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APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-40850R000500060014-9 FOR OFFICIAL USE ONLY JPRS L/ 10497 6 May 1982 . USSR Re ort p ECONOMIC AFFAIRS CFOUO 3/82) ~BIS FOREIGN BROADCAST INFORMATION SERVICE FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R000540060014-9 NOTE .TPRS publications contain inf~rmation primarily from foreign newspapers, periodicals and books, buz als o from news agency transmissions and broadcasts. Materials from foreign-language sources are translated; those from English -language sources - are transcribed or reprinted, with the or iginal phrasing and other characteristics retained. Headlines, editorial reports, and material enclosed in brackets are supplied by JPRS. Pr~acessing indicators such as [Text] or [Excerpt] in the first line of each item, or following the last line of a brief, indicate how the or i ginal information was processed. Where no processing indicator is given, the infor- - mation was summarized or extracted. Unfamiliar names rendered phonetically or transliterated are enclosed in parentheses. Words or names preceded by a ques- tion mark and enclosed in parentheses were not clear in the - original but have been supplied as appropr iate in context. , Other unattributed parenthetical notes within the body of an item originate with the source. Times within items are as given by source. The contents of this publication in no way represent the poli- cies, views or at.titudes of the U.S. Government. - COPYRIGHT LAWS AND REGULtiTIONS GOVERN ING OWNERSHT_P OF MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION OF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE ONLY. APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 FOR OFFICIAL 11SE ONLY JPRS Z/10497 6 May 1982 USSR REPORT ~ - ECnNOMIC AFFAIRS (~'OUO 3/82) CONTENTS INDUSTRIAL DEVELOPMENT [~ND PERFORMANCE Effectiveness of Use of Production Potential (V. Kuznetsov; VOPROSY EKONOMIKI, Oct 81) 1 Normative Net Output in Increased Production Efficiency (L. Rozenova; VOPROSY EKONOMIKI, Jan 82) 13 - a ~ [III - USSR - 3 FOUO] APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 FOR OFFICIAL USF: ONLY I;VDUSTRIAL DEVELOP:^g:NT AIJD PEP.FORMANCE i:r~~CTIVENES5 OI~ US~ OF PRODUCTION POTENTIAL :~oscow VOPROSY ~i:ONOKII:I in Russian No 10, Oct 81 pp 120-130 [Article b}- V. riuznetsovl, [Te~;t] ;~or the party's economic policy in the period of developed socialism, derermination of lon~-term tasks, consideration of the conditions of economic construction, scientific validation of ways of speedin~ up economic progres~ ~ire characteristic features. The highest aim of the party's economic strategy f.or tiie '80s, as pointed out at tiie 26th CPSU Con~ress, is a steady rise of tiie material and cultural level of the liFe of tlie peerl~:, creation of the best conditions for ti?e individual`s all-round development on the basis of a contiii- uiii~; rise of efficiency of public production, grocath of laUor productivity and - :;r~-~wth of the social and labor activity of the Soviet people. Its practical acliievement will require tremendous resources. The national income used for consumption and accumulation should be increased 1.4-fold Uy 1990. '1'iie country's economic development over the long term, which means mobilization of resources, will be associated with a whole series of complicating factors. ?de ref,er to significant curtailment of growth of labor resources, rise of out- in connection with the development of the East and the North, growth of expenditures on protection of the environment. There will be required radical - rebuildinF of oId enterprises, construction of roads and accelerated develop- ment of transport and communications. Uurin~ tize llth Five-Year Plan, it is planned to increase national income by 18-20 percent, output of manufactured products--by 26-28 percent and of agri- cultural ones--Uy 12-14 percent. Total volume of capital investment for tlie five-year plan has been set at 711-730 billion ruUles. Our country has entered the new decade while possessing a mighty scientific- - tecl?nical and ~roduction potential. Tremendous resources are involved in the national economy. National ~aealth (without land, mineral resources and forests) durin, 1~7~-1930 grew from 1.4 to more than 2.7 trillion rubles. The relative share of fi;ced capital amounted to 62 percent, including producer goods--42 - Pexcent, material working capital--17 percent, property of the population--19 percent. lluring the lOth Five-Year Plan fixed production capital grew by 344 uillion rubles. During 1976-1980, it was renewed 38 percent, including 36 percent in industry and 47 percent in agriculture. The capital-labor ratio 1 Ff1R (1FFT~'?Ai [1SF, nN1.Y APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000500460010-9 FOR OFFICIAL USE UNLY of a person engaged in the sphere of material production, which in 1970 amount- ed to 5,500 rubles, had almost d~ubled by 1980, amounting to 10,700 ruUles. In industry it gre~a from 7,100 to 13,400 rub~es (87 percent), in agriculture--from 3,4U0 to 8,St30 rub les (142 percent) and ~.n construction--from 2,000 to 4,400 rubles (lld p~rcent). Comp ared tc, thE. '60s, electric-power production doubled, steel production in- creased Uy 46U million tons and production of the chemical and petrochemical inclustry better ttian doubled. ?n 10 years, machine-building production grew 2.7 -fold, ontput of instruments-~~3.3-fold, computer-technology equipment--ten- fold. Uuring 1971-1980, there were produced in the country more than 5 billion ~ tons of petroleum (including gas condensate~ that is as much as in the preced- in~ ceiitury; 1.4 billion tons of steel were smelted. Profound changes occurred in the distribution of productive forces. The natural resources of tiie eastern and northern regions of the country are being actively involved in national-economic turnover. As a result of the impact of the scientific-technical revolution on the economy, the Lace of many production op- erations and entire sectoL; is rapidly changing. I~iodernization is proceeding at an accelerated pace in industry. During 1971-1980, new and modernized enterprises provided four-fifths of the growth of industrial production. At ~liose enterprises wiiich have been built, expanded or modernized, production out- rut per. worker is almost doubZe to what it was previously. As a result of the systematic realization of the agrarian policy of the CPSU, a mode r.n mate rial-technical base has been created for agriculture. Fixed agri- cultural production capitai amounts to 212 billion rubles. The capital-labor ratio ner ~oorker in agr~iculture reached 8,400 rubles in 1980; the capital-labor ratie per 100 hectares of a~ricultural land is 39,000 rubles of worth of fixed canital. Tlianks to strengthening of the technical base of agricultuxal produc- tion, even with a curtailed number of workers, the volume of production per iiectare grew 1.3-fcld in tihe last 10 years. 'ihe liSSR has rich natural resources. Agricultural land amounts to 609 mil- lion hectares. l~orested area amounts to 792 million hectares (first place in tlie world); the total stocks of tree plantings amount to 84 billion cubic meters (one-fourth o~ the world stocks). Our country occupies first piace in the world ~vith respect ta proved reserves of iron and manganese ores, apatites and natural Ras. 'The country's production potential is determined by the quantitative and qu~11i- tritive features of existin~ production fixed capital, material working capital 1nu labor resources. At the same time, accoun t is taken of availability to tlie state of natural resources that are necessary for the normal functionin~; of E~ub.lic ~roduction. 'io ensure fuller and more effective utilization of ~he nroduction potential means to realize in the complex the most important fdctors for l~oostinp the productivity of social labor and reducing production labor intensiveness, to utilize with the hi~hest yield f:Lxed production capital (re- duction of capital requirements per ruble of output) and to increase the pro- duction output of existing ra~z and other materials while reducing material intensiveness of production. FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500060010-9 FaJR OFFICIAL USE ONLY 'i~ie Soviet people are ri~;htly proud of the production potential created in our country. But pride," L.I. Brezhnev said at the 26th CPSU Congress, "must always be accompanied by a sense of high responsibility. Responsibility for the fact that the tremendous potential created by the Soviet People is to be used efficiently, witii full return." Leading collectives of associations and enterprises have accumulated much ex- perience in the struggle for economy of resources and reduction of material intensiveness of production. During 1976-1980 economies of raw and other ma- terials, Yuel, power and otlier ob jects of labor amounted to 11.4 billion ru- bles. At the same time, unfortunately, more raw materials and electric power are bein~ expended per unit of national income than would be possible if tht best world indicators ~aere consiciered. hlany kinds of machinery and equipment ?iave hign material intensiveness, and expenditures of materials on the fabri- cation of a number of products are great. Tne existence of large reserves for tiie economizing and increasino of production of finished products from re- sources existing in the national economy is shown by cases of inadequate use of resource-savin~ production processes, incomplete removal of minerals from tiie bowels of the eartti, poor utilization of production wastes and secondary resources, significant losses of inetal, fuel, timber, cement, mineral fertili- zers and agricultural products in the course of production or stora~e and slow reduction of production cost and transport expenditures. 1'he adopted decree of the CPSU Central Committee and the USSR Council of Minis- ters (3~ June 1981) "On Intensifyin~ Work on Economy and Rational Utilization o� ~.R41-:iatcrial, Fuel-Power and Other riaterial Resources" notes that the ful- 1:illment of a broad program of economic and social development of the country clesi~nated for tiie llth Five-Year Plan and the ' 80s woulcl require the involve- ment in production of tremendous raw-material, fuel-powe r and other material resources. But the acquisition of raw materials and fuel is increasingly more expensive, while reserves of minerals are irreplaceable. 1ne most economically ancl efficiently possible use of all the types ~~f material resources under these conditions acquires special national-economic importance. The 26th CPSU Con~ress set a task of ensuring economy of material resources, introducing progressive norms of expenditure per manufactured product unit, using on a ~~ide scale integrated processing of racv materials, resource saving equipment and loca-waste, wastefree and power-saving technology and involving in every possible way local raw and other materials into the cycle of opera- tion and utilizing secondary resources; maximally curtailing the use of food = raw materials and other agricultural products for industrial purposes. Tlirifty expenditure of raw and other materials, reduction of waste and elimination of losses siUnify economy of the labor of nullions of people and of capital in- vestment, Uetter production results with lower outlays for it and conservation of. tiie natural environment. In ttie final analysis, all this contributes to tne imPr.oveci crell-bein~ cf the people. The reduetion of solely by half of losses _ an~ wastes in r~etalworking is tl~e equivalent of an increase in ti~e production of iinished rolled ferrous metals of 10 percent. Replacement of inetal cutting witli stamping, pressin~; and f.itting on [nasadka] would make it possible to sihnificantly reduce its expenditure. In machine buildin~, wastes in the course of a year aMOUnt on the averape to almost 19 million tons, which is the ~ 3 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 FOR OFFIC[AL USE ONLY ~c~~iivalc'_nt of several Uillion rubles. Inefficient outlays of inetal because of c~.cessive wei~ht of machinery and equipnient, unjustifiably high metal inten- siveness of- products and insufficient use of progressive technology of inetal w~rl:ing add up to apnroximately 15 million tons. Reliable protection of inetal at;ainst corrosion ~fwhich costsStheastate135S40 billion ru les)lwouldrpermit ly , 10-1~ ~illion tons, trenendous economic savings. C~zpital investment for the collection and processing of one ton of scrap metal is tcaenty-fivefold less than the amount of natural ra~�~ material needed for the sneltina of one ton of cast iron. The use of scrap and wastes of ferrous metals at rerrous-r:;etallur~y plants is the equivalent of the release on an annual It was noted at ;,zsis o~ G7U,OOU persons for the national econony as a whole. L~:ie 26tn CPSU Con~ress that the main directions far the devalopment of ferrous ;,cr,~llurgy involve the radical improvement of the quality and increased produc- 5-fold in- tian of effective types of inetal products. There will be a 1..'`i-2� rrease iu the production of cold-rolled metal plate, rolled products from low- ;,.l..l_oy steel, sheet metal and tinplate with protectTeciseasha~es oflrolledemetal. :;tri� metal and dyn~imic steel, shaped and tii~hly P i ep metallic powder `Clie ProducCion of economical and special types of steel p p, for the manufacture of items ~+~itii high resistance to wear, lonPouringaof steelt ~~~lcc to corrosion is being developed at an accelerated pace. on continous-casting machines for thc production of billets caill reach 35-37 r~iLlion tons. 'ioEether ~aith overcoming shortage of inetal, another way--the z~ationllization of nroduction use--will be introduced. For example, in Che- - lyal~inskaya Oblast, economy of inetals at enterprises and construction projects is l~eiu;; achieved on the basis of promisin~; comprehensive programs. At metal- lur~*, enterPrises, reenuipment is being done for this end of production and l~ro~~ressive production processes are bein~ introduced. As a result, output is }~eiii~; 7.ncreased and quality is improved of inetal products and economical types c,f rolled ~roducts. At user-eiiterprises, groduction metal intensiveness is i~ein~ systematically reduced on the basis of improved design of manufactured itc?,s, improvement of tiieir quality and wide-scale use of inetalworking pro- ;:,,-e~~ive teclinology. Jurin}; tiie current five-year plan,oftrolledaferrous metalse bylan~averagemofano ~~~r;;.in;; to reduce the expend~.ture less tlian 15-2U percent, stec l pipe--10-12 percent, rolled nonferrous metals-- '1-11 percent and savings of rolled ferrous metals in construction--7-9 percent. M i~~.~~~ortant direction in more effective use of th~ production potential lies in e.(~Licient emp loy~e n t o f ener g y carriers. The USSR p roduces annually 2 billion A sign~f- ~ons of conventional fuel, which is one-fifth af world consumption. icant portion ot ii~;ed production capital is concentrated in sectors of the iuel and poorer compler.. For their development, there are allocated roughly one-tliird of all state capital investment and significant material and teciinical resources. lluring 1965-1979, petroleum production (including gas coil:iensate) increased from 242,888,000 tons to 585,571,000 tons, gas--from 1~i7~(~~G million cubic n~telectricOpo;aer producCionrSfroma507fbillion~kilowatt- to 718,664,000 tons, a I~uurs to 1,23ti billion kilowatt-hours. 4 FOR QFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 FOR OFFICIAL USE ONLY Uurinb ttic llth l~ive-Year Plan, the further development and strengthening of the country's fuel and power base is planned. The production cf electric power by 19Fi5 is Pxpected to reach 1,550-1,600 billion kilowatt-hours, including 22U-225 billion kilocaatt hours at atomic electric power stations and 230-235 billion kilowatt-hours at hydroelectric poc~er stations and the production of petroleum (~aith ~as conSensate)--620-645 million tons, gas--600-640 billion cubic neters and coal--770-38U raillion tons. The achievements of the Soviet economy are large determined by the increased efficiency of the extractive industry. The main direction for this lies in accelerated scientific-technical progress, ensuriug of tilorough and comprehensive processing of minerals, the _ u~e of resource-saving equipment and technology and broader use of secondary - resources and local raw materials. Greater economy of petroleum, for example, is promised by its intproved extraction, conversion of motor transport to diesel ~ind ~;as fuel and of thermal electric power stations--from coal to gas. The use of energy-slvin~; tecl~nologies has made it possible to reduce tlie expenditure of fuel in the production of electric power by 20 percent, cast iron and steel-- 12 percent and cement--7 percent. At the same time, losses of fuel, he at and pocaer are still ~reat. rlany possibilities exist for economy of electric pocaer iii the nonproduction sphere. ror consumer needs, 15 percent is expended of the total output of electric power, cahich is released to the population at the lowest price in tne world per %ilowatt-hour. A one-percent reduction of electric-power consumption on everyday needs would make it possible to save annually 0.5 bil- lion lcilowatt-hours, which is the equivalent of 100 train loads of coal. Tiie use of secondary energy resources is 2-2.5-fold less expensive than the construction of enterprises which can ensure the production of such a quan- tity of energy. Secondary resources suitable for use for the national economy as a whole are estin~ated at 240 million gi~acalories. In actuality, only 105 million tons, or 44 percent, are utilized. ln this connection, the experience of enterprises of hemerovskaya Oblast is of interest. The idea here is the development and consistent realization of con- crete programs of reduction of expenditure of fuel, electric and thermal power, reduction of t11e time for reaching projected norms of reducing outlays of re- sources and wide-scale introduction of personal economy accounts. During tiie c~irrent five-year plan, provision has been made on the scale of the entire na- tional economy to ensure economy of fuel ancl power resources in the amount of 16G-170 million tons of conventional fuel, including 70-80 million tons from ti~e reduction of expenditure norms. ln t:ie course of realization of the decree of the CPSU Central Committee and the tiSSt~ Council of i~linisters "On Intensifyin~ Work on the Economy and Rational Use of F:aw-3saterial, Fuel-P~wer and Other I~iaterial tZesources an entire system is oein~ implemented of organizational, scientific-technical, economi.~ and political educational measures, ensuring the launching of a mass movement of workers for a~i-out economy in industry, a~riculture, transport, construction, ttie nonproduction sphere and in management. At enterprises and const ruction Projects, on lcolkhozes and sovkhozes and at institutions and organizations, concrete guidelines are being determined for reducing dsring the curren t five- year plan outlays o� raw and other materials, fuel and power, curtailing waste, making maximum use of secondary resources and eliminatin~; different kinds of 5 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500060010-9 NoK oFFic~n~. usN: orvi,v losses and the responsibility of specific performers and heads of services and subciivisions is increased for the practical realization of the developed measures. l~or the purpose of increasing proved reserves of mineral and raw-material re- sources, particularly fuel and power resources, work on geological study of the territory o� the country will proceed at an accelerated pace. Ttie search for and prospecting of deposits of petroleum and gas in Western and Eastern Siberia, tne ~:uropean part of the iJSSR, Central Asia and "Kazakh SSR is being intensified. The same is true of deposits and easily concentrated ores of ferrous and nonferrous metals, bauxites, phosphorites, coal, fuel shale and raw materials for atomic power engineering and for the production of construc- tion materials and mineral fertilizers as well as the search for and prospect- inR of sub terranean water. 'To~etlier c~~ith expansion of prospecting for reserves of mineral and raw-material resources, measures ]tavc been p rovided for increasing the efficiency of the e::~ractive industry. tde refer to the wider use of petroleum production of new ~netliocis of acting on petroleum beds, introduction of gas-lift operation of wells, higli-output immersed electric pumps and improvement of the technology ol" extractin~, hi~;hly viscous and bituminous petroleum. By 1985, up to:85-90 percent of petroleum will be produced at integrated automated fields. At the same time, labor outlays on the servicing of a well ~oill be reduced 15-18 per- - cent. Upen-metliod production of coal will develop at an advancin~ rate on the basis of wide-scale use or p rogressive technology and mining transport equip- ment witti greater unit capacity. Subterranean procurement of coal performed iiydraulically witt~ its transportation via pipeline will be further developed. Tlie raw-material base of ferrous and nonferrous metallurgy ~~ill be strengthened by r,:or~ complete extraction of components of extracted ores, increased content of iron, u:an~anese and chromium in concentrates, improved technology of extrac- _ tion and processing of ores and concentrates, accelerated introduction of auto- ;;enous, i~ydrometallurgic, microbiological and other effective production pro- cesses as ~aell as the ~ise of mac~iines of large unit capacity. tlccelerated development of ttie cliemical and petrochemical industry will make it ~ossible to nave the production of synthetic resins and plastics reach 6-6.25 ;nillion tons, and synteietic f ibers and thread--1.6 mi.llion tons, to increase Llie production oi synthetic rubber, high-quality polymers with given technical ci~aracteristics and to mor~ fully satisfy the needs of the national economy for catalysts, preservatives, synthetic fibers, thread and dyes, auxiliary textile su~s~ancc:,, detergents, varnisties, paints and packing materials, fat and oil substitutes for iudustrial purposes, chemical additives for polymer materials aiiu syntliesis of piiarmaceutical a~ents. The ratioual, ecouomic use of material resources presupposes intensification of ~i~e struti~;le a~ainst losses. Developed n~easures for increasing economic stimu- lation of those t~lio are able to save pu~lic property should meet the require- ments of coverin; all channels of losses. Special attention is bein~ paid during this five-year plan to the development and production ot equip;~ent possessing high efficiency, lower outlays of inetal 6 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500460010-9 FOR OFFIC[AL USE ONLY anci other materials and lower energy intensiveness. In tne motor-vehicle in- dustry, it is planned to speed up the development of production of trucks with diesel enhines and to increase fuel economy of internal-combustion engines tiirough improvement of tlieir design. The collective of the Pioscow riotor-Vehicle j?lant imeni I.A. Liknachev 'tias decided on the basis of expansion and deepening of creative cooperation with scientific-research institutes of the country to introduce durin~ the current five-year plan ~:G joint developments ar.d to in- crease ttie operational life of motor vehicles by 16 percent and ttiat of engines i~y 2f1 percent. '1'he accomplishmeiit of the complex of ineasures relating to the introduction of lo~a-caaste tecnnolo~y caill make it possible Uy the end of the five-year plan to reducc expenditure of rolled ferrous-metal products by 120,000 tons compared to prescribed norns calculated on the basis of annual production output. Tlie fulfillir,ent of adopted comniitments for the five-year plan on introduction of tiie acliievements of science and technolo~y will make it possible to produce an cconor~ic effect in tiie national economy of more than 320 million rubles and to s~ive about 50U,000 tons of gasoline and 45,000 tons of furnace and boiler fuel. 'ltie i1SSi SCate Coru~ittee for Science and Technology, the USSF. Academy of Sci- ences, liSSR tainistries and departments and councils of ministers of union re- publics have been instructed to stimulate research on urgeni problems of sci- entific and technical prorress for tlie purpose of reducing material intensive- ness and energy intensiveness of Production. ~xpansion of production of new types of machiiiery and equipr.~ent witli continuous operation, large unit caPacity aud productivity r,ial:ing it possible to use resources economically, which is cliaracteristic of heavy, transport and power macliine building, the electrical equinment industry and other macnine-Uuilding sectors. l�?ide-scale use oi resource-saving production processes energes as one of the most efPective methods of reducing, material intensiveness of production. In i:~et:~llurgy, this means tiie re:placement of inetal cutting with economical methods of sliapin~; parts, introduction of electric furnaces into casting production and of the r~ietilod of nonoxidizin~ heatinc; of inetal into forging production and eride-scale use of part rolling mills making it possiUle to use rolled metal e~itii r,iinimal caaste; in machine building--accelerated development of production of complexes of inetalwortiing equipment equipped with automatic manipulators; in liglit and food industry--the use of hi~hly efficient systems of machines ensuring comPreliensive use of agricultural raw materials, reduction of losses in their processin~;, storage and presentation to the consumer, in the construc- tion materials industry--the introduction of energy-savin~ technologies in pro- duction of cement, glass, lime, e conomical methods of heat treatment of rein- Lorced concrete, kilning of ceramic articles and effective mettiods of insulat- in~ lleat units and usin~ secondary heat. During, the current five-,year plan, fuller utilization of timber resources will contribute to raising tlie level of inte~ration of t?ieir processing. tdith an increase in the volume of production output in tiie sector amountin~; to 17-19 percent, the production of propressive forms of wood and paper Products is developing at an advancinp rate. In particular, n roduction of ctiipboard during the five-year plan will increase approximately 1.5-fold, wood-fiber board and cartons--1.3-1.5 fold, paper pulp-- 1.3-1.4--fold and paper--20-'?S percent. 7 F~R nFFT('rAi, USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500060010-9 ~OR OFFI(7AL ON1.1' i Ar, it,portant direction of economic mana~ement is the collection and utilization of secondary ra~~ materials. Processing of ~econdary resources makes it possible te reduce five-tenfold the capital intensiveness and energy intensiveness of products. In 1~~78, one-fifth of the pape.r and almost one-half of the cardboard w~ere produced from waste paper (of which 1.9 million tons were used). As a re- sult about 7 million cubic meters of timber wete saved, the production of whiCh would :iave required fellj.nb of trees over an area in excess of 100,000 hectares. Suctl a volun?e of timber wauld have been provided by 70 new large timber indus- try enterprises whose creation would have required one-time capital investment in tile amount of 1 billion rubles. Each year thousan~s of hectares of land are set aside for the burying of solid everyday ~aastes from cities (40 million tons). At the same time, their contents includes 30-45 percent of paper and cardboard, 5-9 percent of glass, 4-6 percent of textile fabrics, 3-5 percent of inetal and 1-3 pe rcent of wood. The utilization of these wastes provides an im~~ortant ecolo~;ical and economic effect. For this reason, beginning in 1981, plans of economic and social development for enterprises and associations in- clude a section oci assi~nments of use of secandary raw materials. Ltficient utilization of raw materials and energy carriers acquires even a more pressing importance because many of ttiem are irreplaceable. rfajor possibilities for more effective use of the available production potential are opened up by intensive use oE preduction capacities, machines, equipment and means of trans- port. 1)~iring 1970-1979, the growth rate of the capital-labor ratio in indu~try ~zmounted to 132 percent, while the growth rate of labor producCivity was 152 oercent; in agriculture these indicators were 231 percent and 117 percent, respectively. The lag of the gro~oti~ rate of labor productivity behind the growth rate of the ca~>ital-labor ratie is borne out by insufficiently eEficient use of machinery - and equipment, workers and power machines, rneasuring and regulative instruments and devices and neans of transport. l1t many enterprises, machinery and equip- ment operate only one shift and significant intrashift interruptions are per- r,~ittecl. The 26tii CPSU Congress set a task of. improving the use of production caPacities and fixe d capital, raising the shift coefficient of operation of machiiiery and equipment and creating, while taking into consideration the spe- cial features of individual sectors and production operations and using pro- 4,ressive systems of organizatioii of maintenance and modernization of equipment. !;t t'tie end of 19~0, the value of fixed production capital of the national econ- omy ar~ounCed to r,~ore than 1.1 trillion rubles. G)ith today~s scale of produc- tion, a~;rowtl? of output capital in industry of 1 percent is the equivalent of adclitional production output aniounting to roughly 6 billion rub les. ror better utilization of fir.ed production capital, passports of production associations and enterprises are compiled in accordance with the decree of the Cl'SU Central Committee and the USSR Council af rLinisters on improving the econ- omic mechanism. They sliow the presence and use of production capacities, the technical organiz ational level and sper_ialization of production, the quality of manufactured products and also oth~r. technical-economic indicators. Pass- ports of production assaciations and era.L-e rprises provide the possibility of si~;nificantly raising the level of control over the use ot production capac- ities. This is borne out Uy the Sumy Piachine-13uilding Association imeni FOR OFFICCAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R040500060010-9 FOR OFF7('IAt. Util~: ONI.I' :..V. Frunze, wnere a control system of production capacities has been develop- ed. Ar? audit ~aas made at the assoc~ation of the maciiine-tool parlc, and it was established that it would be possible with two=shift work to fulfill a more intensive program. During the lOth Five-Year Plan , 395 various machine to~Ls were found to be unneessary at the association's hea~ plant. The freed area ~Ias used for the placement of 109 new ones, including those with programmed operation. Tiie cnief evaluative criterion is the actual level of use oL norm- ative production capacity. I-fotivation of collectives of sections and shops is determined on the b asis of tcao criteria: fulfillment of plan targets ~ives the right to a reward, while its size is computed according to the level of actual utilization of production canacity (compared to the norm). With distribution of economic-stimulation funds, provision is made for redistribution of funds in favor those collec- tiv~s of sections and shops wliich, in fulfilling tne plan, make better use of production capacities. Effective usa of the production potential just at the Sumy association resulted in a saving of 7_1.5 million rubles of capital investr~ent. e;ro~~th of labor ~roduction because of acceleration of the rate of intep,rated meciianization anu automation of production, introduction of scientific labor or;;anization, imProvement of training and upgrading of qualifications of cad- res and strengtheninr_ of labor discipline constitute the decisive cotidition Lor raisinQ of the efficiency of nublic production. Over ttie course of the last 10 years, productivity of social labor, computed as a ratio of national income to the number of einoloyed in sectors of material production, increased b; a factor of 1.5. This was resPonsible for a greater than 30 percent ~ro~ath of tiie national income and ensured an economy of labor of almost 3b million persons. Ti~e rise of labor productivity in industry by only 1 percent in 1~)�i0 rrovided witii the same numUer of workers additional production output in excess of u billion rul~les. Durinr tlie current five-year plan, it is intended to Provide a 17-20-percent Frowtn of labor productivity. In all sectors, it is imPortant to achieve ~;rowth of production output at existing enterprises ,:~ith a staUle or even snaller number of employees. It is planned to increase laoor productiviCy of ~vorlcers in industry by 23-25 percent, in agriculture--by 22-24 percent, in construction--by 15-17 percent and in railroad transport-- by 10-12 percent. Ttie fulfillment of intensive t~rgets for oroyrth ~~i Iabor productivity is dictated by tiie special features of the country`s economic developrient in tlie ~80s, particularly the sharp reduction of influx of new labor resources with an exceptionally hi~h level of employment of the popula- ' rion (J4 percent). ~ !:eduction of production labor intensiveness can be done on the basis of ~all- possible acceleration of scientific-technical p rogress in all sectors of the economy. During the current five-year plan, a transition will be systematic- ally carried out of creation and introduction of individual machines and pro- ciuction process for the development, production and mass use of nighly effi- cie~it systems of machines and equipment for the mechanization of the ~ahole comple~: of operations--both basic and auxiliary. 9 � FnR f1FFirr r. i JSF ONi.Y APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040500060010-9 FOR OFFICIAL USE ONLY L-,q~rovement of the organization, norm setting and stimulation of labor, strear;tiienin~ of labor discipline and r_he continued rise in the level of vocational-technical t,raining of cadres are of major importance. l~lthough the sphere of use of qualifieci, meclianized labor is constantly expanding, at Lhe present time, riore than 40 million people are en~aged in manual labor in sectors of material production alone, excluding repair work. This results in extensive use of labor resources, creates difficulties in filling work places in counection ~~itii an uncleviating growth of the level of general-educational and vocational-tecilnical training oL- workers, especially of young people. 2'he ineclianization of mariual ~aork rapidly pays for itself and provides a si~nificant social effect. i:;tpenditures on the release of one worker engaged in auxiliary production are on the 1 7i,97 csa: iszo/iu~ iz FOR OFF[C[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2407102/09: CIA-RDP82-00850R000500460010-9 FOR OFFICIAI. USE ONLY INDUSTRIAL DEVELOPMENT AND PERFORMANCE NORMATIVE NLT OUTPUT IN INCREASED PRODUCTION EFFICIENCY Moscow VOPROSY EKONOMIKI in Russian No 1, Jan 82 pp 23-32 [Article by L. Rozenova: "Normative Net Output and Increasing Efficiency of Production"] [TextJ Increasing production efficiency and in all ways economizing on material, labor and financial resources are important directions for steadily advancing the national economy that were earmarked by the 26th CPSU Congress. Economizing on all kinds of resources is a complex task whose solution involves the development of science and technology, improvement of price setting, standardization and forms of stimulation and other economic factors that influence economic conditions. In the decree adopted by the CPSU Central Committee and the USSR Council of Ministers con- cerning economizing on materi~?. resources it is noted that the system of administra- tion, planning and incentives should be directed toward economy and effici~nt utili- zation of all material resources. In order to create conditions that contribute to economizing on resources it is very important to apply the appropriate economic indicators in planning, particular- ly the indicator of normative net output (NChP). As of 1 January 1982, 33 ~ninistries are changing over to the application of the indicator of normative net output in planning industrial production, including all machine building ministries. In the four ministries--the USSR Ministry of Power and Electrification, Ministry of the Petroleum Industry, Ministry of the Gas Industry and the Ministry of Nonferrous Metallurgy--this indicator will be used only at enterprises of the processing in- dustry for the time being. In a number of ministries, particularly the USSR Minis- try of Ferrous Metallurgy, the Ministry of the Petroleum Refining and Petrochemical Industry and the Ministry of the Chemical Industry, experimental testing of the in- dicator of normative aet output is being continued. The normatives will be develop- ed in these branches after the results of the experiment have bee~n generalized. 'I'he utilization of the indicator of normative net output and also other measures that have been taken to improve planning make it possible to evaluate with better justiEication and more objectively the results of the activity of the enterprises and organizations for increasing production efficiency, increasing the productivity of live labor and economizing on labor resources. This is shown by an economic ex- periment in applying the normative net output in planning that was conducted on a larKe scale in the branches, associations and enterprises. Measuring labor praduc- tivity on the basis of gross output does not adequately reflect the enterprise's 13 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 ' FOR OFFICIAL USE ONLY cc~ntribution to increasing its own labor productivity since it includes the results of "outside" labor. The press has extensively elucidated the shortcomings of the tradirional "gross" method of planning and accounting for labor productivity at en- terprises and a~sociations. ~ On of the main directions for economizing on labor resources is increasing labor productivity. What with the shortage of labor force, an objective evaluation of labor productivity becomes especially important. The distribution and utilization of labor resources, the development of ways of economizing on them and, consequent- ly, increasing the efficiency of public production depend largely on this. The normative net output is assigned an essential role in the objective evaluati.on of labor productivity since expenditures of past labor do not influence its levc~l. In the five-year plans for the economic and soci~al development of industrial minis- tries. associations and enterprises (with a breakdown for the various years) thE~ new indicator is the basis for establishing indicators for increased net output (normative) and labor productivity. The NChP is also used for calculating capital-- output ratio. Norn~atives for determining the wage fund and controlling its utili- zation are established in terms of one ruble of NChP. M The main measures of labor productivity, as we know, are the output of products per unit of. working time or expenditures of :~nrk~ng time on the production of each unit of output. These indicators are calculated in physical units. The quantity of vari- ous kinds of products that are produced is measured in value form (in constant prices of the enterprises). Labor productivity in value terms including both past labor that is embodied in raw material, processed materials, semimanufactured products and batching items, and in newly created value essentially characterizes the productivi- ty of public labor. On the basis of the normative net output it is possible to mea- sure only the productivity of live labor. But the growth of the latter in all branches of the national economy, in the final analysis, determines the growth of the productivity of public labor. The increased role of the normative net output in evaluating labor productivity has brought about the structure of the new indicator and the methodology for determining it. Wages comprised more than half of the structure of the normative net output, and the remainder is profit. The table below gives data concerning the structure of n~~rmative net output in the various branches of machine building: Proportion oE T~ormative Net Out~ut Output _ Wages Profit ~ 1 2 3 - Total for machine building ~ 60.0 40.0 including in branches: _ heavy machine b~iilding (2,7 37.3 power machine building 50.1 49.9 electrical equipment industry 59.2 40.8 chemical and petroleum machine building 60.3 39.7 instrument making, automation equipment and control systems 59.3 40.7 machine tool and tool building 65.2 34.8 14 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500060010-9 FOR OFFICIAL USE ONLY Proportion of Normative Net Output Output Wages Profit 1 2 3 construction, roaci and municipal machine building 63.2 34.8 automotive industry 55.0 45.0 tractor and agricultural machine building 54.7 45.3 machine building for animal husbandry and fodder production 54.2 45.8 machine building for light and food industry and household appliances 65.5 34.5 On an average for machine building wages comprise 60 percent of the vplume of the NChP and profit, 40 percent. The deviations from this average level in the various branches is explained by the different structures of expenditures and the formation of profit, taking into account the branch capital-output ratio. The normative net output is a part of the wholesale price of the item, including wages, deductions for social security and profit. 1ne existing "Methodological In- structions Concerning the Policp for the Development and Application of the Indica- tor. af Net Output (Normative) in Planning"* stipulates that the normative of net output for a specific item is determined by the total of wages and normative profit. In general form, the formula~for calculation can be written as follows: H y!1 = 3~,I, -I- 30 + nH , c l) where 3�r --c~~orkers' wages (basic and additional), including deductions for s~:.ial security in the projected (planned) calculation of the production cost of ~ the item; 3� --the wages of the remaining industrial production personnel for ser- vice and administration of production per unit of item; ~jN --normative profit per unit of the item. Net output normatives and wholesale prices are established on the basis of un~fied calculation and progressive technical-economic norms, and they are of a brancY~ na- ture. The branch net output normatives, which have the same calculation base as prices, include not just any labor expenditures of a particular enterprise, but the socially necessary normative expenditures on the production of the products that 1�re used in the formation of wholesale prices and provide the greatest economic effect from ttie production and application of the products. At the Pavlodar Tractor Plant imeni V. I. Lenin, for example, expenditures on the praduction of tractors with a capacity of 90 horsepower exceed the maximum price level caiculated taking into ac- - coiint their technical and economic parameters and efficiency. Therefore the new whol.esale prices that went into effect on 1 January 1982 were reduced by more than 10 per.cent below the level projected by the enterprise and the net output normatives _ were reduced by 30 percent. Labor expenditures in excess of the necessary norms *See "Methodological Instructions Concer.ning the Policy for the Development and Ap- plication of the Indicator of Net Output (Normative) in Planning" (in the collec- tion "Improving the Economic Mechanism" Izdatel'stvo "Pravda", 1980, pp 69-79.) FOR OFFIC[AI. USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500060010-9 FOR OFFICIAL USE ONLY are not reimbursed either through the price or through the normatives, which makes it possible to economically "punish" the enterprises for wasting labor. When calculating the nornatives, the wages of the production workers ( 3n~,) are ap- ~ plied at the level ti:at was taken into account in determining the prices in the cor- responding article of the calculation per unit of output. As for the wages of wor- kers for service and administration of production ~3~ in the calculdtion per unit of output it is determined with a special coefficient (,K,) which is the same for the enterprise or branch. This coefficient characterizes the ratio between the sum of wages of industrial production personnel for administration and service of production and the wages of production workers. The level of this coeff icient de- pends on a number of factors, among which one should mention the number of workers in the d~sign and technological services, the ratio between the number of auxiliary and basic production workers, and so forth. On an average for machine building it amounts to 1.5. The established normatives (froin formula 1) remain stable throughout the five-y~:ar plan. An increase in labor productivity with stable normatives (and, as a rule, with the same number of workers) can be achieved on the basis of economizing on la- bor resources per unit of output both through reducing the labor-intensiveness of the products that are produced .ind through reducing losses and utilizing working time better. The reduction of ~.he labor-intensiveness of the products depends on many factors, including improvement of production organization and increasing its technical support, that is, on factors that are related to the concrete activity of _ the enterprises which is directed toward increasing production efficiency. The significance of the indicator of net output increases especially when determin- ing the labor productivity of enterprises that manufacture products that use less expensive materials and substitutes. The existing policy for price setting stipu- lates that when materials that are less expensive than the present ones are used and the product quality remains at the previous level, wholesale prices remain un- changed until the end of the fi~~e-year plan. Tt~e utilization of less expensive materials requires, as a rule, additional proces- sing of them, which leads to a~ increase in the labor-intensiveness of the produc- tion oF products. For example, the replacement of the lead casing of a long dis- t.nce cable with a corrugated steel one (while retaining the main technical and - economic parameters of the cable) led to a reduction of the weight of one kilometer of cable by 28.5 percent (from 1,105 to 790 kilograms) with a reduction of the pro- duction cost by 28 perc~nt (from 948 to 682 rubles). But the labor-intensiveness of the manufacture of the cable in corrugated steel casing increased 1.4-fold as a resule of the additional operations for cutting the sheets, welding the casings and applying the polyethylene hose. In titich cases, with the "gross" method of calculation of labor productivity, re- taining the existing prices for the cable in lead casing does not fully solve the problem of increasing the motivation of the manufacturer to assimilate a new pro- duct using less expensive raw material since labor productivity decreases at the manufacturing enterprise even through the mass of profit increases. Replacing the cable casing with a less expensive one and one that is in greater supply provided 16 FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2407102/09: CIA-RDP82-00850R000500460010-9 FOR OFFICIAL USE ONLY an annual savings of more than 500,000 rubles for the national economy. But with the "gross" method of calculating labor productivity the interests of the manuf ac- turing enterprise end up in opposition to natianal economic ones. - I3ut when labor productivity is calculated according to the normative net output it is advantageous for the manufacturing enterprise to produce cable with relatively less expensive materials since the net output normativ2 increases. It reflects the economically justifiable increase in labor expenditures which provides for an eco- nomic effect in the production of the cable. It is known that one of the main principles of price setting is the principle of identity of prices for identical products. Therefore the price~ of the cable remains unchanged since its consumer qualities do not change. And t.hus the new indicator more objectively takes into account both the savings of labar expenditures on the production of products and the economically justified increase in labor-intensiveness related to savings on material expenditures when materials are replaced with less expensive ones or to - the increased technical and economic parameters and effectiveness of the new pro- ducts. The changeover from experimental (test) verification of the indicator of normative net output to its planned introduction into economic practice requires that a number of problems be solved, particularly the problem of whether when calculating the NChP for a new product the stable coefficient K,y taken from the basic price list should be used or whether it should be calculated annually. According to the "Methodological Instructions Concerning the Policy for the Development and tion of the IndicaCor of Net Output (Normative) in Planning," the coefficient K3 is used for the same accounting periods in which materials are presented for the sub- stantiation of wholesale prices and normatives, that is, it changes from year to year, which is brought about by the dynamic nature of overhead expenditures in the production of products. As was already noted, the amount of the coefficient K~ depends on the number of workers in design and technological services, the ratio between the numbers of aux- iliary and basic production workers and on other factors. Would it be correct to increase (or reduce) the volume of net output if, for example, the design bureau were transferred to the books of the enterprise (or transferred to independent books)? Would not the change in the coefficient K3 lead to unjustified changes in the rates of growth of production and labor productivity? After all the influence of this coefficient on the level of the normative net output is great since the proportion of wages of workers in service and administration comprises more than 40 percent of the NChP. i'urther, witn mechanization of auxiliary loading-unloading and repair work and a. reduction in the number of workers employed in these operations, the wage fund for service for production in the enterprise as a whole can be decreased, which leads to a reduc~ion of the coefficient K3. Its reduction can also be brought about by an absolute or relative reduction of expenditures (wages) for administration. In a11 of these cases, with an economically justified increase in labor-intensiveness cluring the assimilation of new, more complex and effective items, the normatives f.or the new products, as a result of the reduction of the coefficient K3, can be unjustifiably lower. than those for previously assimilated, less labor-intensive 17 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060010-9 APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000500460010-9 ' FOR OFFICIAL USE ONLY products, but with a greater K3. Therefore it is expedient to keep this coefficient stable throughout the entire period of the five-year plan. On the whole, in c~ur opinion, the role of normatives in economizing on labor resources will be more sig- nificant if it is made dependent mainly on changes in labor-intensivenzss. With the applicatic;*_: of the indicator of NChP in planning, it becomes especially im- portant to have scientifically substantiated planning of labor. The basis for the development of normatives of net output should be the normative labor-intensiveness which is determined taking into account progressive technology and organization of production. The substantiation of the normatives of net output depends on the qu;ility of the norms, their objectivity and precision. Increased norms lead to ad- ditional expenditure of labor resources and the wage fund, and they distort indica- tors that are calculated on their basis. T'his is why the changeover to the NChP in planning requires introducing a strict policy in norm setting for labor. One oF the complicated problems in the development of normatives of net output con- sists in making branch normatives take into account the conditions of cooperation. As we know, the level of labor expenditures at a specific enterprise depends on its cooperation with other enterprises. Moreover the conditions for cooperation at en- terprises that manufacture the same kinds of products can differ significantly, which brings about different levels of labor-intensiveness for the same products. Thus manufactured products, for example, fabrics, can be manufactured from one's own yarn and gray cloth, from others' (purchased) yarn and one's awn gray cloth, or from others' gray cloth. Ln all of these cases labor exper,ditures on the manu- facture of the fabric of the same article differ essentially. In a number of branches (light, food, pulp and paper and others), the normatives are established in terms of limits (for various operations). The overall volume of normative net output is determined by the total of normatives (volumes) from indi- vidual limits and kinds of work performed at a specific enterprise. In these c