MICROANALYSIS OF THE SOVIET MILITARY INDUSTRIAL COMPLEX

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R001200090010-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Sequence Number: 10
• Content Type: MEMO

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14 APR 1982
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
VIA Deputy Director for Intelligence
Director of Soviet Analysis
E. W. Boring
Director of Scientific and Weapons Research
SUBJECT Microanalysis of the Soviet Military Industrial Complex
1. Action. No action required. For your information only.
2. Background. This is in response to your memorandum of 25 March
1982 raising questions about the potential of and requirements for
microanalysis of the Soviet military industrial complex. You also raised
questions about the Soviet predilection for long production runs and the
military civil trade-offs in the Soviet economy. We touched on these
issues in the SOVA memorandum on the "Soviet System", dated 29 March, and
the short study attached to it. In the first few paragraphs of this
memorandum, these issues are amplified and placed in the context of the
inherent inertia which characterizes the Soviet command economy. In the
latter part of the memorandum and in the attachments we address your
request for an understanding of the potential pay-offs of and the
requirements for a broad microanalysis of the Soviet military industrial
complex.
Inertia in the Soviet Economy In analyzing the Soviet military
industrial complex, the nature of the Soviet command economy has unique
features that contrast fundamentally with resource allocation processes in
the United States. The Soviet political leadership endorses a strong
defense establishment and has set forth national resource patterns
consistent with this goal. The momentum imparted by this priority is
reenforced by the nature of the planning system. Weapons programs must be
accompanied by conscious, detailed allocations of physical resources. In
the United States policymakers focus on weapons budgets and leave the
mechanics of resource allocation to the market place. In the USSR the
market place has no vote. The sheer burden of detail required by the
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Soviet approach precludes frequent reconsideration of resource decisions.
Fundamental national policy reviews are required only at five-year
intervals when national economic plans are prepared. Even then the plan
targets tend to reflect only incremental changes to existing programs.
Within the command economy the allocation of resources to the military
industrial complex is compartmented, highly centralized and secretive.
This planning process translates priorities into the legal sanctions that
ensure fulfillment of plan targets. A separate section of Gosplan oversees
the drafting of the five-year economic plan for the defense industries
which is designed to fulfill demands of the corresponding five-year defense
plan prepared by the Soviet General Staff.
As a result of these factors, defense plans are composed of
development and production programs that are not easily altered. Momentum
also permeates other levels of the defense industries. Defense, political,
and industrial leaders have long associations with the military industrial
sector and have accrued status, rank, and other benefits. Moreover,
significant bonuses and incentives for meeting development milestones or
production goals have resulted in a planning system that sets goals
conservatively, is slow and evolutionary in nature, and changes direction
little year by year.
Inertia also extends to the Soviet weapons acquisition process and
design philosophy which stresses evolutionary or incremental development
and controlled introduction of advanced technology to fulfill evolving
military requirements. Performance improvements are often sacrificed but
the trade-offs are major cost-savings, avoidance of excessive demands on
the production and technology base, and a supply of weapons that can be
readily used and maintained in the field by troops with limited technical
skills. This approach, however, also results in a large number of weapon
systems which are designed to perform a single, limited role.
In general, Soviet weapons reflect a commitment to rugged but
functional designs which can be easily manufactured in large quantities.
From 1970 to 1980, the Soviets produced approximately 36,000 tanks, of
which nearly 50 percent were T-64s and T-72s. This figure includes tanks
produced for Soviet ground forces and for export. In a production run of
this scale, costs are substantially reduced through economies of scale and
the use of standard components. Soviet tanks are also smaller, lighter,
and less sophisticated in many of the more costly subsystems. The cheaper,
less complex systems that result are also more attractive on Third-World
export markets where both funds and skills are at a premium. However, the
deployment of large numbers of weapons, especially tactical weapons, to
counter a smaller number of technically superior weapons diverts key
resources from the production of critically needed civilian equipment for
agriculture, industry and transportation.
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The Military/Civilian Trade-Off
The Soviets have a host of economic problems that could be at least
partially alleviated by cuts in military programs. Soviet behavior in the
past, however, has been to continue to allocate a large share of national
resources to the military. Even when military programs have been stopped
or reduced possibly as a result of arms negotiations (ABM and the SS-16)
the resources from these programs have been shifted to other military
programs (battle-management radars and SAMs for tactical forces, and the
SS-20). The severity of their economic difficulties, however, raises the
question as to how long the Soviets can and will continue such a policy.
The feasibility and potential economic benefit of using Soviet defense
productive capacity for civilian output varies by product and by
industry. The Soviets could use some complete military products -- such as
trucks and transport aircraft-- with minor modification in the
transportation and agricultural sectors of the civilian economy. While
most military final products are too specialized for alternative civilian
applications, many of their materials and components could be used in
civilian products. For example, the strategic missile and radar industries
could produce civilian goods only with substantial retooling and a large
sacrifice of specialized capital equipment as well as the uneconomic use of
excessive skills and exotic fabrication technologies. Tank and armored
vehicle production cuts deeply into dual-use automotive components and
naval shipbuilding uses enormous quantities of steel. High-quality steel
not used for armor or submarines could go directly into high-pressure gas
pipe, railcar wheel pairs, and engine crankshafts. Production facilities
for military engines could make high-temperature components for gas
pipeline pumping turbines. Moreover, a large share of the plant space,
tooling and skilled manpower used for defense products is technologically
well-suited for alternative civilian production operations. Finally, a
larger share of top scientific and engineering professionals now conducting
military R&D could be reassigned to the civil sector.
Potential of and Requirements for Microanalysis
To undertake a microanalysis of the Soviet military industrial complex
will require a high-level decision to redirect our research efforts,
augment OSWR and SOYA resources, and refocus other Intelligence Community
resources. We present in the following paragraphs and attachments our past
and current research efforts, an evaluation of resource requirements, an
overview of data availability, and the potential pay-off of an accelerated
and expanded microanalysis.
The capability to perform microanalysis of the Soviet military
industrial complex would obviously provide more in-depth answers to a
variety of questions from US policymakers. Although we are building
towards such capabilities, much remains to be done. Our knowledge of
product lines is good and improving. Large amounts of data not used
previously can now be used in analysis. Our facilities data base, however,
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is far from complete as is our understanding of the infrastructure of the
industries. To accelerate this research, broaden its scope and at the same
time produce reports to satisfy current demands, will require more
resources than are currently available.
To date, our microanalysis of the Soviet military industrial complex
has been driven by a need to forecast the appearance of future weapon
systems to satisfy DOD planning and programming and NIE forecasting
requirements. The result has been an analytical emphasis on R&D as opposed
to production. As a result of this analytical effort, we have a fairly
detailed comprehension of the facilities and the acquisition process, and
we are gaining an appreciation of the resource commitment to the R&D
sector. Much of our analysis of R&D facilities has been strategic weapons
oriented such as "Strategic Missile Development Programs in the National
Economic Planning Process," published in December 1981. Another project,
"Soviet Naval Radar R&D" (March 1982), examined both R&D and production
facilities. The latter research was contracted out because of the lack of
in-house resources. We are just beginning to be able to connect technology
advances with programs so we can better assess future threats.
Our analytical attention to production has followed two directions.
We have devoted considerable attention to developing an understanding of
the production process and a data base concerning production facilities.
Thus far we have limited data on about 650 production facilities. We have
yet to analyze throughly the defense industries' product lines, their
capacity, their network of subsystem contractors, and their capability to
transfer resources to the civilian sector. Our estimates of production,
however, have been driven more by an understanding of what is entering the
inventory in troop units than by direct evidence of production rates.
We are working with DIA, NSA, Army, NISC, FTD, and others to improve
our ability to estimate production and to integrate more closely our
consideration of the defense industries and the forces they support. We
have improved our collection of data concerning the production facilities
and have used the data base as a tool for forecasting, as in "Expansion in
Soviet Defense Industries: An Indicator of Future Weapons Program
Activity," published in March 1981. The data base also has been used as a
tool to understand the life cycle of a program, including production rates
such as in "Soviet Preparations for Production of the New Soviet Medium
Solid ICBM" (March 1982). We also are working to improve our understanding
of the rates of procurement, entry into the inventory, and useful life-
cycle of land armaments--an area which in the past has been given
substantially less attention than strategic programs. To this end, in the
past year we have devoted five SOVA analysts, the support of about three
photointerpreters and more than $0.5 million in external research to
develop a comprehensive understanding of the land armaments in the Warsaw
Pact Forces. OSWR has established additional analytical positions to study
the R&D establishment and land arms program development. All of this is
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coming together in a large interagency project to assess the Warsaw Pact's
future land forces and armament production requirements.
A partial listing of some of the more relevant projects concerning
economic issues, resource constraints, the acquisition process, research
and development of weapon systems, production and force projections is
presented in Tab A. The list contains projects completed, presently
scheduled, and a few that are currently unscheduled that will be undertaken
as resources become available.
In Tab B we present the types of research data available and the
analytical framework needed for a microanalysis of the Soviet military
industrial complex. An estimate of the resources needed to compile the
data base and to produce reports to satisfy current demands is in Tab C.
Estimates of resources and data requirements are based on our experience in
constructing a similiar microanalysis of the R&D sector. This analysis
focused on R&D management and decision making processes, the R&D facilities
and their weapons and space development programs, and the dollar costs of
these nrnorAmq. The cost ffort over the past four years has been
about external contracts. It has yielded a 25X1
good and has identified about percent 2X1
of the weapons and space programs now underway in the Soviet Union.
Another effort, devoted to only the Soviet nuclear energy industry, has
required contracts. The R&D and nuclear 25X1
energy efforts have required the support of betwee imagery 25X1
analysts in NPIC and OIA.
E. W. Boring__
Attachments:
Tab A - Projects Completed and Underway
Tab B - Microanalysis of the Soviet Military Industrial
Complex: Areas of Research, Availability
of Data and Intelligence Pay-offs
Tab C - Resource Requirements
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SUBJECT: Microanalysis of the Soviet Military Industrial Complex
Distribution:
Orig & 1 -- Addressee and return to Originator with attachments.
I -- DDCI w/attachments Tabs A, B, and C.
1 -- Executive Director DCI w/attachments Tabs A, B, and C.
1 -- DDI (for chrono) w/attachments Tabs A, B, and C.
1 -- ADDI w/attachments Tabs A, B, and C.
I -- DDI Registry w/attachments Tabs A, B, and C.
1 -- DI/SOVA w/attachments Tabs A, B, and C.
1 -- DI/A w/attachments Tabs A, B, and C.
1 -- EA/SOVA w/attachments Tabs A, B, and C.
1 CS/SOVA w/attachments Tabs A, B, and C.
1 -- PA/SOYA w/attachments Tabs A, B, and C.
1 -- SE/SOYA w/attachments Tabs A, B, and C.
1 -- SF/SOYA w/attachments Tabs A, B, and C.
1 -- TF/SOVA w/attachments Tabs A, B, and C.
2 -- D/OSWR w/attachments Tabs A, B, and C.
2 -- D/SOVA
SOYA/DI/A
(13 APR 1982)
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S E C R E T
Projects Completed and Underway
The research efforts of SOVA and OSWR address many issues designed to
improve our knowledge of the Soviet military industrial complex. The
research projects listed below are some of the projects undertaken to
address DDI Priority Research Issue No. 1 as well as projects undertaken by
SOVA and OSWR to address other key intelligence issues relating to the
military industrial complex.
Projects Under DDI Priority Research Issue No. 1, "Military and Foreign
Policy Consequences in the 1980s of the Deteriorating Soviet Economic
P e rf o rma nce"
- Eight research projects and one overview paper, "The Development of
Soviet Military Power," have been completed. A number of other research
projects and one overview paper are scheduled for 1982. This research
program is designed to assess Soviet economic prospects during the 1980s,
detail the options available to Soviet leaders, and describe the political
and military implications of their difficulties. The projects under this
priority issue which deal directly or indirectly with military expenditures
and/or the defense/civilian trade-off are listed below:
Project
Office
Status
The 11th Five Year Plan: Political
SOVA
2Q82
and Military Implications
Resources for Soviet Military RDT&E
SOVA/OIA
2Q82
Dynamic Burden of Soviet Defense
SOYA
3Q82
Spending
Soviet Military and Space Systems
SOVA/OSWR
3Q82
in Development
Implications of Change in Soviet
SOVA
4Q82
Military Policy
Implications of the Soviet
SOVA
4Q82
Economic Slowdown
Military and Economic Impact of
SOVA
Unscheduled.
Alternative Defense Budgets
Soviet Preparations for Production of
SOVA
Completed
the New Medium Solid-Propellant ICBM
Soviet Spending for Defense: Trends
SOVA
Completed
Since 1951 and Prospects for the 1980s
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Implications of Continued Production of SOVA
the Soviet D-III-Class Ballistic
Missile Submarines
Expansion in Soviet Defense Industries: SOVA
An Indication of Future Weapons Program
Activity
The Development of Soviet Military SOVA
Power: Trends Since 1965 and Prospects
for the 1980s
Soviet ABM and BMEW Programs: Status SOVA
and Options
Prospects for Accelerated Soviet SOVA
Defense Effort
Land Armaments and Manpower Model (LAMM) SOVA
Warsaw Pact Ground Forces: The SOVA
Next Two Decades of Change
.Other Selected Scheduled SOVA Projects
Soviet Fighter Production Programs SOVA
Bureaucratic and Economic Constraints SOVA
on Soviet Weapon Programs
Soviet R&D Expenditures
A Comparison of Soviet and US
Defense Activities 1972-81
Western Technology in Defense-
Related Soviet Heavy Industry
A Method for Costing Alternative
Soviet Force Projections
Measuring Price Change in the
Soviet Defense Sector
The Tank and the Soviet Army:
The Next Two Decades
Ground Forces Development in
Von-Soviet Warsaw Pact Forces
Completed
Completed
Completed
Completed
Completed
2Q82
4Q82
3Q82
4Q82
4Q82
4Q82
4Q82
Unscheduled
Unscheduled
External Research
Unscheduled
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The following recent and ongoing projects provide a representative
cross-section of the work produced in OSWR to deal with forecasting future
systems and technologies.
Projects Completed
Office
Status
USSR: Strategic Missile Development Programs
OSWR
Completed
in the National Economic Planning Process
Management of Soviet Missile and Space Programs:
OSWR
Completed
Key to Understanding Soviet Development Capabilities
SALT Uncertainty and Soviet Defense Planning
OSWR/SOVA
Completed
for 1981-85
Spacecraft Design and Development
OSWR
Completed
Responsibilties of the Glushko Organization
Soviet Development of Solid-Propellant ICBMs:
OSWR/SOVA
Completed
Status and Options
Soviet Naval Radar R&D
OSWR
Completed
Future Space Launch Vehicle Capabilities of
OSWR
Completed
Kuybyshev Aerospace Product-ion Plant 1
Spacecraft Capability of the Reshetnev Design Bureau
OSWR
Completed
Intelligence Analysis of Soviet Nuclear Weapons
OSWR
Completed
Research and Development Facilities
Other Selected Scheduled OSWR Projects
Soviet Liquid Hydrogen Engine Program
OSWR/OIA
4Q82
Soviet Organizations Responsible for Developing
OSWR/OIA
4Q82
Solid Propellant Missiles for the SRF
Soviet Cruise Missile Development Process,
OSWR
4Q82
Participants and Programs
USSR: Reassignment of Defense Industry
OSWR
2Q83
Organizations to Support the Space Program
Soviet Low Frequency Acoustic ASW R&D
OSWR
1Q83
Prospective Soviet Technologies Applicable
OSWR
3Q82
To Space Systems
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Soviet Laser Development Industry
OSWR
3Q82
Military Technology Flow Assessment
OSWR
4Q82
Science and the Military in Soviet Military R&D
OSWR
3Q82
USSR:
Tank Design Bureau in Leningrad
OSWR/OIA
2Q82
Soviet Nuclear Weapons R&D and Fabrication Facilities
OSWR/OIA
4Q82
 Microanalysis of the Soviet Military Industrial Complex: Areas of. Research, Availability of Data and Intelligence Pay-offs
Generic Areas of Research
Availability of Data
Intelligence Pay-offs
Infrastructure
Data on R&D and production
facilities by plant, by product,
by industry, and by design bureau
leading to an historic perspective
of Soviet activities and
capabilities.
Transferability of Resources
Transferability of military
resources to civilian products.
Military industrial role in current
civilian production. Problems in
converting final. assembly and
subcontracting industries to
civilian products.
Bureaucratic factors which
inhibit or foster change.
Technology and its Rate of Development
Flow of technology from domestic
and foreign sources from its
conception or acquisition to use
in military, space and civilian
products.
Bureaucratic factors which inhibit
or allow utilization of new
technologies.
Long Range Forecasting
An understanding of advanced
technologies and the way and when
they may be used in military,
space, and civilian applications.
Integration of these technological
capabilities with military
requirements and doctrine, and
political and economic goals.
--Data are available but not compiled or fully
exploited to develop a base-line plant analysis.
--Data availability is uncertain for analyzing R&D
and industrial infrastructure for subsystems and
components. The little work that has been done,
however, has demonstrated the utility of such
analysis.
--Data are available to analyze the implications of
shifts of military resources to the civilian
sector.
--Historical data are available to allow in-depth
analysis of shifts in emphasis (aircraft to
missile, etc.) and transferability of resources
within defense R&D and production sectors.
--Data on technology transfers are available that
would allow a greater appreciation of the pace of
adoption of foreign technologies into the military
and civilian sectors.
--Data are available on the resistance of the Academy
of Sciences to more applied work. Data are needed
on the success of civil and military leaders to
make the Academy more responsive to their needs.
--Data are available that allow better technological
forecasts by linking knowledge of the level of
technology with an understanding of the
bureaucratic processes.
--Data are available on Soviet military-related
scientific research projects that could be used
to determine the concepts leading to weapon
programs for the 1990s.
--Data are available on the Soviet weapons acquisitions
process that can be used to identify a large number
of development and production programs now underway.
Microanalysis will permit more in-depth
responses to intelligence questions on:
--Development and production of military
equipment at the plant and industry level.
--Changing trends in the development and
production of new military and space programs.
--Shifts in resources (military to military
or military to civilian) resulting from
arms control agreements.
--Factors which trigger shifts in military
industrial emphasis (aircraft to missile,
etc) as well as earlier recognition of
such shifts.
--Importance of technology in the economy,
its impact on growth, and insights into
technology transfer leverage questions.
--Technical capabilities and timing of
weapons programs by integrating Soviet
state-of-the-art with development
practices, yielding earlier insights
on future programs.
--Bureaucratic efforts to accelerate the
pace of technological assimilation by
increasing the participation of the
Academy of Sciences in applied technology.
--Long-term projections of future Soviet
weapons systems and forces.
--Determination of future weapons programs
by analyzing scientific research projects
and forecasting Soviet weapon options.
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