REVIEW OF SOVIET INTERNAL AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000102350001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: July 21, 2010
• Sequence Number: 1
• Publication Date: October 14, 1980
• Content Type: REPORT

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Central Intelligence Agency
National Foreign Assessment Center
August-September 1980
Domestic Politics
Although turmoil in Poland may have seriously disturbed
the peace of mind of Soviet leaders over the last two months,
those leaders who were active during this period seemed out-
wardly confident and unruffled, betraying few indications of
policy differences or political manuevering within their
ranks. Instead, they gave every indication of concentrating
on preparations for the coming CPSU congress early in 1981
and drafting the next five year plan.
Policy Toward Poland
for Kazakhstan to participate along with several other
Politburo members in that republic's 60th anniversary
celebrations. He stayed in Alma-Ata until 31-August.
Kirilenko, who often deputizes for Brezhnev when the
general secretary is out of town, visited Belgorod
Oblast in the RSFSR 28-30 August, and thus was also
not in Moscow when the Polish Government announced its
Throughout the Polish crisis the Soviet leadership has
preferred to exercise its influence quietly behind the
scenes, avoiding any appearance of alarm. As the strike
movement in Poland grew to nationwide proportions during
August, Soviet leaders went ahead with scheduled activities
and holiday plans. During much of this period a number of
key leaders--including Ustinov, Chernenko, and Brezhnev--
were absent from Moscow. Brezhnev vacationed in the
Crimea from 24 July until 25 August. Returning to Moscow,
Brezhnev remained there only one full day before leaving
acquiescence to the workers' .chief demands on
30
August.
During this period Kosygin was incapacitated
by
illness.
This revie~a_is.based on research and analysis raork
completed by CIA~s National Foreign Assessment Center
through 10 October 1980.- The contributions-have been
reviewed by appropriate individuals within NFAC but have
not been formally coordinated. Comments are-r~eZcome and -
may be addressed to Chief, Soviet Internal Braneh, USSR-EE
Division, Office~of Political Analysis, Room 6 G 22, CIA 25X1
Aeadquarters~ PA M 80-10449 CX
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These leadership movements suggest that the top
Soviet leaders did not meet to discuss the Polish situation
at the hei ht of the crisis in late August.
While taking pains to avoid the appearance of forcing
solutions on the Polish leadership, the Soviet leadership
evidently approved--and perhaps initiated--the policy of
temporary concessions in order to end the strikes. Moscow
reportedly supported Gierek's tough policy toward the
strikers at first, but soon abandoned this approach
The Soviet leadership's approval of Kania was evident
in Moscow's rapid endorsement of the new regime, and
in the Soviet media's complimentary references to Kania.
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Moscow also quickly offered economic assistance, and
pressured other East Euro can countries for contributions
to help Poland.
In exchange for its backing, the Soviet leadership
clearly expects Kania quickly to restore stability and
to do so in a way that leaves intact the party's authority
and the regime's socialist orientation. The Soviets regarded
the concessions to the workers as no more than an unavoidable
expedient. Escalating Soviet criticism of the new independent
trade unions, such as that by Soviet trade union chief
Shibayev in a speech on 1 October, indicates that the
Soviets are pressing the Poles not to yield any more
ground to the new unions. In his meeting with Jagielski,
Suslov was also adamant that party members not be permitted
to join the independent trade unions.
1968 Revisited?
The Soviet leadership's present posture toward Poland
is similar to their approach toward Czechoslovakia during
the initial period after Dubcek took office. The Soviets
then expressed cautious support while taking Dubcek's
measure and assessing their options. Current Soviet comments
and actions, however, contrast sharply with their behavior
immediately prior to -the invasion of Czechoslovakia why
took place seven months after Dubcek assumed office.
During the late spring and summer of 1968, Soviet
leaders held a series of summit meetings with Czechoslovak
leaders, and with leaders of other East European countries.
By contrast, since Kania assumed power the only direct
contacts between high-level Polish and Soviet leaders
were Jagielski's sessions in Moscow with Suslov on
10 September and with Brezhnev the next day, and
Gromyko's meeting with the Polish Foreign Minister in
New York on 22 September. Rumors of a meeting between
Chernenko, Ponomarev (or Kirilenko), and Gierek near
the Polish-Soviet border in late August have not been
confirmed. The frequency of contact between Soviet
and other East European leaders has not been conspic-
uously high.
Moreover, in the summer of 1968 several-Soviet
Politburo members explicitly and publicly denounced.
trends in Czechoslovakia, charging that sympathy for
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counterrevolutionary ideas existed within the Czechoslovak
Communist leadership itself. During the present Polish
crisis, Soviet Politburo members who have given speeches
have only made oblique references to Poland. Soviet media
have taken the line that the Polish Communist Party is
successfully combatting anti-socialist elements rather
than colluding with them. Spokesmen for the Soviet
regime, however, have criticized certain developments
within the Polish party in a way that could be expanded
later, if deemed expedient, into accusations of "anti-
socialism."
Preparing for Congress and Plan
While top Soviet leaders have probably been preoccupied
with the Polish problem, they are also preparing for their
party congress. The first round of pre-congress meetings
has already begun. The several hundred thousand primary
party organizations at the base of the party structure are
now selecting delegates to city and district party
meetings. Over the next few months similar gatherings
will take place at successively higher levels of the hierarchy,
a process culminating in the convening of .the CPSU Congress
in February. Meanwhile, Central Committee departments and
Academy of Sciences institutes in Moscow are working on
documents for the congress. Brezhnev's chief aide,
Andrey Aleksandrov-Agentov, is presumably overseeing
these preparations, as he did before the last congress.
Recent leadership speeches, party resolutions, and
press articles do not indicate that any major political
or economic reforms are being readied. US Embassy officers
in Moscow have recently picked up rumors that some lower
level officials are advocating changes in the antiquated
party program, which was adopted in 1961, and have proposed
organizational reforms that would enable the party to
supervise Gosplan's work more closely. There is no
evidence that, central party organs have acted on these
suggestions.
Drafting of the basic directives of the next Five Year
Plan (1981-1985), which Gosplan had hoped to have ready by
mid-September, has fallen behind schedule. Competition
for resources between regions ~s at least partly responsible
for the delay. Officials from older industrial areas in
the European Soviet Union are reportedly resisting, as
they have in .the past, increased investment in development
projects east of the Urals".
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/Soviet authorities, nervous about the impact
of the Polish strike movement on the mood of the Soviet
working class, might be adjusting the plan to increase
wages and benefits for workers. Several recent press
articles admonishing trade union officials to show
greater sensitivity to workers' grievances provide
some circumstantial support for this view.* The renewed
jamming of some Western radio stations indicates official
concern to prevent Polish disorder from spilling over into
the Soviet Union.
There is no persuasive evidence, however, that apprehension
about potential worker unrest will lead to any major shift in
investment priorities. An August editorial in the Gosplan
journal Planovoye khozyaystvo mentioned the "uninterrupted
supply of food, especially meat" as an important economic
goal but listed four other economic objectives as being
more criticala A middle-level Gosplan official in late
September also told a US Embassy officer that the "military-
industrial complex" would "not be the loser" in any struggle
with the consumption sector.
Soviet authorities still have time to work through
these planning snags. The Supreme Soviet session scheduled
for 22 October, and the Central Committee plenum that will
precede it, will approve only the annual economic plan for
1981. This can be done even if Gosplan has not completed
the basic directives for the entire five year period by
then. Another plenum probably will be held just prior
to the congress next February to ratify the basic directives
prior to their presentation at the congress itself.
Leadership Health and the Succession
As the decrepit senior leaders look to the congress,
they continue to convey the impression that they are
unperturbed about their failure to groom a generation
of younger leaders to succeed them. It is possible
that death or disease will soon force a shake-up at
the top, but the likely beneficiaries in the short run
are themselves old men whose elevation will not rejuvenate
the leadership.
Although the Soviet press has continued to publish
messages "signed" by Kosygin in his capacity~as chairman
of the Council of Ministers, he has not appeared in public
'~Pyatras Grishkyavichyus, head of the party in Lithuania,
the Soviet republic most susceptible to Polish influence, in
a speech in Zate August particularly emphasized the need to
pay more attention to workers' complaints.
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since 3 August
/ The early scheduling
of a Supreme Soviet session--for October rather than the
usual December date--raises the possibility that Kosygin
may be replaced as premier at that time.
Brezhnev himself appears to be feeling better physically
than he has for several years,
After visits in August
to the Crimea and Kazakhstan--where he performed uite
well in delivering a televised speech
Brezhnev's increased
vigor may make him even less inclined than previously to
think of leaving office.
It is unclear how the temporary improvement in Brezhnev's
health will affect the fortunes of Kirilenko and Chernenko,
the leading contenders for the general secretary's job.
On the one hand, Brezhnev may now feel less dependent on
Chernenko, whose indispensability to his chief has been
his major political asset. On the other hand, the longer
Brezhnev lives, the greater the chance that Kirilenko,
now 74, will be disqualified as a successor.
The accidental death on 4 October of Belorussian
party boss Masherov, a Politburo candidate member,
eliminated yet another younger leader who had the
background and qualifications to hold a top party or
government position. It also deprived advocates of a
more innovative approach toward economic management of
their most articulate and forceful champion within the
leadership. The death of Masherov, who was never
politically, or personally close to Brezhnev, will give
the general secretary the opportunity to shape the-top
leadership in Belorussia more to his own liking.. Whoever
is named to~replace Masherov. could well be promoted to
Politburo status at the 26th Party Congress,, perhaps
establishing a new candidate for romotion to one of
the top leadership positions.
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Economic Affairs
Eight months through 1980, the Soviet economy continues
to show few signs of improvement. A major exception is the
Soviet hard currency position which is the strongest in two
decades. Events in Poland together with the sharp slowdowns
in economic growth occurring throughout Eastern Europe are
adding to the tough economic choices facing the Soviet
leadership.
Industry
Soviet industrial production after eight months of
1980 is less than 4 percent above the poor performance during
the corresponding period last year. Growth in ferrous metals
has dropped to about one percent on an annual basis primarily
because of a failure to fully utilize equipment and to link
up new capacity. The chemical and construction materials
industries continue to lag and the output of coal and consumer
nondurables is below the levels reached in 1979. A scarcity
of raw materials, transportation snarls, and low labor produc-
tivity will restrict the growth of industrial output to about
3 percent this year.
Agriculture
We currently estimate the total Soviet grain crop at
about 205 million tons, down 5 million tons from our
previous forecast. Should the crop fall much below
200 million tons, the impact on livestock output,
especially meat, in the current marketing year (July 1980-
June 1981) will be substantial. Prospects for most other
major crops are poor. Production of sugar beets, sunflower
seeds, and vegetables this year will be below average.
The single exception is cotton which is expected to set
a new record of about 9.3 million tons.
Strong Hard Currency Picture
Spiraling prices for exports, especially oil, have
given the USSR its strongest hard currency position since
the 1960s. Moscow's hard currency surplus should approximate
$2 billion this year. The rosy trade picture gives the
Soviets the luxury of reducing their presence in Western
gold and credit markets, strengthening an international
credit standing that was in question just three years ago.
It also leaves Moscow in a strong position to provide hard
currency support for its financially strapped allies and
to pay premiums for grain and other embargoed goods. On
11 September, for example; Poland and the USSR signed an
aid agreement in Moscow that the-Poles have valued at
$690 million. Nonetheless, we expect the USSR to be
very cautious in exploiting its~new position in the future,
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because the potential claims on the surplus are so large
and the outlook for maintaining the cushion is so uncertain.
Energy--A Continuing Headache
Energy problems continue to be a major concern of the
Soviet leadership. In an effort to stem a fall-off in
energy production in the 1980s, Moscow has already announced
an ambitious list of energy development programs for the
1981-85 economic plan.
Production drilling in West Siberia is planned
to grow from less than 6 million meters in
1979 to 20 million meters in 1985. Total
production drilling planned for the whole
country is scheduled to double in the next
five years compared with 1976-80. In addition,
construction and transportation facilities are
to be doubled in West Siberia between 1980 and
1983, and a large number of oil and gas workers
are to be added to the work force.
Exploratory oil drilling is also to be expanded
throughout the country--from about 5 million
meters this yeast to 12.5 million meters per
year by 1985.
Large scale development of the Kuznetsk, Karaganda,
Ekibastuz, and Kansk-Achinsk coal fields is
planned.
The share of nuclear power in toal energy production--
now 1 percent--is to increase to about 3-4 percent
by 1985.
The large expenditures ticketed for energy development
come at a time when investment goods are acutely scarce and
badly needed in other areas of the economy. Sectors such as
ferrous metals, for example, that are already suffering from
a lack of investment in the 1970s, will probably be squeezed
Economic Denial Measures: An U date
The economic denial measures against the USSR continue.
to draw only limited support from our allies. The single
exception is the grain embargo whicYi has strained domestic
feed supplies in the USSR and forced cutbacks in the important
livestock sector.
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We now estimate that the Soviets have replaced
8.5 million of the 17 million tons of grain
denied this year by the United States. As a
result, Moscow is faced with about an 8 million
ton shortfall compared with their preembargo
expectations.
Western economic sanctions on trade in technology
and equipment have been further weakened by three
major deals worth more than $800 million consummated
by the Soviet Government with West German and
French firms since the beginning of September.
At the same time, negotiations are continuing
on several fronts on the proposed West Siberia-
Western Europe gas pipeline. European banking
syndicates are being formed to finance the
$11-13 billion pipeline.
Sanctions on Western credits to the Soviet Union
have been weakened by the Japanese decision to
proceed with new credits for several Siberian
projects. Italy may soon change its stance on
credit sanctions as well because of easier credit
availability in France and West Germany.
Western economic sanctions on trade in technology and
equipment, while not creating hardships for Moscow, present
important policy problems for the USSR. The denial measures
have forced the leadership to reexamine the long-term future
of USSR-Western trade and have introduced an element of
uncertainty at a time when Soviet officials are putting
the finishing touches on the 1981-85 plan. Although the
extent of continued Western participation in Soviet develop-
ment is still being debated in Moscow, no fundamental
change in Soviet policy seems to be in the offing. The
Soviet leadership probably sees little alternative to a
continued Western role and, in any event, probably believes
that the sanctions will soon collapse.
Eastern Europe
The East European countries are experiencing the same
kind of slowdown in economic growth_that confronts the USSR.
Because of this, Moscow is facing some tough trade-offs
between their own needs and those of Eastern Europe. .On
the one hand, the Kremlin has been trying to reduce the
cost of maintaining its empire. At a recent meeting of
the Council for Mutual Economic Assistance (CEMA), for
instance, the Soviets announced that:
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There will be no increase over the 1980 level
in Soviet oil deliveries to membership countries
in the 1981-85 period.
Deliveries of raw materials to CEMA countries
may have to be reduced from their 1980 level.
At the same time, the Soviet leadership is taking a
big risk if it assumes an inflexible attitude in its economic
policy toward Eastern Europe. Recent events in Poland
undoubtedly will cause Moscow to be as accommodating as
possible. As the expected economic slowdown continues,
however, aid requests to the USSR are likely to grow,
while Soviet flexibility in providing aid will erode
rapidly as Soviet energy production falters. Furthermore,
the Soviets almost certainly will be reluctant to subsidize
East European consumers who alread are more prosperous
than the Soviet o ulation.
Military Issues
Although the Soviet military has been preoccupied
with the war in Afghanistan for most of the year, develop-
ments in Poland clearly diverted the attention
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NFAC/OPA/USSR-EE/SRI (14 Oct 1980)
1 - DCI
1 - DDCI
1 - Executive Registry
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1 - Executive Secretary, NFAC Production Board
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1 - A. Denis Clft
Assistant to the Vice President
for National Security Affairs
Office of the Vice President
Room 298
Old Executive Office Building
1 - Les Denend
National Security Council Staff
The White House --
1 - Marshall Shulman --
Special Adviser to the Secretary-of State
Room 7246
Department of State
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1 - Robert K. German
Director, Office of Soviet Union Affairs
Room 4217
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USSR/Europe
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USSR/Europe
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Old Executive Office Building
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International Situation Room.
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Security Affairs
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1 - Ambassador Henry Owen
Economic Affairs
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