1976-1980 Resource Burden of the Soviet Space Program-part 3
[The Soviet space resources burden and the Soviet command economy were based on its allocation of its resources in the form of tons of material, equipment, personnel, and personnel human power as its barter currency for each Soviet “Five Year Plan” fiscal planning during the Cold War. -CPV]
Resource Burden of the Soviet Space Program*
OPPORTUNITY COSTS: MILITARY-SPACE VERSUS INVESTMENT FOR
GROWTH
*Prepared by John P. Hardt and George D. Holliday. Dr. Hardt is Senior Specialist in Soviet Economics and Dr. Holliday is Specialist in International Trade and Finance, Economics Division, CRS. This chapter is based on a similar chapter appearing on Soviet Space Programs 1971-75, vol. II, pp. 85-98. Some modest updating to provide insights in the alternatives of the 1980's has been added.
Assuming the high marginal cost-low political utility of military-space programs is the Soviet leadership perception we might consider what civilian options are at stake. In preparing for the Eleventh Five-Year Plan (1981-85), unveiled by party directives prior to the 26th Party Congress in February 1981, the requirements for increased investment may run well ahead of the anticipated annual GNP growth rate of about 4 percent, although actual allocations fall closer to the 2 percent rate.
Some of the pressing claimants for more investment are the following:
1. Development of Siberian oil and natural gas reserves.
2. Construction of the Baykal Amur railroad in the inhospitable sub-Arctic areas of East Siberia and the Far East, coupled with the expansion of materials output (timber, ore, et cetra) and industry in the regions opened by the railroad.
3. Expansion of the East Siberian hydroelectric based grid and related energy consuming industries, such as aluminum, steel, and copper.
4. Increased investment in agriculture to open the new non-black soil lands to cultivation and to provide more fertilizer and machinery to reduce the harvest losses and augment productivity.
5. Establishment of a modern animal husbandry system for expanded meat output.
6. Expansion of production facilities and infrastructure to permit the extended use of motor cargo transport and passenger car use.
7. Expansion of merchant fleets, tanker facilities, port facilities, and fishing fleets to meet transportation and food requirements.
It should be noted that these major objectives were very similar to those of the Tenth Five-Year Plan (1976-80), suggesting that military-space choices dominated growth objectives in the recent pool. (29)
Post-Stalin Soviet leaders have shown an increasing concern about progress in civilian industries, transportation and agriculture. Yet, even with a significant increase in the civilian share of investment funds, it will be difficult to meet the pressing needs of those sectors of the economy. Thus, it would seem clear that the opportunity costs of diverting resources to military and space programs should be very high for Soviet decision makers. However, if military and space superiority is deemed to be an attainable and desirable goal or defensive needs are overriding, the cost may be bearable.
It should be emphasized that the specialized, high-technology inputs of the Soviet space program are not easily convertible to civilian investment needs in the short run. Nevertheless, the difficult economic choices which confront Soviet leaders in the 1980's is likely to force them to reconsider all existing resource allocation patterns. (30) In such an environment, economic performance may well become a major issue in the inevitable succession process in Soviet leadership. Falling economic performance is of concern to all groups in the leadership, as well as the population as a whole. An "industrialization debate," such as influenced the succession to Lenin may not be precisely revisited, but every period of change seems likely to concentrate attention on vexing economic problems. A profound change in political as well as economic policy is possible in the wake of Brezhnev's exit from the scene. Moreover, the time of succession is likely to coincide with a period of potentially sharp deterioration in economic performance.
According to pessimistic U.S. intelligence estimates of energy and agricultural production and changes in the efficiency of labor and capital, the aggregate growth rate may be halved in the next decade to an average of little more than 2 percent, or less per
annum in specific years with some years potentially evidencing negative growth. Others in the West with similar data conclude that a continuation of a 4-percent growth rate is an attainable expectation. (31)
While defense allocations have grown more rapidly than national income since the beginning of the Brezhnev era in 1965, real income per capita has risen and a respectable growth of industrial output has been achieved. In effect, the Soviets have been able to have "guns," "butter," and "modernization." But Soviet leaders must now choose. If defense spending continues as before, there will be shortfalls in civilian production and industrial manpower. A Wharton econometric study estimated that the incremental burden of defense procurement on the machine building and metal working industries would rise from a level of 35 percent during the current plan to 54 percent during the Twelfth Five-Year Plan, if the past trend in defense spending growth continues. (32) If military manpower is to be maintained at about 4.5 million men, with continuation of educational deferments, the civilian labor force will fall in absolute numbers after 1983.33 These sharp increases in the incremental burden of defense procurement and military manpower will make the guns/butter/modernization choice more of a necessity in the 1980's.
The sharp increase in the procurement burden is due to the projected slowdown in growth and the increasing cost of ongoing programs. The manpower crisis is the demographic "second echo" of World War II. (34)
MILITARY OR CIVILIAN SPACE
If Soviet space and military programs are to be slowed down, one might expect the military space share to retain or expand its portion compared to the civilian space programs, as has been the case in the past. However, if the U.S.-U.S.S.R. cooperative program is revived, its focus on civilian programs may provide an incentive for the Soviets to maintain their civilian program. In order to benefit from the American program and to keep the prestige of a proud scientific ommunity intact, Soviet leader may show an uncharacteristic preference for the visible, civilian program. If, then, the Soviet leaders were to move toward a cooperative US.-U.S.S.R. Space Shuttle program, the civilian space program might be among the higher priority claimants.
FUTURE PROSPECTS
The priority accorded Soviet space programs in the planning period ahead will probably depend primarily on the leadership's perception on the economic costs and political benefits of new programs. If considerable political gain is possible in the world arena, the high priority for military space will continue and even increase. If the gains are of questionable value in the international balance of power, the pressing claims of alternative civilian investment programs are likely to dominate. In that environment, serious negotiations as arms limitations seem more likely.
References:
A. SOVIET SPACE PROGRAMS: 1976-80, SUPPORTING VEHICLES AND LAUNCH VEHICLES, POLITICAL GOALS AND PURPOSES, INTERNATIONAL COOPERATION IN SPACE, ADMINISTRATION, RE-SOURCE BURDEN, FUTURE OUTLOOK PREPARED AT THE REQUEST OF HON. BOB PACKWOOD, Chairman, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, UNITED STATES SENATE, Part 1, Dec. 1982.
29. Cf. Soviet Space Programs 1971-75, vol. II, p. 97.
30. For additional discussion of future trends in the Soviet economy, see triannual compendia of the Joint Economic Committee, and Soviet Economy in a Time of Change; H. Hunter (editor), Future of the Soviet Economy, Boulder, Colo.: Westview Press, 1979. Earlier papers of the author given at NATO-SHAPE and the U.S. Military Academy were drawn on liberally. See J. Hardt, 'Soviet Economic Capability and Defense Resources" in Grayson Kirk and Nils H. Wessell (ed.), The Soviet Threat, Myths and Realities, Academy of Political Science, New York, 1978; "Military or Economic Superpower: A Soviet Choice," in Senior Conference of U.S. Military Academy, Integrating National Security and Trade Policy, final report, June 1978, West Point,
31. Donald W. Green, "The Soviet Union and the World Economy in the 1980's: A Review of Alternatives," in H. Hunter, ibid., p. 42.
32. Daniel L. Bond and Hebert S. Levine, "The llth Five Year Plan, 1981-85," Russia at the Crossroads. The 26th Congress of the CPSU," sponsored by the Rand Corp. and Columbia University and held on Apr. 23-25, 1981 in Washington, D.C., London, and Boston. Alien and Univim, 1982, pp. 103-106.
33. Murray Feshbach and Stephen Rapawy, "Soviet Population and Manpower Trends and Policies," in U.S. Congress, Joint Economic Committee, Soviet Economy in a New Perspective: A Compendium of Papers Submitted to the Joint Economic Committee, (Washington, U.S. Government Printing Office, 1976), p. 150. Soviet military strength is now about 4.8 million men. The 4.5 million figure cited in the text is a conservative estimate of military manpower in the mid-1970's by Feshbach and Rapawy.
34. Office of Senior Specialists and Foreign Affairs and National Defense Division, The 6 th Soviet Communist Party Congress, CRS Report No. 81-203F.
