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

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plans at an international level, and could make for the most effective
organization of this complex process."' 1
QUANTIFYING CONVERSION
Plans for defense industry call for the output of enterprises of the
"defense complex- designated for "peaceful purposes- to rise from the
present 40 percent to 50 percent by 1991 and to 60 percent by 1995.
We can decompose this growth in the share into two sources: the
announced reduction of approximately 20 percent of defense output
that will be transferred to civil purposes, and an additional growth in
civilian production capacity in defense industry. Under these assumptions,
the plans would call for an absolute growth of civilian output of
10.3 percent annually over the 1989-1995 period, or by roughly 7 percent
annually over and above the gains flowing from conversion. 4 2
If the announced 20 percent arms reduction were only the first
round of a series of cuts, the civilian production goals would not
require the high rates of growth projected in the figures shown above.
But it is unlikely that defense output can actually be converted ruble
for ruble into civilian uses. Not only will additional investment be
needed, but the efficiency of conversion will probably be considerably
below 100 percent. Meeting the civilian output goals, therefore, will
require either greater cutbacks in defense or more rapid growth of
purely civilian capabilities in defense industry; consideration of the
present state of Soviet politics and the economy suggests that the
former is more likely than the latter, but also that the planned goals
will not be achieved.
In line with the typical Soviet method of identifying output by the
counting of things, VPK chairman Belousov noted that the comprehensive
plan for the processing industry identified 4500 categories of new
agroindustrial equipment planned for development and production by
1995, including 3000 by defense industry enterprises. When these
plans have been fulfilled, defense industry enterprises will be responsible
for R17.0 billion of processing equipment output, or almost half the
"1Ye. Serov, "Coordinated Interstate Actions in the Sphere of Conversion Proess
Should Have a Juridical Basis," Venyi Vestni, July 1989, No. 13, pp. 11-12 (JPRS-
UEA-8W-024-L, September 12, 1989, p. 9).
4 2 f the present levels of output are indexed at 60 for defense and 40 for civilian, the
20 pereent reduction of defense output that in to be transferred to civilian usm would
enerate an index level of 48 for defense and 52 for civilian output by 1995. An additional
gowth of the civilian portion of defenm industry of 20 index units to 72 by 1996,
while df&n output remained constant at 48, would place eivilian output at the dsignated
60 pereent shmre of total output.