C.I.A. SAYS SOVIET CAN ALMOST DO WITHOUT IMPORTS

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CIA-RDP84B00274R000300150006-8
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RIFPUB
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K
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1
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December 20, 2016
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May 17, 2007
Sequence Number: 
6
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Publication Date: 
January 9, 1983
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OPEN SOURCE
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Approved For Release 2007/05/17: CIA-RDP84B00274R000300150006-8 LF 03 . ;.ARED NEV YORK TIMES G$li ,~. 41 - 9 JAI VARY 1983 C.I.A. Says Soviet Can Almost Do Without By tIERNARD GWERTZMAN SpedsltoThe$e.YorkTt .es WASHINGTON, Jan. 8 -The Central Intelligence Agency, in a study of the SiA-iet economy,- concludes that the Soviet Union's ability to live without im- ports is much greater than that of most, possibly all, other industrialized econo- mies. The report, delivered to the Joint Economic Committee of Congress an Dec. 1 by Henry Rowen, chairman of the C.I.A.'s National Intelligence Coun- cil, seems to support the argument that American trade embargoes against the Soviet Union have only limited effect. The Reagan Administration has sought to tighten Western controls on trade to the Soviet Union to bring politi- cal pressure on Moscow, a policy often at odds with European allies and with some American businessmen. Capital, Technology and Food The C.I.A. report said that for the last decade the Soviet Union has used trade with the West to help modernize its economy and make it more efficient. It said that the Russians had relied on im- ports of capital and technology to in- crease or maintain production of some raw materials and that food imports had "become critical" to maintaining a quality diet. Imports of grain and other agricul- tural products, it said, meant primarily to prevent a decline in meat consump- tion, cost the Russians tit billion in 1981, or 40 percent of their hard-cur- rency purchases that year. But Mr. Rowen said that "despite the An Ability 'to Remain Viable' Imports from the West, Mr. Rowen said, "can play an important role in re- critical shortages, spurring aM" lieving Ports technological progress and generally, improving Soviet economic peform- I Mr. Rowen said the C.I.A. agreed ance." But he added that "the ability of with Mr. Proxmire that "confusion sur- the Soviet economy to remain viable in rounding the Soviet economy abounds." the absence of imports is much greater "Western observers have tended to than that of most, possibly all, other in- describe Soviet economic performance dustrialized economies." as 'poor' or `deteriorating' at a time "Consequently," he concluded, "the when Soviet defense spending continues susceptibiity of the Soviet Union to eco- to rise, overall Soviet gross national nomic leverage tends to be limited." product in real terms continues to in- The Soviet Union has always put crease and Soviet G.N.P. is second in great emphasis on self-sufficiency. This size only to that of the United States," dates from the earliest days after the he said, noting the apparent contradici- 1917 revolution, when most foreign tons. countries did not recognize the Soviet As a result of recent declines in the regime, and it continued as a result of rate of growth, the gap between per- the isolation the country experienced in formance and expectations, and the World War II. lack of economic efficiency, "the Mr. Rowen's report was prepared at record compiled by the Soviet economy the request of Senator William Prox- in recent years has indeed been poor," mire, Democrat of Wisconsin. The he said. Senator, who is vice chairman of the "Results that are unsatisfactory subcommittee on international trade, when measured by this yardstick, how- finance and security economics, hid ever, do not mean that the Soviet econ- asked for "a balanced assessment" of omy is losing its viability as well as its the strengths and weaknesses of the dynamism," the C.I.A. official said. Soviet economy. "In fact, we do not consider an eco- This was the second C.I.A. report in a nomic `collapse' - a sudden and sus- u o th t t t tr th th e in n o pom o s eng m e tamed decline in G.N.P. - even a re.. Soviet economy. mote possibility," he said. The, C.I.A. projects, he said, that Soviet economic growth "will remain slow but positive," averaging 1 to 2 per- cent "for the foreseeable future," al- though per capita consumption might level off or drop slightly. Energy Production Rises Mr. Rowen said that natural gas pro- duction had continued to increase at a rapid rate, 8 percent in 1982, and that energy as a whole was increasing, with oil up by about 1 percent and coal 2 per- cent in the past year. The Russians have also improved their trade with the West, cutting their deficit from $4 bil- lion in 1981 to $2 billion in 1982. large-scale expansion in agricultural imports, the Soviet Union remains basi- cally self-sufficient with respect to food " He said the average Soviet citizen consumes abut 3,300 calories a day, as against 3,52O'for an American. The re- port showed that the Soviet diet consists of far more grain and potatoes than the American diet, but less fish and meat and less sugar. And Mr. Rowen said that grain production in the Soviet Union "is more than sufficient to meet consumer demand for bread and other cereal products." The report said trade with the West amounted to only 5 percent of the Soviet gross national product. But it seemed to agree with some Administration policy makers when it said the Russians would have to import 15 million to 20 million tons of steel pipe in the next seven years to build the pipelines it has planned, and will need "sophisticated" exploration equipmenu for its oil and natural gas fields. The Administration has tried to block those exports in particular, provoking feuds with Western govern., meets that have contracted to provide the equipment. The Soviet gross national product in 1982 was estimated at $1.6 trillion, or $6,000 per'capita, roughly 55 percent of .the American gross national product. The C.I.A. estimated Soviet gold re- serves at 200 million troy ounces, giving pit 35 percent of the world total. Product tion in 1981 was estimated at 325 tons and its stock at about 1,900 tons, worth over$25 billion at current prices. 1eecono~my was tha ed major the h growth + of the work force, with only 9 million ex- petted to join in this decade as against 19 million in the 1970's. Agriculture remains the weakest . link. Grain production achieved a record high of 237 million tons in 1978 but has not reached 190 million tons since then. The report also highlighted problems in poor administration, bot- tlenecks in industry, an overworked railroad system and depletion of many mineral reserves.