MILITARY-ECONOMIC ADVISORY PANEL: ITEMS DISCUSSED AT THE MEETING WITH DCI AND DDCI, 8 JULY 1976

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M00165A001000270010-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 15, 2016
• Document Release Date: January 16, 2004
• Sequence Number: 10
• Publication Date: July 13, 1976
• Content Type: MFR

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13 July 1976
Revised 6 August 1976
MEMORANDUM FOR THE RECORD
SUBJECT: Military-Economic Advisory Panel: Items
Discussed at the Meeting with DCI and DDCI,
8 July 1976
PRESENT: George Bush (DCI), E.H. Knoche (DDCI),
Paul Walsh (ADDI), (NIO/E),
Noel Firth (AD/OSR), (Member,
MEAP), and Herbert S. Levine (Chairman, MEAP)
1. New Reporting Role of MEAP
--In the past the MEAP reported to the DDI,
now it reports to the DCI. In order to
address itself to issues which are of
interest to the DCI (and the DDCI), the
Panel would appreciate some guidance to
help focus its efforts.
--Now that the Panel's scope has been enlarged,
who should be the main contact person and
support for the Panel? Should it remain OSR
(Noel Firth) or perhaps the IC Staff? (it
was agreed that maintaining the existing
relationship made the most sense.)
--The Panel would like to meet individually
with people from other agencies with a
direct interest in military-economic
analysis: Robert Ellsworth, William Hyland,
Sam Wilson, Hal Saunders, Admiral Murphy
and others.
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2. Organizational Issues
. A. Internal to CIA
--The time has come to consider the
reestablishment of an area focus within
CIA--that is, a possible reestablishment
of an Office whose mission is to study
the Soviet Union. The Soviet Union is
becoming more complex. There is a need
to integrate the analytical resources
(economic, political, scientific, mili-
tary) focusing on the Soviet Union.
There are many different possible
approaches to this issue, ranging from
formal reorganization to the setting
up of specific task forces to work on
specific issues. At a minimum, when
related topics are presented to OSR
and OER, joint task forces should
be set up to work on the projects
rather than the two offices just
.exchanging papers. The experience
at the last MEAP meeting of OSR and
OER interacting on the issue of ruble-
dollar ratios was stimulating and rewarding
but it was also disturbing that such
interaction had not taken place previously.
--In addition, the Panel feels that perhaps
the time has come for OSI and OWI to be
put back under the DDI.
B. External
--CIA's virtual monopoly in the community
on military-economics, indeed on Soviet
economics as a whole, continues to be
somewhat risky despite the high level
of competence and objectivity evident'
in the Agency. DIA does monitoring and
assisting and we understand is planning
to broaden work in this field, but no
other department or agency is in a
position to properly evaluate and use
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CIA's analysis. Certainly it would be
wasteful for others to fully duplicate
the efforts of CIA. It might, however,
be useful for the DCI to ask other IC
members to invest a small level of
effort in order to broaden the NFIB
base on Soviet military-economics.
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3. SCAM II
--The Panel urges that sufficient resources
be devoted to making SCAM II operational.
We understand that time is of the essence
and we urge that the present opportunities
not be lost.
4. Resources
--The Panel strongly calls for an increase
in the resources devoted to Soviet
economics, Soviet military-economics and
Soviet affairs in general both within
CIA and outside of CIA.
5. Collection, Reporting and Analysis
--The Panel urges that increased collection
efforts be devoted to Soviet economic
targets, i.e. a higher priority for economic
intelligence, including more attention
given to and analysis of the inevitable
economic by-products available from primary
missions.
--The Panel also urges that the proportion of
overall effort devoted to analysis (in
distinction to collection and reporting) be
increased. This is whence the increased
resources called for above could primarily
come. In other words, it is an allocation
problem as much as, if not more than, an
increased resources problem.
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--The principle CIA military-economic reports
(the so-called "ruble" and "dollar" papers)
receive much attention in both classified
and unclassified form. To enhance the
utility of those reports to the principle
consumers, and to reduce the probability
of misuse of the analyses, the Panel urges
that each report be accompanied by an
extensive appendix--written with the staffs
of the principle consumers in mind--which
explains more fully the theoretic bases of
the analyses, outlines the issues which
the data legitimately can bear upon and
which they cannot, and lays out in more
specific terms the policy implications
of the analyses.
--Editions of the "ruble" and "dollar"
papers, prior to the most recent, presented
the data over decade time periods, and
supplemented the aggregate data with
resource- and mission-category breakouts.
The Panel recommends that these practices
be resumed in future editions.
6. RDT&E
--The Panel calls for the implementation of
the recommendation contained in the Panel
report prepared by for an
increase in Agency resources allocated to
and the undertaking of a major research
effort on the study of Soviet RDT&E.
There is a growing list of customers for
such work including: Chairman Mahon of the
House Appropriations Committee, the Defense
Science Board, and PFIAB. Furthermore with
the recreation of the Office of Science
Advisory to the President, another customer
will soon be calling. If the OSI and OWI
were to be put back under the DDI, then an
effort devoted to a study of Soviet R&D
would be easier to muster. In the absence.
of such a reorganization, consideration
might be given to the creation of an NIO
for Soviet R&D. The Panel would like to
review the steps taken on this subject at
our next meeting.
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7. Coordination of Basic Research on the
Soviet Union
--The Panel calls attention to the need for
coordination of basic research on the
Soviet Union between CIA and other govern-
ment agencies, on the one hand, and the
non-government (private) agencies, such
as universities and contract research
institutes, on the other hand.
8. Specific Research Projects
--The Panel calls for the undertaking, as
rapidly as possible, of the following
major studies:
e Alternative National Security Expendi-
ture estimating techniques. It would
be extremely useful, at this time, to
undertake a thorough survey and analysis
'of the various NSE estimating techniques,
and how current data resources (e.g.
input-output data) might be applied to
them. The Panel suggests that Fred
Denton be asked to undertake this
assignment.
o The Soviet price systems, especially
the differences in the pricing of military
and civilian goods. It is hoped that
such a major study would shed some new
light on the perennial ruble-dollar
ratio issue. If CIA is to effectively
fulfill its mission of providing information
to US policymakers, then this information
must be in a dimension understood by US
policymakers. In military-economic
matters this dimension of necessity is
that of dollars (though the Panel has
urged and continues to urge the ruble
costing of US military expenditures).
It might be useful to commission an
outside think piece by someone connected
with the Kravis International Price
Comparison Study (perhaps Professor
Robert Summers) on the general issue
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of dollar evaluations and price compari-
sons in the military economic area.
This might provide helpful new insights.
Also increased use of recent emigres
could prove to be helpful in the study
of the Soviet price system.
? Soviet military economic decision-
making. The Panel calls for an in-
depth, integrated (Economic, Political,
Military) study of the Soviet decision-
making mechanism in regard to military-
economic matters.
a- Civil defense, broadly conceived. A
prominent area omitted from the current
military-economic analyses is that of
civil defense. The Panel urges that
this area be pursued under a conception
broad enough to include all programs
designed to enhance post-attack national
survival; for example, the dispersion
and hardening of facilities, stockpile
storage complexes, and the configuration
of lines of communication.
o Inventory estimation. The Panel again
wishes to restate its conviction that
the estimation of weapons inventories
is crucial to a proper assessment of
the relative military capabilities of
the Soviet Union and the United States.
The Panel recognizes the fundamental
difficulties and intractabilities
inherent in the problem, but the issue
is vital and the Panel recommends that
higher priority be given to its pursuit.
Furthermore, for comparison purposes,
it is of course necessary that estimations
of US military stocks be made. The Panel
recommends that the appropriate office within
the DoD initiate efforts to collect
data on the value of US stocks of military
equipment, to be used in a net assessment
of US-Soviet weapons inventories.
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? Comparative investments in the ability
to produce future military capability.
A significant military-economic issue
concerns the comparative extent to which
the US and the Soviet Union have invested
in the ability to produce future military
capability, and the Panel recommends
that the analysis of this issue be
pursued. While the subject would include
aspects of the civil defense programs,
it would go beyond these to consideration
of, for example, the industrial bases
presently committed to military production
or capable of being so committed over
varying lengths of time; the national
policies with regard to surge or
emergency military production; the
processes of embodying technological
change into fielded systems; and the
relations between military production
capacity, war reserves, and stockpiles
to existing and planned force structures.
HERBERT S. LEVINE
Chairman, MEAP
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