SOVIET PLANNING AND ECONOMIC ADMINISTRATION REORGANIZED

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001600060001-7
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• Document Creation Date: December 9, 2016
• Document Release Date: May 24, 2000
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• Publication Date: April 11, 1963
• Content Type: BRIEF

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CONFIDENTIAL
Current Support Brief
SOVIET PLANNING
AND ECONOMIC ADMINISTRATION REORGANIZED
CIA/RR CB 63-35
11 April 1963
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONFIDENTIAL
GROUP I
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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C-O-N-F-I-D-E-N-T-I-A-L
SOVIET PLANNING
AND ECONOMIC ADMINISTRATION REORGANIZED
On 13 March the USSR announced a sweeping reorganization at the
top level of the Soviet economic planning and administrative structure.
The announcement appears to complete the framework of the general
reorganization of economic management called for by the November
plenum of the Party?s Central Committee. This latest phase of the
reorganization contains two major provisions: first, it provides for
the establishment of a new Supreme Council of National Economy to
coordinate and direct Gosplan, the USSR Sovnarkhoz, Gosstroy, and
their subordinate republic and regional units; second, it provides for
the subordination to the new Supreme Council of the state-branch-of-
industry committees, which are now mainly responsible for industrial
research and development. The two provisions thus concentrate in
the hands of the Supreme Council responsibility for the coordination
and direction of almost all aspects of industry and much of construc-
tion. The Supreme Council also has been given important responsi-
bilities in agriculture through the subordination to it of Gosplan itself,
which engages in the planning of over-all agricultural production, and --
through Gosplan and the USSR Sovnarkhoz -- of such committees as
Soyuzsellkhoztekhnika, which supervises the supply and maintenance of
farm equipment. However, the agencies responsible for administrative
direction of the individual farms, for administration of procurement,
and for agricultural research have not been subordinated to the Supreme
Council, and thus its responsibility in agriculture is less pervasive than
in industry and construction. (For the central administrative structure
of the USSR as of 15 March 1963, see the chart. )
The Supreme Council of National Economy
Membership in the new Supreme Economic Council consists of a
chairman (D. F. Ustinov, simultaneously elevated to the position of
first deputy chairman of the USSR Council of Ministers) and five deputy
chairmen: one without portfolio (A. N. Tarasov) plus the chairmen of
Gosplan (P. F. Lomako), the USSR Sovnarkhoz (V. E. Dymshits),
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Gosstroy (I. T. Novikov), and the State Committee for the Coordination
of Scientific Research (K. N. Rudnev). As yet, no provision for a staff
or for other members of the council has been made public although the
existence of a "bureau" has been mentioned in the press. The small
size of the council and the fact that three of its members have full-time
duties in agencies subordinate to the council indicate that the leadership
intends the activities of the council to be confined to more general and
high level questions.
Subordination of State-Branch-of-Industry Committees
The principal responsibility of most of the state-branch-of-industry
committees is now industrial research and development of new products
and new technology within their respective fields. To bring research
and development under the purview of the new Supreme Council, all
state-branch-of-industry committees and a number of other state com-
mittees such as that for standards and measures have been subordinated
to the new council either directly or indirectly via subordination to
Gosplan, Gosstroy, or the USSR Sovnarkhoz. To place direction of
industrial production more fully under the control of the-new,-council,
five former ministries and one main administration engaged in the
administration of industrial production or construction -- those for
electric power, medium machine building, geology, transport construc-
tion, construction in the Central Asian region, and gas production and
distribution -- were reformed into state "production" committees and
subordinated directly or indirectly to the new council.
To some extent, the new subordinations of the state committees
form a pattern. The state committees concerned with various aspects
of construction have been subordinated to Gosstroy; those concerned
with defense or defense-related production, such as aviation, atomic
energy, and shipbuilding have been subordinated directly to the Supreme
Council; most of those concerned primarily with civilian production
have been subordinated to Gosplan; and two state committees concerned
with distribution -- those for domestic trade and for supply and mainte-
nance of agricultural equipment -- have been subordinated to the USSR
Sovnarkhoz. In many cases, however, the basis for the new state
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committee subordinations is still obscure. For example, the State Com-
mittee for Fish Industry has been subordinated to the USSR Sovnarkhoz,
whereas the committees for food and light industry have been subordinated
to Gosplan. Moreover, although most state committees not concerned
with specific branches of industry (such as those for standards and meas-
ures and for inventions and innovations) have been subordinated directly
to the Supreme Council, the state committee for vocational and technical
training has been subordinated to Gosplan and the state committee for
labor and wages presumably has retained its direct subordination to the
USSR Council of Ministers.
Relation of the New Measures to the Plenum Proposals
Formation of the new Supreme Economic Council was not proposed
at the November plenum. The new council does bear a distinct resem-
blance, however, to the technical economic council proposed in Khru-
shchev's plenum speech and about which no more has been said. At
the plenum, Khrushchev proposed that consideration should be given
to the formation of a technical economic council within Gosplan that
would be composed in part of the chairmen of the state-branch-of-
industry committees and would "deal with vital issues relating to the
working out of national economic plans, as well as to the further im-
provement of planning and of the draft plan for the development and
introduction of new technical means. " The long delay between the
plenum and the announcement of this final phase of the reorganization
thus may have resulted from indecision or disagreement within the
Soviet leadership as to whether the new council should operate within
or above Gosplan and what relation it should bear to the state-branch-
of-industry committees.
Evaluation of the Reorganization Measures
Formation of the Supreme Economic Council should be of consider-
able help in improving top-level coordination between the functions of
planning performed by Gosplan and of implementation performed by the
USSR Sovnarkhoz and in part by Gosstroy. In the case of high priority
industries -- particularly those whose state committees are subordinate
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C -0-N-F -I-D-E -N -T -I-A-L
directly to the new council -- formation of the new council also may
result in increased emphasis on technological progress in drawing
up plans. These two problems were the ones most heavily stressed
by Khrushchev in his plenum speech and appear to be major factors
in the decision to form the new council. Because of the high level on
which the new council will operate and because of the apparent failure
of the state -branch-of -industry committees to obtain representation
on it in spite of Khrushchev's original proposal, however, the oper-
ation of the new council may have little impact on the rate of tech-
nological progress in lower priority industries.
This phase of the reorganization does not make much change in
the degree of centralization of the administration of the economy
envisaged by the proposed elevation of the authority of the state-branch-
of-industry ,?oommittees. It does, however, provide for a concentration
of powers within an administrative agency responsible solely for exer-
cising them -- powers formerly exercised, if imperfectly, by the
Council of Ministers.
The announced provisions of any phase of the reorganization fail
to deal with most of the widespread problems of parallelism and dupli-
cation in the structure of economic administration and of poor coordi-
nation of supply with production planning about which there has been
much complaint in the Soviet press. There is increasing evidence
that a considerable reshuffling of functions, organizations, and per-
sonnel has taken place within Gosplan, the USSR Sovnarkhoz, and
Gosstroy -- a reshuffling that could result in the clearing of some of
this administrative confusion. Until more information becomes avail-
able on the nature and objectives of these changes, however, an evalu-
ation of their probable effectiveness is premature.
Continuity in Planning
In a separate action on 13 March the USSR announced a decision to
begin work on the national economic plans for the 2-year period 1964-65
and for the 5-year period, 1966-70. This announcement appears to
signal the adoption of at least two of three proposals for improving the
C -O -N -F -I - D -E -N - T - I -A -L
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continuity of planning that have been under top-level consideration for
at least 2 years. In March 1961, a conference on the improvement of
planning held by Gosekonomsovet -- the long-term planning agency at
that time -- called for three major innovations in planning procedures:
first, instead of preparing detailed plans to implement a given long-
term plan each year, these would be prepared for 2-year periods;
second, during each year of a given long-term plan, general guide lines
for production and investment would be worked out for the year lying
5 years ahead; and third, preparation of the next 5-year plan would
begin midway through the current one.
Although adoption of these proposals presumably will involve
additional work for the planners without necessarily improving the
quality of planning, it could smooth out some of the abrupt changes
of pace in economic activity that led Khrushchev as early as 1957 to
call for recommendations for improving the continuity of plans.
Adoption of new planning procedures at this time may have been
prompted additionally by the need to make a number of changes in the
existing Seven Year Plan (1959-65). Such a need is to be expected
toward the end of a long-term plan period and is not necessarily in-
dicative of major difficulties.
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Analyst:
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Sources: Based on official Soviet press releases.
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CONFIDENTIAL
CONFIDENTIAL
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 Analyst: A/MM
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Control Staff
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Control Sheet Ezch,.,W from aatamatlc
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Series Number
CIA/RR CB 63-35
Date of Document 11 April 1963 375
Copy No,
Recipient Date Returned
1
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SUBJECT: Distribution of Current Support Brief No. 63-35,
Soviet Planning and Economic Administration Reorganized, 11 April 1963,
Confidential
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19 April 1963
MEMORANDUM FOR: Chief, Dissemination Control Branch, DD/CR
FRCi : Chief, Publications Staff, ORR
SUBJECT : Transmittal of Material
It is requested that the attached copies of CIA/RR CB 63-35,
Soviet Planning and Economic Administration Reorganized 11 April
1963, Confidential, be forwarded as follows:
State, INE Communications Center,
Room 7818, State Dept. Bldg.
For Ekabasssies in Berlin, Bucharest, Budapest,
Moscow, Prague, Sofia, Warsaw, Bonn, Frankfurt,
London, Rome, Tokyo, and. Canberra
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Attachments:
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cc: St/I/B
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