SHARP DECLINE IN CAPITAL INVESTMENT IN SOVIET CONSUMER INDUSTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001400050001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: November 16, 2016
• Document Release Date: May 18, 2000
• Sequence Number: 1
• Publication Date: November 19, 1962
• Content Type: BRIEF

Approved For Release 200QL,(~ 3QDP79TO1 OO3AO 000500 -R
Current Support Brief
CIA/RR CB 62-75 No. Pages 3
19 November 1962
SHARP DECLINE IN CAPITAL INVESTMENT
IN SOVIET CONSUMER INDUSTRIES
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
GROUP 1
Excluded from automatic
downgrading and
declassification
70106107 : CIA
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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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C -O-N-F -I-D-E -N-T -I-A-L
SHARP DECLINE IN CAPITAL INVESTMENT
IN SOVIET CONSUMER INDUSTRIES
Annual capital investment in Soviet consumer industries in 1961
showed a decline from the investment level of 1960 as reported in the
latest Soviet statistical handbook just released. I/ Investment in con-
sumer industries decreased 9. 8 percent, including a 1. 5-percent de-
cline in investment in light industry and a 14. 4-percent decline in the
food industry. These data reflect the total investment both from cen-
tralized state funds and from noncentralized sources such as enter-
prise funds and other local sources. Cutbacks presumably are in the
noncentralized portion of investment inasmuch as some increase in
the centralized investment had already been reported.
Looking at the broader picture, investments in Group B industries
(those industries producing goods for consumption, light industry and
the food industry) had increased slightly in recent years relative to the
much larger investment in Group A, the heavy industries. As a per-
centage of total investment in industry, Group B had grown from 11. 8
percent of total investment in 1956 to 13. 5 percent in 1960. In 1961,
however, the percentage of Group B fell to 11.7 percent of total invest-
ment, or a level slightly below that in 1956. The indexes given below
show these changes in the investment pattern for the period 1956-60,
which reflected a trend favorable to consumption, followed by a marked
shift in the pattern in 1961, which is less favorable to consumers. The
possible change in allocation of resources that is suggested by these in-
vestment data would tend to substantiate the theory -- which emerged at
the time of the 22nd Party Congress in October 1961 -- that Khrushchev's
consumer welfare program had suffered a real setback.
19 November 1962 CIA/RR CB 62-75
C-O-N-F-I-D-E-N-T-I-A-L
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C -O-N-F-I-D-E -N-T -I-A-L
Trends in Capital Investment
1956-61
1956 = loo
Year
Group A Industry
Group B _Industry
Light Industry
Food Industry
1956
100
100
100
100
1957
105
107
110
104
1958
117
130
140
124
1959
135
151
141
158
1960
149
173
153
186
1961
158
156
150
160
These restrictions in investment in the consumer industries, when
added to problems already faced by these industries, point to bleak pros-
pects for the eager Soviet consumer who had come to expect continuing
improvements in supplies of consumer goods. The rate of growth in
light industry, which began to slacken in 1960, experienced a sharp de-
cline in 1961 and shows little prospect in 1962 for recovery to the level
required by the Seven Year Plan (1959-65). 2/ Nor is the outlook en-
couraging in the food industry, where a decline in the industrial produc-
tion of the important commodity, meat, was reported for 1961. 3/ In-
dustrial production of meat dropped to 96. 5 percent of the previous year's
production, and, by mid-1962, prices of meat were raised by an average
of 30 percent. 4/ As a result, less meat now appears on the Soviet family
table. Consumer displeasure with these developments has been widespread,
particularly among urban residents, and some active (although limited) con-
sumer protest has occurred in the form of dock strikes against exports of
food and other consumer goods and in a reported uprising of more serious
proportions in the Rostov area following the price increases. 5/
19 November 1962 CIA/RR CB 62-75
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Analyst:
C-O-N-F-I-D-E-N-T-I-A-L
25X1A
1. Narodnoye khozyaystvo SSSR v 1961 godu (National Economy of
the USSR in 1961), p. 545. U.
2. CIA. CIA/RR CB 62-45, Decline in Growth Rate of Soviet Light
Industry, 7 Aug 62. C.
3. Narodnoye khozyaystvo (1, above), p. 263.
4. Pravda, 1 Jun 62. U.
5. New York Times, 30 Sep 62. U.
19 November 1962 CIA/RR CB 62-75
C-O-N-F-I-D-E-N-T-I-A-L
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CONFIDENTIAL
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 Analyst: MS/M
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Control Sheet
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Data of Document ~19 November 1962
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