REVAMPING THE COUNCIL OF MINISTERS
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP85T01058R000608560001-1
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
24
Document Creation Date:
December 22, 2016
Document Release Date:
February 22, 2011
Sequence Number:
1
Case Number:
Publication Date:
December 27, 1985
Content Type:
REPORT
File:
Attachment | Size |
---|---|
![]() | 844.57 KB |
Body:
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
1e-
DATE
I3
Doc NO M
u 3S~ ()2A
OCR 2-
P&PD '
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Iq
Next 1 Page(s) In Document Denied
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
cnln Inlc igcncc Agcncv
DIRECTORATE OF INTELLIGENCE
27 December 1985
Revamping The Council of Ministers
Summary
General Secretary Gorbachev is waging a two-
pronged campaign of personnel and organizational
changes to mobilize the USSR Council of Ministers
behind his economic program. On the personnel front,
he has replaced the Chairman of the Council and six
deputy premiers with younger officials more likely to
support his policies. Most of these new appointees
have backgrounds in defense industry, reflecting
Gorbachev's intention to draw on that sector to improve
the management of civilian industry.
More than a dozen economic ministers also have
been retired or reassigned and another has died,
enabling Gorbachev to appoint new officials politically
beholden to him. He probably will continue to move
rapidly in replacing ministers who are eligible for
Central Committee membership before the elections to
that body at the upcoming Party Congress.
On the organizational front, Gorbachev has
eschewed a sweeping, sudden overhaul in favor of a more
cautious approach that reduces the potential for
economic dislocation. Since mid-October he has
established a new bureau to oversee the machine-
building ministries and embarked upon a major
This paper was prepared byl Ithe Office of Soviet Analysis.
Comments and questions may be directed to the author or to the
Chief, Domestic Policy Division,
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
reorganization of the agro-industrial bureaucracy.
These recent actions and Gorbachev's speeches suggest
that further efforts to streamline and revitalize the
too levels of the economic bureaucracy are likely. F
The personnel and organizational changes now
underway should improve the qualifications of senior
economic managers and increase their ability to deal
with economic tasks that cut across ministerial
boundaries. If accompanied by significant reductions
in the bureaucracy's size, they could also pave the way
for the transfer of additional decisionmaking power to
the enterprise level. They may also highlight the need
to address basic Soviet economic problems caused by
irrational pricing, poor incentives, chronic breakdowns
in supply, and inadequate consumer input into
production decisions. Because such problems arise from
the centralized system of economic planning, they will
be far more difficult to resolve than the
organizational and personnel issues Gorbachev has
addressed so far.
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Gorbachev's New Broom
Since succeeding Konstantin Chernenko in March of this year,
Mikhail Gorbachev has frequently criticized the economic
ministries for poor management and called for personnel and
organizational changes to improve their performance. In June,
for example, he publicly criticized four industrial ministers for
wasting equipment and resources and for evading tight output
targets. Several months later he openly criticized Gosplan
Chairman Nikolay Baybakov for presiding over a system of economic
planning that permitted such gross inefficiencies. 25X1
In expressing such criticism, Gorbachev has echoed the words
of his last three predecessors, all of whom had described the
economic bureaucracy as a major obstacle to efforts to remedy the
economy's ills. In contrast to his recent predecessors, however,
Gorbachev has displayed unusual ability to match his words with
deeds. Under his leadership, personnel turnover in the Council
of Ministers has far exceeded the pace of the Brezhnev, Andropov,
and Chernenko years and the Council has embarked upon the first
major reorganization since reestablishment of the economic
ministries in 1965. 25X1
Changes on the Personnel Front
Gorbachev's greatest success on the personnel front has come
in the Council's Presidium which, with its Chairman and a dozen
first deputies and deputies, constitutes a type of economic
cabinet (see table 1). Although Deputy Chairman Ivan Bodyul was
retired in May, and Andrey Gromyko resigned as first deputy
chairman in July upon his election as President, personnel
turnover in the Presidium was slow during Gorbachev's first few
months in office. Since the replacement of Chairman Nikolay
Tikhonov by Nikolay Ryzhkov in September, however, turnover in
the Presidium has accelerated sharply. Five of the oldest deputy
chairmen have been retired and replaced by younger men--one of
whom, Nikolay Talyzin, was already a member of the Presidium.
Talyzin, the new Chairman of the State Planning Committee, and
Vsevolod Murakhovskiy, who oversees the agro-industrial sector,
have also had their positions upgraded to first deputy premier.
A new deputy premier, Ivan Silv, has been appointed to oversee
civilian machine building. F 25X1
Ryzhkov comes to the chairmanship with considerable
industrial experience. An engineer by training, he has worked on
proposals for planning and management reform in industry and has
supported ministerial restructuring to remove superfluous
administrative levels. He has also had a long working
relationship with other top level industrial managers that should
serve him in good stead in his new position. Ryzhkov, moreover, ^^
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Changes in the Presidium of the Council of Ministers
Under Gorbachev
Yea r
Position Incumbent (Mar 85) Appointed Status
Chairman Nikolay Tikhonov, 80 1980
First Deputies Geydar Aliyev, 62 1982
Ivan Arkhipov, 78 1980
Andrey Gromyko 76, 1983
Deputies Aleksey Antonov, 73 1980
Nikolay Baybakov, 74 1965
Ivan Bodyul, 67 1980
Veniamin Dymshits, 75 1962
Guriy Marchuk, 60 1980
Nikolay Martynov, 75 1976
Ziya Nuriyev, 70 1973
Yakov Ryabov, 57 1984
Boris Shcherbina, 66 1984
Leonid Smirnov, 69 1963
Nikolay Talyzin, 56 1980
New Appointee
retired Sept 1985 Nikolay Ryzhkov,
56
remains in office
remains in office
moved to Presidency
July 85
appointed in
Nov
promoted in
Oct
remains in office,
assumed Talyzin's
old job
retired Oct 1985
retired May 1985
retired
Dec 1985
remains
in office
retired
Nov
1985
retired Nov
1985
remains
in
office
remains
in office
retired
Nov 1985
promoted to 1st
dep. Oct 1985
appointed in Nov,
assumed Antonov's
old job
Vsevolod
Murakhovskiy, 59
Nikolay Talyzin,
56
(Talyzin)
Yuriy Batalin, 58
Lev Voronin, 57
(Murakhovskiy)
Yuriy
Maslyukov, 58
Ivan Silayev,,55
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
may have an unusually free hand to put his stamp on economic
policy. In requesting ratification of Ryzhkov's appointment at
the Supreme Soviet session on 26 November, Gorbachev praised his
experience and organizational abilities and noted that the new
chairman had already submitted "substantial proposals" for
improving economic management. 25X1
Although two members over 70 remain in the Presidium,
Ryzhkov has a reinvigorated cabinet heavily weighted with men of
his own generation who have similar backgrounds in industrial
planning and management and, in some cases, longstanding career
ties to him. Talyzin, Lev Voronin, Yuriy Maslyukov, and Ivan
Silayev, for example, all have experience in defense-related
industries. Presumably, their appointments reflect Gorbachev's
declared intention to borrow more heavily from the more effective
managerial methods of the defense sector to improve productivity
and product quality in civilian industry. Voronin worked with
Ryzhkov in industrial plants in Sverdlovsk in the 1950s and 1960s
and later served with him in Gosplan. His selection to head the
State Committee for Material-Technical Supply may foreshadow
plans to change the present industrial supply system, which is
often criticized as overcentralized and undependable. While head
of a commission to oversee the current experiment in industrial
planning and management, he was ordered to prepare proposals for
improving supply. 25X1
Gorbachev has also had great success in renewing the ranks
of economic officials at the ministry level, where 14 ministries
and several state committee chairmanships have already changed
hands (see table 2). The number of changes occurring in such a
short period of time and so soon after Gorbachev's accession
indicates a major effort to speed the pace of ministerial
turnover in preparation for the Party Congress scheduled for
February 1986. Gorbachev, no doubt, hopes to place men of his
own choosing in positions eligible for Central Committee
membership before the elections to that body at the Congress.
With few exceptions, he has replaced ministers in their mid-70s
with men of his own generation who have technical backgrounds,
production experience, or managerial expertise. 25X1
While moving to place his political stamp on the ministerial
bureaucracy, Gorbachev has evidently also made an effort to maintain
some managerial continuity in most economic sectors. Of the
fourteen economic ministries where the top official has been
replaced, seven have been taken over by their former first
deputies. Only three--the ministries of light industry,
construction machine building, and finance--have been given to men
who were not serving elsewhere in the ministerial bureaucracy;
these assignments went to a former regional party secretary, a
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Turnover In Economic Organizations of the Council of Ministers Under Gorbachev
Who's Out?
How and When Removed
Who's In? Former Job
A. Economic Ministries
Agriculture
Valentin Mesyats,
Reassigned to First
no replacement,
57
Secretary Moscow
ministry
Obkom Nov 1985
disbanded
Aviation
Ivan Silayev, 55
Appointed dep chairman
,
Apollon Systsov, First
Industry
CM Nov 1985
56 Deputy
Coal Industry
Boris Bratchenko,
Retired Dec 1985
Mikhail Fi rst
73
Shchadov Deputy
58
Construction
Aleksey Yashin,
Retired July
Sergey RSFSR
Materials
66
1985
Voyenushkin, Minister of
56 Industrial
Construction
Construction,
Vitaliy Chudin,
Retired Aug 1985
Yevgeniy Director of
Road & Municipal
56
Varnachev, Uralmash
Machine Building
53 Production
Association
(Job once held
by Ryzhkov)
Electrical
Anatoliy
Moved to Ministry of
Gennadiy Fi rst
Equipment
Mayorets, 56
Power, May 1985
Voronskiy, 60 Deputy
Aleksandr Shokin,
Retired, Nov 1985
Vladislav Fi rst
76
Kolesnikov, 60 Deputy
Ferrous
Ivan Kazanets,
Retired, July 1985
Seraf im Fi rst
Metallurgy
67
Kolpakov, 52 Deputy
Vasil iy
Died, Nov 1985
Boris Gostev, First Deputy
Garbuzov, 75
58 Chief of CC
Economics
De
partment
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Food Industry Vol'demar
Lein, 65
Foreign Trade Nikolay
Patolichev, 77
Fruit and Nikolay
Vegetable Koz.lov, 60
Industry
Industrial Yuriy
Construction Solov'yev, 60
Status unknown,
ministry abolished
Nov 1985
Retired, Oct 1985
Boris Aristov, Deputy
60 Minister of
Foreign Affairs
Status unknown,
ministry abolished
Nov 1985
Moved to First
Secretary, Leningrad
Obkom, July 85
Light Industry Nikolay Tarasov, Retired, July 1985
73
Meat and Dairy Yevgeniy Sizenko, Appointed first
Industry 54 deputy chairman
new Agro-Industrial
Committee
Petroleum Viktor Fedorov, Retired, Oct 1985
Refining and 73
Petrochemical
Power and Petr
Electrification Neporozhniy, 75
Retired, March 1985
Rural Viktor Status unknown,
Construction Danilenko, 49 ministry abolished
Nov 1985
Transport Ivan Sosnov, 76 Retired, May 1985
Construction
B. State Committees
Agro-Industrial (new committee
Nov 1985)
Foreign Economic Mikhail Retired, Nov 1985
Relations Sergeychik, 76
Arkady Ukrainian
Shchepetil'nikov, Minister of
55 Industrial
Construction
Vladimir First
Klyuyev, 61 Secretary
Ivanovo Oblast
No replacement,
ministry
disbanded
Nikolay Lemayev, First
56 Deputy
Anatoliy Minister of
Mayorets, 56 Electrical
Equipment
Industry
Vl adimi r First
Brezhnev, 54 Deputy
Vsevolod First Secretary
Murakhovskiy, Stavropol
59 Obkom
Konstantin Ambassador
Katushev, 58 to Cuba
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Labor & Social
Yuriy Batalin, 58
Appointed deputy N
ot ye
t
Problems
chairman CM, Dec 1985 a
nnoun
ced
Material-
Nikolay
Retired, Nov 1985 L
ev Vo
ronin, Firs
t Deputy
Technical
Martynov, 75
5
7
Chai
Gosp
rman of
lan
Supply
Planning
Nikolay
Retired, Oct 1985
Nikola
y Depu
ty
74
Baybakov
T
alyzi
n, 56 Chai
rman,
,
Coun
cil of
Mini
sters
and
Perm
anent
Repr
esentative
to C
EMA
Supply of
Petroleum
Talgat Khuramshin
Fired, expelled
from CP December 1985
Products
Supply of
Production
Equipment for
Leonid
Khitrun, 55
Status unknown,
Committee abolished
Nov 1985
Agriculture
C. Other Organizations
Central
Lev Volodarskiy,
Retired, Dec 1985
Mikha
il Firs
t Deputy
Statistical
74
Korol
ev, 54
Administration
Military-
Leonid Smirnov,
Retired, Nov 1985
Yuriy
Fir
st Deputy
Industrial
69
Masly
ukov, Chai
rman
Commission
58
of
Gosplan
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
director of a major industrial association for machine building
and the first deputy chief of a Central Committee department.
Several of the ministerial changes were clearly aimed at
improving industrial performance by replacing ministers who were
considered to be inefficient managers. The retirement of the 75-
year-old Minister of Power and Electrification, Petr Neporozhniy,
for example, followed sharp public criticism of him in the press
and paved the way for his replacement by Anatoliy Mayorets, who
seems to share Gorbachev's commitment-to managerial reform. As
Minister of the Electrical Equipment Industry, Mayorets had
headed one of the first five ministries to participate in an
experiment in industrial management that Gorbachev has recently
extended. In addition, Minister of Ferrous Metallurgy Ivan
Kazanets and Minister of Light Industry Nikolay Tarasov had been
under fire for producing low quality output as far back as
Brezhnev's day, and Minister of Petroleum Refining and the
Petrochemical Industry Viktor Fedorov had been publicly
criticized by Gorbachev in a speech in June.
Structural Reorganization
Although organizational change has yet to match the pace of
personnel turnover, Gorbachev--having put his people into key
positions--has recently embarked on a program of major structural
changes in the ministerial system. The General Secretary had
indicated his intention to undertake such changes in his speech
at the April Plenum when he criticized the ministries for
pursuing a "narrow departmental approach" to economic problems
and for excessive interference in day-to-day decisionmaking at
lower operating levels. In later speeches he called for measures
to improve interagency coordination, reduce the size of the
central bureaucracy, and increase the rights and responsibilities
of industrial and agricultural enterprises. He indicated that
such steps would be taken first in the agro-industrial and
machine-building sectors.
On 17 October the Politburo announced the creation of a
"bureau" attached to the Council of Ministers to oversee and
coordinate the machine-building industries (see table 3). The
bureau, which is headed by recently appointed Deputy Premier
Silayev, was given authority both to give instructions to the
ministries and to redistribute resources among them. The limited
information available on the bureau suggests that it may be
intended to be civilian machine building's counterpart to the
Military Industrial Commission, the body which coordinates the
work of the defense industrial ministries.
The creation of the new coordinating bureau seems to be a
first step in Gorbachev's efforts to improve top-level management
of civilian machine building. The General Secretary's speeches
suggest that additional changes are in the offing--in particular
F_ I
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Ministries Likely To Be Affected by the
New Machine-Building Bureau
Ministry of the Automotive Industry
Ministry of Chemical and Petroleum Machine Building
Ministry of Construction, Road, and Municipal Machine Building
Ministry of the Electrical Equipment Industry
Ministry of Heavy and Transport Machine Building
Ministry of Instrument Making, Automation Equipment, and Control
Systems
Ministry of Machine Building for Animal Husbandry and Fodder
Production
Ministry of Machine Building for Light and Food Industry and
Household Appliances
Ministry of the Machine Tool and Tool-Building Industry
Ministry of Power Machine Building
Ministry of Tractor and Agricultural Machine Building
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
he has hinted that he intends to consolidate ministries engaged
in the manufacture of similar or related products. In his speech
to the Central Committee Conference on Science and Technology in
June, for example, Gorbachev noted that poor coordination among
the ministries producing computers, peripheral equipment and
software was hindering computerization of the economy and implied
that consolidation of planning and other functions within this
sector would help in alleviating this problem. In the same
speech he stated that the civilian sector should draw upon the
managerial talent and superior technology available in the
defense industrial sphere. Ministerial reorganization might
facilitate pursuit of this goal but would not by itself duplicate
the success of the defense sector, which is primarily due to
priority access to resources and a strong link between producers
and consumers.
Gorbachev has already moved to consolidate ministries in the
agro-industrial sector. On 22 November, Soviet media announced
the creation of a new State Agro-Industrial Committee, headed by
recently appointed First Deputy Premier Vsevolod Murakhovskiy, a
Gorbachev protege who succeeded him as first secretary of
Stavropol' Kray in 1978. In the June issue of Partiynaya Zhizn',
Murakhovskiy supported Gorbachev's call for unifying agricultural
management and, carrying the 1982 reorganization to its "logical
conclusion."
The new agro-industrial agency replaces five ministries* and
a state committee and will assume control of some of the
enterprises and organizations formerly under the control of three
other USSR ministries (see table 4). It has also been given
authority to plan and finance the activities of three other agro-
industrial ministries and the USSR State Committee for Forestry--
all of which are to continue to exist as separate agencies. The
restructuring thus creates a high-level committee headed, in
effect, by an agro-industrial tsar. All government organs with
agricultural responsibilities are subject to the committee's
authority, providing for management of the agro-industrial
complex as a single entity--a step intended to overcome
departmental barriers between producing, processing, and
servicing branches.
For all the boldness of Gorbachev's recent moves on the
organizational front, the steps he has taken toward
reorganization indicate a careful, methodical approach that
stands out in distinct contrast with Khrushchev's brash attempt
Yevgeniy SizenF0__T_5_4T, former head of the now defunct Ministry of the Meat
and Dairy Industry, has been named a first deputy chairman of the new
committee and a member of the Council of Ministers. Former Minister of
Agriculture Valentin Mesyats (57) has been reassigned to a high-level party
post. The fate of the other 3 former ministers is unknown.
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Tahle 4
The New State Ay_ro-Industria_l_Committee
A. Organizations Merged in the New State Agro-Industrial
Committee
Ministry of Agriculture
Ministry of the Food Industry
Ministry of the Fruit and Vegetable Industry
Ministry of the Meat and Dairy Industry
Ministry of Rural Construction
State Committee for the Supply of Production Equipment for
Agriculture
B. Ministries Transferring Some of Their Functions to the
Committee
Ministry of Procurement
Ministry of Light Industry
Ministry of Land Reclamation and Water Resources
C. Ministries and Agencies Planned and Financed as Part of Agro-
Industrial Complex
Ministry of Grain Products (previously the Ministry of
Procurement)
Ministry of Land Reclamation and Water Resources
Ministry of Fish Industry
State Committee for Forestry
Central Union of Consumers' Cooperatives
D. Coordinating Ministries
Tractor and Agricultural Machine Building
Machine Building for Animal Husbandry and Fodder Production
Machine Building for Light and Food Industry and Household
Appliances
Mineral Fertilizer Production
Medical and Microbiological Industry
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
to redo the ministerial system in one fell swoop (see box, "The
Khrushchev Analogy"). A gradual series of moves to break up
established organizations may be a more effective means of
dealing with bureaucratic resistance to change. Nonetheless, the 25X1
creation of the new agro-industrial committee is evidently an
unsettling development for the bureaucrats affected.
The Khrushchev Anal o9
The changes in the organization and personnel of the Council
of Ministers introduced by Gorbachev have been more rapid and more
extensive than any enacted under Leonid Brezhnev, Yuriy Andropov,
or Konstantin Chernenko but pale in comparison with those that
were made by Nikita Khrushchev. In 1957, for example, Khrushchev
abolished almost all the industrial and construction ministries at
both the national and republican levels and replaced them with 105
regional economic councils (sovnarkhozy). The creation of the
regional councils made the bureaucracy more attentive to local
needs and enabled Khrushchev to place his political allies and
supporters in influential posts. Ultimately, however, the
reorganization was counterproductive in both economic and
political terms. It worsened the already poor coordination among
institutions responsible for the implementation of economic policy
and increased political opposition to Khrushchev among elements of
the Soviet elite.
Prospects
Gorbachev's speeches suggest he believes much more remains
to be done and is likely to continue to press for additional
changes in the Council's membership and organization. On the
personnel front, there are several likely candidates for
retirement. Among the economic ministers, for example, Minister
of Chemical and Petroleum Machine Building Konstantin Brekhov
(age 78), Minister of Medium Machine Building Yefim Slavskiy
(87), and Minister of Nonferrous Metallurgy Petr Lomako (81),
have held their posts since the ministries were reestablished in
1965. On grounds of age alone, they are probably incapable of
playin the energetic roles required by Gorbachev's economic game
plan. 25X1
US Embassy officers also have heard rumors through Soviet
contacts that 57-year-old Yakov Ryabov--a former associate of
Ryzhkov's in Sverdlovsk and in Gosplan--may take over First
Deputy Premier Ivan Arkhipov's responsibilities as overseer of
aid and trade and that Deputy Premier Aleksey Antonov may be on
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
the way out. Antonov's recent assumption of Talyzin's former
duties as permanent representative to CEMA, however, suggests
that he may be retained. There has also been speculation
concerning the political future of First Deputy Premier Geydar
Aliyev, who was appointed to the Presidium shortly after Andropov
came to power but whose promotion was attributed
to the influence of the Brezhnev old guard. In any
event, the appointment of two new first deputies has probably
weakened Aliyev's authority.
There will probably be additional changes on the
organizational front as well. Gorbachev's calls for action to
overcome ministerial barriers that have hindered technological
progress indicate that a major reorganization of the top levels
of the economic bureaucracy is in the offing. This may include
creation of additional sectoral committees or bureaus headed by
members of the Council of Ministers Presidium, similar to the two
recently established in the agro-industrial and machine-building
areas. Likely sectors for reorganization include construction,
energy, electronics, transport, and consumers goods industries.
The creation of new agencies with broader charters should
increase the central authorities' ability to deal with economic
tasks that cut across ministerial boundaries and could improve
the allocation of resources within economic sectors. If
accompanied by significant reductions in the bureaucracy's size,
ministerial reorganization could also pave the way for the
transfer of additional control over operational decisionmaking to
the enterprise level. The selection of officials with broad
managerial and planning experience, who have supported measures
to strengthen enterprise management, to head the new economic
agencies should increase the chances that the reorganization of
the Council of Ministers will achieve its desired effects.
Placing loyal supporters in top positions should also reds
bureaucratic resistance to Gorbachev's overall program.
Changes in management structures and staff, moreover, may
highlight basic problems in the Soviet economy caused by
irrational pricing, chronic breakdowns in supply, inadequate
economic incentives, inaccurate and inefficient flow of
information to central planners, and insufficient input from
consumers into production decisions. Even in the best organized
and well-staffed decisionmaking structures, economic decisions
will often be seriously flawed as long as they are based on
prices that fail to reflect consumers' preferences and on reports
from officials whose primary goal is to receive low production
targets. When sound decisions are made at the top, their
implementation will be seriously hampered by the central
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
authorities' limited ability to motivate labor and management at
the enterprise level. To achieve his ambitious economic goals,
Gorbachev must also deal with problems that arise from the
central economic plannandypersonnellissuesahe haseaddressedtso
than the organizational
far.
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
(SAMPLE) 4 Nov. 1985
Typescript Distribution List
(Finished Copy) (Internal Distribution)
1 - DCI (7E47)
2 - DDCI (7E47
3 - SA/DCI (7E47)
4 - ED/DCI (7E47)
5 - Executive Registry (7E47)
6 - DDI (7E47)
7 - Senior Review Panel (7842)
8-12 - OCPAS/IMD/CB (7G15)
13 - NIO/USSR (7E47)
14 - NIO/EODN (7E47)
15 - NIO/SP (7E47)
in - C/nm/SE
17 - DDO/SE
18 - C/DDO/
19 - DDO/PPS
20 - C/NCD/PES (814 KE
21 - D/SOVA (4E58)
22 - DD/SOVA 4E58)
23 - C/SOVA/NIG (4E51)
24 - C/SOVA/NIG/DPD (4E65)
25 - C/SOVA/NIG/EPD (5E66)
26 - C/SOVA/NIG/EPD/IA
27 - C/SOVA/NIG/EPD/RM
28 - C/SOVA/NIG/EPD/FT
29 - C/SOVA/NIG/EPD/EP
30 - C/SOYA/RIG (5E25)
31 - C/SOVA/RIG/EAD (5E25)
32 - C/SOVA/RIG/TWAD (4E12)
33- -...C/SOVA/SIG (4E13)
34 - C/SOVA/SIG/SFD (4E13)
35 - C/SOVA/SIG/SPD (4E13)
36 - C/SOVA/DEIG (5E46)
37 - C/SOVA/DEIG/DEA (5E68)
38 - C/SOYA/DEIG/DID (4E31)
39 - PDB STAFF (7F30)
40 - C/NIC/AG (7E47)
41 - C/ES/CIB (4E66)
42 - C/FBIS/AG (1016 KEY)
43 - C/ACIS (7D35)
44 - AC/ORES (3E63)
45 - C/IPC (2F21)
46 - D/ALA (3F$5)
47 - D/MESA (6G42)
48 - D/EURA (6G02)
49 - C/PES/MPS (6F44)
50 - D/OCPAS (7F17)
51 - D/OCR (2E60)
25X1
52 - D/OEA (4F18)
sa - D/OGI (3G00)
55 - D/OSWR (5F46)
C'/fi~oh' a
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
External Distribution
DR. WYNFRED JOSHUA
S",
DIO FOR EUROPEAN AND SOVIET POLITICAL/
MILITARY AFFAIRS
DEFENSE INTELLIGENCE AGENCY
DEPARTMENT OF DEFENSE
ROOM 2C238
THE PENTAGON
S 9 KEITH SEVERIN
FOREIGN PRODUCTION ESTIMATES DIV.
FOREIGN AGRICULTURAL SERVICE
RooM 6042
SOUTH BUILDING
DEPARTMENT OF AGRICULTURE
6O BYRON L. JACKSON
DIRECTOR, OFFICE OF INTELLIGENCE LIAISON
DEPARTMENT OF COMMERCE
ROOM 6854
MAIN COMMERCE
to JACK BROUGHER, JR.
CHIEF, USSR DIVISION, EASTERN EUROPE AND
SOVIET AFFAIRS OFFICE
DEPARTMENT OF COMMERCE
RM. 3415
MAIN COMMERCE
41 MALCOLM BALDRIDGE
SECRETARY OF COMMERCE
RM. 5851
COMMERCE
l/; SUSANNE LOTARSKI
DIRECTOR, OFFICE OF EASTERN EUROPE
AND SOVIET AFFAIRS
DEPARTMENT OF COMMERCE
RM. 3410
MAIN COMMERCE
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
(o~ DARNELL WHITT
INTELLIGENCE ADVISOR TO THE UNDERSECRETARY FOR POLICY
DEPARTMENT OF DEFENSE
ROOM 4D840
THE PENTAGON
G S JAMES W. MORRISON
DIRECTOR, OASD/ISP/EUR/REGIONAL POLICY
DEPARTMENT OF DEFENSE
RN. 1D469
PENTAGON
(T RICHARD N. PERLE
ASSISTANT SECRETARY
(INTERNATIONAL SECURITY POLICY)
DEPARTMENT OF DEFENSE
RM. 4E838
PENTAGON
f RONALD S. LAUDER
DEPUTY ASSISTANT SECRETARY
(EUROPEAN AND NATO POLICY)
DEPARTMENT OF DEFENSE
RM 4D822
PENTAGON
20
THE HONORABLE FRED C. IKLE
UNDER SECRETARY OF DEFENSE FOR POLICY
DEPARTMENT OF DEFENSE
RN 4E830
PENTAGON
AMBASSADOR WILLIAM HARTMAN
U.S. AMBASSADOR
U.S. EMBASSY MOSCOW
DEPARTMENT OF STATE
DENNIS T. AVERY
OFFICE OF ECONOMIC ANALYSIS
BUREAU OF INTELLIGENCE AND RESEARCH
ROOM 8439
DEPARTMENT OF STATE
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
DON GRAVES
CHIEF, SOVIET INTERNAL AFFAIRS DIVISION
BUREAU OF INTELLIGENCE AND RESEARCH
RH. 4844
DEPARTMENT OF STATE
7j DONALD B. KURSCH
DEPUTY DIRECTOR (ECONOMIC AFFAIRS)
OFFICE OF SOVIET UNION AFFAIRS
ROOM 4223
DEPARTMENT OF STATE
ELLIOT HURWITZ
SPECIAL ASSISTANT, OFFICE OF THE
UNDER SECRETARY FOR ECONOMIC AFFAIRS
ROOM 7260
DEPARTMENT OF STATE
JOHN DANYLYK
CHIEF, COMMUNIST ECON. RELATIONS DIV.
BUREAU OF INTELLIGENCE AND RESEARCH
RM. 8662
DEPARTMENT OF STATE
76 KENNETH YALOWITZ
ECONOMIC COUNSELOR
U.S. MISSION, NATO
DEPARTMENT OF STATE
?2
LYNN PASCOE
DEP.DIRECTOR, OFFICE OF SOVIET UNION AFFAIRS
BUREAU OF EUROPEAN AND CANADIAN AFFAIRS
RM. 4217
DEPARTMENT OF STATE
MARK PALMER
DEPUTY ASSISTANT SECRETARY FOR
EUROPEAN AND CANADIAN AFFAIRS
RM. 6219
DEPARTMENT OF STATE
MARK R. PARRIS
DIRECTOR, OFFICE OF SOVIET UNION AFFAIRS
BUREAU OF EUROPEAN AND CANADIAN AFFAIRS
RM. 4217
DEPARTMENT OF STATE
f6 MARK RAMEE
POLITICAL COUNSELOR
U.S. EMBASSY MOSCOW
DEPARTMENT OF STATE
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
g l MARTHA C. MAUTNER
DEPUTY DIRECTOR, OFFICE OF ANALYSIS FOR
THE SOVIET UNION AND EASTERN EUROPE
RM. 4758
DEPARTMENT OF STATE
g~- MORTON I. ABRAMOWITZ
DIRECTOR
BUREAU OF INTELLIGENCE AND RESEARCH
RM. 6531
DEPARTMENT OF STATE
S3 PAUL GOBLE
OFFICE OF ANALYSIS FOR THE SOVIET UNION
AND EASTERN EUROPE
RM. 4844
DEPARTMENT OF STATE
RALPH LINDSTROM
ECONOMIC
DIRECTOR9 OFFICE OF OF INTELLIGENCE AND RESEARCH
BUREAU RM. 8722
DEPARTMENT OF STATE
ROBERT F. OBER, JR.
ECONOMIC COUNSELOR
U.S. EMBASSY, MOSCOW
DEPARTMENT OF STATE
ROBERT H. BARAZ
DIRECTOR, OFFICE OF ANALYSIS FOR THE
SOVIET UNION AND EASTERN EUROPE
RM. 4758
DEPARTMENT OF STATE
7 ROLAND K. KUCHEL
DIRECTOR, OFFICE OF EASTERN EUROPEAN AND
YUGOSLAVIA AFFAIRS
RM. 5220
DEPARTMENT OF STATE
(I SHAUN BYRNES
POLITICAL SECTION
U.S. EMBASSY, MOSCOW
DEPARTMENT OF STATE
WILLIAM H. COURTNEY
SPECIAL ASSISTANT, OFFICE OF THE
UNDER SECRETARY FOR POLITICAL AFFAIRS
RM. 7240
DEPARTMENT OF STATE
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
CIO DOUGLAS R. MULHOLLAND
SPECIAL ASSISTANT TO THE SECRETARY
(NATIONAL SECURITY) REASURY
DEPARTMENT
RM. 4324
MAIN TREASURY
11 7
AMBASSADOR JACK F. MATLOCK, JR.
SPECIAL THE PRESIDENT
AFFAIRS
SR. . DIRECTOR,
NATIONAL SECURITY AFFAIRS
RM. 368
EOB
COL. TYRUS M. COBB
DIRECTOR, EAST-WEST SECTION
EUROPEAN AND SOVIET
RS
SECURITY AFFAIRS
ROOM 373
EXECUTIVE OFFICE, BUILDING
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1
f r DAVID WIGG
DEPUTY DIRECTOR
INTERNATIONAL OMIC AFFAIRS
NATIONAL
ROOM 373
EOB
g 9. DONALD GREGG
ASSISTANT TO THE VICE PRESIDENT FOR
NATIONAL SECURITY AFFAIRS
NATIONAL SECURITY AFFAIRS
ROOM 298
THE WHITE HOUSE
/,10 KENNETH DE GRAFFENREID
INTELLIGENCE PROGRAMS
NATIONAL SECURITY AFFAIRS
ROOM 300
EOB
I0 / PAULA J. DOBRIANSKY.
EUROPEAN AND SOVIET .FAIRS
NATIONAL SECURITY RM. 368
BOB
1413 LT. GEN. WILLIAM E. ODOM
DIRECTOR SECURITY AGENCY
NATIONAL ST532/CDB
FORT KEADE, MD
/Oz/ MANNY RUBIO
DIRECTOR
WHITE HOUSE SITUATION ROOM
WHITE HOUSE
Sanitized Copy Approved for Release 2011/03/22 : CIA-RDP85T01058R000608560001-1