Perestroika and Change in Soviet Weapons ... - The Black Vault

27
of this problem of fragmentation and dispersal of functions, Party
Secretary Baklanov has announced the creation of large associations
and amalgamations of some defense enterprises in the Kuybyshev
region in preparation for the transition to khozrawchet 8s 2 However,
there is no additional evidence of how widespread this process is likely
to be.
But it is not just production and R&D that is fragmented- Investment
is controlled by the ministry; supply has been organized by the
VPK, the State Planning Committee (Gosplan), and the State Committee
for Supply (Goesnab); and demand is formulated by the armaments
directorates of the armed services. Moreover, defense industry
organizations typically face monopoly suppliers of inputs and do not
possess the finance, credit, or organizational freedom to create new
suppliers or to recombine their own activities with other potential collaborators.
In the Soviet economy, still dominated by central planning and ministerial
authority, defense industry managers see plans as essential; in
any event they have little experience in operating in the more fluid circumstances
of market-like conditions. As expressed by an economist
attached to the Council of Ministers,
It must be said bluntly that most defense sector managers are not
ready for this yet (i.e., choosing a new configuration for their output
and position in the market for nonmilitary output). They have
become accustomed to regular, generous clients, and are unable to
analyze and forecast the market situation.... Therefore, a precise,
long-term program for the conversion of the military economy is
needed.is
This expert goes on to note that even though plans are needed, defense
enterprises will also have to engage in marketing and learn how to submit
to market demands.
The planning process for conversion had been only partly carried
out by mid-1989, as Gosplan, the Ministry of Defense, the VPK,
defense production ministries, and other organizations grappled with
both the theory and practical realization of large-scale and speedy
conversion.
All parties do not fully accept the necessity for top-down planning of
conversion, however. "Some Soviet specialists" believe that the appropriate
approach is for each enterprise to develop its own transition plan.
1 2 TASS, September 14, 1989 (FBIS-SOV-89-180, September 19, 1989, p. 80).
33 Yu Yakovets, "This was Discussed at the Congras: Inverting the Pyramid,"
Sovetskaya Rosiya, June 23, 1989, p. 2, emphasis in original article (FBIS-SOV-89-127,
July 5, 1989, p. 75).