Economic troubles may slow Soviet defense spending
By 1990, the Kremlin may be forced to slow down military spending as the Soviet Union faces economic troubles. But its absolute defense expenditures will remain high, thus providing ample provision for a new generation of weapons, according to an unclassified version of a Western alliance study obtained here.
In fact, Soviet military spending is likely to consume an even larger share of the gross national product in the coming decade because of a slowdown forecast in general economic growth, the study concludes.
From 1970 to 1981, Soviet defense costs accounted for 12 to 16 percent of GNP. The Reagan administration's budget proposal would put American military spending at 6.8 percent of GNP, about half the Soviet level.
Soviet spending on research and development ''has been the fastest growing category in the period 1970-1981, reflecting the increasing importance of qualitative force improvements in shaping Soviet military spending,'' the report stated.
Research and development into new hardware represents about one-fifth of total spending and has been growing at a real rate of 4 percent each year, the study adds. Weapons research in the new budget recently proposed by President Reagan is slated for a 30 percent increase.
Overall Soviet defense spending in the last decade also increased at a 4 percent real rate. Through the 1990s, however, ''economic difficulties may necessitate a reduction in military expenditures.'' But, adds the report, ''any economies would be unlikely to have an observable impact on the rate of growth of spending before the end of the decade.''
The study indicates that Soviet military expenditures, calculated in accordance with NATO's definition of defense programs, are estimated to have risen from 43-47 billion rubles in 1970 to 64-69 billion rubles in 1981, based on the value of 1970 rubles. In current prices, the study states, spending would be higher due to inflation.
Although the ruble is not convertible into Western currencies, conversion at the prevailing official exchange rate would place this spending at between $55.9 billion and $61.1 billion in 1970 and $83.2 and $89.7 billion in 1981. The Central Intelligence Agency, however, estimates Soviet military spending at $191 billion for 1981. In comparison, US military spending in 1981 was $156 billion.
In the eyes of some Western observers, the more meaningful figure is the percentage of GNP allocated to the military budget: 12 to 16 percent for the Soviet Union vs. 6.8 percent for the United States.
The study notes that the amounts allotted to the various military services have not been even, but instead tended to reflect the increased emphasis placed on new generations of missiles for the strategic rocket troops and aircraft for the air forces. Ground, naval, and air defense forces were on the decline during the period. Spending in the Central European and China theaters represented about 10 percent of total outlays each, and tended to grow more rapidly than other sectors, the study observes.
In commenting about prospects for spending in the rest of the decade, the study notes a number of major constraints that would almost inevitably result in the Soviet economy growing more slowly in the 1980s than in the 1970s. These range from slower growth of the labor force to poor agricultural performance.
It also notes that military spending places a heavy burden on the Soviet productive capacity and in many ways restricts overall growth. It estimates that about one-third of the output of the metallurgical and machine tool industries is claimed by the military sector.
One-seventh of the total labor force is directly or indirectly engaged in the military sector, which also employs a high proportion of the best-qualified engineers.
Despite strains on the economy, the study says the Soviet leadership is likely to ''continue to give highest priority to the military sector and may be expected to meet the costs of military programs it considers vital to national security.'' For instance, it notes that previous plans to put more emphasis on consumer-oriented output had ultimately been sacrificed because of security priorities.