• Military Menu                       

• Introduction
• Systems
• Facilities
• Agencies
• Industry
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• WMD
• Intelligence
• Homeland Security
• Space

12th Five-Year Plan - 1986-1990

When Gorbachev attained power in 1985, most Western analysts were convinced that Soviet economic performance would not improve significantly during the remainder of the 1980s. "Intensification" alone seemed unlikely to yield important immediate results. Gorbachev tackled the country's economic problems energetically, however, declaring that the economy had entered a "pre-crisis" stage. The leadership and the press acknowledged shortcomings in the economy with a new frankness.

Restating the aims of earlier intensification efforts, the Basic Directions for the Economic and Social Development of the USSR for 1986-1990 and for the Period to the Year 2000 declared the principal tasks of the five-year plan period to be "to enhance the pace and efficiency of economic development by accelerating scientific and technical progress, retooling and adapting production, intensively using existing production potential, and improving the managerial system and accounting mechanism, and, on this basis, to further raise the standard of living of the Soviet people." A major part of the planned increase in output for the 1986-90 period was to result from the introduction of new machinery to replace unskilled labor. New, advanced technologies, such as microprocessors, robots, and various computers, would automate and mechanize production. Obsolete equipment was to be retired at an accelerated rate. Industrial operations requiring high energy inputs would be located close to energy sources, and increasing numbers of workplaces would be in regions with the requisite manpower resources. Economic development of Siberia and the Soviet Far East would continue to receive special attention.

Gorbachev tackled the problem of laxness in the workplace and low worker productivity (or, as he phrased it, the "human factor") with great vigor. This attention to individual productivity and discipline resulted in the demotion or dismissal of influential older officials who had proved to be corrupt or ineffective. Gorbachev called for improved motivation among rank-and-file workers and launched a vigorous anti-alcohol campaign (also a priority under Andropov).

At the Central Committee plenum in January 1987, Gorbachev demanded a fundamental reassessment of the role of the government in Soviet society. His economic reform program was sweeping, encompassing an array of changes. For example, it created a new finance system through which factories would obtain loans at interest, and it provided for the competitive election of managers. These changes proceeded from Gorbachev's conviction that a major weakness in the economy was the extreme centralization of economic decision making, inappropriate under modern conditions.

According to Abel Aganbegian, an eminent Soviet economist and the principal scholarly spokesman for many of Gorbachev's policies, the Soviet Union was facing a critical decision: "Either we implement radical reform in management and free driving forces, or we follow an evolutionary line of slow evolution and gradual improvement. If we follow the second direction, . . . we will not achieve our goals." The country was entering "a truly new period of restructuring, a period of cardinal breakthroughs," he said, at the same time stressing the leadership's continuing commitment to socialism.

In keeping with Gorbachev's ambitious reform policies, the specific targets of the Twelfth Five-Year Plan (1986-90) were challenging. The targets posited an average growth rate in national income of about 4 percent yearly. To reach this goal, increases in labor productivity were to average 4 percent annually, a rate that had not been sustained on a regular basis since the early 1970s. The ratio of expenditure on material inputs and energy to national income was to decrease by 4 to 5 percent in the plan period. Similar savings were projected for other aspects of the economy.

The plan stressed technical progress. Machine-building output was to increase by 40 to 45 percent during the five-year period. Those sectors involved in high technology were to grow faster than industry as a whole. The production of computers, for example, was to increase 2.4 times during the plan period. Growth in production of primary energy would accelerate during the period, averaging 3.6 percent per year, compared with 2.6 percent actual growth per year for 1981-85. The plan called for major growth in nuclear power capacity. (The Chernobyl' accident of 1986 did not alter these plans.)

Capital investment was to grow by 23.6 percent, whereas under the Eleventh Five-Year Plan the growth rate had been only 15.4 percent. Roughly half of the funds would be used for the retooling necessary for intensification. The previous plan had earmarked 38 percent for this purpose. Agriculture would receive large investments as well. The plan called for a relatively modest improvement in the standard of living. The share of total investment in services was to rise only slightly, although the proportion of the labor force employed in services would continue to grow.