areas. The normal flow of labor from farm to city has been
speeded up by the pricing policies of the Communist government. Farm
purchase prices are kept relatively low compared with those of manu-
factured goods, and thus farm purchasing power is relatively depressed.
The present migration constitutes a serious problem if agricultural
production fails. to keep pace with population increases. The magni-
tude of the influx is such that urban employment opportunities are not
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adequate to keep new arrivals at work in the city, and the government
has taken some measures to prevent further additions to the city
population.
One of the problems of the regime is to create employment
opportunities not only for the surplus rural labor force that is now
migrating to the city but also for the underemployed nonagricultural
labor, whose natural rate of increase is more than adequate for the
present requirements of unskilled labor for the state's industriali-
zation program.
North Korea and North Vietnam both have predominantly rural
populations and are faced with a considerable shortage of technical
and managerial as well as of skilled and semiskilled labor. In both
cases, population presses against the food resources of the country.
E. Agricultural Production.
The confiscation and redistribution of land by the Communist
regime in China ended in 1953. Simultaneously, the government began
to organize agricultural mutual aid teams and producer cooperatives --
Chinese counterparts and milder adaptations of the Soviet collective
farm. Land reform has had several deleterious effects: it has
fragmented land holdings, destroyed the rural credit system, and
caused some loss of draft animals, orchards, and other agricultural
supplies. On the other hand, the government has attempted to preserve
various production incentives for agriculture.
Production of agricultural commodities has not increased
notably under the Chinese Communist regime, and there are indications
of a serious food shortage in 1955. (See Figure 18.*) Grain rationing
has been instituted in urban areas, and a generally tense situation
in Chinese agriculture prevails. On the basis of estimates of grain
production in 1954-55, the daily caloric intake per capita is esti-
mated at about 1,800 calories. This is about 10 percent below the
1931-37 average and is lower than in all other countries in Asia
except India and North Vietnam.
Under the land utilization pattern in Communist China, the
largest proportion of cultivated land is devoted to the principal food
crops, with relatively small shares divided among the commercial crops.
* Following p. 38.
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Millions of Metric Tons
200
175
150
125
100
75
50
25
0
Prewar
Figure 18
COMMUNIST CHINA
FOOD PRODUCTION, 1951-56
TOTAL ............
FOOD
RICE
WHEAT
me.m? Emm,
????? ???Il
?????
?????
MI=
POTATOES*
????=1?=
.101?IM
?MI
25210 12-55
1951
1952
1953
1954
1955
1956
*Potatoes are converted into groin equivolent by multiplying by .25
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Given the present limits of the total cultivated acreage -- about 134
million hectares (including double-cropped areas) -- and the possi-
bility of expanding cultivated acreage at about 1.5 percent per year,
it is believed that moderate investments can bring forth substantial
increases both in cultivated acreage and in yields of commercial crops
without compromising the required minimum increase in food crops. It
is believed that the Five Year Plan goal for 1957 may be reached for
cotton, but not for all the commercial crops. It is estimated that
food production will not increase more than about 2 percent on the
average per year* in the next few years -- in other words, that it
will fall about 12 percent short of the Five Year Plan goal for 1957.
These shortfalls in agricultural production, it is believed, will not
necessarily compromise the realization of industrial goals.
The intense efforts of the Chinese Communists to industrialize
rapidly lead inevitably to the relative decline in the importance of
agriculture. Policy measures such as the land reform are expected to
have some impact upon food production, but at best China can look
forward to a continuation of an acute food problem for many years to
come.
F. Industrial Production.
Starting from an unusually small industrial base, the average
annual rate of growth of Chinese Communist industrial output, excluding
farm handicraft, increased from 1949 to 1952 by more than 30 percent
per year. In the period 1952 to 1954 this rate fell to about 20 per-
cent per year. The rate from 1955 to 1957 is expected to average about
10 percent per year. The rate of development of Chinese industry has been
phenomenally high and is a reflection of the effort and determination
of the Chinese Communists to build up their industrial base. Figure 19**
shows the ?steep curve of industrial production, projected through 1957.
The rate of development of Chinese industry under the Communists
is shown in Figures 20 and 21.** Indexes of production of commodities
and services are impressive in their rates of growth. There is every
indication that these high rates of growth will continue. As in the
* The Chinese Communists claim that the population of China is
increasing at a rate of 2 percent per year.
** Following p. 40.
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other countries of the Sino-Soviet Bloc, heavy industry is receiving
the highest priority in investment; a 125-percent increase over the
1952 totals for the production of producer goods is anticipated by
1957.
The armaments industry of Communist China is not yet capable
of meeting all the requirements of the Chinese forces but nevertheless
is growing rapidly. The Communist regime is still concentrating on
the production of relatively small equipment such as small arms,
machine guns, and mortars, as well as some light artillery. Heavier
weapons and aircraft are not yet generally within the industrial
capabilities of the Chinese Communists, and many are imported from
the USSR.
G. Foreign Trade.
The reorientation of trade between Communist China and the
USSR after 1949 represents an almost total reversal of the pre-World
War II trade pattern. Since 1950, trade with the rest of the Sino-
Soviet Bloc has increased by more than 800 percent, whereas that with
the Free World has decreased annually, except in 1953, when it
represented 25 percent of total Chinese trade. Communist China's
foreign trade continues to be shaped by its military requirements and
by its industrialization program, with producer goods constituting 89
percent of 1954 imports and with food exports being maintained despite
severe domestic shortages of food products. Although trade with the
West may increase in volume and in value, the basic reliance of China
upon the USSR and other nations of the Bloc will continue into the
foreseeable future.
In addition to trade, the USSR has assisted Communist China
substantially in its industrialization program. This assistance has
taken the form of providing not only capital equipment and facilities
but also technical knowledge and supervision by Soviet engineers and
Soviet planners located in China.
IV. East-West Comparison.
The GNP of the USSR in 1954 was equal to slightly more than one-
third that of the US in terms of 1951 US dollars (see Figure 22*).
In 1948, however, the ratio of Soviet to US GNP was about 1 to 4. In
* Following p. 42.
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FIGURE 19 COMMUNIST CHINA
INDEX OF INDUSTRIAL DEVELOPMENT:1949-57
200
150
100
50
?
* Includes military end items and hand craft
production except farm handicrafts.
I I -1
1949
50
51
52
53
54
55
56
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FIGURE 20
12
10
8
26
42
g ? 4
00
2
0
1949 1950 1951 1952 1953 1954
ELECTRIC POWER
COMMUNIST CHINA
PRODUCTION OF SELECTED COMMODITIES AND SERVICES
1949-54
15
? 12
42
? 9
1? 6
3
0
1949 1950 1951 1952 1953 . 1954
Millions of Metric Tons
COAL
100
80
42
60
40
?
42
20
?949
1950 1951 1952 1953 1954
PIG IRON AND STEEL INGOTS
3600
3000
2400
1800
1200
600
e
s,00
..0"
..".
Nek
e
A0.0"
oo e
.0
...
b e
e
0,.
1949 1950 1951
1952 1953 1954
FINISHED STEEL PRODUCTS
2000
.,1600
42
i1200
1 800
400
0
1949 1950 1951
1952 1953 1954
TIN
18
15
MACHINE TOOLS
SPINDLES SULFURIC ACID
360
300
240
200
42
12
12
11
240
160
9
180
st, 120
-G
6
o
120
g 8?
3
60
40
5
4
42
3
? 2
? 1
0
1949 1950 1951 1952 1953 1954
7949 1950 1951
1952 1953 1954
0
1949 1950 1951
CEMENT
42
1
42
COTTON YARN
'en
I300
1
1000
500
800
400
600
400
200
200
,00
0
1949 1950 1951
1952 1959 1954
0
1949 1950 1951 1952
1952 1953 1954
7
1953 1954
Billions of Metric Ton Kilometers
0
1949 1950 1951 1952 1953 1954
RAIL TRANSPORTATION
100
oo
60
40
20
0
1949 1950 1951 1952
SECDFT
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FIGURE 21
150
100
50
0
1949
SECRET
COMMUNIST CHINA
INDEX OF PRODUCTION OF AGRICULTURE,
FORESTRY, AND FISHING, /949-57
50
51
52
53
54
55
56
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the future, Soviet GNP will increase as a proportion of that of the US,
but the disparity in absolute terms will continue to increase as the US
also continues to increase its total production.
The economic disparity between the two major groups of powers
aligned with the US and the USSR -- the NATO powers and the Sino-
Soviet Bloc -- is practically the same as that between the USSR and the
US. The GNP of the Sino-Soviet Bloc is about 35 percent that of the
NATO countries, which include the US. From another point of view the
European Satellites, Communist China, and the Far Eastern Satellites
bear approximately the same relationship to the USSR as do the other
NATO countries to the US in terms of total production. The Western
economies are maintaining a clear lead over the economies of the Sino-
Soviet Bloc in terms of over-all economic strength. It is estimated
that the European NATO countries will continue to surpass the GNP
generated in the entire Sino-Soviet Bloc, in terms of value of pro-
duction, until sometime in the late 1960's. At the same time, it
should be emphasized that the relationship is different if only that
part of GNP which is devoted to national security is considered. Much
of the wealth generated in the West is devoted to maintaining and
increasing living standards, whereas low subsistence levels in the Sino-
Soviet Bloc permit relatively larger expenditures for national security
and a higher degree of military readiness than in the West. Figure 23*
shows the relative expenditures for armaments in the US and in the
USSR.
The comparison of GNP for the Sino-Soviet Bloc and the Western
alliance also suffers by virtue of the aggregative nature of GNP and
may be somewhat misleading if only war-supporting capabilities are
considered. The Soviet machine tool industry is comparable in size,
although not always in quality of output, to the US machine tool
industry. The additions to steel capacity in the USSR exceed US
additions even though Soviet steel output still remains about one-third
that of the US. The relatively small quantities of petroleum products
used by civilian transport in the USSR compared with the US makes it
possible for the USSR to allocate more petroleum products to the mili-
tary and to industry.
When NATO production of various specific commodities is com-
pared with Sino-Soviet Bloc production, the advantage falls to the West
by varying margins. Energy consumption in the NATO countries is nearly
* Following p. 42.
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4 times that in the Sino-Soviet Bloc, and steel production in NATO
is about 3 times that in the Bloc. NATO wheat production is, on
the other hand, 7 percent smaller than that of the Bloc countries.
The per capita availability of wheat, however, is much greater in the
NATO countries than in the Sino-Soviet Bloc. In addition, the
European NATO countries alone have a combined GNP of more than 80
percent of that of the Sino-Soviet Bloc in 1954.
The rates of economic growth achieved in the Soviet Bloc from
1946 to 1949 and in the Sino-Soviet Bloc from 1949 to 1954 have been
higher than those in Western Europe and in the US. From 1946 to 1949,
before the addition of China to the Bloc, the average annual increase
of the Soviet GNP was approximately 10 percent per year. This may be
compared with a rate of increase 3 to 4 percent per year in the West.
In 1949 the GNP of the USSR showed an increase of approxi-
mately 12 percent over 1948. In 1951 and 1952, growth declined but
the annual average increase was 7.6 percent per year. In the European
Satellites the annual rate of growth of GNP in the 1950-51 period
ranged from 4 percent in Czechoslovakia to 13 percent in East Germany.
In 1953 these extremes had fallen to 1 percent and 6.4 percent,
respectively. Only in Poland, Rumania, and Hungary were high growth
rates maintained, although, in each case, they were below the rates of
growth recorded in 1950. In Communist China, likewise, the rate of
increase dropped in 1953 and in 1954 but was nevertheless very high,
about 10 percent per year. By way of comparison, the rate of growth
in GNP of the Organization for European Economic Cooperation (OEEC)
countries of Western Europe declined from an annual 9-percent growth
rate in 1948 to. a rate of 2 percent in 1952. Rates of growth for
these countries increased to 6 percent in 1954. The average rate over
the entire period has been about 3 percent per year.
It is probable that the Sino-Soviet Bloc countries will con-
tinue to achieve rapid rates of economic growth in the foreseeable
future. In the next 10 to 15 years the GNP of the USSR probably will
double; in the next 20 years it may nearly triple. Industrial pro-
duction is expected to grow faster than GNP, probably more than
doubling between 1955 and 1965. The economic growth of the European
Satellites probably will be rapid but significantly less than the
economic growth of the USSR.
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US AND USSR
COMPARISON OF GROSS NATIONAL PRODUCTS
Figure 22
TRADE
77 6.3%
COMMUNICATIONS
11 0.9% ?
TRANSPORTATION
87 7.1%
CONSTRUCTION
85 6.9%
(By Sector of Origin)
1954
U.S.S.R.
1,230 Billion /95/ Rubles
INDUSTRY
395 32.1%
AGRICULTURE
347 28.2%
U.S.
360 Billion /95/ Dollars
AGRICULTURE
22 6.2%
COMMUNICATIONS')
5 1.4%
CONSTRUCTION
15 4.2%
TRANSPORTATION
20 5.6%
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SOVIET ARMAMENT PRODUCTION 1950-1954
US ARMAMENT DELIVERIES, FISCAL YEARS 1951-1954
FIGURE 23
(in billions of 1951 US dollars)
1950 1951 1952 1953
(Calendar or Fiscal year)
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On the other hand, even if there are no severe business
recessions, the NATO countries are not expected to develop their
economies so rapidly as the Sino-Soviet Bloc countries. The lag will
be greatest with respect to industrial production. By 1975 the com-
bined Bloc GNP may be over 45 percent of the GNP of the NATO countries
compared with 35 percent in 1954. The GNP of the USSR alone may rise
to over one-half that of the US. On the other hand, the absolute
disparity between the GNP of the NATO countries and that of the GNP
of the Bloc is expected to increase.
Heavy industry is the most immediate source of Sino-Soviet
Bloc economic power, since it can serve as a base for the expansion
of the economy or alternatively for the production of military end
items. It is in this area that Bloc production will grow most rapidly
in the future, in absolute terms and in relation to production in the
West.
The economic strength of the USSR versus the US, or the Sino-
Soviet Bloc versus the NATO countries, represents the greatest array
of over-all economic power -- approximately 90 percent of total world
production -- ever in conflict in the world, as well as the most
formidable industrial and economic threat faced by this nation since
the early nineteenth centruy.
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APPENDIX A
GROSS NATIONAL PRODUCT, POPULATION, AND PRODUCTION OF SELECTED ITEMS
IN THE SINO-SOVIET BLOC AND NATO COUNTRIES a/*
Gross national product
Population
Total labor force
Agriculture labor force
Nonagriculture labor force
Agricultural products
Cotton fiber (ginned)
Wool, grease basis
Breadgrains
Coarse and other grains
Rice, paddy
Potatoes
Coal products
Brown and lignite
Hard
Metallurgical coke
Electric power
Natural gas
Petroleum
Crude petroleum
Petroleum products
Nonferrous minerals
and metals
Bauxite
Aluminum (primary
and secondary)
Antimony
Cobalt
Copper (primary
and secondary)
Mercury
Unit
USSR
Communist
China
1954
East
Germany
1954
Poland
1954
Czecho-
slovakia
1954
Total
European
Satellites
1954
Soviet Bloc
1954
Sino-Soviet
Bloc
1954
NATO
(excluding
us)
1954
us
1954
1940
1950
1953
1954
Billion 1951 US $
Million
Million
Million
Million
Thousand MT
Thousand MI
Million MT
Million Mr
Million MT
Million MT
Million MT
Million MT
Million MT
Billion kwh
Million Mr
Million MT
Million MT
Thousand MT
Thousand MT
Thousand MT
Thousand MT '
Thousand MT
Thousand
34.5 kg
727.7
143.2
56.5
0.26
69.4
26.8
139.2
19.5
48.3
2.1
30.7
300.0
81.0
161.0
96.0
202
1,140.0
190.0
57.2
0.40
72.2
71.2
190.8
27.5
90.0
4.7
37.6
33.0
605,.0
235.0
2.5
1.4
275.0
17.5
116.0
212
1,300.0
230.0
54.9
0.40
66.4
95.5
224.0
38.9
133.0
5.5
49.6
45.3
800.0
388.0
5.0
1.8
350.0
32.0
123.0
216
94.5
53.6 g/
40.9
1,410.0
235.0
56.6
30.0
0.40
67.2
105.0
243.0
42.0
147.0
5.8
53.6
49.2
880.0
510.0
6.0
1.9
405.0
32.0
50.6
583
310
245.0
65.0
970.0
35.4
23.5 12/
61.0
62.8
Negligible
80.0
4.5
10.9
0.8
0.4
25.0
1.5
12.0
12.6
7.0
15.8
18
7.85
2.1
5.75
o
4.5
2.7
2.42/
o
11.7
180.7
2.6
0.27
26.0
0
2.2
37.0
0.2
42.3
17.1
27
13.2
7.2
6.0
o
4.6
7.9
o
30.4
5.9
91,..6
3.4
15.4.
0.3
0.2
0.47
3.0
20.0
9.2
13
5.8
2.0
3.8
o
2.0
2.4
2.42/
o
5.1
37.7
21.6
5.9
13.8
Negligible
0.14
0.8
21.5
3.0
0.6
1.0
49.4
93
44
22
22
32.3
54.9
19.4
0.1
49.6
257.0
119.2
9.8
66.0
0.5
12.3
13.9
1,360.0
97.4
3.2
o
67.9
1.2
172.4
309
138.5
75.6
62.9
1,442.3
289.9
76.0
0.5
116.8
362
362.2
51.8
213.0
6.3
65.9
63.1
2,240.0
607.4
9.2
1.9
472.9
33.2
223.0
892 2/
448.5
320.6
127.9
2,412.3
325.3
99.5
61.5
179.6
362
442.2
56.3
223.9
6.3
66.7
63.5
2,265.0
608.9
21.2
1.9
485.5
40.2
188.5 12/
275 (1/
123.3 2/
180.0
158.0
47.2 1/
38.2
1.37
66.7 11/
95.7 1/
487.4
78.6 T/
341.3 2/
17.3 2/
85.9 2/
1,828.0
1,023.0
4.4
1.0
884.9 2/
360.4
165
63.8 f/
5.9
54.2
2,978.3
123.4
27.0
105.2
2.67
9.4
2.0
378.0
53.5
544.6
329.0
312.9
1,937.0
1,596.0
0.7
0.9
877.0
89.7
* Footnotes for Appendix A follow on p. 49.
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Unit
Total NATO
USSR Communist East Czecho- European Sino-Soviet (excluding
China Germany Poland slovakia Satellites Soviet Bloc Bloc us) us
1940 1950 1953 1954 1954 1954 1954 1954 1954 1954 1954 1954 1954
Nonferrous minerals
and metals (continued)
Tin metal (primary) Thousand MT 1.7 8.3 11.5 13.0 12.0 I/ 0.6 y/ o o 0.6 13.6 25.6 70.0 2/ 27.5
Zinc, refined Thousand MT 86.o 123.0 199.0 213.0 8.5 3.8 y 157.0 o 190.8 403.8 412.3 946.3 805.0
Lead, refined Thousand MT 75.0 96.0 171.0 193.0 22.2 19.6 40.0 10.0 126.0 319.0 341.2 530.2 500.4
Ferrous minerals and metals
Iron ore Million MT 40.0 58.0 64.0 8.4 1.5 1.6 2.0 6.2 70.2 78.6 84.0 79.2
Raw steel ingots and steel
for castings Million MT 18.3 27.3 38.0 41.0 2.2 2.6 3.3 4.3 12.0 53.0 55.2 66.o 11/ 80.1
Rolled steel (finished) Million MT 13.1 20.7 29.0 32.0 1.7 1.8 2.3 3.0 8.1 40.1 41.8 46.6 y/ 57.3
Ferroalloy minerals and metals
Chromite (45 percent Cr203) Thousand MT 500.0 670.0 700.0 o o o 118.0 818.0 818.0 105.2
Manganese ore (35 percent) Thousand MT 3,500.0 4,700.0 5,000.0 130.0 o o 250.0 250.0 5,250.0 5,635.0 192.0
Molybdenum (65 percent MoS2) Thousand MT 0.4 3.2 4.2 4.6 0.7 1.4/ o o Negligible 4.6 5.3 26.5
Nickel Thousand MT 8.5 32.0 42.0 45.0 0.1 0.5 0.6 45.6 45.6 2.4
Tungsten (65 percent.WO3) Thousand MT 7.6 8.0 8.2 17.0 25.2 12.5
Vanadium (40 percent) Metric tons 495 795 900 50.0 xJ Negligible o 900 950
Consumer nondurable goods
Boots and shoes Million pairs 280.0 304.0 362.0 385.0
Rayon (synthetic yarn) Million meters 10.6 34.0 44.8
Linen cloth Million meters 270.0 232.0 288.0 295.0
Woolen cloth Million meters 110.0 158.0 210.0 242.0 3.5 y/
Cotton cloth Million meters 3,900.0 3,900.0 5,289.0 5,549.0 4,932.0
Hosiery Million pairs 469.0 610.0 673.0
Consumer durables
45.0
269.5
17.9
120.2
39.6
74.8
74.8
71.2
523.0
73.5
47.0
51.0
147.0
355.0
187.2 572.2
391.3
125.8 442.5
199.2 441.2
1,603.0 7,152.0
572.2 524.0
688.9 2,445.0
441.2 198.1 ./ 306.2
12,084.0 2,032.9812./ 5,586.8
1,882.8
Bicycles Thousand units 271.0 655.0 1,900.0 2,400.0 326.0
Sewing machines Thousand units 176.0 508.0 1,000.0 1,290.0
Radio receivers Thousand units 900.0 1,600.0 2,310.0 44.0 810.0 It/ 280.0 340.0 1,69700 4,007.0 4,051.0
Television receivers Thousand units 9.0 34.0 225.0 79.5 5.0 86.5 311.5
Food products
Fish catch Thousand MT 1,400.0 1,740.0 2,450.0 2,800.0 4,000.0 2,623.0
Meat Thousand MT 3,075.0 3,890.0 3,950.0 6,625.0 R2/ 534.0 766.0 348.0 2,238.0 6,188.o 12,813.0 10,165.0 11,491.0 mi
Sugar, raw Million MT 2.4 2.5 3.3 2.6 0.6 0.7 1.0 0.6 2.7 5.3 5.9 5.8 2.4
Animal fats Thousand MT 562.0 338.0 475.0 475.0 187.O& 319.0 114.0 766.0 1,241.0 1,241.0 1,826.0
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0-z-u
'ood products (continued)
Vegetable oils
Flour
Milk
:armed goods
Milk
Fruits and vegetables
Fish
Cheese
Butter
3hemicals
Alcohol, ethyl
Ammonia, synthetic
Benzol, refined
Caustic soda (100 percent)
Chlorine
Nitric acid (100 percent)
Phenol, refined
Sulfuric acid (100 percent)
Toluol
Chemical fertilizers
3onstruction materials
Asbestos
Gypsum
Cement
Wood, industrial
Aachinery and equipment
Tractors
Antifriction bearings
Machine tools
Unit
Thousand MT
Million MT
Million MT
Million cans,
400 grams
Million cans,
400 grams
Million cans,
400 grams
Thousand MT
Thousand MT
Million gal
Thousand MX
Thousand MX
Thousand MT
Thousand MT
Thousand MX
Thousand MT
Million MT
Thousand MX
Thousand MX
Thousand MT
Thousand MT
Million ME'
Million cu
meters solid
ThouSand units
Million units
Thousand units
USSR Communist
China
1940 1950 1953 1954 1954
235.1
335.0
160;0
200.0
89.0
400.0
18.6
1.52
61.0
775.0 1,246.0 1,380.0 1,941.0 fy
37.2 41.9 42.5 17.3
22.9 26.0 27.0
81.0 180.0 220.0
922.0 1,363.0 1,780.0
200.0
48.0
325.0
330.0
78.0
400.0
410.0
87.0
408.0
258.0 373.0 403.0
520.0 677.0 714.0
222.0 310.0 335.0
348.0 480.0 533.0
208.0 266.0 296.0
1,035.0 1,350.0 1,420.0
21.1 24.6 34.0
2.04 2.75 3.2
76.0 98.0 104.0
84.0 100.0 130.0 140.0
725.0 1,470.0 2,060.0 2,220.0
5.8 10.0 16.0 19.0
East
Germany
1954
38.2
1.9
4.6
Total
Czecho- European
Poland slovakia Satellites
1954 1954 1954
50.1
4.2
9.0
16.1
1.6
3.6
242.4
11.7
20.6
NATO
Sino-Soviet (excluding
Soviet Bloc Bloc us)
1954 1954 1954
1,622.4
54.2
47.6
2,563.4
US
1954
2,669.0
71.5 7.0 BE/ 10.1 hh/
77.8 II/ 56.1
51.9 314.0 110.0 43.5 512.0 1,226.0 1,277.9
29.8 11.3 95.0 63.7 172.0 507.0 536.8
116.1 228.0 85.5 48.9 403.0 936.0 1,053.1
203.0 6.0 36.5 276.3 572.3
22.0 268.0 96.1 90.3 563.1 1,983.1 2,005.1
0.3 11.4 3.1 4.4 19.1 53.1 53.1
0.2 0.5 0.5 0.4 1.5 4.7 4.9
6.5 3.7 13.6 9.3 26.7 130.7 137.2
4.6 2.6 3.6 2.4 12.7
162.0 215.0 245.0 21.1 9.4 10.6 8.0 43.0
31.0 22/ 104.0
36.0 83.0
49.o 79.0
120.3 146.5 7.5 7.7 14.0 38.2
139.0 160.0 1.0 12.5 2.1 11.8 28.6
88.0 92.0 15.9 sa/ 28.0 9.0 18.5 60.2
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31.7 36.3
288.0 309.1
184.7
188.6 189.6
152.2 168.1
1,030.0 11/
1,081.0 hh/
614.0
657.3
393.0
2,467.0
3,394.0
2,626.0
1,811.0
7;9 il/ 12.7
2,017.0 22/
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61.4/
226.0
226.o 22/
52.6
786.0
45.6
46.2
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Electrical equipment
Power and distribution
transformers
Generators
Motors
Wire and cable
Turbines
Transportation equipment
Automobiles
Trucks
Cars, freight
Cars, rail passenger
Locomotives, diesel
Locomotives, electric
Locomotives, steam
Fishing vessels
Naval vessels
Maritime (harbor and ocean)
Inland fleet
Self-propelled
Non-self-propelled
Rubber and rubber products
Natural rubber
Reclaimed rubber
Synthetic rubber
Rubber tires
Transportation
Rail transport
Road transport
Water transport
Inland
Ocean
Unit
Million kva
Million kw
Million kw
Thousand MT of
copper content
Million kw
Thousand units
Thousand units
2-axle-equivalent
thousand units
.Thousand units
Units
Units
Thousand units
Thousand GRT
Thousand GDT
Thousand GRT
Thousand hp
Thousand GRT
Thousand IC
Thousand MT
Thousand MI
Million units
Billion metric TKM
Billion metric TKM
Billion metric TKM
USSR Communist East
China Germany Poland
1940 1950 1953 1954 1954 1954 1954
8.1 14.0 16.0 2.1 3.0 2.4
1.3 5.1 5.6 0.1 0.9 0.2
5.8 9.9 11.0 1.0 1.8 1.0
6o.o 80.o 90.0 13.0 29.0 18.5
2.6 4.0 4.6 0.02 0.6 0.1
21.0 22/ 50.0 72.0 75.0 16.0 2.4
126.020/ 293.0 288.0 313.0 11.0 11.5
132.0 131.0 131.0 6.0 12.3 16.5
2.5 2.8 2.9 0.09 1.0 0.7
140 250 320 o o o
135 200 225 0 o 15
1.3 1.3 1.5 0.05 Negligible 0.3
14.8 39.7 48.o 26.0 37.2 9.8
101.6 112.5 158.0 1.0 5.3 o
77.1 133.0 137.0 175.3 33.5 71.0
50.0 61.7 66.3 8.6 214/ 9.0
613.0 658.0 748.0 26.0
1.0
24.5 45.0 61.0 66.5 6.0 5.5 6.0
82.0 143.0 211.0 213.0 66.3 5.5
4.2 8.2 10.9 11.4 o.6 1.1 0.4
612.0 84o.o 869.0 91.5 23.0 48.0
20.1 32.0 34.0 1.5 3.0 0.6
49.3 61.8 65.5 7.4 1.8 2.3
38.1 48.9 57.7 4.4 0.2 9.2
Czecho-
slovakia
1954
Total NATO
European Sino-Soviet (excluding
Satellites Soviet Bloc Bloc us) us
1954 1954 1954 1954 1954
1.5 9.1 25.1 27.2
0.9 2.2 7.8 7.9
2.3 6.6 17.6 18.6
16.0 75.8 165.8 178.8
1.1 1.9 6.5 6.52
20.0 38.4 113.4
12.0 40.0 353.0
15.5 60.1 191.1 197.1
0.5 2.9 5.8 5.9
Negligible Negligible 320 320
Negligible 30 255 255
0.3 0.9 2.4 2.45
o 47.2 95.2 129.5
o 5.3 163.3 164.3
O 120.8 257.8 433.1
19.2 40.2 106.5
2.4 35.8 783.8 809.8
9.5 21.2 87.7 93.7
2.0 73.8 286.8
1.8 3.8 15.2 15.8
24.4 117.7 986.7 1,078.2
0.5 4.8 38.8 40.3
1.5 8.8 74.3 81.7
1.0 13.9 71.6 76.o
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2,187.2 ELI 5,558.9
698.3 22/ 1,042.1
261.1
632.4
89.1
241.8 yyj 801.9
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a. Blank spaces indicate data are not available. Statistics for the countries of the Sino-Soviet Bloc were derived from CIA files. Data for the NATO countries were obtained from Monthly
Bulletin of Statistics, New York, the United Nations, Vol. IX, No. 1, January 1955, and General Statistics, Paris, Organization for European Cooperation, No. 1, January 1955. Statistics for
the US were computed from data appearing in the Survey of Current Business, Department of Commerce, Washington, March 1955; United Nations, Monthly Bulletin of Statistics, New York, March 1955;
Department of Agriculture, Foreign Agricultural Circular FW-5-54, GPO, -Washington, 26 November 1954; Department of Agriculture, Foreign Crops and Market, Vol. 70, No. 11, GPO, Washington,
31 January, 7 February, 14 March, 28 March 1955.
D. The 14 countries included are Belgium, Denmark, France, West Germany, Greece, Iceland, Luxembourg, Italy, Netherlands, Norway, Portugal, Turkey, UK, and Canada at current US prices.
a. Total includes Communist China figure, which is for 1953.
1. All NATO countries excluding US.
a. All countries included, but statistics for Belgium, Luxembourg, West Germany, Greece, Netherlands, and UK are for 1953; Italy and Canada for 1951; Iceland and Turkey for 1950.
f. Includes unemployed.
g. Does not include members of the armed services, workers in forced labor camps, or independent artisans.
h. Wheat only.
i. Countries included are Belgium, Denmark, France, West Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Turkey, UK, and Canada.
j. Includes barley, oats, corn, and miscellaneous grains. Rice not included for the USSR and the European Satellites.
kt. Eleven NATO countries: Canada, UK, France, Belgium, Netherlands, Italy, Norway, Denmark, Portugal, West Germany, and Greece.
1. The nine reporting countries were Canada, Denmark, France, West Germany, Greece, Italy, Netherlands, Portugal, and Turkey.
al. Seven countries reported coke-oven production. They were Belgium, France, Saar, West Germany, Italy, Netherlands, and the UK.
a. Fifteen countries reported on electric power production'. They were Belgium, Luxembourg, Denmark, France, Saar, West Germany, Italy, Netherlands, Norway, Portugal, Turkey, UK, Canada, Iceland,
and Greece.
o. The seven countries reported included France, West Germany, Italy, Norway, UK, Canada, and Belgium.
p. The nine reporting countries were Belgium, Italy, France, West Germany, Norway, Turkey, UK, Netherlands, and Portugal.
1. The seven reporting countries were Belgium, Canada, France, West Germany, Norway, Turkey, and UK.
r. Crude tin averaging about 99 percent tin.
s. The three countries reporting were Belgium, Netherlands, and UK.
t. Includes alloys.
u. The 11 countries were Belgium, Canada, Denmark, France, West Germany, Italy, Luxembourg, Netherlands, Norway, Turkey, and UK. Reported as "crude steel."
v. The eight reporting countries were Belgium, Luxembourg, France, Saar, West Germany, Italy, Netherlands, and UK.
w. Ore has a 75-percent content of MoS2
x. Ore has a content of 35 percent.
y. A range of 3.4 to 3.6.
z. The eight countries were Belgium, Canada, France, West Germany, Italy, Netherlands, Norway, and UK.
a. The seven countries were Belgium, Canada, France, West Germany, Italy, Norway, and UK.
b. Civilian radio and TV receivers.
c. Includes beef, veal, buffalo, pork, mutton, lamb and goat meat, and slaughter fats, fat cuts, lard and bacon and estimated carcass weight of live animals exported. Does not include Tibet or
Sinkiang.
d. Slaughter meat.
e. Includes creamery butter, beef, lamb, mutton, goat, and pork fats.
f. Includes sesame oil, peanut oil, soybean oil, rapeseed oil, tung oil, and all other vegetable oils.
g. Wheat flour only. Bloc figures include rye flour.
h. Wheat flour only. Bloc figures include rye flour.
I. The nine countries reported were France, West Germany, Italy, Netherlands, UK, Canada, Denmark, Greece, and Norway.
j. The seven countries reported were Canada, Denmark, France, Italy, Netherlands, Norway, and UK. Factory production only.
k. The eight countries reported were Belgium, Canada, Denmark, France, West Germany, Netherlands, Norway, and UK. Factory production only.
1. The five countries were France, West Germany, Italy, Netherlands, and UK.
m. The six countries reported were Belgium, France, West Germany, Italy, Norway, and UK.
n. The 12 countries reported were Belgium, Canada, Denmark, France, West Germany, Italy, Netherlands, Norway, Portugal, Saar, Turkey, and UK.
o. Soviet official figures for passenger cars and truck production.
p. The four countries reported were France, West Germany, Italy, and UK.
q. Chinese official figure based on speech by Kao Kang in 1950.
r. The five countries reported were France, West Germany, Italy, Canada, and UK.
s. The five countries reported were Canada, France, West Germany, Italy, and UK.
t. Excludes naval vessels.
u. Reported as 1,000 GRT.
v. The 13 countries reporting were Belgium, Canada, Denmark, France, West Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Turkey, and UK. Freight net ton-kilometers.
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