REPORT ON MEETING OF MILITARY-ECONOMIC ADVISORY PANEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01542R000700030004-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 12
• Document Creation Date: December 19, 2016
• Document Release Date: December 28, 2005
• Sequence Number: 4
• Publication Date: June 19, 1978
• Content Type: MF

The Director of Central Intelligence
Washington. D. C.20S05
q- ~ .-U~ 99Y~
MEMORANDUM FOR NATIONAL FOREIGN INTELLIGENCE BOARD
SUBJECT: Report on Meeting of Military-Economic
Advisory Panel
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The attached memorandum reports on the
most recent meeting of the Military-Economic
Advisory Panel, an external consultants group
which reports to me in relation to my community-
wide responsibilities in this area.
The Panel will meet again in October, and
will prepare a more comprehensive annual report
following that meeting. Any comments you wish
to make on the attached report would be welcomed
by both the Panel and by me.
~/ S~an~f i?lc~ burn?~
STANSFIELD TURNER
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Mr. Frank C. Carlucci
Deputy Director of Central Intelligence
Room 7D60, CIA Headquarters Bldg.
Deputy to the DCI for Resource Management
Room 6A03
Community Headquarters Bldg.
Dr. Robert Bowie
Deputy to the DCI for National Foreign Assessment
Room 7E44,~CIA Headquarters Bldg.
Deputy to the DCI for Collection Tas ing
Room 7E25, CIA Headquarters Bldg.
Mr. Martin Packman
Acting Deputy Director, Intelligence and Research
Room 6531, Department of State
Admiral Daniel J. Murphy, U.S. Navy (Ret.)
Deputy Under Secretary of Defense for Policy
Room 2E812, Pentagon
Dr. Gerald P. Dinneen
Assistant Secretary of Defense (Communications,.
Command, Control and Intelligence)
Room 3E1014, Pentagon
Lieutenant General Eugene F. Tighe, Jr. USAF
Director, Defense Intelligence Agency
Room 3E258, Pentagon
Vice Admiral B. R. Inman, U.S. Navy
Director, National Security Agency
Room 9A192, Fort George G. Meade, Md.
Dr. Hans Mark
Under Secretary of the Air Force
Room 4E871, Pentagon
Mr. J. Foster Collins
Special Assistant to the Secretary (National Security)
Room 4326, Main Treasury Bldg.
Department of the. Treasury
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Mr. Walter McDonald
Principal Deputy Assistant Secretary
for International Affairs
Room 2104, 2000 M Street, NW
Department of Energy
Mr. J. Michael Kelly
Counselor to the Attorney General
Room 5111, Main Justice
Department of Justice
Mr. Thomas W. Leavitt
Assistant Director, Intelligence Division
Federal Bureau of Investigation
Room 4026, J.E. Hoover Bldg.
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?ffice of Strategic Researcf~
MEMORANDUM FOR: DCI
Transmittal of Report on the April
Meeting of the I~filitary-Economic Advisory Panel
report of the most recent h~EAP meeting
is attached. I also attach copies with brief cover
notes for your. signature for dissemination to the
NFIB Principals. I will arrange for internal dis-
tribution within the NFAC.
S . N . (~2AYBEAL
Director
Strategic Research
1 2 JU~J 197
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WHICH MAY BE USED.
 CONFIDENTIAL
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June 8, 1978
Admiral Stansfield Turner
Director of Central Intelligence
Washington, D. C. 20505
The Military Economic Advisory Panel held its Spring meet-
ing during April 13-16. Our past practice has been to prepare
one annual report each year -- usually following the Fall meet-
ing -- but we covered some new ground this session as well as
reviewing some old issues. I, therefore thought it worthwhile
to prepare a short statement for you now on the major points
addressed at this. meeting. A fuller report will be forthcoming
at the end of the year.
Your new appointee to the Panel, fortunately
was also able to attend this session. as you now, brings
with him considerable experience and know e ge on the issues we
cover, and the Panel as a whole warmly welcomed his addition to
our deliberations.
We are now beginning to formulate our thoughts on topics
to address at the next Panel session, which is now scheduled
for October 26-29. If there are any issues foremost in your
mind that you would like for us to consider at that time, please
let me know so that I can arrange to see that we give them proper
attention.
I hope our attached observations are of service to you.
Warm regards,
Chairman
Military Economic
Advisory Panel
25X1
25X1
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 SUBJECT: Military Economic Advisory Panel
Meeting of April 13-16, 1978
This memorandum reports on the April meeting of the Military
Economic Advisory Panel. It is organized into four sections:
CONF I DENT~IAL
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Jtme 8,78
? New issues the Panel has not previously considered
before in detail;
Carryover discussions raised at our last meeting
on which we had requested follow-up briefings;
? Brief comments on some basic issues the Panel has
had under continuing discussion;
? Concluding comments.
NEW ISSUES
National Intelligence Tasking - was kind 25X1
enough to give us an hour of his time to review his concepts
and plans concerning the operations of the NITC. We realize
it is still only spring plowing and planting season for 0 25X1
and his staff, and thus any evaluative comments from us
now would be premature. We share with him, however, his belief
that more systematic collection planning, with cross-linkages
of the costs and benefits of information from photographic,
communications, and human sources will be necessary for any
overall optimization of collection resources. And we do not
underestimate the substantive and procedural difficulties
likely to be encountered in structuring and administering a
National Center to these ends. Most of the Panel members have
had experience in related areas of analysis and have an inter-
est in following progress in the NITC. A better
understanding of the productivity of collection resources could
also help to address. the question of the appropriate split of
resource flows going to collection versus analysis. The Panel
has touched on this issue in the past and still has some con-
cerns about what seems to be an imbalance weighted excessively
in favor of collection. With DCI concurrence, we will look
more closely at this in 1979.
Soviet Military Sales to LDCs - Recent press reporting on
this issue led the Panel to ask for special briefings on exist-
ing and planned Intelligence Community studies of Soviet mili-
tary sales. Given the heightened interest in the subject in
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the Administration and the Congress, the new work undertaken by
CIA and DIA was certainly timely, if not overdue. Overall, we
applaud the work that has been done to develop more comparability
in measures of the scale of U.S. and Soviet military sales, and
in the attempts to disaggregate the totals into hardware and
support components so that more, meaningful comparisons can be
made. Methodologically, the approach is sound, although some
data deficiencies on the Soviet side outlined to us call for
continued attention in both collection and analysis. Also, the
lack of a thoroughly defined measure of U.S. sales and deliveries
calls for continued caution in drawing policy implications from
the studies. This agenda item was of considerable interest, and
.the Panel hopes to monitor progress at our next session. _
Consumer Needs for Intelligence - Consumer needs is an area
in which the Panel has had a long standing interest but which
we have heretofore kept on the back burner. This is largely
because a number of Panel members had had relatively recent ex-
perience as consumers themselves and so had felt the issue
could be held temporarily in abeyance in the face of problems
of more immediate concern. We feel now, however, that we should
turn more directly to the issue of how well intelligence is
serving the present policymaker.. We were pleased to have Drs.
Wade and Berenson of the Department of Defense brief us on how
they saw the role of intelligence in supporting U.S. arms de-
velopment and acquisition planning. Their message was that
there are numerous near-term U.S. decision points on weapons
developments that may take 10 to 15 years to come to fruition
where intelligence could play a vital policy support role if
~~future Soviet forces were better understood. However, the
analyses necessary are particularly difficult for the Intelli-
gence Community. First, there are both data and analytical
shortcomings involved in understanding long run Soviet military
R&D objectives. Second, there is understandably a reluctance
by the community to project Soviet force compositions and levels
beyond ~t h e next three to five years. Unfortunately, present
U.S. R&D decisions do not fit this restricted time frame. In
our view, this problem will never be completely resolved,. but
could be addressed more fruitfully with more energetic efforts
within the NFAC to jointly plan and carry out cooperative re-
search across technological, scientific, political, economic,
and military force planning disciplines. OER and OSR -- with
inputs from DIA -- have been doing rather well, we think, in
joint work over the last two years or so. The other NFAC
Offices have so far less successfully been able to input rou-
tinely into this work. More on this point in the next paragraph.
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CARRYOVER TOPICS FROM THE LAST MEETING
Joint Research Among NFAC Offices - At the last MEAP ses-
sion, the Panel was briefed by the Director of ORPA on his plans
for closer collaboration with OER and OSR to better integrate
political intelligence into military economic studies and force
projections. We asked for more on this subject at our spring
meeting and suggested that OSI and OWI also be heard from on any
planning they might be doing along similar lines. We also felt
that some link between the MEAP and the DCI's S&T Advisor Panel
would perhaps be useful. We did lunch with 25X1
Vice Chairman of the STAP, during this session, and the Directors
of ORPA, OSI, and OWI or their deputies met with us to talk about..
their research plans. Overall, we see a greater recognition of
the need for a broad matrix approach to research on Soviet mili-
tary force issues than we see positive steps being taken to ac-
complish it. One approach raised by the new Director of ORPA
seems to have particular merit. In this, for example, each
NFAC Office might recruit a visiting scholar who, in his own
published research, has actually demonstrated an ability to in=
tegrate work across disciplines in imaginative ways. Such
scholars, during the time of their residence, could be utilized
as team leaders with the regular NFAC Office staffs, both to ac-
complish useful work in itself. as well as to perform vital train-
ing of NFAC career personnel for the longer haul. We believe
this approach has promise and should be considered favorably by
the DCI. It does little, however, to institutionalize a regular
transfer of insights among intelligence disciplines and should
not be relied on to substitute for the NFAC Office Directors'
responsibilities in this regard. .
Soviet Energy Problems - Energy specialists of CIA and DIA
presented to us their differing views on the seriousness of
Soviet petroleum shortfalls that might emerge over the next
five years. While the exposition of each view was thoughtful,
the Panel was not persuaded that the evidence now available
was compelling for either position over the other. We also
feel that the issue has so far been addressed with too much
reliance on a single discipline -- industrial economics -- and
that the range of possible internal Soviet political responses
have not been sufficiently considered. We have three sugges-
tions to offer:
? That CIA and DIA prepare written statements of
the area of their agreement and disagreement.
? That both also formulate their present expecta-
tions concerning how. the Soviet energy position
will evolve over the. next one to two years, in-
cluding specific expected developments and the
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timing of events that would provide evidence
bearing significantly on their position.
? That the question of Soviet energy be looked
at more closely from the demand side, so that
the crucial issue of Soviet political options
for management of domestic oil consumption and
export can_be faced more directly.
This topic is of considerable concern to the Panel -- less
because of its direct bearing on a current U.S. policy issue
than because of its potential for creating public and press re-
percussions unfavorable to CIA and the community if intelligence
forecasts of Soviet oil production are not very carefully ex-
amined, explained and documented.
.Ruble/Ruble Comparisons of U.S. and Soviet Military
Programs - This is a hoary issue with the Panel. The MEAP has,
since 1973, alternately coaxed, pleaded, urged, and demanded
that such calculations be regularly included in studies that
make use of dollar comparisons. We were particularly pleased
a.t this meeting to hear the results of recent DIA work, and we
applaud their initiative CIA/DIA collaboration on data and
methods has been good in this area, and we urge its continua-
tion. Methodological refinements underway should be pursued.
and the findings incorporated into the dollar/dollar compari-
sons that are published annually, with appropriate caveats as
to the technical meaning of the data.
Ruble/Dollar Purchasing Power Comparisons - The briefing
OER provided on the Ruble/Dollar ratios was reassuring in that
it provided an up-date on continuing basic research that we
consider an essential underpinning of the major economic and
military-economic estimates of Soviet activity that are pro-
duced for use by U.S. policymakers. As past experience has
painfully shown, any neglect in this area can have serious
consequences for future estimative confidence in comparative
measures of U.S. and Soviet resource flows.
Complimentary Methodologies - There is no question among
the Panel members that the direct costing approach should re-
main the core of CIA's military-economic estimates. At the
same time, however, we have strongly endorsed efforts to com-
plement direct costing studies by alternative gross measures
of military outlays developed from budget analysis, economic
modeling studies, etc. Such alternative methods aid in ensur-
ing the proper calibration of direct costing, and we continue
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to support work in this area. We were briefed on OSR's work
during this session, and would like to get more deeply into
the matter at our next session.
Economic Modeling - This is another area of basic research
on analytical methods that the Panel has recommended and followed
with interest over the years, and we were briefed again on it
this session. We consider CIA's investment in this area to be
well-grounded. Such modeling has potential for wide applica-
tion in many areas of MEAP interest, such as sensitivity analy-
ses on energy problems, implications of savings from arms con-
trol agreements, and testing of future military force projec-
tions, as well as in the more conventional aggregative economic
trend analyses. No one else inside government has the capability
to do such work on the Soviet Union at the lel of detail avail-
able in CIA, and we consider this a resource of considerable
value.
This spring meeting of the MEAP was productive in numerous
ways. And while we remain somewhat dissatisfied with the pro-
gress of joint work among some NFAC Offices in integrating
economic, political and S&T analyses, we do understand that
this is one of the most difficult problems that exist within
the academic community and in the "think tanks" as well. The
work calls for rare abilities, and those most able to carry
it out are generally already. heavily tasked in overall manage-
ment matters and simply have not the time to spare. As a start,
we recommend the visiting scholar approach already discussed --
but we think that institutionalized joint research planning
could also be strengthened.
The accomplishment of OER and OSR working together -- along
with CIA/DIA collaboration -- are having good payoffs, particu-
larly in data base improvement and in methodological develop-
ments. Both the staffs and managers are to be congratulated.
Some examples of these payoffs are:
?
The data base for military costing studies is
vastly
Costing
work on
improved because of the CIA/DIA Military
Review Board and the jointly funded
Ruble/Dollar ratios.
?
Many positive initiatives are being undertaken
in areas the Panel has long encouraged. The
Ruble/Ruble study and the economic modeling
work have both been mentioned. SCAM documen-
tation work has gone well, and we take the
nature of the dialogue on Soviet energy prob--
lems as evidence of responsible handling of
disagreement.
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The greater openness of CIA publications on economic and
military economic matters has not appeared to open the door to
greater demands and criticism as much as many had feared. In-
deed, it may have fostered a greater degree of understanding
and trust on the part of the press and in academia.
The work we cite positively has taken scarce resources,
we realize, but the commitment to such basic matters is criti-
cal to advances in the ability of the intelligence community
to meet the legitimate expectations of consumers.
We will address some of the issues covered only briefly
in this report more fully in our annual report later this year.
The Chairman of the Panel will consult with the other members
and with the NFAC Office Directors on the scope and content
of our fall meeting, and solicits an in uts from the Director,
Ambassador Carlucci, Dr. Bowie, 25X1
on other issues that may be of par icu ar c n er
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