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Soviet Union [USSR] ECONOMY
Salient Features: Centrally planned socialist economy.
Government owned and operated all industries: banking,
transportation, and communications systems; trade and public
services; and most of agricultural sector. CPSU, guided by
principles of Marxism-Leninism, controlled planning and decisionmaking processes; central planners determined investment, prices,
distribution of goods and services, and allocation of material and
human resources according to CPSU priorities. Defense and heavy
industries emphasized over consumer and agricultural sectors.
Availability and quality of food, clothing, housing, and services
often inadequate for average citizen. Economy planned as being
largely self-sufficient. Economic development and population
centers primarily west of Ural Mountains, but many raw material and
energy resources in eastern areas, making access difficult and both
exploration and transportation costly. Declining economic growth
since mid-1970s caused in part by overly centralized planning,
excessive bureaucratic administration, resistance to innovation,
shortages of skilled workers, worker alienation, and low
productivity. Beginning in 1985, regime attempted to implement
economic reform.
Gross National Product (GNP): Estimated at US$2.4
trillion in 1986; US$8,375 per capita in 1986; real growth rate in
1988 about 1.5 percent, continuing deceleration begun in mid-1970s.
Industry: Diversified industrial base directed by
complicated, centralized bureaucratic system. Highest priorities
given to machine-building and metal-working industries and to
military matériel manufacturing; consumer industries not allocated
comparable human, financial, or material resources. Technological
advances applied primarily to defense industries. Major industrial
branches: manufacturing (including defense), chemicals, metallurgy,
textiles, food processing, and construction. Employment in industry
and construction 38 percent in 1988.
Energy: Self-sufficient in energy and a major energy
exporter. World's largest producer of oil and natural gas and
second largest coal producer. Enormous energy resources in Siberia,
but cost of extraction and transportation over great distances to
western industrial areas high. Main generators of electric power:
thermoelectric (coal, oil, natural gas, and peat), nuclear power
plants, and hydroelectric stations.
Agriculture: Collective farms and state farms supplied
bulk of agricultural needs. Wheat and other grains, potatoes, sugar
beets, cotton, sunflower seeds, and flax main crops. Private plots-
-small percentage of sown area--produced substantial quantities of
meat, milk, eggs, and vegetables. Large amounts of grain and meat
imported. Despite high investment, serious problems in agriculture
persisted: insufficient fertilizer; inadequate refrigeration,
storage, and transportation; wasteful processing; and unrealistic
planning and management. More fundamental problems: only 1.1
percent of arable land receives optimal precipitation; widely
fluctuating crop yields; and many fertile areas have insufficient
growing seasons because of northern latitudes or moisture
deficiency.
Fishing: World's largest oceangoing fishing fleet,
accompanied by large, modern, fish-processing ships, operated in
Atlantic and Pacific ocean systems. Inland seas and rivers
accounted for less than 10 percent of catch.
Forestry: With a third of world's forested areas,
country's production of logs and sawn timber exceeded that of all
other countries, despite inefficient and wasteful processing.
Inadequate processing capacity made production of pulp, paper
cardboard, plywood, and other wood products low.
Foreign Trade: Government policies of self-sufficiency
and strict control maintained trade in minor economic role. In 1985
exports and imports totaled US$185.9 billion, but each accounted
for only 4 percent of GNP. Major trade partners included other
communist countries, particularly those of Eastern Europe, which
accounted for 67 percent of trade. Industrialized countries
accounted for 22 percent and Third World countries for 11 percent.
Major exports petroleum and petroleum products, natural gas,
metals, wood, agricultural products, and manufactured goods,
primarily machinery, arms, and military equipment. Major imports
grain and other agricultural products, machinery and industrial
equipment, steel products (especially large-diameter pipe), and
consumer goods. Balance of trade favorable in mid-1980s. Trade with
socialist countries conducted on bilateral basis with imports
balancing exports. Value of exports to Third World countries,
including arms and military equipment, exceeded hard-currency
deficit caused by unfavorable trade balance with West. Merchant
fleet consisted of about 2,500 oceangoing ships.
Exchange Rate: Officially, 0.61 ruble per US$1 (1988
average), but rubles had no official value outside of Soviet Union.
Soviet authorities set exchange rates based on policy rather than
market factors. Unofficial (black market) exchange rates offered
considerably more rubles per United States dollar.
Fiscal Year: Calendar year.
Data as of May 1989
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