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Defense 1990 [OA 8483]
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Speech Backup Alphabetical Files
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Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Alpha File, 1987-1991
OA/ID Number:
13843
Folder ID Number:
13843-010
Folder Title:
Defense, 1990
Stack:
Row:
Section:
Shelf:
Position:
G
26
23
2
7
PAGE
6
27TH DOCUMENT of Level 1 printed in FULL format.
Public Papers of the Presidents
Address to the German People on the Reunification of Germany
26 Weekly Comp. Pres. Doc. 1513
October 2, 1990
LENGTH: 546 words
It is with great pleasure that I congratulate Chancellor Kohl and the German
people at this historic moment. And it is my distinct honor to address the
people of the united Germany.
In Berlin and Bonn, from Leipzig in the east to western towns along the
Rhine, people are celebrating the day that all of Germany has been waiting for,
for 45 long years. For the world, those 45 years were a time of tension and
turmoil. For your nation, fate was particularly cruel. For 45 years, at the
heart of a divided continent stood a divided Germany, on the fault line of the
East-West conflict, one people split between two worlds.
No more. Today begins a new chapter in the history of your nation.
Forty-five years of conflict and confrontation between East and West are now
behind us. At long last the day has come: Germany is united; Germany is fully
free.
The United States is proud to have built with you the foundations of freedom;
proud to have been a steady partner in the quest for one Germany, whole and
free. America is proud to count itself among the friends and allies of free
Germany, now and in the future. Our peoples are united by the common bonds of
culture, by a shared heritage in history. Never before have these common bonds
been more evident than in this past year as we worked in common cause toward the
goal of German unity. Today, together, WE share the fruits of our friendship.
In this past year, we've witnessed a world of change for the United States,
for the united Germany, for the Atlantic alliance of which we are a part. Even
as Germany celebrates this new beginning, there is no doubt that the future
holds new challenges, new responsibilities. I'm certain that our two nations
will meet these challenges, as we have in the past, united by a common love of
freedom. Together, building on the values we share, we will be partners in
leadership.
This day, so full of meaning for Germany, is full of meaning for the world.
Meters away from the walls of the Reichstadt, scene of the first session of the
newly united German Parliament, stood the Berlin Wall, the stark and searing
symbol of conflict and cold war. For years, free men and women everywhere
dreamed of the day the Berlin Wall would cease to exist, when a world without
the Wall would mean a Germany made whole once more -- when Germany, united and
sovereign, would contribute in full measure as a force for peace and stability
in world affairs.
Today the Wall lies in ruins, and our eyes open on a new world of hope. Now
Germany is once more united. Now the Wall no longer divides a nation and a
world in two. The last remnants of the Wall remain there at the heart of a free
Berlin, a ragged monument in brick and barbed wire, proof that no wall is ever
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26 Weekly Comp. Pres. Doc. 1513
strong enough to strangle the human spirit, that no wall can ever crush a
nation's soul.
Today the German nation enters a new era; an era, in the words of your
national anthem, of "unity and justice and freedom." At this moment of
celebration, as we look forward with you to a future of hope and promise, let me
say, on behalf of all Americans, may God bless the people of Germany.
Note: The President's remarks were videotaped in the Oval Office at the White
House for broadcast by German television.
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6
7TH DOCUMENT of Level 1 printed in FULL format.
Public Papers of the Presidents
Advance Text of the Thanksgiving Address to the Nation
25 Weekly Comp. Pres. Doc. 1819
November 22, 1989
LENGTH: 2200 words
Like many of you, I'm spending tomorrow with family. We'll say grace, carve the
turkey, and thank God for our many blessings and for our great country.
This holiday also marks the adjournment of Congress. And I've worked with
Congress, extending my hand across the party aisle, advancing legislation to
free our streets of the fear of crime and drugs. We proposed ways to clean the
air, the water, and the land around us. We've joined with the Nation's
Governors to enter an historic compact to better our schools. And especially
touching is that so many Americans have answered the call for community service,
the Thousand Points of Light, by rolling up their sleeves and pitching in for
the hopeless, the helpless - each volunteer, a beacon of light for someone who
has lost his way.
This will be a very special Thanksgiving. It marks an extraordinary year.
But before our families sit down tomorrow, we will give thanks for yet another
reason: Around the world tonight, new pilgrims are on a voyage to freedom, and
for many, it is not a trip to some faraway place but to a world of their own
making.
On other Thanksgivings, the world was haunted by the images of watchtowers,
guard dogs, and machineguns. In fact, many of you had not even been born when
the Berlin Wall was erected in 1961. But now the world has a new image,
reflecting a new reality: that of Germans, East and West, pulling each other to
the top of the Wall, a human bridge between nations; entire peoples all across
Eastern Europe bravely taking to the streets, demanding liberty, talking
democracy. This is not the end of the book of history, but it is a joyful end
to one of history's saddest chapters.
Not long after the Wall began to open, West German Chancellor Kohl telephoned
and asked me to give you, the American people, a message of thanks. He said
that the remarkable change in Eastern Europe would not be taking place without
the steadfast support of the United States -- fitting praise from a good friend.
For 40 years, we were not wavered in our commitment to freedom. We are grateful
to our American men and women in uniform. We should also be grateful to our
postwar leaders. You see, we helped rebuild a continent through the Marshall
plan; and we built a shield, NATO [North Atlantic Treaty Organization], behind
which Europeans and Americans could forge a future in freedom.
For so many of these 40 years, the test of Western resolve, the contest
between the free and the unfree, has been symbolized by an island of hope behind
the Iron Curtain: Berlin. In the 1940's, West Berlin remained free because
Harry Truman said: Hands off. In the 1950's, Ike backed America's words with
muscle. In the 1960's, West Berliners took heart, when John F. Kennedy said: "I
am a Berliner." In the 1970's, Presidents Nixon, Ford, and Carter stood with
Berlin by standing with NATO. And in the 1980's, Ronald Reagan went to Berlin
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25 Weekly Comp. Pres. Doc. 1819
to say: "Tear down this wall." Now we are at the threshold of the 1990's. And
as we begin the new decade, I am reaching out to President Gorbachev, asking him
to work with me to bring down the last barriers to a new world of freedom. Let
us move beyond containment and once and for all end Cold War.
We can make such a bold bid because America is strong and 40 years of
perserverance and patience are finally paying off. More recently, quiet
diplomacy, working behind the scenes, has achieved results. We can now dare to
image a new world, with a new Europe, rising on the foundations of democracy.
This new world was taking shape when my President began with these words: "The
day of the dictator is over.' During the spring and summer we told the people of
the world what America believes and what America wants for the future. America
believes that "liberty is an idea whose time has come in Eastern Europe."
America wants President Gorbachev's reforms, known as perestroika, to succeed.
And America wants the Soviets to join us in moving beyond containment to a new
partnership. Some wondered if all this was realistic. Now, though we are still
on the course set last spring, events are moving faster than anyone imagined or
predicted.
Look around the world. In the developing nations, the people are demanding
freedom. Poland and Hungary are now fledgling democracies -- a non-Communist
government in Poland and free elections coming soon in Hungary. And in the
Soviet Union itself, the forces of reform under Mikhail Gorbachev are bringing
unprecedented openness and change.
But nowhere in the world today, or even in the history of man, have the warm
hearts of men and women triumphed 50 swiftly, 50 certainly, over cold stone as
in Berlin, indeed, in all of East Germany. If I may papaprhase the words of a
great poet, Robert Frost: There is certainly something in us that doesn't love a
wall.
When I spoke to the German people in Mainz last May, I applauded the removal
of the barriers between Hungary and Austria, saying: "Let Berlin be next." And
the West German people joined us in a call for a Europe whole and free.
Just yesterday, the West German Foreign Minister gave me a piece of the
Berlin Wall. It is on my desk as a reminder of the power of freedom to bring
down the walls between people. It brought back memories of 7 years ago, when I
went to Modlareuth, a small town in Germany also known as Little Berlin, a
divided village, really, its cobbled streets blocked by barbed wire and
concrete. On the one side freedom; on the other, despair. I talked with the
townspeople, not 150 yards from the specter of armed guards in towers. Someday
I'd like to go back to Little Berlin and see families reunited, see neighbors
once apart coming together.
Change is coming swiftly, and with this change, the dramatic vindication of
free Europe's economic and political institutions. The new Europe that is
coming is being built -- must be built -- on the foundation of democratic
values. But the faster the pace, the smoother our path must be. After all,
this is serious business. The peace we are building must be different than the
hard, joyless peace between two armed camps we've known so long. The scars of
the conflict that began a half century ago still divide a continent. So, the
historic task before us now is to begin the healing of this old wound.
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25 Weekly Comp. Pres. Doc. 1819
During our visit to Poland and Hungary last July, I found new encouragement
that we were on track: that there was, at long last, the chance for fundamental
change. I saw firsthand acts of healing and reconciliation. It was in Warsaw,
at my lunch for General Jaruzelski and the leaders of Solidarity, that I met a
woman who had worked, at great personal risk, for the release of jailed
Solidarity members. She was asked: "How is it possible, after such a short
time, to break bread with the men who ordered those imprisonments? Why the
absence of bitterness?" And she replied: "Our joy at what is happening now is
more powerful than memory. I wish you could have been there, for what we
witnessed was extraordinary. The old antagonisms melted away as former
adversaries stood up, often with tears in their eyes, and toasted the future.
Our guests knew that history would judge them by how well they would cooperate.
Well, there is a spirit of cooperation in Eastern Europe. The result: Poland
and Hungary are being transformed.
They deserve our support, and they're getting it. We have matched our words
with action: new loans and grants, teams of American economic experts working to
help them adjust to a free-market society, clearing the way for U.S. investment
and trade with Poland and Hungary. Now the peoples of these nations can finally
expect their hard work to lead to a better life.
These same winds of change are sweeping our own hemisphere: democracy
transforming the Americas with stunning speed. Regrettably, there are some
exceptions -- Panama, Nicaragua, and Cuba. And these last two are holding out
against their people only because of the massive support of weapons and supplies
from their Communist allies. So, when I see President Gorbachev, I'll ask him
to join with us to help bring freedom and democracy to all the people of Latin
America.
So, as we celebrate the events of Eastern Europe, remember that some walls
still remain between East and West. These are the invisible walls of suspicion;
the walls of doubt, misunderstanding, and miscalculation.
It was while in Eastern Europe last summer that I decided to make a personal
effort to break through these last barriers. Back in May, I set down five steps
President Gorbachev should meet if we are to take his new thinking seriously:
First, reduce Soviet forces; second, support self-determination in Eastern
Europe; third, work with us to end regional disputes; fourth, achieve a lasting
pluralism and respect for human rights; and fifth, join with us in addressing
global problems, including the international drug menace and dangers to the
environment. Serious problems still remain, especially regional conflicts. The
Soviet Union has made progress in these five areas. That is undeniable.
With that in mind and the momentous changes in Eastern Europe, I invited
President Gorbachev to meet me 10 days from now. This is a first meeting, a
time for exploration. It is not a time for detailed arms control negotiations
best left for next year's summit. I want President Gorbachev to know exactly
where the United States stands. Let me be clear: America stands with freedom
and democracy. We are not meeting to determine the future of Europe. After
all, the peoples of Europe are determining their own future. Though there will
be no surprises sprung on our allies, we will miss no opportunity to expand
freedom and enhance the peace. And to those who question our prudent pace, they
must understand that a time of historic change is no time for reckelessness.
The peace and the confidence and the security of our friends in Europe -- it's
just too important.
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25 Weekly Comp. Pres. Doc. 1819
We will seek President Gorbachev's assurance that this process of reform in
Eastern Europe will continue, and we will give him our assurance that America
welcomes reform not as an adversary seeking advantage but as a people offering
support. Our goal is to see this historic tide of freedom broadened, deepened,
and sustained. We find enormous encouragement in its peaceful advance and its
acceptance by the Soviet Union. We can now raise our hopes on other issues: our
common environment, our common war against drugs, as well as on human rights and
the regional conflicts that remain.
Immediately after my visit with President Gorbachev, I will go to Brussels to
consult with our partners in NATO, the very alliance that has kept the West free
for 40 years. I will assure them that no matter how dramatic the change in
Eastern Europe or in the Soviet Union itself the United States will continue to
stand with our allies and our friends. For in a new Europe, the American role
made change in form but not in fundamentals. After all, the Soviet Union
maintains hundreds of thousands of troops throughout Eastern Europe. Study the
map, review history, and you'll see that this presence, with the Soviet Union's
natural advantage of geography, cannot be ignored. So, even if forces are
significantly reduced on both sides, a noble goal indeed, we will remain in
Europe as long as our friends want and need us.
Off the island nation of Malta, Mikhail Gorbachev and I will begin the work
of years. We can help the peoples of Europe achieve a new destiny, in a
peaceful Europe whole and free. I will tell President Gorbachev, the dynamic
architect of Soviet reform, that America wants the people of the Soviet Union to
fulfill their destiny. And I will assure him that there is no greater advocate
of perestroika than the President of the United States.
When we meet, we will be on ships at anchor in a Mediterranean bay that has
served as a sealane of commerce and conflict for more than 2,000 years. This
ancient port has been conquered by caesar and sultan, crusader and king. Its
forts and watchtowers survey a sea that entombs the scuttled ships of empires
lost -- slave galleys, galleons, dreadnoughts, destroyers. These ships, once
meant to guard lasting empires, not litter the ocean floor and guard nothing
more than reefs of coral. So, if the millennia offer us a lesson, perhaps it is
this: True security does not come from empire and domination. True security can
only be found in the growing need of free peoples.
It has been said that peace is not the work of a single day not will it be
the consequence of a single act. Yet every constructive act contributes to its
growth; every omission impedes it. Peace will come, in the end, as a child
grows to maturity, slowly, until we realize one day in incredulous surprise that
the child is almost grown. It is our hope that Malta will be such a
constructive act: guiding brave pilgrims on their journey to a new world of
freedom.
Note: The President spoke at 9:01 p.m. in the Laurel Lodge at Camp David, MD.
The transcript of the actual address was not available for inclusion in this
week's issue.
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JNL 8 '92 16:01 FROM OASD-PA
PAGE . 002
Xerre
05
LEFENSE DEPART ENSE
Table 6-8 [Continued]
DEPARTMENT of DEFENSE BA by TITLE
($ in Millions)
FY 81
FY 62
FY 83
FY 84
FY 85
FY 86
FY 87
FY 88
FY 89
FY 90
FY 91
FY 92
FY.93
8
CURRENT DOLLARS
26,
MILITARY PERSONNEL
36,909
42,876
45,688
48,363
67,773
87,794
74,010
76,584
78,477
76,876
84,213
79,217
77,080
RETIRED PAY
13,840
14,986
16,156
16,503
0&M
65,548
62,466
66,540
70,950
77,803
74,888
79,607
81,629
80,221
88,309
131,930
92,501
86,471
PROCUREMENT
48,025
64,402
80,355
86,161
96,842
92,606
80,234
80,053
79,390
81,376
71,740
60,532
64,418
16:04
RDT&E
16,609
20,060
22,798
26,867
31,327
33,609
35,644
36,521
37,530
36,459
36,193
36,999
38,813
MILITARY CONST
3,398
4,916
4,512
4,610
5,517
6,281
6,093
5,349
5,738
6,130
6,188
4,942
6,195
FAMILY HOUSING
2,004
2,203
2,712
2,669
2,890
2,803
3,075
3,199
3,276
3,143
3,296
3,650
4,004
SPEC FOREIGN CURR
3
3
4
3
9
2
1
DEF WIDE CONTINGENCY
-110
REV & MGMT FUNDS
2,677
2,494
1,075
2,774
5,088
5,235
2,612
1,246
897
566
2,701
4,324
1,552
TRUST & RECEIPTS
-634
-607
-342
-628
-428
-707
-781
-801
-668
-832
-44,329
-6,690
-763
DEDUCT, INTRAGOVT RECPT
-15
-17
-23
-22
-21
-22
-28
-26
-25
-27
-29
-178
-29
FROM OASD-PA A
TOTAL, CURRENT $
178,365 213,751 239,474 258,150 286,002 281,390 279,469 283,755 290,837 292,999 290,904 276,297 267,628
CONSTANT FY 93 DOLLARS
78
MILITARY PERSONNEL
66,786
07,789
69,117
69,938
88,066
86,086
90,681
90,179
89,474
88,631
90,633
82,762
77,080
RETIRED PAY
21,469
21,803
22,217
21,950
O&M
80,629
86,439
90,332
94,991
102,068
97,259
99,977
99,290
100,079
99,033
138,421
95,765
86,471
PROCUREMENT
74,377
94,130
112,444
116,669
127,187
117,886
98,561
94,681
90,515
89,651
76,498
62,511
64,416
RDT&E
25,654
29,220
32,038
36,403
41,177
43,026
44,233
43,688
43,093
40,207
38,578
38,231
38,813
MILITARY CONST
5,178
7,174
6,363
6,167
7,302
6,802
6,333
6,381
6,672
5,661
5,541
5,106
6,195
FAMILY HOUSING
3,046
3,111
3,722
3,558
3,747
3,660
3,790
3,821
3,761
3,477
3,497
3,771
4,004
SPEC FOREIGN CURR
4
4
5
4
11
3
4
DEF WEDE CONTINGENCY
-110
REV & MGMT FUNDS
4,197
3,634
1,505
3,744
6,641
6,647
3,229
1,495
1,033
626
2,877
4,467
1,562
TRUST & RECEIPTS
-994
-1,015
-479
-848
-556
-898
-966
-961
-769
-921
-47,211
-5,878
-763
DEDUCT, INTRAGOVT RECPT
-23
-26
-32
-30
-27
-27
-36
-31
-29
-30
-31
-184
-20
TOTAL, CONSTANT $
280,211
312,262
337,233
362,528
375,607
359,132
345,690
338,543
333,728
326,415
308,803
286,551
267,628
% REAL GROWTH
MILITARY PERSONNEL
3.6
1.5
2.0
1.2
25.9
-3.4
6.5
-0.5
-0.8
-1.0
2.3
-8.7
-6.9
RETIRED PAY
4.0
1.6
1.8
-1.2
0&M
9.2
7.2
4.6
5.2
7.4
-4.7
2.8
-0.7
0.0
-1.1
39.8
-30.8
-9.7
PROCUREMENT
26.1
26.6
19.5
3.7
9.0
-7.5
-16.3
-3.9
-4,4
-1.0
-14.7
-18.3
-13.0
ADT&E
12.9
14.3
9.6
13.6
13.1
4.6
2.8
-1.2
-1.4
-6.5
-4.3
-0.9
1.5
MILITARY. CONST
38.1
38.8
-11.3
-3.3
18.6
-8.9
-6.9
0.8
3.0
-13.9
-2.1
-7.8
21,3
FAMILY HOUSING
20.0
2.1
19.6
-4.4
5.3
-6.3
0.0
0.8
-1.6
-7.6
0.8
7.8
6.2
TOTAL
13.0
11.4
8.0
4.5
6.5
-4.4
-3.8
-2.1
-1.4
-2.2
-5.4
-7.2
-6.6
PAGE.003
Table 6-8 [Continued]
DEPARTMENT of DEFENSE BA by TITLE
($ in Millions)
FY 68
FY 69
FY 70
FY 71
FY 72
FY 73
FY 74
FY 75
FY 76
FY 77
FY 78
FY 79
FY 80
CURRENT DOLLARS
MILITARY PERSONNEL
20,023
21,427
22,995
22,643
22,984
23,727
24,167
24,963
25,430
26,118
27,246
28,703
31,014
RETIRED PAY
2,095
2,450
2,858
3,391
3,901
4,442
5,151
6,251
7,326
8,238
9,180
10,283
11,985
O&M
20,950
22,349
21,529
20,434
20,792
21,731
23,955
26,107
26,731
32,108
34,732
38,023
48,366
PROCUREMENT
23,408
20,543
17,867
16,702
17,777
17,473
17,028
16,698
20,991
27,922
29,529
31,428
35,283
ROT&E
7,285
7,629
7,408
7,066
7,619
7,960
8,176
8,672
9,451
10,439
11,371
12,437
13,661
MILITARY CONST
1,543
1,168
960
1,322
1,287
1,356
1,563
1,927
2,360
2,204
1,641
2,319
2,293
FAMILY HOUSING
612
512
604
717
860
987
1,099
1,157
1,229
1,258
1,346
1,563
1,526
SPEC FOREIGN CURR
11
3
12
3
3
2
3
4
2
14
7
REV & MGMT FUNDS
516
961
6
168
135
220
423
726
1,336
TRUST & RECEIPTS
-150
-125
-134
-113
-100
-97
-146
-168
-139
-163
-137
-481
-715
DEDUCT, INTRAGOVT RECPT
-7
-B
-7
-8
-8
-8
-7
-7
-7
-9
-11
-11
-12
TOTAL, CURRENT $
76,286
76,905
74,083
71,159
75,006
77,555
80,901
85,661
95,508
108,338
115,322
125,004
142,621
CONSTANT FY 93 DOLLARS
MILITARY PERSONNEL
104,329
104,960
100,568
92,482
82,330
76,239
72,735
70,545
66,219
68,400
64,860
64,412
64,473
RETIRED PAY
9,831
10,912
11,841
12,701
13,701
14,703
16,549
16,538
17,454
18,531
19,206
19,873
20,630
0&M
88,313
90,146
80,039
72,569
68,624
67,391
66,916
65,632
87,301
89,228
69,400
70,070
73,852
PROCUREMENT
97,342
81,341
68,726
57,017
60,441
54,492
49,705
44,778
52,161
62,092
59,782
57,737
58,987
ROT&E
28,772
29,016
26,769
24,271
24,561
24,511
23,019
21,874
22,427
22,766
22,903
22,868
22,642
MILITARY CONST
6,007
4,385
3,442
4,493
4,156
4,064
4,203
4,785
5,479
4,691
3,210
4,126
3,747
FAMILY HOUSING
2,429
1,977
2,204
2,478
2,841
3,060
3,268
3,021
2,982
2,818
2,810
2,999
2,530
FROM OASD-PA
SPEC FOREIGN CURR
43
9
40
11
8
6
6
8
6
28
12
REV & MGMT FUNDS
1,987
3,586
16
412
327
493
886
1,392
2,316
TRUST & RECEIPTS
-577
-468
-480
-389
-331
-308
-437
-437
-338
-365
-286
-922
-1,240
DEDUCT, INTRAGOVT RECPT
-28
-30
-24
-21
-20
-25
-20
-17
-17
-20
-23
-21
-21
TOTAL, CONSTANT $
339,449
325,826
293,990
265,800
256,332
244,137
234,947
227,038
238,001
246,640
242,751
242,561
247,936
% REAL GROWTH
MILITARY PERSONNEL
4.0
0.8
-4,2
-8.0
-11.0
-7.4
-4.6
-3.0
-3.3
-2.7
-2.3
-0.7
0.1
16:05
RETIRED PAY
10.2
11.0
8.5
7.3
7.9
7.3
5.8
6.4
5.5
6.2
3.6
3.5
3,8
08M
4.0
2.1
-10.2
-10.4
-5.4
-1.8
-0.7
-2.1
2.7
2.9
0.3
1.0
6.4
PROCUREMENT
-2.1
-16.4
-15.5
-17.0
6.0
-9.9
-8.8
-9.9
16.5
19.0
-3.7
-3.4
2.2
RDT&E
-1.7
0.8
-7.8
-9.3
1.2
-0.2
-6.1
-5.0
2.6
1.5
0.6
-0.2
-1.0
MILITARY CONST
35.2
-27.0
-21.6
30.6
-7.5
-2.2
3.4
13.8
14.5
-14.4
-31.6
28.5
-9.2
FAMILY HOUSING
18.3
-18,6
11.5
12.4
14,6
7.7
6.8
-7.6
-1.3
-5.6
-0.3
6.7
-16.4
8
TOTAL
1.7
-3.7
-9.8
-9.7
-3.5
-4.8
-3.8
-3.4
3.9
4.6
-1.6
-0.1
2.2
Administration of Ronald Reagan, 1983 / Mar. 8
people, regardless
"The American Adventure," a film and ani-
ited with students participating in the
o live, to work, to
mation presentation depicting a three-cen-
World Showcase Fellowship Program, an
sions can combine
tury rediscovery of America. The film was
educational and cultural exchange program
S the promise of
presented jointly by the American Express
and Coca-Cola Companies and is the
designed to enable outstanding young
adults to represent their various countries
mise of America.
centerpiece of World Showcase, that portion
you today that I
of EPCOT which, through pavilion dis-
for 1 year in the pavilions of World Show-
I believe in your
plays, recreates the architecture and culture
case. The fellowship program is part of the
of nine countries.
President's private sector initiative on inter-
rage and your de-
After the presentation, the President vis-
national youth exchange.
the time arrives,
tion will be very.
ver to your care.
of that program
nething about the
Remarks at the Annual Convention of the National Association of
of this exchange
Evangelicals in Orlando, Florida
he. same age, will
March 8, 1983
her countries and
as human beings
e always believed.
Reverend clergy all, Senator Hawkins,
[laughter]-which I'll share with you.
ms in the world
distinguished members of the Florida con-
An evangelical minister and a politician
le talk about each
gressional delegation, and all of you:
arrived at Heaven's gate one day together.
other. And maybe
I can't tell you how you have warmed my
And St. Peter, after doing all the necessary
this kind, you are
heart with your welcome. I'm delighted to
formalities, took them in hand to show
dream that has
be here today.
them where their quarters would be. And
the first and earli-
Those of you in the National Association
he took them to a small, single room with a
at is the dream of
of Evangelicals are known for your spiritual
bed, a chair, and a table and said this was
ving each other, it
and humanitarian work. And I would be
for the clergyman. And the politician was a
eone to say to you
especially remiss if I didn't discharge right
little worried about what might be in store
or that you must
now one personal debt of gratitude. Thank
for him. And he couldn't believe it then
with these people
you for your prayers. Nancy and I have felt
when St. Peter stopped in front of a beauti-
DW so well.
their presence many times in many ways.
ful mansion with lovely grounds, many serv-
iing we can to see
And believe me, for us they've made all the
ants, and told him that these would be his
ers and goes for-
difference.
quarters.
ility of young gen-
The other day in the East Room of the
And he couldn't help but ask, he said,
meet and become
White House at a meeting there, someone
"But wait, how-there's something wrong-
round the world.
asked me whether I was aware of all the
how do I get this mansion while that good
time here, and I
people out there who were praying for the
and holy. man only gets a single room?"
ngs for me to do,
President. And I had to say, "Yes, I am. I've
And St. Peter said, "You have to understand
will be as much
felt it. I believe in intercessionary prayer."
how things are up here. We've got thou-
been. And I just
But I couldn't help but say to that question-
sands and thousands of clergy. You're the
thank you, and
er after he'd asked the question that-or at
first politician who ever made it." [Laugh-
least say to them that if sometimes when he
ter]
was praying he got a busy signal, it was just
But I don't want to contribute to a stereo-
me in there ahead of him. [Laughter] I
type. [Laughter] So, I tell you there are a
at 1:52 p.m. in
think I understand how Abraham Lincoln
great many God-fearing, dedicated, noble
Experimental Pro-
felt when he said, "I have been driven
men and women in public life, present
morrow (EPCOT)
many times to my knees by the overwhelm-
company included. And, yes, we need your
anding math and
ing conviction that I had nowhere else to
help to keep us ever mindful of the ideas
e central Florida
go."
and the principles that brought us into the
'er, after an intro-
From the joy and the good feeling of this
public arena in the first place. The basis of
is, executive vice
conference, I go to a political reception.
those ideals and principles is a commitment
rises.
[Laughter] Now, I don't know why, but that
to freedom and personal liberty that, itself,
President viewed
bit of scheduling reminds me of a story-
is grounded in the much deeper realization
359
Mar. 8 / Administration of Ronald Reagan, 1983
tions on publicly financed abortions, it also
of minority citizens for equal rights, once a
forties and fif
addresses this whole problem of infanticide.
source of disunity and civil war, is now a
which now prc
I urge the Congress to begin hearings and
point of pride for all Americans. We must
tegic ballistic n
to adopt legislation that will protect the
never go back. There is no room for racism,
an entire class
right of life to all children, including the
anti-Semitism, or other forms of ethnic and
range nuclear I
disabled or handicapped.
racial hatred in this country.
At the same
Now, I'm sure that you must get discour-
I know that you've been horrified, as
made to under:
aged at times, but you've done better than
have I, by the resurgence of some hate
mise our princ:
you know, perhaps. There's a great spiritual
groups preaching bigotry and prejudice.
never give aw
awakening in America, a renewal of the tra-
ditional values that have been the bedrock
Use the mighty voice of your pulpits and
never abandon
the powerful standing of your churches to
will never sto]
of America's goodness and greatness.
One recent survey / by a Washington-
denounce and isolate these hate groups in
peace. But we
based research council concluded that
our midst. The commandment given us is
things America
called nuclear f
Americans were far more religious than the
clear and simple: "Thou shalt love thy
some.
neighbor as thyself."
people of other nations; 95 percent of those
The truth is tl
surveyed expressed a belief in God and a
But whatever sad episodes exist in our
very dangerous
huge majority believed the Ten Command-
past, any objective observer must hold a
illusion of peace
ments had real meaning in their lives. And
positive view of American history, a history
find peace throu
another study has found that an over-
that has been the story of hopes fulfilled
I would agree
whelming majority of Americans disapprove
and dreams made into reality. Especially in
freeze the Sovie
of adultery, teenage sex, pornography, abor-
this century, America has kept alight the
at current levels
tion, and hard drugs. And this same study
torch of freedom, but not just for ourselves
any incentive fc
showed a deep reverence for the impor-
but for millions of others around the world.
seriously in Gen
tance of family ties and religious belief.
And this brings me to my final point
chances to achie
I think the items that we've discussed
today. During my first press conference as
tions which we
here today must be a key part of the Na-
President, in answer to a direct question, I
they would achie
tion's political agenda. For the first time the
pointed out that, as good Marxist-Leninists,
the freeze.
Congress is openly and seriously debating
the Soviet leaders have openly and publicly
A freeze would
and dealing with the prayer and abortion
declared that the only morality they recog-
for its enormous
issues-and that's endrmous progress right
nize is that which will further their cause,
buildup. It would
there. I repeat: America is in the midst of a
which is world revolution. I think I should
long overdue 1
spiritual awakening and a moral renewal.
point out I was only quoting Lenin, their
States and allied
And with your Biblical keynote, I say today,
guiding spirit, who said in 1920 that they
our aging force
"Yes, let justice roll on like a river, right-
repudiate all morality that proceeds from
And an honest fr
eousness like a never-failing stream."
supernatural ideas-that's their name for re-
sive prior negotia
Now, obviously, much of this new politi-
ligion-or ideas that are outside class con-
numbers to be lin
cal and social consensus I've talked about is
ceptions. Morality is entirely subordinate to
to ensure effectiv
based on a positive view of American histo-
the interests of class war. And everything is
ance. And the k
ry, one that takes pride in our country's
moral that is necessary for the annihilation
been suggested W
accomplishments and record. But we must
of the old, exploiting social order and for
ble to verify. Su
never forget that no government schemes
uniting the proletariat.
divert us complet
are going to perfect man. We know that
Well, I think the refusal of many influen-
gotiations on ach.
living in this world means dealing with
tial people to accept this elementary fact of
tions.
what philosophers would call the phenom-
Soviet doctrine illustrates an historical re-
A number of y
enology of evil or, as theologians would put
luctance to see totalitarian powers for what
father, a very pro
it, the doctrine of sin.
they are. We saw this phenomenon in the
entertainment wo
There is sin and evil in the world, and
1930's. We see it too often today.
dous gathering in
we're enjoined by Scripture and the Lord
This doesn't mean we should isolate our-
the time of the C(
Jesus to oppose it with all our might. Our
selves and refuse to seek an understanding
and our own way
nation, too, has a legacy of evil with which
with them. I intend to do everything I can
people's minds. A
it must deal. The glory of this land has been
to persuade them of our peaceful intent, to
that subject. And S
its capacity for transcending the moral evils
remind them that it was the West that re-
him saying, "I love
of our past. For example, the long struggle
fused to use its nuclear monopoly in the
anything-" Ano
362
Administration of Ronald Reagan, 1983 / Mar. 8
ual rights, once a
forties and fifties for territorial gain and
no, don't. You can't-don't say that." But I
il war, is now a
which now proposes 50-percent cut in stra-
had underestimated him. He went on: "I
ricans. We must
tegic ballistic missiles and the elimination of
would rather see my little girls die now, still
room for racism,
an entire class of land-based, intermediate-
believing in God, than have them grow up
ms of ethnic and
range nuclear missiles.
under communism and one day die no
At the same time, however, they must be
longer believing in God."
made to understand we will never compro-
en horrified, as
There were thousands of young people in
mise our principles and standards. We will
e of some hate
that audience. They came to their feet with
never give away our freedom. We will
and prejudice.
shouts of joy. They had instantly recognized
never abandon our belief in God. And we
our pulpits and
the profound truth in what he had said,
will never stop searching for a genuine
our churches to
with regard to the physical and the soul and
peace. But we can assure none of these
hate groups in
what was truly important.
things America stands for through the so-
ent given us is
Yes, let us pray for the salvation of all of
called nuclear freeze solutions proposed by
shalt love thy
those who live in that totalitarian dark-
some.
The truth is that a freeze now would be a
ness-pray they will discover the joy of
les exist in our
knowing God. But until they do, let us be
very dangerous fraud, for that is merely the
er must hold a
illusion of peace. The reality is that we must
aware that while they preach the suprem-
istory, a history
find peace through strength.
acy of the state, declare its omnipotence
hopes fulfilled
I would agree to a freeze if only we could
over individual man, and predict its eventu-
ty. Especially in
freeze the Soviets' global desires. A freeze
al domination of all peoples on the Earth,
kept alight the
at current levels of weapons would remove
they are the focus of evil in the modern
st for ourselves
world.
any incentive for the Soviets to negotiate
und the world.
seriously in Geneva and virtually end our
It was C. S. Lewis who, in his unforgetta-
my final point
chances to achieve the major arms reduc-
ble "Screwtape Letters," wrote: "The great-
S conference as
tions which we have proposed. Instead,
est evil is not done now in those sordid
rect question, I
they would achieve their objectives through
'dens of crime' that Dickens loved to paint.
arxist-Leninists,
the freeze.
It is not even done in concentration camps
ly and publicly
A freeze would reward the Soviet Union
and labor camps. In those we see its final
ity they recog-
for its enormous and unparalleled military
result. But it is conceived and ordered
er their cause,
buildup. It would prevent the essential and
(moved, seconded, carried and minuted) in
think I should
long overdue modernization of United
clear, carpeted, warmed, and well-lighted
g Lenin, their
States and allied dèfenses and would leave
offices, by quiet men with white collars and
.920 that they
our aging forces increasingly vulnerable.
cut fingernails and smooth-shaven cheeks
proceeds from
And an honest freeze would require exten-
who do not need to raise their voice."
ir name for re-
sive prior negotiations on the systems and
Well, because these "quiet men" do not
side class con-
numbers to be limited and on the measures
"raise their voices," because they some-
subordinate to
to ensure effective verification and compli-
times speak in soothing tones of brother-
1 everything is
ance. And the kind of a freeze that has
hood and peace, because, like other dicta-
e annihilation
been suggested would be virtually impossi-
tors before them, they're always making
order and for
ble to verify. Such a major effort would
"their final territorial demand," some would
divert us completely from our current ne-
have us accept them at their word and ac-
many influen-
gotiations on achieving substantial reduc-
commodate ourselves to their aggressive
entary fact of
tions.
impulses. But if history teaches anything, it
historical re-
A number of years ago, I heard a young
teaches that simple-minded appeasement or
wers for what
father, a very prominent young man in the
wishful thinking about our adversaries is
menon in the
entertainment world, addressing a tremen-
folly. It means the betrayal of our past, the
ay.
dous gathering in California. It was during
squandering of our freedom.
d isolate our-
the time of the cold war, and communism
So, I urge you to speak out against those
inderstanding
and our own way of life were very much on
who would place the United States in a po-
rything I can
people's minds. And he was speaking to
sition of military and moral inferiority. You
ful intent, to
that subject. And suddenly, though, I heard
know, I've always believed that old Screw-
West that re-
him saying, "I love my little girls more than
tape reserved his best efforts for those of
opoly in the
anything- And I said to myself, "Oh,
you in the church. So, in your discussions of
363
Mar. 8 / Administration of Ronald Reagan, 1983
the nuclear freeze proposals, I urge you to
beware the temptation of pride-the temp-
of Eden with the words of temptation, "Ye
Tocqueville fo
shall be as gods."
tation of blithely declaring yourselves above
lieved that reli
The Western World can answer this chal-
it all and label both sides equally at fault, to
to the mainter
lenge, he wrote, "but only provided that its
ignore the facts of history and the aggres-
stitutions. Toda
faith in God and the freedom He enjoins is
this Nation in
sive impulses of an evil empire, to simply
as great as communism's faith in Man."
call the arms race a giant misunderstanding
truth, that our
I believe we shall rise to the challenge. I
and thereby remove yourself from the
believe that communism is another sad, bi-
pends upon an
has been clear
struggle between right and wrong and good
zarre chapter in human history whose last
and evil.
Washington, w}
pages even now are being written. I believe
dress:
I ask you to resist the attempts of those
this because the source of our strength in
who would have you withhold your support
the quest for human freedom is not materi-
Of all the (
for our efforts, this administration's efforts,
al, but spiritual. And because it knows no
lead to poli
to keep America strong and free, while we
limitation, it must terrify and ultimately tri-
morality a
negotiate real and verifiable reductions in
umph over those who would enslave their
And let
the world's nuclear arsenals and one day,
fellow man. For in the words of Isaiah: "He
supposition
with God's help, their total elimination.
giveth power to the faint; and to them that
tained with
While America's military strength is im-
have no might He increased strength.
and experie
portant, let me add here that I've always
But they that wait upon the Lord shall
that nationa
maintained that the struggle now going on
renew their strength; they shall mount up
clusion of re
for the world will never be decided by
with wings as eagles; they shall run, and not
Nearly every
bombs or rockets, by armies or military
be weary.
has proclaimed
might. The real crisis we face today is a
Yes, change your world. One of our
thanksgiving to
spiritual one; at root, it is a test of moral
Founding Fathers, Thomas Paine, said, "We
favors of Almigl
will and faith.
have it within our power to begin the world
edged God's gu
Whittaker Chambers, the man whose
over again." We can do it, doing together
our National ant
own religious conversion made him a wit-
what no one church could do by itself.
Allegiance. As tl
ness to one of the terrible traumas of our
God bless you, and thank you very much.
1952, "We are a
time, the Hiss-Chambers case, wrote that
stitutions presup
Note: The President spoke at 3:04 p.m. in
The founders
the crisis of the Western World exists to the
degree in which the West is indifferent to
the Citrus Crown Ballroom at the Sheraton
ers of the First
Twin Towers Hotel.
God, the degree to which it collaborates in
to forbid public
communism's attempt to make man stand
Following his appearance before the con-
prayer has been
alone without God. And then he said, for
vention, the President attended a Florida
blies since Benja
Marxism-Leninism is actually the second
Republican fundraising reception at the
quest that praye
oldest faith, first proclaimed in the Garden
hotel and then returned to Washington,
stitutional Conve
D.C.
I have lived
longer I li
proofs I see e
erns in the
Message to the Congress Transmitting the Proposed Constitutional
believe that
Amendment on Prayer in Schools
we shall suc
March 8, 1983
ing no bet
Babel: We sh
partial local
To the Congress of the United States:
this package, I am calling on the Congress
be confound
On May 17, 1982, I transmitted for your
to act speedily to pass it.
become a rej
consideration a proposed constitutional
The public expression through prayer of
to future age
amendment to restore the simple freedom
our faith in God is a fundamental part of
I therefore
of our citizens to offer prayer in our public
our American heritage and a privilege
henceforth p
schools and institutions. I know that already
which should not be excluded by law from
ance of Hea
this Session there is growing bipartisan sup-
any American school, public or private.
our deliberat
port for the amendment and as I forward
One hundred fifty years ago, Alexis de
sembly every
ceed to busin
364
Speeches of the American Presidents
ead recently about the Lubbock school case
failure to feed and care for handicapped infants
where a judge actually ruled that it was uncon-
in this facility is prohibited by federal law." It
stitutional for a school district to give equal
also lists a 24-hour, toll-free number so that
treatment to religious and non-religious stu-
nurses and others may report violations in time
dent groups, even when the group meetings
to save the infant's life.
were held during the students' own time.
In addition, recent legislation introduced in
The First Amendment never intended to re-
the Congress by Representative Henry Hyde
quire government to discriminate against reli-
not only increased restrictions on publicly fi-
gious speech. Senators Denton and Hatfield
nanced abortions, it also addresses this whole
have proposed legislation in the Congress on
problem of infanticide.
the whole question of prohibiting discrimina-
I urge the Congress to begin hearings and
tion against religious forms of student speech.
to adopt legislation that will protect the right
Such legislation could go far to restore free-
of life to all children, including the disabled or
dom of religious speech for public school stu-
handicapped.
dents and I hope the Congress considers these
I'm sure you must get discouraged at times,
bills quickly. And with your help, I think it's
but there is a great spiritual awakening in
America, a renewal of the traditional values
possible we can get the constitutional amend-
that have been the bedrock of America's good-
ment through the Congress this year.
THE
More than a decade ago, a Supreme Court
ness and greatness.
One recent survey by a Washington based
decision literally wiped off the books of 50
research council concluded that Americans
states statutes protecting the rights of unborn
were far more religious than the people of oth-
Ind
children. "Abortion on demand" now takes the
er nations; 95 percent of those surveyed ex-
lives of up to one and a half million unborn
pressed a belief in God and a huge majority
children a year.
believed the Ten Commandments had real
Human life legislation ending this tragedy
meaning for their live.
will someday pass the Congress-and you and
Another study has found that an over-
I must never rest until it does. Unless and until
whelming majority of Americans disapprove
it can be proven that the unborn child is not a
of adultery, teen-age sex, pornography, abor-
living entity, then its right to life, liberty and
tion and hard drugs. And this same study
the pursuit of happiness must be protected.
showed a deep reverence for the importance of
You may remember that when abortion on
family ties and religious belief.
demand began many, indeed, I'm sure many of
I think the items we have discussed here to-
you warned, that the practice would lead to a
day must be a key part of the nation's political
decline in respect for human life, that the
agenda. For the first time the Congress is
philosophical premises used to justify abortion
openly and seriously debating and dealing with
on demand would ultimately be used to justify
the prayer and abortion issues-that's enor-
other attacks on the sacredness of human
mous progress right there.
life, infanticide or mercy killing. Tragically
I repeat: America is in the midst of a spiritu-
enough, those warnings proved all too true:
al awakening and moral renewal. With your
Only last year a court permitted the death by
biblical keynote, I say today let "justice roll on
starvation of a handicapped infant.
like a river, righteousness like a never-failing
I have directed the Health and Human Ser-
stream."
vices Department to make clear to every health
Now, obviously, much of this new political
care facility in the United States that the Reha-
and social consensus I have talked about is
bilitation Act of 1973 protects all handicapped
based on a positive view of American history,
persons against discrimination based on handi-
one that takes pride in our country's accom-
caps, including infants.
plishments and record. But we must never for-
And we have taken the further step of re-
get that no government schemes are going to
quiring that each and every recipient of federal
perfect man; we know that living in this world
funds who provides health care services to in-
means dealing with what philosophers would
fants must post and keep posted in a conspicu-
call the phenomenology of evil or, as theolo-
ous place a notice stating that "discriminatory
gians would put it, the docrine of sin.
758
ts
as
Ronald Wilson Reagan
is
È
There is sin and evil in the world, and we
I intend to do everything I can to persuade
e
are enjoined by Scripture and the Lord Jesus
them of our peaceful intent; to remind them
that it was the West that refused to use its nu-
n-
to oppose it with all our might. Our nation,
too, has a legacy of evil with which it must
clear monopoly in the '40s and '50s for terri-
d
deal. The glory of this land has been its capaci-
toral gain and which now proposes 50 percent
id
ty for transcending the moral evils of our past.
cuts in strategic ballistic missiles and the elimi-
X,
For example, the long struggle of minority
nation of an entire class of land-based, inter-
IS
citizens for equal rights, once a source of dis-
mediate range nuclear missiles.
ed
unity and civil war, is now a point of pride for
At the same time, however, they must be
st
all Americans. We must never go back.
made to understand we will never compromise
o-
There is no room for racism, anti-Semitism
our principles and standards. We will never
le
or other forms of ethnic and racial hatred in
give way our freedom. We will never abandon
is
this country. I know you have been horrified,
our belief in God.
id
as have I, by the resurgence of some hate
And we will never stop searching for a gen-
groups preaching bigotry and prejudice. Use
uine peace. But we can assure none of these
the mighty voice of your pulpits and the pow-
things America stands for through the so-
erful standing of your churches to denounce
called nuclear freeze solutions proposed by
and isolate these hate groups in our midst. The
some. The truth is that a freeze now would be
e
commandment given us is clear and simple:
a very dangerous fraud, for that is merely the
e
"Thou shalt love thy neighbor as thyself."
illusion of peace. The reality is that we must
al
But whatever sad episodes exist in our past,
find peace through strength.
it
any objective observer must hold a positive
I would agree to a freeze if only we could
If
view of American history, a history that has
freeze the Soviets' global desires. A freeze at
h
been the story of hopes fulfilled and dreams
current levels of weapons would remove any
S
made into reality. Especially in this century,
incentive for the Soviets to negotiate seriously
in Geneva, and virtually end our chances to
o
America has kept alight the torch of free-
dom-not just for ourselves but for millions of
achieve the major arms reductions which we
Γ.
others around the world. And this brings me
have proposed. Instead, they would achieve
».
to my final point today.
their objectives through the freeze.
1,
During my first press conference as presi-
A freeze would reward the Soviet Union for
dent, in answer to a direct question, I pointed
its enormous and unparalleled military build-
out that as good Marxist-Leninists the Soviet
up. It would prevent the essential and long
),
leaders have openly and publicly declared that
overdue modernization of United States and
n
the only morality they recognize is that which
allied defenses and would leave our aging
a
will further their cause, which is world revolu-
forces increasingly vulnerable. And an honest
tion.
freeze would require extensive prior negotia-
I think I should point out I was only quoting
tions on the systems and numbers to be limited
Lenin, their guiding spirit, who said in 1920
and on the measures to insure effective verifi-
y
that they repudiate all morality that proceeds
cation and compliance.
from supernatural ideas or ideas that are out-
And the kind of freeze that has been sug-
side class conceptions; morality is entirely sub-
gested would be virtually impossible to verify.
ordinate to the intersts of class war; and
Such a major effort would divert us completely
everything is moral that is necessary for the
from our current negotiations on achieving
annihilation of the old exploiting social order
substantial reductions.
and for uniting the proletariat.
Let us pray for the salvation of all those who
I think the refusal of many influential peo-
live in totalitarian darkness, pray they will dis-
ple to accept this elementary fact of Soviet
cover the joy of knowing God.
doctrine illustrates an historical reluctance to
But until they do, let us be aware that while
see tolitarian powers for what they are. We
they preach the supremacy of the state, declare
saw this phenomenon in the 1930s; we see it
its omnipotence over individual man, and pre-
too often today. This does not mean we should
dict its eventual domination of all peoples of
isolate ourselves and refuse to seek an under-
the earth-they are the focus of evil in the
standing with them.
modern world.
759
Speeches of the American Presidents
It was C.S. Lewis who, in his unforgettable
administration's efforts to keep America
"Screwtape Letters," wrote:
strong and free, while we negotiate real and
"The greatest evil is not now done in those
verifiable reductions in the world's nuclear ar-
sordid 'dens of crime' that Dickens loved to
senals and one day, with God's help, their total
paint. It is not done even in concentration
elimination.
camps and labor camps. In those we see its fi-
While America's military strength is impor-
nal result. But it is conceived and ordered
tant, let me add here that I have always main-
(moved, seconded, carried, and minuted) in
tained that the struggle now going on for the
clear, carpeted, warmed, and well-lighted of-
world will never be decided by bombs or rock-
fices, by quiet men with white collars and cut
ets, by armies or military might.
fingernails and smooth shaven cheeks who do
The real crisis we face today is a spiritual
not need to raise their voice."
one; at root, it is a test of moral will and faith.
Because these "quiet men" do not "raise
Whittaker Chambers, the man whose own
their voices," because they sometimes speak in
religious conversion made him a "witness" to
soothing tones of brotherhood and peace, be-
one of the terrible traumas of our age, the
cause, like other dictators before them, they
Hiss-Chambers case, wrote that the crisis of
are always making "their final territorial
the Western world exists to the degree in
demand," some would have us accept them at
which the West is indifferent to God, the de-
their word and accommodate ourselves to their
gree to which it collaborates in communism's
aggressive impulses.
attempt to make man stand alone without God.
But, if history teaches anything, it teaches:
For Marxism-Leninism is actually the sec-
Simple-minded appeasement or wishful think-
ond oldest faith, he said, first proclaimed in the
ing about our adversaries is folly-it means the
Garden of Eden with the words of temptation:
betrayal of our past, the squandering of our
"Ye shall be as gods." The Western world can
freedom.
answer this challenge, he wrote, "but only pro-
So I urge you to speak out against those who
vided that its faith in God and the freedom He
would place the United States in a position of
enjoins is as great as communism's faith in
military and moral inferiority. You know, I
man."
have always believed that old Screwtape re-
I believe we shall rise to this challenge; I be-
serves his best efforts for those of you in the
lieve that communism is another sad, bizarre
church.
chapter in human history whose last pages
So in your discussions of the nuclear freeze
even now are being written. I believe this be-
proposals, I urge you to beware the temptation
cause the source of our strength in the quest
of pride-the temptation blithely to declare
for human freedom is not material but spiritu-
yourselves above it all and label both sides
al, and, because it knows no limitation, it must
equally at fault, to ignore the facts of history
terrify and ultimately triumph over those who
and the aggressive impulses of an evil empire,
would enslave their fellow man.
to simply call the arms race a giant misunder-
For, in the words of Isaiah:
standing and thereby remove yourself from the
"He giveth power to the faint; and to them
struggle between right and wrong, good and
that have no might He increased strength. But
evil.
they that wait upon the Lord shall renew their
I ask you to resist the attempts of those who
strength; they shall mount up with wings as ea-
would have you withhold your support for this
gles; they shall run, and not be weary."
STAR WARS
Washington, D.C., March 23, 1983
REAGAN'S announcement, during a nationally televised speech on peace and national se-
curity, that the United States would develop a space-based defense against nuclear bal-
760
S
S
Ronald Wilson Reagan
S
1-
waste one more moment to give back to the of life.
e
world all that we can in return for this miracle
Thank you all. God bless you all.
1-
d
d
THE ICELAND SUMMIT
<,
S
Washington, D.C., October 13, 1986
d
st
THE PRESIDENT'S two summits with Mikhail Gorbachev in 1984 and 1986 were unpro-
ductive. Reagan refused to meet with a Soviet leader until late in his first term, and
e
then, as Garry Wills has noted, he ensured that the press knew that substantial issues
S
were not going to be discussed so that no one's hopes would be raised.
d
The second summit, held in Reykjavik, Iceland, was a bona-fide failure. The U.S.
negotiators, apparently poorly prepared, could not come to grips with radical Soviet
proposals for massive arms reductions, or follow through on Reagan's suggestion to
eliminate all ballistic missiles over a fixed period. Nor could the Soviets, falling behind
e
in strategic defense technology, accept Reagan's firm intention to test and deploy a Star
e
Wars defense. So disappointing was the whole event that top Reagan aides, especially
al
Secretary of State George Shultz, could not conceal their anger and dismay. (This was
t
attributed by the White House to "fatigue.") In this national address, the president
If
sought ot deflect criticism of the summit, laying most of the blame for the lack of results
h
on the Soviets (in a parallel statement, Gorbachev blamed the United States), and insist-
S
ing that radical arms reductions were still possible.
o
Good evening. As most of you know, I have
pursued. And it's for these aims I went the,
Γ.
just returned from meetings in Iceland with
went the extra mile to Iceland.
e.
the leader of the Soviet Union, General Secre-
Before I report on our talks though, allow
1,
tary Gorbachev. As I did last year when I re-
me to set the stage by explaining two things
turned from the summit conference in
that were very much a part of our talks, one a
Geneva, I want to take a few moments tonight
treaty and the other a defense against nuclear
,,
to share with you what took place in these dis-
missiles which we're trying to develop. Now
n
cussions.
you've heard their titles a thousand times-the
a
The implications of these talks are enor-
ABM treaty and S.D.I. Well, those letters
mous and only just beginning to be under-
stand for ABM, anti-ballistic missile, S.D.I.,
stood.
Strategic Defense Initiative.
We proposed the most sweeping and gener-
Some years ago, the United States and the
ry
ous arms control proposal in history. We of-
Soviet Union agreed to limit any defense
fered the complete elimination of all ballistic
against nuclear missile attacks to the emplace-
missiles-Soviet and American-from the
ment in one location in each country of a small
face of the earth by 1996. While we parted
number of missiles capable of intercepting and
company with this American offer still on the
shooting down incoming nuclear missiles.
table, we're closer than ever before to agree-
Thus leaving our real defense a policy called
ments that could lead to a safer world without
Mutual Assured Destruction, meaning if one
nuclear weapons.
side launched a nuclear attack, the other side
But first, let me tell you that, from the start
could retaliate. And this mutual threat of de-
of my meetings with Mr. Gorbachev, I have al-
struction was believed to be a deterrent against
ways regarded you, the American people, as
either side striking first.
full participants. Believe me, without your
So here we sit with thousands of nuclear
support, none of these talks could have been
warheads targeted on each other and capable of
held, nor could the ultimate aims of American
wiping out both our countries. The Soviets de-
foreign policy-world peace and freedom-be
ployed the few anti-ballistic missiles around
783
Speeches of the American Presidents
Moscow as the treaty permitted. Our country
olations of that pact, its refusal to let citizens
didn't bother deploying because the threat of
leave their country or return.
nationwide annihiliation made such a limited
We also discussed regional matters such as
defense seem useless.
Afghanistan, Angola, Nicaragua, and Cambo-
For some years now we'be been aware that
dia.
the Soviets may be developing a nationwide
But by their choice the main subject was
defense. They have installed a large modern
arms control. We discussed the emplacement
radar at Krashnoyarsk which we believe is a
of intermediate-range missles in Europe and
critical part of a radar system designed to pro-
Asia and seemed to be in agreement they could
vide radar guidance for anti-ballistic missiles
be drastically reduced. Both sides seemed will-
protecting the entire nation. Now this is a vio-
ing to find a way to reduce even to zero the
lation of the ABM treaty.
strategic ballistic missiles we have aimed at
Believing that a policy of mutual destruction
each other. This then brought up the subject
and slaughter of their citizens and ours was un-
of S.D.I.
civilized, I asked our military a few years ago
I offered a proposal that we continue our
to study and see if there was a practical way to
present research and if and when we reached
destroy nuclear missles after their launch but
the stage of testing we would sign now a treaty
before they can reach their targets rather than
that would permit Soviet observation of such
to just destroy people. Well this is the goal for
tests. And if the program was practical we
what we call S.D.I., and our scientists re-
would both eliminate our offensive missiles,
searching such a system are convicned it is
and then we would share the benefits of ad-
practical and that several years down the road
vanced defenses.
we can have such a system ready to deploy. In-
I explained that even though we would have
cidentally we are not violating the ABM treaty,
done away with our offensive ballistic missiles,
which permits such research. If and when we
having the defense would protect against
deploy, the treaty also allows withdrawal from
cheating or the possibility of a madman some-
the treaty upon six months' notice. S.D.I., let
time decideing to create nuclear missiles. After
me make it clear, is a nonnuclear defense.
all, the world now knows how to make them.
So here we are at Iceland for our second
I likened it to our keeping our gas masks even
such meeting. In the first and in the months in
though the nations of the world had outlawed
between, we have discussed ways to reduce
poison gas after World War I.
and in fact eliminate nuclear weapons entirely.
We seemed to be making progress on re-
We and the Soviets have had teams of negotia-
ducing weaponry, although the general secre-
tors in Geneva trying to work out a mutual
tary was registering opposition to S.D.I. and
agreement on how we could reduce or elimi-
proposing a pledge to observe ABM for a num-
nate nuclear weapons. And so far, no success.
ber of years as the day was ending.
On Saturday and Sunday, General Secretary
Secretary Shultz suggested we turn over the
Gorbachev and his Foreign Minister Shevard-
notes our note-takers had been making of ev-
nadze and Secretary of State George Shultz
erything we'd said to our respective teams and
and I met for nearly ten hours. We didn't limit
let them work through the night to put them
ourselves to just arms reductions. we discussed
together and find just where we in agreement
what we call violation of human rights on the
and what differences separated us. With re-
part of the Soviets, refusal to let people emi-
spect and gratitude, I can inform you those
grate from Russia so they can practice their re-
teams worked through the night till 6:30 A.M.
ligion without being persecuted, letting people
Yesterday, Sunday morning, Mr. Gorb-
go to rejoin their families, husbands and wives
achev and I, with our foreign ministers, came
separated by national borders being allowed to
together again and took up the report of our
reunite. In much of this the Soviet Union is vi-
two teams. It was most promising. The Soviets
olating another agreement-the Helsinki ac-
had asked for a ten-year delay in the deploy-
cords they had signed in 1975. Yuri Orlov,
ment of S.D.I. programs. In an effort to see
whose freedom we just obtained, was impris-
how we could satisfy their concerns while pro-
oned for pointing out to his government its vi-
tecting our principles and security, we, pro-
784
Ronald Wilson Reagan
its
posed a ten-year period in which we began
gua, Angola, Cambodia, and elsewhere. And,
as
with the reduction of all strategic nuclear
finally, we began work on what I believe most
is
arms, bombers, air-launched cruise missiles,
spurred the Soviets to negotiate seriously-
en-
intercontinental ballistic missiles, submarine
rebuilding our military strength, reconstruct-
he
launched ballistic missiles and the weapons
ing our strategic deterrence, and, above all, be-
in-
they carry.
ginning work on the Strategic Defense
They would be reduced 50 percent in the
Initiative.
nd
first five years. During the next five years, we
And yet at the same time we set out these
nd
would continue by eliminating all remaining
foreign policy goals and began working to-
ex,
offensive ballistic missiles, of all ranges. And
ward them, we pursued another of our major
ns
during that time we would proceed with re-
objectives: that of seeking means to lessen ten-
ed
search development and testing of S.D.I. All
sions with the Soviets, and ways to prevent
rst
done in conformity with ABM provisions. At
war and keep the peace.
ro-
the ten-year point, with all ballistic missiles
Now, this policy is now paying dividends—
gle
eliminated, we could proceed to deploy ad-
one sign of this in Iceland was the progress on
is
vanced defenses, at the same time permitting
the issue of arms control. For the first time in
led
the Soviets to do likewise.
a long while, Soviet-American negotiations in
And here the debate began. The general sec-
the area of arms reduction are moving, and
retary wanted wording that in effect would
moving in the right direction: not just toward
have kept us from developing the S.D.I. for the
arms control, but toward arms reduction.
entire ten years. In effect, he was killing S.D.I.
But for all the progress we made on arms re-
ve
and unless I agreed, all that work toward elimi-
ductions, e must remember there was other
ice
nating nuclear weapons would go down the
issues on the table in Iceland, issues that are
cal
drain-canceled.
fundamental.
ght
I told him I had pledged to the American
As I mentioned, one such issue is human
elf
people that I would not trade away S.D.I.-
rights. As President Kennedy once said. "And,
ph
there was no way I could tell our people their
is not peace, in the last analysis, basically a mat-
cts
government would not protect them against
ter of human rights
?"
ho
nuclear destruction. I went to Reykjavik deter-
I made it plain that the United States would
Mr.
mined that everything was negotiable except
not seek to exploit improvement in these mat-
ite.
two things, our freedom and our future.
ters for purposes of propaganda. But I also
vn,
I'm still optimistic that a way will be found.
made it plain, once again, that an improvement
The door open and the opportunity to begin
of the human condition within the Soviet
eliminating the nucelar threat is within reach.
Union is indispensable for an improvement in
So you can see we made progress in Iceland.
bilateral relations with the United States. For
tle,
And we will continue to make progress if we
a government that will break faith with its own
on
pursue a prudent, deliberate, and, above all, re-
people cannot be trusted to keep faith with
3 a
alistic approach with the Soviets. From the
foreign powers. So, I told Mr. Gorbachev-
earliest days of our administration, this has
again in Reykjavik as I had in Geneva-we
been our policy. We made it clear we had no
Americans place far less weight upon the
rary
illusions about the Soviets or their ultimate in-
words that are spoken at meetings such as
tentions. We were publicly candid about the
these, than upon the deeds that follow. When
critical moral distinctions between totalitari-
it comes to human rights and judging Soviet
anism and democracy. We declared the princi-
intentions, we're all from Missouri: you gotta
pal objective of American foreign policy to be
show us.
not just the prevention of war but the exten-
Another subject area we took up in Iceland
sion of freedom. And, we stressed our com-
also lies at the heart of the differences between
mitment to the growth of democratic
the Soviet Union and America. This is the is-
government and democratic institutions
sue of regional conflicts. Summit meetings
around the world. And that's why we assisted
cannot make the American people forget what
freedom fighters who are resisting the imposi-
Soviet actions have meant for the peoples of
tion of totalitarian rule in Afghanistan, Nicara-
Afghanistan, Central America, Africa, and
785
Speeches of the American Presidents
Southeast Asia. Until Soviet policies change,
tack? As of today, all free nations are utterly
we will make sure that our friends in these ar-
defenseless against Soviet missiles-fired by
eas-those who fight for freedom and the ine-
either by accident or design. Why does the So-
pendence-will have the support they need.
viet Union insist that we remain so-forever?
Finally, there was a forth item. And this area
So, my fellow Americans, I cannot promise,
was that of bilateral relations, people-to-
nor can any president promise, that the talks
people contacts. In Geneva last year, we wel-
in Iceland or any future discussions with Mr.
comed several cultural exchange accords; in
Gorbachev will lead inevitably to great break-
Iceland, we saw indications of more movement
throughs or momentous treaty signings.
in these areas. But let me say now the United
We will not abandon the guiding principle
States remains committed to people-to-people
we took to Reykjavik. We prefer no agree-
programs that could lead to exchanged be-
ment than to bring home a bad agreement to
tween not just a few elite but thousands of ev-
the United States.
eryday citizens from both our countries.
And on this point, I know you're also inter-
So I think then that you can see that we did
ested in the question of whether there will be
make progress in Iceland on a broad range of
another summit. There was no indication by
topics. We reaffirmed our four-point agenda;
Mr. Gorbachev as to when or whether he plans
we discovered major new grounds of agree-
to travel to the United States, as we agreed he
ment; we probed again some old areas of dis-
would last year in Geneva. I repeat tonight at
agreement.
our invitation stands and that we continue to
And let me return again to the S.D.I. issue.
believe additional meetings would be useful.
I realize some Americans may be asking to-
But that's a decision the Soviets must make.
night: Why not accept Mr. Gorbachev's de-
But whatever the immediate prospects, I can
mand? Why not give up S.D.I. for this
tell you that I'm ultimately hopeful about the
agreement?
prospects for progress at the summit and for
Well, the answer, my friends, is simple.
world peace and freedom. You see, the current
S.D.I. is America's insurance policy that the
summit process is very different from that of
Soviet Union would keep the commitments
previous decades; it's different because the
made at Reykjavik. S.D.I. is America's security
world is different; and the world is different
guarantee-if the Soviets should-as they
because of the hard work and sacrifice of the
have done too often in the past-fail to comply
American people during the past five and a half
with their solemn commitments. S.D.I. is what
years.
brought the Soviets back to arms control talks
Your energy has restored and expanded our
at Geneva and Iceland. S.D.I. is the key to a
economic might; your support has restored
world without nuclear weapons.
our military strength. Your courage and sense
The Soviets understand this. They have de-
of national unity in times of crisis have given
voted far more resources for a lot longer time
pause to our adversaries, heartened our
than we, to their own S.D.I. The world's only
friends, and inspired the world. The Western
operational missile defense today surrounds
democracies and the NATO alliance are revi-
Moscow, the capital of the Soviet Union.
talized and all across the world nations are
What Mr. Gorbachev was demanding at
turning to democratic ideas and the principles
Reykjavik was that the United States agree to
of the free market. So because the American
a new version of a 14-year-old ABM treaty
people stood guard at the critical hour, free-
that the Soviet Union has already violated. I
dom has gathered its forces, regained its
told him we don't make those kind of deals in
strength, and is on the march.
the United States.
So, if there's one impression I carry away
And the American people should reflect on
with me from these October talks, it is that,
these critical questions.
unlike the past, we are dealing now from a po-
How does a defense of the United States
sition of strength, and for that reason we have
threaten the Soviet Union or anyone else?
it within our grasp to move speedily with the
Why are the Soviets so adamant that America
Soviets toward even more breakthroughs.
remain forever vulnerable to Soviet rocket at-
Our ideas are out there on the table. They
786
Ronald Wilson Reagan
won't go away. We're ready to pick up where
dependence has been
unfurled, there will
we left off. Our negotiators are heading back
be America's heart, her benedictions, and her
to Geneva, and we're prepared to go forward
prayers," John Quincy Adams once said. He
whenever and wherever the Soviets are ready.
spoke well of our destiny as a nation. My fel-
So, there's reason-good reason-for hope.
low Americans, we are honored by history, en-
I saw evidence of this in the progress we
trusted by destiny with the oldest dream of
made in the talks with Mr. Gorbachev. And I
humanity-the dream of lasting peace and hu-
saw evidence of it when we left Iceland yester-
man freedom.
day, and I spoke to our young men and women
Another president, Harry Truman, noted
at our naval installation at Keflavik-a critical-
that our century has seen two of the most
ly important base far closer to Soviet naval bas-
frightful wars in history. And that "the su-
es than to our own coastline. As always, I was
preme need of our time is for man to learn to
proud to spend a few moments with them and
live together in peace and harmony."
thank them for their sacrifices and devotion to
It's in pursuit of that ideal I went to Geneva
country. They represent America at ther fin-
a year ago and to Iceland last week. And it's in
est: committed to defend not only our own
pursuit of that ideal that I thank you now for
freedom but the freedom of others who would
all the support you've given me, and I again ask
be living in a far more frightening world-
for your help and your prayers as we continue
were it not for the strength and resolve of the
our journey toward a world where peace
United States.
reigns and freedom is enshrined.
"Whenever the standard of freedom and in-
Thank you and God bless you.
THE IRAN-CONTRA AFFAIR
Washington, D.C., March 4, 1987
IN OCTOBER 1986 reports began to circulate that the Reagan administration had secretly
sold arms to Iran in the hope of securing the release of American hostages held in Beirut
by Iranian-backed terrorists-in effect, offering ransom for hostages, in direct contra-
diction to the president's oft-expressed policy of not negotiating with terrorists. Short-
ly afterward, the administration revealed that some of the money paid by Iran for the
arms had been diverted to the Nicaraguan contras by members of the National Security
Council (NSC) at a time when direct funding of contra military activities was banned
by Congress. The president, who claimed to have approved the arms sales only after
they took place, and who claimed to have no knowledge at all of the diversion of funds,
authorized a special commission headed by former Senator John Tower to investigate
the affair. The Tower report, released in late February 1987, was a scathing indictment
of many Reagan aides, and sharply criticized the "management style" of the president
himself.
With public opinion turning against him, Reagan went on nationwide television to
demonstrate that he was still in command of himself and of the government, and he
brought it off with great skill. The speech was a masterful piece of image-building. Ap-
pearing earnest and a touch chastened, Reagan presented the entire affair as a simple
matter of poor judgment-a regrettable error that had made him a sadder but wiser
president.
My fellow Americans, I've spoken to you from
dency is often thought to reside within this
this historic office on many occasions and
Oval Office. Yet it doesn't rest here; it rests in
about many things. The power of the presi-
you, the American people, and in your trust.
787
142 Countries, 1987
TABLE III
MILITARY
GNP
EDUCATION
Equivalent
Economic-
Public
School-Age
School-Age
Years of
Military
Social
Expenditures
Population
Population
Public Expenditures
Income1
Burden²
Standing³
per Capita
per Capita
per Teacher4
in School4
Literacy Rates
Education
% of
per
1,000
versed
Average
F
F/M
average
GNP
Capita
Years
T11
Rank
--nk
US$
lank
US$
ank
No.
Tank
%
box
%
Tank
WORLD
5.1
189
225,374
3,655
185
33
70
65/79
Developed
5.1
688
64,644
13,576
703
18
89
98/99
Developing
5.2
37
160,730
703
27
39
67
52/72
AMERICA
North America
6.1
1,122
16,338
18,301
1,003
18
100
99/99
US
6.5
1,204
15,769
9
18,595
989
18
100
:
99/99
;
Canada
2.2
342
569
4
'.,
15,540
1,131
16
100
99/99
"
Latin America
1.6
29
7,263
1,764
57
30
79
81/85
Argentina
1.5
37
464
45
2,468
46
20
79
95/96
J.
Barbados
0.5
31
1
27
=
5,586
334
20
100
98/99
20
Bolivia
4.7
26
316
96
553
16
33
79
is
65/84
75
Brazil
1.0
21
1,415
58
"
2,063
70
:
29
.7
80
36
76/79
:
Chile
3.3
46
415
53
0
1,386
as
66
30
:
87
91/92
.6.
Colombia
0.8
9
241
74
1,131
3
30
35
J1
76
87/89
.7
Costa Rica
0.6
9
17
55
5
1,520
-
68
40
71
-
93/94
Cuba
7.2
129
725
42
=1
1,787
,
111
15
1
79
2:
96/96
4
Dominican Rep.
1.1
7
72
81
-3
690
a
10
47
..
88
77178
Ecuador
2.1
21
211
71
LG
984
34
31
,
85
80/85
-
El Salvador.
3.9
36
191
88
925
:
20
65
is
64
69/75
Guatemala
1.8
15
152
93
U.
814
18
59
50
47/63
"J
Guyana
11.8
29
117
92
250
24
5
43
72
-3
95/97
Haiti
1.3
5
81
115
349
7
::
58
::
58
35/40
Honduras
5.0
41
234
84
812
40
55
in
70
58/61
Jamaica
1.0
10
24
61
:
1,049
,
55
34
_
82
96/96
:1
Mexico
0.3
6
285
59
;
1,616
33
11
32
82
i,
88/92
JS
Nicaragua
20.0
169
700
77
:
845
52
45
72
88/88
$
Panama
2.0
46
47
50
2,255
:
121
29
75
88/89
Paraguay
1.1
12
44
79
1,105
;
14
30
.3
67
=
85/91
5
Peru
5.0
105
1,036
63
:
2,108
:
71
;;
32
J
91
13
78/92
6
Trinidad & Tobago
1.0
35
12
40
-
3,518
201
24
93
23
95/97
Uruguay
2.1
52
65
47
--
2,439
3
74
in
22
13
86
.,,
94/93
CG
Venezuela
2.2
57
398
48
:-
2,640
0
143
:
27
37
83
-
86/88
of
EUROPE
NATO Europe
3.4
394
13,229
11,748
568
20
80
93/97
Belgium
2.9
420
291
15
14,294
736
12
=
76
99/99
Denmark
2.2
418
113
3
18,962
1,506
12
:
84
99/99
France
4.0
627
2,205
10
.
15,806
885
18
:
87
99/99
:
Germany, West
3.0
561
1,847
11
-
18,483
813
17
79
99/99
Greece
6.2
290
621
29
4,675
17
126
33
21
is
90
88/97
Iceland
-
-
-
4
21,146
913
...
20
4,
80
100/100
Italy
2.4
321
1,399
25
3 13,117
:
525
17
63
..3
96/98
Luxembourg
0.9
199
-
3
1
22,076
887
...
100/100
1
Netherlands
3.1
448
448
12
; 14,606
1,096
"
19
18
86
99/99
Norway
3.3
659
140
2
19,710
1,320
13
..:
81
100/100
Portugal
3.2
111
323
36
3
3,498
;
153
16
:
89
80/89
;
Spain
2.4
177
937
21
7,369
=
235
.2
25
"
89
of
92/97
Turkey
4.4
55
2,298
78
"
1,257
21
63
41
:
72
"
62/86
!
United Kingdom
4.6
555
2,604
16
':
12,091
618
_2
19
3
89
99/99
:
ALL NATO
(incl. US & Canada)
4.8
697
29,567
14,481
749
19
88
96/98
Warsaw Pact
9.5
754
35,277
7,931
397
18
87
98/99
Bulgaria
3.8
219
341
32
in
5,758
"
288
35
22
it
81
A
93/96
37
Czechoslovakia
3.5
296
545
28
V
8,470
...
306
LI
28
TO
71
99/99
is
Germany, East
4.5
484
749
20
--
:
10,749
413
2
17
57
74
99/99
Hungary
2.1
135
223
33
6,430
233
19
79
71
C
98/99
40
Poland
2.8
127
1,057
37
4,543
:
202
.7
20
-
76
98/99
Romania
1.2
59
275
46
3
4,889
is
76
00
31
33
67
:
95/98
USSR
11.4
976
32,087
19
3
8,562
.3
462
:
16
94
:
98/99
:
54
World Military and Social Expenditures 1991
TABLE I.
Military Expenditures, Armed Forces, GNP, Central Government
Expenditures, and Population, 1979-1989 - continued
MILITARY
ARMED
GROSS NATIONAL
CENTRAL
PEOPLE
ME
ME
ME
ARMIT
GNP
EXPENDITURES
FORCES
PRODUCT
GOVERNMENT
PER
FORCES
PER
(ME)
(GNP)
EXPENDITURES
GNP
CGE
CAPITA
PER
CAPITA
(CGE)
100
Million dollars
Million dollars
Million dollars
PEOR
1
Constant
Constant
Constant
YEAR
Current
Constant
1989
Thousands
Constant
1989
Current
Millions
%
%
1989
1989
1989
Soldie
dollars
dollars
Soviet Union
E
E
C
c,e
1979
176900
284400
3900
1390000
2235000
509600
264.1
12.7
55.8
1077
14.8
8460
1980
198200
292000
3900
1532000
2257000
546600
266.4
12.9
53.4
1096
14.0
8473
1981
219600
295200
3900
1699000
2284000
571300
268.7
12.9
51.7
1099
14.5
8499
1982
237900
300500
3900
1850000
2337000
616400
271.1
12.9
48.8
1108
14.4
8619
1983
250700
304900
3900
1965000
2390000
606800
273.6
12.8
50.2
1114
14.3
8733
1984
263700
309200
3900
2063000
2419000
615500
276.3
12.8
50.2
1119
14.1
8755
1985
277200
315600
3900
2145000
2442000
630700
278.9
12.9
50.0
1132
14.0
8757
1986
287600
319200
3900
2275000
2525000
680300
281.5
12.6
46.9
1134
13.c
8970
1987
303000
325900
3900
2393000
2574000
709900
284.0
12.7
45.9
1147
13.7
9062
1988
317900
330900
3900
2526000
2630000
712500
286.4
12.6
46.4
1155
13.0
9180
1989
311000
311000
3700
2664000
2664000
680000
288.7
11.7
45.7
1077
12.8
9226
Spain
1979
3822
6145
374
178100
286300
79910
37.2
2.1
7.7
165
10.1
7695
1980
4560
6719
356
196200
289100
82650
37.5
2.3
8.1
179
9.5
7711
1981
5112
6872
366
213400
286900
85800
37.8
2.4
8.0
182
9.i
7599
1982
5541
6998
372
229800
290200
91790
38.0
2.4
7.6
184
9.11
7642
1983
5999
7295
355
242600
295000
98250
38.2
2.5
7.4
191
9.1
7729
1984
6167
7231
342
256200
300400
107500
38.3
2.4
6.7
189
8.9
7835
1985
6639
7558
314
271000
308500
108800
38.5
2.4
6.9
196
8.2'
8014
1986
6505
7219
314
287800
319300
110000
38.7
2.3
6.6
187
8.1
8260
1987
7554
8125
314
313800
337500
118500
38.8
2.4
6.9
209
8.1
8692
1988
7244
7541
304
340200
354200
103800 E
39.0
2.1
7.3
193
7.11
9084
1989
7775
7775
277
370700
370700
135500 E
39.1
2.1
5.7
199
7.1
9471
Sri Lanka
1979
45
72
18
2891
4648
1769
14.6
1.5
4.1
5
1.2
317
1980
49
72
18
3333
4911
2097
14.9
1.5
3.4
5
1.2
330
1981
48
65
18
3801
5110
1722
15.2
1.3
3.8
4
1.2
337
1982
53
67
18
4352
5497
1837
15.4
1.2
3.7
4
1.2
357
1983
68
83
19
4674
5684
1862
15.6
1.5
4.5
5
1.2
364
1984
78
91
21
4975
5832
1868
15.8
1.6
4.9
6
1.3
369
1985
157
179
21
5517
6280
2145
16.0
2.9
8.4
11
1.3
392
1986
144
159
25 E
5903
6551
2170
16.2
2.4
7.4
10
1.5
403
1987
189
203
30 E
6161
6626
2161
16.5
3.1
9.4
12
1.8
402
1988
300
313
47
6519
6786
2345
16.7
4.6
13.3
19
2.8
406
1989
223
223
47
6939
6939
2194
17.0
3.2
10.2
13
2.8
409
Sudan
E
E
1979
279
449
65
8193
13170
2786
18.2
3.4
16.1
25
3.6
722
1980
302
445
65
9000
13260
2684
18.9
3.4
16.6
24
3.1
702
1981
317
426
87
9896
13300
2883 E
19.5
3.2
14.8
22
4.5
683
1982
442
558
86
11740
14830
2976
20.1
3.8
18.8
28
4.3
737
1983
230
280
86
12390
15060
NA
21.8
1.9
NA
13
4.0
693
1984
236
277
65
12000
14070
NA
22.6
2.0
NA
12
2.7
624
1985
220
250
65
11700
13310
NA
23.5
1.9
NA
11
2.8
567
1986
201
223
59
13270
14720
NA
24.2
1.5
NA
9
2.4
607
1987
313
337
59 E
13950
15000
NA
24.8
2.2
NA
14
2.4
606
1988
286
298
65
13640
14200
2550 E
25.2
2.1
11.7
12
2.6
563
1989
339
339
65
15640
15640
NA
25.7
2.2
NA
13
25
608
81
TABLE I. Military Expenditures, Armed Forces, GNP, Central Government
Expenditures, and Population, 1979-1989 - continued
MILITARY
ARMED
GROSS NATIONAL
CENTRAL
PEOPLE
EXPENDITURES
ME
FORCES
ME
ME
ARMED
PRODUCT
GNP
GOVERNMENT
(ME)
PER
FORCES
(GNP)
EXPENDITURES
GNP
CGE
PER
CAPITA
PER
CAPITA
(CGE)
1000
Million dollars
Million dollars
Million dollars
PEOPLE
Constant
Constant
Constant
YEAR
Current
Constant
Constant
1989
Thousands
Current
1989
1989
Millions
%
%
1989
Soldiers
1989
dollars
dollars
United Arab Emirates
E
1979
1197
1924
25
23660
38030
3792
0.9
5.1
50.7
2176
28.3
43020
1980
1724
2541
44
31330
46170
6143
1.0
5.5
41.4
2540
44.0
46150
1981
2090
2809
44
34820
46800
7362
1.1
6.0
38.2
2553
40.0
42530
1982
1980
2500
44
32820
41460
6874
1.2
6.0
36.4
2077
36.6
34440
1983
1973
2399
44
29350
35690
5403
1.3
6.7
44.4
1823
33.4
27120
1984
1932
2265
44
28890
33870
5004
1.4
6.7
45.3
1575
30.6
23550
1985
1901 E
2165 E
44
28520
32470
4943
1.6
6.7
43.8
1378
28.0
20680
1986
1580 E
1753
E
44 E
22700
25190
4041
1.7
7.0
43.4
1023
25.7
14700
1987
1590
1710
44 E
24760
26630
3884
1.8
6.4
44.0
926
23.8
14420
1988
1587
1652
43
24590
25590
3739
2.0
6.5
44.2
834
21.7
12910
1989
1471
1471
43
27760
27760
3613
2.1
5.3
40.7
695
20.3
13110
United Kingdom
1979
18920
30420
324
418300
672400
257500
56.2
4.5
11.8
541
5.8
11960
1980
22080
32530
330
442800
652500
261500
56.3
5.0
12.4
578
5.9
11590
1981
22860
30730
341
479800
645000
265600
56.4
4.8
11.6
545
6.0
11440
1982
25780
32560
335
519500
656200
275800
56.3
5.0
11.8
578
5.9
11650
1983
29270
35600
333
560200
681200
283800
56.4
5.2
12.5
631
5.9
12080
1984
30790
36100
336
593200
695500
281600
56.5
5.2
12.8
639
6.0
12320
1985
32560
37070
334
632700
720200
292500
56.6
5.1
12.7
655
5.9
12720
1986
32780
36380
331
673000
746900
292300
56.8
4.9
12.4
641
5.8
13160
1987
33320
35840
328
724400
779200
289100
56.9
4.6
12.4
630
5.8
13690
1988
32710
34050
324
783300
815400
282400
57.1
4.2
12.1
597
5.7
14290
1989
34630
34630
318
834400
834400
285700
57.2
4.2
12.1
605
5.6
14580
United States
1979
122300
196600
2033
2508000
4032000
843500
225.1
4.9
23.3
873
9.0
17920
1980
144000
212100
2050
2732000
4025000
916900
227.8
5.3
23.1
931
9.0
17670
1981
169900
228400
2101
3053000
4103000
966000
230.1
5.6
23.6
992
9.1
17830
1982
196400
248000
2168
3166000
3999000
992300
232.5
6.2
25.0
1067
9.3
17200
1983
218000
265100
2201
3406000
4142000
1041000
234.8
6.4
25.5
1129
9.4
17640
1984
237100
277900
2222
3772000
4422000
1051000
237.0
6.3
26.4
1173
9.4
18660
1985
265800
302600
2244
4015000
4571000
1143000
239.3
6.6
26.5
1265
9.4
19100
1986
280900
311700
2269
4232000
4696000
1149000
241.6
6.6
27.1
1290
9.4
19430
1987
288200
309900
2279
4516000
4857000
1137000
243.9
6.4
27.2
1271
9.3
19910
1988
293100
305100
2246
4874000
5073000
1164000
246.3
6.0
26.2
1239
9.1
20600
1989
304100
304100
2241
5201000
5201000
1.190000
248.8
5.8
25.5
1222
9.0
20910
Upper Volta (see Burkina Faso)
Uruguay
1979
117
188
28
4908
7891
1682
2.9
2.4
11.2
65
9.6
2716
1980
167
246
28
5662
8343
1873
2.9
2.9
13.1
84
9.6
2857
1981
249
334
28
6344
8528
2167
2.9
3.9
15.4
114
9.5
2905
1982
247
312
29
6019
7602
2358
3.0
4.1
13.2
105
9.8
2574
1983
192
233
30
5708
6942
1879
3.0
3.4
12.4
78
10.1
2335
1984
161
189
30
5741
6730
1739
3.0
2.8
10.9
63
10.0
2251
1985
155
176
30
5938
6760
1660
3.0
2.6
10.6
59
10.0
2247
1986
163
181
30 E
6720
7457
1799
3.0
2.4
10.1
60
9.9
2464
1987
138
148
28
7394
7953
1926
3.0
1.9
7.7
49
9.2
2612
1988
162
169
29
7661
7975
2072
3.1
2.1
8.1
55
9,5
2603
1989
NA
NA
27
8066
8066
1500
3.1
NA
NA
NA
8.8
2617
85
Veterans Affairs
Worldwide Military Expenditures-Arms Trade
339
Business by Program: 1980 to 1989
No. 548. Worldwide Military Expenditures: 1980 to 1988
see text, section Includes all new prime contracts;
[For military expenditures and Armed Forces by country, see section 31. GNP=Gross national product]
fficial awards, amendments, or other changes in prime con-
contracts and contracts which do not obligate a firm total
PER CAPITA
and delivery orders against such contracts]
MILITARY EXPENDITURES (bil. dol.)
COUNTRY GROUP
(dol.)
1980
1981
1982
1983
1984
1985
1986
1987
1988.
1980
1988
1984
1985
1986
1987
1988
1989
CURRENT DOLLARS
146.0
163.7
Worldwide, total
636
719
804
857
910
963
990
151.4
1,034
1,032
202
158.8
202
156.5
139.3
10.1
12.4
United States
144
170
196
217
237
266
281
296
308
894
9.9
8.8
1,250
8.9
9.6
8.3
8.6
Percent of total
22.7
23.6
24.4
25.3
26.1
27.6
28.3
28.6
29.8
9.1
8.9
(X)
8.2
6.4
(X)
3.1
Developed countries
2
2.7
705
725
759
786
807
3.4
3.5
842
857
876
865
650
754
3.5
3.3
2
124.9
139.6
215
136.5
Developing countries
195
203
216
217
135.3
211
198
192
167
58
42
130.8
120.0
86.3
98.1
NATO countries
92.8
345
363
387
406
421
447
456
466
467
597
763
93.0
85.9
79.9
29.2
34.6
Warsaw Pact countries
330
333
343
348
353
360
365
372
359
879
32.3
898
27.7
25.0
24.2
19.7
22.0
Soviet Union
280
283
289
293
19.7
297
303
306
313
300
22.6
1,053
17.8
1,047
18.1
16.7
18.7
19.4
19.8
19.7
18.7
9.4
10.4
9.4
11.5
13.7
CONSTANT (1988) DOLLARS
9.6
11.4
12.5
12.0
Worldwide, total
899
928
975
11.6
9.7
1,001
1,024
1,053
1,055
1,068
1,032
202
202
9.2
8.5
9.1
10.4
United States
204
219
238
254
267
291
299
306
308
894
11.0
12.0
11.7
1,250
Percent of total
22.6
23.6
24.4
25.3
26.0
27.6
28.4
28.6
29.8
(X)
(X)
mbursable purchases on behalf of foreign governments.
Developed countries
2
705
725
759
786
807
842
857
876
865
650
754
Developing countries
2
shown separately. Contracts awarded for work in U.S.
195
203
216
215
217
211
198
192
167
58
42
3
contracts in a classified location; and any intragovern-
NATO countries
345
363
387
406
421
447
456
466
467
597
763
Warsaw Pact countries
330
333
343
348
353
360
365
372
359
879
898
Soviet Union
280
283
289
293
297
303
306
313
300
1,053
1,047
PERCENT OF GNP
Worldwide, total
5.3
5.4
5.7
5.7
5.6
5.6
5.5
5.4
5.0
(X)
(X)
ds-Summary: 1989
United States
5.3
5.6
6.2
6.4
6.3
6.6
6.6
6.5
6.3
(X)
(X)
Developed countries
2
5.2
5.2
5.5
5.5
5.4
5.5
5.5
5.4
5.2
(X)
(X)
pecified; expenditures relating to awards may extend over
Developing countries
2
6.1
6.3
6.7
6.5
6.4
6.0
5.5
5.2
4.3
(X)
(X)
foreign national direct hire civilians and civilian personnel
NATO countries
3
4.3
4.5
4.8
4.9
4.9
5.0
5.0
4.9
4.8
(X)
(X)
civilians and those direct hire civilians not subject to OMB
Warsaw Pact countries
4
11.6
11.6
11.7
11.6
11.6
11.8
11.6
11.6
11.0
(X)
(X)
ashore. Excludes personnel temporarily shore-based in
Soviet Union
12.9
12.9
12.9
12.8
12.8
12.9
12.6
12.7
11.9
(X)
(X)
of civilian and active duty military personnel for services
xcludes employer's share of employee benefits, accrued
X Not applicable. 1 Includes countries not shown separately. 2 Twenty-eight developed countries; see table 549 for
selected countries; for complete list see source. 3 North Atlantic Treaty Organization. 4 The meaning of the ratio of military
expenditures to GNP differs somewhat between most Communist countries and non-Communist countries because of different
PERSONNEL
estimating procedures. For details, see source.
Contract
STATE
awards
Payroll
(1,000)
(mil. dol.)
(mil. dol.)
Civilian
Military
No. 549. Arms Trade in Constant (1988) Dollars-Selected Countries: 1986 to 1988
1,236
951
17.9
13.6
[In millions of dollars, except percent. Because some countries exclude arms imports or exports from their trade statistics and
5,897
7,634
111.7
96.2
their "total" imports and exports are therefore understated and because arms traansfers maybe estimated independently of trade
163
58
2.0
0.4
data, the ratio of arms to total imports or exports maybe overstated and may even exceed 100 percent]
1,104
2,673
15.5
92.3
568
1,912
20.7
41.6
1988
1988
1,864
2,762
39.9
63.3
4,452
3,246
33.8
77.8
Arms
Arms
4,078
3,907
60.6
84.7
COUNTRY
1986
1987
imports as
COUNTRY
1986
1987
imports as
333
1,444
14.0
38.8
Total
percent of
Total
percent of
1,118
393
7.7
9.9
total
total
1,392
1,378
25.7
21.2
imports
imports
1,235
692
13.3
14.7
S.C.
11,985
World total
1
7,527
100.3
189.4
49,110
55,950
48,610
(NA)
RECIPIENTS
370
336
5.2
9.0
Developing
37,700
45,200
37,810
5.6
1,693
925
8.5
25.3
Afghanistan
1,385
1,446
2,600
288.9
659
1,358
24.4
28.2
EXPORTERS
Algeria
639
594
825
10.6
9,263
4,908
62.3
127.0
Angola
1,385
1,653
1,600
(NA)
35,208
19,923
252.2
422.9
Canada
149
165
180
0.2
Argentina
32
62
20
0.4
7,835
4,337
62.8
110.9
China: Mainland
1,279
2,376
3,100
0.5
Cuba.
1,705
1,859
1,700
22.4
81
131
1.4
4.6
Czechoslovakia
1,385
1,240
850
0.8
Egypt
1,172
1,549
725
3.1
75
147
1.3
5.2
France
4,582
2,789
1,890
0.1
El Salvador
85
52
60
(NA)
67
114
1.2
3.8
Poland
1,492
1,240
675
3.8
Ethiopia
352
1,033
725
80.6
2,928
1,362
14.4
40.0
Soviet Union,
22,380
23,040
21,400
1.0
Greece
170
289
575
4.7
625
640
9.2
15.0
United Kingdom
1,598
2,169
725
0.3
India
3,197
3,512
3,200
16.7
2,847
894
11.2
26.2
United States
9,803
14,770
14,300
0.2
Iran.
2,451
1,519
2,000
18.2
983
768
22.0
5.8
West Germany
852
1,890
360
0.4
Iraq.
6,074
5,681
4,600
37.1
230
281
2.2
10.3
Israel
533
1,859
1,900
12.6
27,373
15,586
189.5
312.0
Jordan
277
362
320
11.6
2,951
2,172
29.4
40.5
IMPORTERS
Kuwait
139
145
190
3.6
179
121
3.2
0.7
Libya.
1,385
646
575
11.5
23,125
10,529
131.5
204.2
Developed
1
11,410
10,740
10,800
0.5
Morocco
96
413
90
1.9
540
761
5.1
22.8
Australia
1,066
749
1,300
3.6
Nicaragua
639
516
525
65.6
579
2,002
20.2
43.8
Canada
139
176
210
0.2
North Korea
448
434
1,000
32.3
Czechoslovakia
1,172
956
210
0.8
Oman
107
103
30
1.4
of contracts of over $25,000 for work in each State and
East Germany
1,066
320
875
(NA)
Pakistan
320
320
340
5.2
defense work. Often the State in which a prime contractor
Hungary.
192
413
60
0.3
Peru
160
444
30
1.0
also headnote, table 546. Undistributed civilians and
Italy
234
207
270
0.2
Saudi Arabia.
4,049
5,681
3,000
14.9
in classified locations are excluded.
Japan
852
981
1,100
0.6
South Korea
586
646
600
1.2
States and Selected Areas, annual.
Poland
1,279
852
1,000
3.8
Spain
352
1,007
900
1.5
Romania
533
124
20
(NA)
Syria
1,279
1,963
1,300
58.5
Soviet Union.
1,279
1,240
1,100
1.0
Turkey.
639
981
775
5.4
United Kingdom
719
568
625
0.3
Venezuela
107
103
60
0.5
United States
440
625
646
0.2
Vietnam.
2,238
1,963
1,500
(NA)
West Germany
373
754
900
0.4
Yemen (Sanaa)
298
403
400
28.6
NA Not available.
1
Includes countries not shown separately.
Source of tables 548 and 549: U.S. Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers,
annual.
No. 1489. Military Expenditures in Current and Constant (1988) Dollars: 1980 to 1988:
[In millions of dollars, except as indicated. See also table 548. For most countries, data for expenditures and for GNP were
based on local currencies which were deflated to constant 1988 local currency values before conversion to U.S. dollar equivalents.
In general, the rates used for conversion are the 1988 average par/market exchange rates as supplied by the International Bank
for Reconstruction and Development]
CURRENT DOLLARS
CONSTANT (1988) DOLLARS
COUNTRY
Per capita
Percent of
1980
1985
1987
1988
1980
1985
1987
1988
(dollars)
GNP
1
1980
1988
1980
1988
United States
144,000
265,800
296,200
307,700
203,700
290,500
306,000
307,700
894
1,250
5.3
6.3
Algeria
1,188
1,248
1,486
1,784
1,681
1,365
1,536
1,784
'89
74
3.9
2,789
21,400
3.4
Argentina
2,712
2,972
3,837
23,049
21,447
2,972
136
94
3.6
3.1
Australia
3,006
5,195
5,729
6,170
4,253
5,678
5,918
6,170
291
379
2.3
2.7
Austria
895
21,447
1,441
1,426
1,266
21,581
1,488
1,426
168
188
1.1
1.2
Belgium
3,148
3,837
4,158
4,097
4,454
4,194
4,295
4,097
452
415
3.3
2.7
Brazil
1,559
2,402
3,356
1,209
2
2,206
2,626
3,467
1,209
18
8
0.7
0.3
Bulgaria
4,088
5,953
6,644
6,842
5,784
6,507
6,863
6,842
654
763
11.7
12.7
Canada
4,993
8,547
9,594
10,020
7,065
9,343
9,911
10,020
293
384
1.9
Chile
2.1
452
622
2825
2808
639
680
852
2808
58
64
3.6
China:
4.0
Mainland
2
16,370
19,890
20,510
21,270
23,160
21,740
21,180
21,270
24
20
9.1
3.9
Taiwan
2,982
25,939
25,107
6,156
4,219
26,492
5,276
6,156
237
308
Cuba
2
6.5
5.2
1,140
1,603
1,306
1,326
Czechoslovakia
2
1,613
1,752
1,349
1,326
167
128
6.5
3.8
5,687
8,625
9,551
9,818
8,046
9,428
9,866
9,818
527
629
6.5
7.1
Denmark
1,610
2,095
2,205
2,320
2,278
2,290
2,278
2,320
445
453
2.5
22
East Germany
2
7,895
12,150
13,700
14,320
11,170
13,280
14,150
14,320
667
863
Egypt
2
6.9
7.7
3,402
7,911
8,038
6,086
4,813
8,647
8,303
6,086
114
114
9.5
7.8
El Salvador
117
269
2244
212
166
294
252
212
35
39
2.7
3.8
Finland
891
1,326
1,566
21,701
1,260
1,450
1,618
2,701
264
344
1.6
1.7
France
22,700
31,620
34,930
35,950
32,120
34,570
36,090
35,950
596
644
4.0
3.9
Greece
1,894
3,250
3,053
3,378
2,679
2
3,552
3,153
3,378
278
337
5.5
6.5
Hungary
2,965
3,939
4,217
4,489
4,195
4,306
4,356
4,489
392
424
6.3
6.3
India
3,922
7,373
9,171
9,458
5,549
8,059
9,474
9,458
8
12
3.2
3.5
Indonesia
1,197
1,515
1,480
1,400
1,693
1,655
1,529
1,400
11
8
2
3.1
1.8
Iran
14,700
24,770
(NA)
(NA)
20,800
27,070
(NA)
(NA)
531
Iraq
2
(NA)
6.6
(NA)
19,810
18,970
(NA)
(NA)
28,030
20,730
(NA)
(NA)
2,124
(NA)
22.5
(NA)
Israel
7,018
7,425
6,101
6,001
9,929
8,116
6,302
6,001
2,657
1,396
29.2
13.8
Italy.
10,060
15,540
18,540
20,430
14,230
16,990
19,150
20,430
252
356
2.1
2.6
Japan
13,660
22,870
26,670
28,870
19,320
25,000
27,550
28,870
165
235
0.9
1.0
Kuwait
939
1,606
1,330
1,340
1,328
1,755
1,373
1,340
970
692
2.9
5.1
Malaysia
708
2971
1,307
908
1,002
21,062
1,350
908
73
55
4.4
2.8
Mexico
448
1,032
2869
1,016
634
1,128
'898
1,016
9
12
0.4
0.6
Morocco
²757
(NA)
21,156
1,138
21,071
(NA)
21,194
1,138
52
46
7.6
6.0
Netherlands
4,440
5,990
6,556
6,729
6,282
6,548
6,773
6,729
444
457
3.1
3.0
Nicaragua
249
2176
(NA)
(NA)
269
2192
(NA)
(NA)
25
(NA)
5.8
(NA)
Nigeria
505
333
202
223
715
363
2
208
223
8
2
2.4
0.8
North Korea
4,380
5,260
5,640
5,840
6,197
5,750
5,826
5,840
346
266
20.0
20.0
Norway
1,488
2,421
2,930
2,895
2,105
2,646
3,027
2,895
515
691
3.0
3.2
Oman
1,059
1,937
1,518
1,371
1,498
2,118
1,568
1,371
1,522
1,083
22.1
19.1
Pakistan
845
1,905
2,287
2,516
1,196
2,082
2,362
2,516
14
23
5.4
6.9
Peru
1,318
2,108
2,135
(NA)
1,865
2,304
2,205
(NA)
108
(NA)
5.0
(NA)
Philippines
505
408
653
680
715
446
675
680
14
11
2
1.9
1.7
Poland
9,916
15,080
15,810
15,660
14,030
16,480
16,330
15,660
394
413
8.2
8.7
Portugal
867
1,061
1,196
1,347
1,226
1,160
1,236
1,347
125
130
3.6
3.3
Qatar
604
2
(NA)
(NA)
(NA)
855
(NA)
(NA)
(NA)
3,707
(NA)
9.3
(NA)
Romania
4,585
6,768
7,431
7,670
6,487
7,398
7,676
7,670
292
333
6.0
6.5
Saudi Arabia
14,990
21,340
216,210
13,560
21,210
23,320
216,740
13,560
2,090
878
14.3
16.5
Singapore
514
1,085
1,105
1,321
727
1,187
1,142
1,321
301
499
5.2
5.3
South Africa
2,594
2,644
23,353
3,607
3,669
2,890
23,463
3,607
126
103
5.2
4.3
South Korea
3,607
5,630
6,427
7,202
5,103
6,154
2
6,639
7,202
134
168
6.1
4.3
Soviet Union
198,200
277,200
303,000
299,800
280,400
303,000
313,000
299,800
1,053
1,047
12.9
11.9
Spain.
4,489
6,528
7,441
7,171
6,351
7,136
7,686
7,171
169
183
2.3
2.2
Sweden
3,324
4,473
4,697
4,975
4,703
4,889
4,852
4,975
566
593
3.1
2.8
Switzerland
2,746
23,885
23,768
23,888
3,885
24,247
23,892
3
23,888
609
590
2.4
2.1
Syria
1,601
2,959
21,472
21,604
2,265
23,235
21,521
21,604
261
139
17.2
10.9
Thailand
1,004
1,801
1,717
1,718
1,420
1,969
1,774
1,718
30
31
4.1
3.1
Turkey
1,540
2,404
2,807
2,664
2,179
2,628
2,900
2,664
48
49
4.8
3.9
United Arab Emirates
1,724
21,901
1,590
1,587
2,440
2,078
1,642
1,587
2,439
801
5.7
6.8
United Kingdom
22,960
33,890
34,780
34,680
32,490
37,050
35,930
34,680
577
609
5.0
4.3
Venezuela
441
491
1,593
2848
624
537
"1,646
"848
42
45
1.1
1.4
West Germany
24,430
32,710
34,420
35,100
34,570
35,760
35,560
35,100
562
576
3.3
2.9
Yugoslavia
1,809
2,042
2,665
2,080
2,559
2,232
2,753
2,080
115
88
4.3
3.4
NA Not available. 1 Military expenditure as percent of gross national product. For additional information on comparisons
between communist and noncommunist countries, see footnote 4, table 548.
2
Estimated.
3
Data probably omit a major share
of total military expenditures, probably including most arms acquisitions.
Source: U.S. Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers, annual.
Statistic
Armed Forces Personnel
865
tant (1988) Dollars: 1980 to 1988
No. 1490. Armed Forces Personnel-Number and Rate, by Country: 1980 to 1988
countries, data for expenditures and for GNP were
[Personnel data as of July. Armed Forces refer to active-duty military personnel, including paramilitary forces where those
values before conversion to U.S. dollar equivalents.
forces resemble regular units in their organization, equipment, training, or mission. Reserve forces are not included]
change rates as supplied by the International Bank
ARMED FORCES PERSONNEL (1,000)
ARMED FORCES PER 1,000 POPULATION
COUNTRY
CONSTANT (1988) DOLLARS
1980
1984
1985
1986
1987
1988
1980
1984
1985
1986
1987
1988
Per capita
Percent of
United States
2,050
2,222
2,244
2,269
2,279
2,246
9.0
9.4
9.4
9.4
9.3
9.1
1987
1988
(dollars)
GNP
Algeria
101
170
170
180
170
126
5.4
8.0
7.7
7.9
7.2
5.2
Argentina.
155
174
129
104
118
95
5.5
5.8
4.3
3.4
3.8
3.0
1980
1988
1980
1988
Australia
71
71
70
71
70
71
4.9
4.6
4.5
4.5
4.4
4.3
306,000
307,700
894
1,250
5.3
Austria
40
40
40
39
70
55
5.3
5.3
5.3
5.2
9.2
6.3
7.2
5
1,536
1,784
89
74
3.9
Belgium.
108
107
107
107
109
110
11.0
10.9
10.9
10.8
11.0
11.1
3.4
21,447
2,972
136
94
3.6
Brazil
450
459
496
527
541
319
3.7
3.4
3.5
3.7
3.7
3.1
2.1
5,918
6,170
291
379
2.3
Bulgaria
188
189
189
190
191
160
21.2
21.2
21.2
21.2
21.3
2.7
17.8
1,488
1,426
168
188
1.1
Canada
82
82
83
85
86
88
3.4
3.3
3.3
3.3
3.3
3.4
1.2
4,295
4,097
452
415
3.3
Chile
116
123
124
127
127
96
10.5
10.4
10.3
10.3
10.2
2.7
7.6
3,467
1,209
18
8
0.7
China: Mainland
4,650
4,100
4,100
4,030
3,530
3,783
4.7
4.0
3.9
0.3
3.8
3.3
3.5
6,863
6,842
654
763
11.7
Taiwan
465
470
440
390
365
390
26.1
24.7
22.8
12.7
20.0
18.5
19.5
9,911
10,020
293
384
Cuba
1.9
220
297
297
297
297
297
22.8
29.8
29.5
29.2
2.1
28.9
28.7
"852
2808
58
64
3.6
Czechoslovakia
190
206
210
214
215
211
12.5
13.3
13.5
13.8
13.8
4.0
13.5
Denmark
33
31
29
28
28
30
6.4
6.1
5.7
5.5
5.5
5.9
21,180
21,270
24
20
9.1
3.9
East Germany
228
240
242
242
241
242
13.6
14.4
14.5
14.6
14.5
14.6
5,276
6,156
237
308
6.5
5.2
Egypt
447
466
466
400
450
452
10.6
9.8
9.5
7.9
8.7
8.5
1,349
1,326
167
128
6.5
3.8
El Salvador
16
45
48
48
49
45
3.4
9.2
9.6
9.3
9.3
8.4
9,866
9,818
527
629
6.5
7.1
Finland
36
40
(NA)
37
37
36
7.5
8.2
(NA)
7.4
7.4
7.2
2,278
2,320
445
453
2.5
2.2
France
575
571
563
558
559
558
10.7
10.4
10.2
10.1
10.1
10.0
Greece
186
197
201
202
199
199
19.3
19.9
20.2
20.3
19.9
19.9
14,150
14,320
667
863
6.9
7.7
Honduras
14
20
21
22
22
19
3.7
4.6
4.7
4.6
4.5
3.8
8,303
6,086
114
114
9.5
7.8
Hungary
120
118
117
116
116
117
11.2
11.0
11.0
10.9
10.9
11.0
252
212
35
39
2.7
3.8
India
1,104
1,380
1,515
1,492
1,502
1,362
1.6
1.8
2.0
1.9
1.9
1.7
1,618
21,701
264
344
1.6
1.7
Indonesia
250
281
281
278
281
284
1.6
1.7
1.6
1.6
1.6
1.5
36,090
35,950
596
644
4.0
3.9
Iran
305
335
345
345
350
654
7.8
7.4
7.3
7.1
7.0
12.6
3,153
3,378
278
337
5.5
6.5
Iraq
430
788
788
800
900
1,000
32.6
51.7
49.9
48.8
53.0
56.9
4,356
4,489
392
424
6.3
6.3
Israel
196
205
195
180
180
191
52.4
51.2
47.8
43.4
42.6
44.4
9,474
9,458
8
12
3.2
3.5
Italy
500
508
531
529
531
446
8.9
8.9
9.3
9.2
9.3
7.8
1,529
1,400
11
8
3.1
1.8
Japan
242
241
241
245
244
245
2.1
2.0
2.0
2.0
2.0
2.0
(NA)
(NA)
531
(NA)
6.6
(NA)
(NA)
(NA)
2,124
(NA)
22.5
Kuwait.
12
15
16
18
20
15
(NA)
8.8
9.2
9.3
10.1
10.7
7.7
6,302
6,001
2,657
1,396
29.2
Malaysia
83
105
106
106
106
108
13.8
6.0
7.0
6.9
6.7
6.6
6.6
19,150
20,430
252
356
2.1
Mexico
120
129
140
141
2.6
141
154
1.7
1.7
1.8
1.8
1.7
1.8
27,550
28,870
165
235
0.9
Morocco
117
149
165
185
200
195
1.0
5.7
6.6
7.1
7.8
8.2
7.8
Netherlands
107
103
103
106
106
107
7.6
7.1
7.1
7.3
7.2
7.3
1,373
1,340
970
692
2.9
Nicaragua
24
67
74
75
5.1
80
74
8.6
21.6
23.4
23.1
24.1
21.7
1,350
908
73
55
4.4
Nigeria
150
144
134
138
138
107
2.8
1.7
1.4
1.3
1.3
1.3
1.0
'898
1,016
9
12
0.4
North Korea
700
784
784
0.6
838
838
842
39.1
39.9
38.5
40.1
39.1
38.3
21,194
1,138
52
46
7.6
Norway
40
39
36
6.0
38
38
40
9.7
9.4
8.7
9.1
9.1
9.5
6,773
6,729
444
457
3.1
Oman
15
25
25
3.0
26
27
27
15.2
22.4
21.7
21.9
22.0
21.0
(NA)
(NA)
25
(NA)
5.8
Pakistan
467
646
644
(NA)
573
572
484
5.5
6.7
6.5
5.6
5.5
4.5
208
223
8
2
2.4
Peru
0.8
151
135
128
127
127
111
8.7
7.0
6.5
6.3
6.1
5.2
5,826
5,840
346
266
20.0
20.0
Philippines
155
157
157
161
161
105
3.0
2.8
2.7
2.7
2.6
1.7
3,027
2,895
515
691
3.0
Poland
3.2
408
434
439
443
441
430
11.5
11.7
11.8
11.8
11.7
11.3
1,568
1,371
1,522
1,083
22.1
19.1
Portugal
88
100
102
101
105
104
9.0
9.9
10.0
9.9
10.2
10.0
2,362
2,516
14
23
5.4
6.9
Qatar
6
6
7
9
11
7
26.0
21.5
24.0
29.7
34.8
21.3
2,205
(NA)
108
(NA)
5.0
(NA)
Romania
211
236
237
238
248
220
9.5
10.4
10.4
10.4
10.8
9.5
675
680
14
11
1.9
1.7
Saudi Arabia
79
80
80
80
80
84
7.8
6.3
6.0
5.7
5.4
5.4
16,330
15,660
394
413
8.2
8.7
Singapore
50
59
59
56
55
56
20.7
23.3
23.1
21.5
21.0
21.0
1,236
1,347
125
130
3.6
3.3
South Africa
70
97
95
90
102
100
2.4
3.0
2.9
2.7
3.0
2.8
South Korea
600
602
600
604
604
626
15.7
14.9
14.6
14.5
14.3
14.6
(NA)
(NA)
3,707
(NA)
9.3
(NA)
Soviet Union
3,900
3,900
3,900
3,900
3,900
3,900
14.6
14.1
14.0
13.9
13.7
13.6
7,676
7,670
292
333
6.0
6.5
Spain
356
342
314
314
314
304
9.5
8.9
8.1
8.1
8.1
7.8
216,740
13,560
2,090
878
14.3
16.5
Sweden
70
69
(NA)
66
66
65
8.4
8.3
(NA)
7.8
7.8
7.7
1,142
1,321
301
499
5.2
5.3
Switzerland
23
25
(NA)
21
20
23
23,463
3.6
3.8
(NA)
3.2
3.0
3.5
3,607
126
103
5.2
4.3
Syria
250
402
402
400
400
400
28.8
40.2
38.8
37.2
35.9
34.6
6,639
7,202
134
168
6.1
4.3
Thailand
234
250
270
275
275
273
5.0
4.9
5.2
5.2
5.1
5.0
313,000
299,800
1,053
1,047
12.9
11.9
Turkey
717
815
814
860
879
847
15.9
16.5
16.1
16.6
16.6
15.6
7,686
7,171
169
183
2.3
2.2
United Arab Emirates
44
44
44
44
44
43
44.0
30.6
28.0
25.7
23.8
21.7
4,852
4,975
566
593
3.1
2.8
United Kingdom
330
336
334
331
328
324
5.9
5.9
5.9
5.8
5.8
5.7
23,892
23,888
609
590
2.4
2.1
Venezuela
55
64
71
66
69
73
3.7
3.8
4.1
3.7
3.8
3.9
21,521
21,604
261
139
17.2
10.9
Vietnam
900
1,000
1,000
1,300
1,300
1,100
16.8
16.9
16.5
21.0
20.4
16.9
1,774
1,718
30
31
4.1
3.1
West Germany
490
487
495
495
495
495
8.0
8.0
8.1
8.1
8.1
8.1
2,900
2,664
48
49
4.8
3.9
Yugoslavia
260
259
258
234
234
229
11.6
11.3
11.2
10.0
10.0
9.7
1,642
1,587
2,439
801
5.7
6.8
35,930
34,680
577
609
5.0
4.3
NA Not available.
1,646
2848
42
45
1.1
1.4
35,560
35,100
562
576
3.3
2.9
Source: U.S. Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers, annual.
2,753
2,080
115
88
4.3
3.4
uct. For additional 3 information on comparisons
Estimated.
Data probably omit a major share
litures and Arms Transfers, annual.
324
National Defense and Veterans A ffairs
Fig. 11-1. NATIONAL DEFENSE AND TOTAL BUDGET OUTLAYS: 1960 TO 1976
(See table 513)
Billions of dollars
Billions of dollars
400
400
COS
fec
Defense outlays
the
300
Total Federal outlays
300
Off
Na
Bu
Af
200
200
Off
Ce
]
Sta
Joi
100
100
def
Th
rel:
of
of
0
0
1960
1965
1970
1971
1972
1973
1974
1975
1976
the
act
Source: Chart prepared by U.S. Bureau of the Census. Data from U.S. Office of Management and Budget
(e.{
T
De:
oth
is I
Fig. 11-2. WORLDWIDE MILITARY EXPENDITURES: 1965 TO 1974
on
(See tables 514 and 517)
F
Billions of dollars
Billions of dollars
res]
150
150
mai
NATO countries
Sec
the:
125
United States
125
S
Warsaw Pact countries
clas
into
Other
100
100
to
for
exa:
75
75
tior
Cui
plai
50
50
M
Nat
Gus
25
25
ava
and
T
0
0
vide
1965
1970
1972
1973
1974
is S
Source: Chart prepared by U.S. Bureau of the Census. Data from U.S. Office of Management and Budget
and U.S. Arms Control and Disarmament Agency:
328
National Defense and Veterans Affairs
No. 517. WORLDWIDE MILITARY EXPENDITURES: 1965 TO 1974
[Calendar year data. For estimates of military expenditures and armed forces by country, see section 32]
MILITARY EXPENDITURES (bil. dol.)
ITEM
PER CAPITA (dol.)
1965
1968
1969
1970
1971
1972
1973
1974
1965
1970
1973
1974
IN CURRENT DOLLARS
Worldwide, total
160
212
225
235
250
261
280
315
48
64
Percent U.S. of total
71
32
38
36
33
79
30
30
28
27
(X)
(X)
(x)
(x)
Developed countries 1
142
189
197
203
208
219
233
260
151
206
230
Developing countries 1
18
23
28
32
42
254
42
47
55
7
12
16
NATO countries 2
79
111
113
19
112
112
118
122
136
156
210
223
Warsaw Pact countries
60
74
246
80
87
91
96
106
119
181
251
Other
299
21
332
27
32
36
47
47
52
60
8
13
17
20
IN CONSTANT 1973 DOLLARS
Worldwide, total
222
268
271
268
273
276
280
285
67
73
Percent U.S. of total
71
32.5
38.1
71
36.2
33.2
30.0
29.7
28.0
27.3
(X)
(X)
(X)
(X)
Developed countries 1
198
239
237
232
227
231
233
235
210
235
230
Developing countries 1
24
233
29
34
36
46
45
47
50
10
13
16
NATO countries 2
110
141
17
136
127
122
124
122
123
217
239
Warsaw Pact countries
223
223
83
93
96
99
100
102
106
107
252
287
Other
299
300
29
34
39
42
51
50
52
55
12
15
17
18
AS PERCENT OF GNP 3
Worldwide, total
6.7
7.0
6.7
6.3
6.2
5.9
5.7
5.7
(X)
United States
(X)
(X)
(X)
a
7.6
9.3
8.8
8.0
7.1
6.7
6.1
6.2
(X)
(X)
(X)
(X)
Developed countries 1
7.2
7.5
7.1
6.6
6.3
6.1
5.8
5.8
(X)
(X)
Developing countries 1
(X)
(X)
4.4
4.6
4.8
4.8
5.6
5.2
5.1
5.3
(X)
a
(X)
NATO countries 2
(X)
(X)
6.1
6.8
6.3
5.8
5.4
5.2
4.8
4.9
(X)
c
(X)
Warsaw Pact countries 4
(X)
(X)
5-9
5-9
5-9
5-9
5-9
5-9
5-9
5-9
to
(X)
(X)
(X)
(X)
p
X Not applicable.
1 27 developed countries include all those in North America, in Oceania, in European NATO (except Greece,
Portugal, and Turkey), in the Warsaw Pact (except Bulgaria), and also Austria, Finland, Ireland, Japan, South
Africa, Sweden, and Switzerland; 109 developing countries include all those in Latin America, in the Near East,
th
in South Asia, in East Asia (except Japan), in Africa (except South Africa), and also Albania, Bulgaria, Greece,
at
Malta, Portugal, Spain, Turkey, and Yugoslavia.
2 North Atlantic Treaty Organization.
3 Gross national product.
4 5-9 percent range.
u)
No. 518. ARMS EXPORTS AND IMPORTS, SUPPLIER AND RECIPIENT COUNTRIES: 1965
TO 1974
N
[In millions of constant 1973 dollars]
[I.
1965-
COUNTRY
1970
1971
1972
1973
1974
1965-
COUNTRY
1970
1971
1972
1973
1974
World, total
38,670
6,940
9,210
9,555
8,365
IMPORTS-Con.
EXPORTS
Developed
United States
18,730
3,690
4,330
5,020
3,770
countries-Con.
U.S.S.R
11,640
1,770
2,570
840
2,550
Hungary
327
42
74
20
118
France
1,261
168
571
571
Other
509
2,372
320
421
218
368
China, People's
Developing
Republic
1,155
275
421
233
292
countries
25,880
5,140
7,020
8,055
6,010
Poland
1,124
189
96
61
18
Vietnam, South
5,078
877
1,380
1,140
603
Czechoslovakia
1,071
133
128
106
69
Vietnam, North
3,700
338
787
325
363
United Kingdom
1,026
194
329
333
420
Korea, Rep. of
1,730
243
539
152
103
Canada
821
204
162
74
99
Egypt
1,568
393
320
595
107
Germany, Federal
Turkey
1,456
287
345
265
186
Republic
772
142
239
26
202
Cambodia
107
59
87
79
274
Other
1,070
175
364
291
436
Libya
131
105
188
209
143
195
IMPORTS
China, Rep. of
1,082
258
235
145
114
195
India
1,196
257
216
180
117
196
Developed
countries
12,790
Iran
879
349
438
482
789
1,800
2,190
1,500
2,355
United States
Israel
674
281
226
1,720
577
1966
1,072
166
167
171
105
1967
U.S.S. R
Syria
288
120
172
724
422
1,660
213
106
100
36
Greece
666
294
219
49
153
1968
United Kingdom
1,332
75
40
38
66
Spain
254
98
134
75
1969
105
Germany, Federal
Pakistan
54
101
133
85
1970
Republic of
1,371
382
283
620
277
426
German Dem.
Iraq
528
38
90
341
323
1971
Republic
1,076
138
338
105
372
Laos
469
121
115
96
62
1972
Poland
1,036
132
229
100
263
Korea, North
432
180
143
140
54
1973
Australia
705
43
58
199
50
Brazil
224
56
62
116
64
1974
Czechoslovakia
729
90
137
75
249
Cuba
262
27
26
25
16
1975
Italy
416
66
204
84
165
Peru
132
58
85
77
67
Japan
367
90
48
73
83
Indonesia
295
26
37
20
32
Romania
327
43
85
40
54
Other
4,109
621
1,075
937
1,281
N
Source of tables 517 and 518: U.S. Arms Control and Disarmament Agency, World Military Expenditures and
So
emb
Arms Transfers, 1965-1974, March 1976.
356
National Defense and Veterans Affairs
Fig. 12-1 FEDERAL BUDGET OUTLAYS FOR NATIONALDEFENSE: 1960 TO 1977
(See table 564)
Billions of dollars
Percent of total Federal outlays
160
60
National defense as percent
National defense in 1977 dollars
of total Federal outlays
(Left scale)
(Right scale)
National defense in
120
current dollars (Left scale)
45
80
30
40
15
0
0
1960
61
62
63
64
65
66
67
68
69
70
71.
72
73
74
75
76
'77
Source: Chart prepared by U.S. Bureau of the Census: Data from U.S. Office of Management and Budget.
Fig. 12-2. WORLDWIDE MILITARY EXPENDITURES IN CURRENT DOLLARS: 1966 TO 1975
(See tables 565 and 568)
Billions of dollars
Billions of dollars
150
150
NATO countries
Warsaw Pact countries
125
United States
125
Other
100
100
75
75
50
50
25
25
0
0
1966
1968
1970
1972
1974
1975
Source: Chart prepared by U.S. Bureau of the Census: Data from U.S. Arms Control and Disarmament Agency.
360
National Defense and Veterans Affairs
No. 568. WORLDWIDE MILITARY EXPENDITURES: 1966 TO 1975
[For military expenditures and armed forces by country, and for list of NATO and Warsaw Pact countries, see
section 33]
MILITARY EXPENDITURES (bil. dol.)
PER CAPITA (dol.)
ITEM
1966
1968
1969
1970
1971
1972
1973
1974
1975
1966
1970
1975
IN CURRENT DOLLARS
Worldwide, total
184
220
234
245
258
272
294
334
371
53
65
91
Percent U.S. of total
35
37
35
32
29
29
27
26
25
(X)
(x)
(X)
Developed countries 1
157
187
196
201
209
221
236
264
290
163
202
279
Developing countries 1
27
33
38
44
49
51
58
70
82
11
16
27
NATO countries 2
91
110
112
111
111
117
121
135
145
177
208
262
Warsaw Pact countries
62
73
79
85
92
98
108
122
136
185
246
379
Other
31
37
43
49
55
57
65
77
90
12
17
29
IN CONSTANT 1974 DOLLARS
Worldwide, total
279
311
314
312
312
317
323
334
340
80
83
84
Percent U.S. of total
34.6
36.7
34.7
31.8
29.1
28.5
26.7
25.7
24.5
(X)
(X)
(X)
Developed countries 1
237
264
263
256
253
257
260
264
265
247
257
255
Developing countries 1
42
47
50
56
59
60
63
70
75
17
20
25
NATO countries 2
138
156
150
141
135
137
133
135
133
268
265
239
Warsaw Pact countries
94
103
106
109
112
114
119
122
125
281
314
347
Other
47
52
58
62
65
66
71
77
82
18
22
26
AS PERCENT OF GNP 3
Worldwide, total
7.0
7.2
6.9
6.5
6.3
6.1
5.8
5.9
6.0
(x)
(x)
(X)
United States
8.4
9.3
8.7
7.9
7.0
6.6
6.0
6.1
6.0
(X)
(X)
(X)
Developed countries 1
7.3
7.5
7.1
6.6
6.3
6.1
5.8
5.9
6.0
(X)
(X)
(X)
Developing countries 1
5.8
6.0
6.0
6.1
6.1
5.8
5.7
6.0
6.1
(X)
(X)
(x)
NATO countries 2
6.5
6.8
6.3
5.8
5.4
5.2
4.8
4.8
4.9
(x)
(X)
(X)
Warsaw Pact countries 4
5-7
5-7
5-7
5-7
5-7
5-7
5-7
5-7
5-7
(X)
(X)
(X)
X Not applicable.
28 developed countries include all those in North America, in Oceania, in European NATO (except Greece
and Turkey), in the Warsaw Pact (except Bulgaria), and also Austria, Finland, Ireland, Japan, South Africa,
Sweden, and Switzerland; 114 developing countries include all those in Latin America, in the Near East, in South
Asia, in East Asia (except Japan), in Africa (except South Africa), and also Albania, Bulgaria, Greece, Malta,
Spain, Turkey, and Yugoslavia. 2 North-Atlantic Treaty Organization.
3 Gross national product.
4 5-7 percent range.
No. 569. VALUE OF ARMS EXPORTS AND IMPORTS, SUPPLIER AND RECIPIENT COUNTRIES,
IN CONSTANT DOLLARS: 1966 TO 1975
[In millions of constant 1974 dollars. Countries ranked on basis of totals for 10-year period, 1966-1975]
1966-
1971-
COUNTRY
1970
1973
1972
1974
1975
1966-
1971-
COUNTRY
1970
1972
1973
1974
1975
World, total
37,300
17,830
10,530
9,290
8,890
RECIPIENTS-Con.
SUPPLIERS
Developing
United States
18,630
8,870
5,520
4,160
4,440
countries
25,370
13,380
8,870
6,670
6,510
U.S.S.R
10,980
4,770
3,150
2,870
2,390
Vietnam, South
5,291
2,504
1,250
665
829
France
1,250
809
621
561
461
Vietnam, North
3,570
1,243
358
400
142
United Kingdom
960
579
366
463
346
Israel
683
553
1,880
636
650
China, People's Rep
1,166
765
255
321
175
Iran
930
871
530
870
1,020
Germany, Fed. Rep
703
421
29
223
235
Egypt
1,612
765
655
118
211
Czechoslovakia
950
289
117
76
108
Korea, Rep. of
1,773
864
167
114
166
Canada
825
405
81
109
67
Turkey
1,498
700
292
205
152
Poland
1,039
316
67
20
38
India
1,126
524
198
129
139
Other
797
606
324
487
630
Syria
306
323
797
465
202
RECIPIENTS
China, Rep. of
1,090
546
160
126
151
Iraq
529
141
394
416
413
Developed
Greece
641
567
54
169
177
countries
11.930
4.450
1,660
2,620
2,380
Libya
149
326
231
159
330
Germany, Fed. Rep.
1,258
736
305
470
442
Pakistan
580
169
145
93
62
Germany, Dem. Rep.
974
526
116
410
338
Korea, North
416
357
154
60
16
U.S.S.R
1,490
352
110
40
27
Poland
925
400
110
290
252
Laos
457
262
106
68
20
United States
1,060
368
188
116
132
Spain
231
257
116
83
112
Cambodia
108
162
87
302
117
United Kingdom
1,406
128
42
73
101
Brazil
226
131
128
71
66
Czechoslovakia
623
250
83
275
178
Peru
140
157
85
74
99
Australia
624
111
219
55
28
Cuba
261
59
28
18
35
Italy
387
298
92
182
72
Indonesia
51
70
22
35
16
Japan
361
151
80
91
47
Other
3,702
1,829
1,033
1,394
1,385
Hungary
256
128
22
130
101
Romania
269
140
44
60
111
Other
2,297
862
249
428
551
Source of tables 568 and 569: U.S. Arms Control and Disarmament Agency, World Military Expenditures and
Arms Transfers, 1966-1975, December 1976.
BANKING
OF
TO SOCIAL INDICATORS
TABLE III
141 Countries 1978
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic-
Public
School-Age
% School Age
% Girls in
Expenditures
Expenditures
Expenditures
Social
Expenditures
Population
Population
Total Enrollment
Literacy
per Capita
per Soldier'
Per Sq. Km.
Standing2
per Capita
per Capita
per Teacher³
in School
High School
Rate⁴
US$
Rank
US$
MAR
US$
Rank US$
Rank US$
Rank Number
Bank Number
Pank
%
Rank %
WORLD
97
17,561
3,207
2,155
110
49
54
43
69
69
51
99
Developed
309
32,632
5,967
6,937
382
27
Developing
30
6,780
1,266
635
24
61
50
40
57
AMERICA
North America
468
52,739
5,860
9,634
577
23
83
50
99
United States
499
:
52,802
:;
11,668
7
9,752
10 565
;
23
:
84
35
50
1 99
10
174
A
51,112
3
410
17
8,531
3 688
16
26
1.4
75
47
49
ID 98
Canada
14
Latin America
22
6,508
367
1,422
53
43
57
45
78
Argentina
55
16
11,000
i
529
37
47
1,994
65
54
21
28
60
58
S
53
11 94
Barbados
**
4
'30
1,000
=
2,500
1,861
31
158
26
30
14
71
21
51
17 97
34
49
3,913
12
82
32
17
38
60
58
2
41
+3 63
Bolivia
18
.03
81
78
770
77
Brazil
1,3
18
53
7,536
1
243
54
52
1,608
62
55
47
38
51
52
@
54
09 75
Chile
1
73
50
9,188
i
1,032
44
59
67
50
51
40
11
71
2
56
.3 90
1,474
7
20
2,211
10
148
69
878
39
20
76
54
73
54
44
.3 82
Columbia
73
Costa Rica
1
11
90
4,600
1
451
50
53
1,606
43
99
66
49
73
54
To
54
35 90
Cuba
1
49
113
2,962
2
4,096
36
50
1,270
17
82
6
22
.1
76
_1
51
17 96
Dominican Republic
:
17
85
4,789
3
1,857
70
75
846
91
18
92
74
85
51
S
50
C6 68
62 74
Ecuador
...
:
22
77
6,560
is
577
64
66
977
75
35
58
46
18
61
. 3
44
El Salvador
:
13
51
8,429
:-
2,810
84
82
673
37
23
:06
91
36
50
?
44
19 63
Guatemala
:
9
52
4,500
578
85
71
934
100
14
97
78
115
32
72
43
in 47
62
95
50
1 85
10
37
4,000
37
Guyana
65
90
579
69
46
42
36
13
Haiti
0
2
12!
1,857
is
464
122
125
183
135
2
120
121
114
33
11
30
11.1 23
Honduras
11
114
2,714
.0
339
91
96
494
G1
18
S4
77
99
42
1:
51
76 58
39
1,818
79
57
44
30
66
3
53
39 86
Jamaica
9
40
10,000
49
64
1,160
49
Mexico
8
06
4,979
19
245
59
59
1,418
56
68
62
48
25
67
11
42
34 80
Nicaragua
28
51
9,714
2
523
74
74
873
65
24
98
79
90
48
21
51
76 58
9
26
1,545
03
224
48
1,237
58
65
53
41
21
69
13
53
3 82
Panama
.)
62
Paraguay
J5
13
117
2,353
17
98
74
76
817
101
13
60
47
31
52
17
49
:3 82
Peru
7
33
30
6,236
15
432
77
85
633
93
17
31
58
34
64
07
46
'3 72
Trinidad & Tobago
I
11
41
12,000
1
2,400
45
40
2,933
35 140
72
52
90
48
21
51
14 92
94
Uruguay
40
55
4,259
y?
653
42
51
1,702
77
32
29
32
54
60
3
54
;
Venezuela
)
44
37
14,159
:
683
43
41
2,822
32 149
55
43
60
58
13
53
3 82
EUROPE
NATO Europe
237
28,620
27,501
6,578
348
28
64
48
93
3 322
11
36,448
: 105,700
ds. 9,878
9 589
21
28
30
58
:5
50
99
Belgium
13
Denmark
: 259
13
38,824
'J
30,698
2
6 10,830
3 752
:
20
.5
70
01
51
99
France
1 350
15
37,091
;1 34,108
8
16 8,902
12 512
13
24
22
68
13
53
: 99
Germany, West
i
350
9
43,808
"
86,209
5
7 10,479
14 491
21
28
25
67
21
51
99
10,816
15,568
74
46
37
16
70
47
49
18 84
Greece
L.)
220
47
1;
30
35 3,433
51
Iceland
-
-
I
4
11
9,536
19 397
6
22
16
70
35
50
1 99
Italy
0
112
33
17,572
19
21,133
20
27 4,669
28 215
9
23
48
61
56
48
23 95
Luxembourg
C3
103
17
37,000
33
12,333
15
5 11,408
7 698
15
25
54
60
35
50
20 98
05
50
1 99
Netherlands
'5 304
14
38,500
1 103,293
9
13 9,396
4 730
37
34
38
63
Norway
3 322
19
33,564
13
4,040
3
12
9,528
5 729
:
21
16
70
21
51
99
Portugal
3
64
50
9,828
31
6,837
41
48
1,968
53
73
:1
35
43
62
20
52
63
72
Turkey
3
64
32
5,736
46
3.562
70
61
1,244
71
44
30
57
90
48
106
32
72 60
United Kingdom
?
262
.
46,716
7
59,926
16
25
5,578
23 297
9
23
2
81
17
49
1 99
ALL NATO
(incl. US and Canada)
336
39,358
8.586
7,886
446
26
73
49
95
Warsaw Pact
311
24,303
4,917
3,777
173
31
58
57
99
77
91
4,527
34
6,117
37
31
33
69
56
13
53
23 95
Burgaria
4
27
37
3,212
120
Czechosiovakia
.3
143
43
11,651
20
16,930
20
26 4,733
33
144
37
34
57
59
1
61
99
Germany, East
01
218
25
23,255
12
33,806
19
24 5,666
27 226
42
36
38
63
63
47
1 99
Hungary
12
79
70
7,368
27
9,032
32
34 3,477
34 142
20
27
69
56
63
47
20 98
55
20 98
Poland
03
99
45
11,287
25
11,000
30
33 3,655
41
101
53
41
78
54
7
Romania
35
56
75
6,757
37
5,1.0
29
38
3,088
40
103
31
33
25
67
35
50
20 98
USSR
...
394
21
28,312
39
4,598
23
31
3,705
29
189
25
29
60
58
2 56
: 99
28
World Military and Social Expenditures 1981
Estimating Military Expenditures of the USSR
sumably this is because major equipment can, in
large part, be obtained or observed, and at least some'
of the ruble prices determined from Soviet price lists
and its Warsaw Pact Allies
or sales abroad. In theory at least there is good,
"hard" information in this area. Keeping it accurate
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent
and up to date is quite another problem, as evidenced
calculations must be made by western authorities (chart 22).- A review of the estimates made by official US
by CIA's announcement in 1976 that Soviet military
sources indicates that they tend to exaggerate Soviet military expenditures. The result is a stimulus to the arms
expenditures in rubles were now estimated to be twice
race.
as high as previously thought, because the ruble prices
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a rela-
paid were higher than CIA had calculated.
tively simple step: make public its military budget in the detail proposed by the United Nations for all coun-
Even assuming comparatively solid information in
tries. At a small sacrifice of secrecy, it could thereby provide the kind of reassurance on which mutual trust
some areas, there are others which must depend
between nations and arms restraint depend.
heavily on judgment or guesswork, for example: the
quality and condition of equipment which is not ob-
figure is of principal public interest (since it is used
tainable or visible by satellite or other observation;
The usual statistical note on Soviet military ex-
the range of efficiency and cost within Soviet indus-
penditures was expanded in WMSE 1980 to give an
for comparison with US expenditures), but it is the
overview of the range of western estimates and a
CIA ruble estimate which this study uses for its
try; and the amount of overhaul of old equipment, a
practice which some analysts consider fairly com-
more detailed evaluation of the official US estimates.
calculation of Soviet military expenditures. Working
mon in the Soviet Union.
The summary is repeated in this edition, with some
from the ruble estimate makes it possible to follow
revisions based on CIA testimony made available in
the same procedure for conversion to dollars which is
In addition, a significant source of measurement
error arises in valuing equipment for which no ruble
the past year. Given the limitations of space and
used for other countries in this worldwide report and
for GNP and other budget expenditures. It also avoids
prices are available. The estimating process then be-
time, this is necessarily a cursory examination of a
comes very shaky indeed. For at least some of the
very complex subject. Hopefully it will provide some
some of the exaggerating effects of the CIA calcula-
encouragement to others to explore further.
tion in dollars; these will be discussed below.
procurement items, CIA must use US analogs. Values
Soviet military expenditures warrant special atten-
In using the CIA ruble estimate for this purpose,
in US equivalent prices are established, then con-
however, we do so with reservations. This is not to
verted back to rubles by applying dollar-to-ruble con-
tion for several reasons:
question either the competence of the analysts, who
version factors. Assessing quality as compared with
1. As a summary of the Soviet military effort and
like US equipment must become a major headache in
trend, they affect US and all NATO planning, the
are highly respected professionals, nor the careful as-
this case, made more difficult by the fact that Soviet
willingness of public officials to spend more to meet
sembly of a massive amount of information. The
technology as a rule lags behind the US. and the
the competition, and of taxpayers to bear the burden.
gaps in knowledge and the need for subjective judg-
ment are still formidable. The numerous uncertainties
product itself tends to be more simplified.
2. Unlike other major industrial powers, the Soviet
Union fails to provide detail on its military budget, or
which invite "worst-case" interpretation and the
For example, CIA testimony mentions micro-
miniaturization in computers as one area in which
even to describe what expenditures are covered. It
methodology of the calculations together tend to pro-
announces a single undefined figure each year, which
duce an upward bias in the ruble as well as in the
the Soviets are far behind US technology. The ques-
seldom changes. Since 1970 the budget has dropped
dollar estimate. Even though we cannot remove this
tion is how accurately analysts can determine the
about 4 percent, from 17.9 to 17.2 billion rubles.
bias, or determine precisely how much it may exag-
lesser dollar value of a weapon which does not have
gerate the total, identifying some of the factors which
built into it the accuracy and capability of remote
3. The Soviet announced budget is clearly incom-
appear to produce it may help to indicate the scope
command and control equivalent to its US counter-
plete in view of the advanced military technology and
of the problem.
part.
the size of the military force the USSR has produced.
Although CIA analysts report that they do make
4. The ruble is essentially a domestic currency and
the effort to adjust the cost basis of Soviet equipment
official rates of exchange reflect neither the relation
Components of CIA estimate
for physical and performance qualities, they have
between internal prices and foreign prices, nor bal-
stated that where their knowledge is incomplete their
ance of payments forces.
In ruble values, CIA calculates Soviet military ex-
estimates tend to overstate the costs of producing the
5. Between the official Soviet military budget, con-
penditures at more than three times the budget of
Soviet design.
verted to dollars at the official rate, and the official
17.2 billion rubles which the USSR announced for
US view of that budget, there was a gap, as chart 22
1978. While the public record does not show how the
Operating costs-Manpower, although rated at a low-
indicates, of $129 billion in 1978, a disparity which
1978 figure breaks down into all of the components,
er level of reliability than procurement, is considered
was larger than the total US military budget that
averages for the period 1967-1977 will give some clue
by CIA to be the most reliable element in the esti-
year.
to the relative importance of the major categories.
mates of Soviet operating costs. It is also a relatively
6. Between the official US estimate of Soviet mili-
The estimate of Soviet expenditures in rubles in that
small part of the overall estimate of ruble outlays.
tary expenditures, and the estimate in this study, the
period was composed as follows:
While Soviet forces are very large, this is a draft
gap was $51 billion in 1978, although we continue to
almost one-quarter for research, development, test
army and ruble pay scales are low. (The pay for a
use the CIA ruble estimate for the calculation.
and evaluation (RDT&E);
private is said to be the ruble equivalent of about
In the discussion following, the principal focus is on
-one-half for investment (procurement of equipment
$6 per month.)
the calculations by US intelligence agencies which
and construction);
Estimates of manpower costs presumably depend
establish the official US view of Soviet military ex-
a little over one-quarter for operating (60 percent
on the determination of numbers in the total force,
penditures. Since this publication also has dollar es-
of that for personnel).
the table of organization, and the pay scales used.
timates for other Warsaw Pact countries lower than
What does the record say about some of the mea-
The record is not clear on all these points. For 1978
the US official estimates, the basis for the alternatives
surement problems associated with each of these
CIA estimated manpower at 4.2 million, IISS (the
will be described as well.
components?
source used in this report) at 3.6 million. The higher
Research-This category of expenditures is identi-
CIA figure may result from a definitional difference,
Soviet expenditures in rubles
fied by the analysts as the most imprecise element
possibly from the CIA inclusion of civilians in uni-
in the estimates. Research outlays cannot be estimated
form or of border guards. (ISS has a separate cate-
Basis of estimates
from observable physical quantities. Instead they
gory for paramilitary forces.) It could also result
appear to be derived in large part through an analysis
from higher assumptions of the actual complement
In the absence of adequate reporting by the Soviet
of Soviet information on expenditures for science.
of Soviet divisions. CIA does state that it takes ac-
Union, western analysts have generally resorted to
While no direct reference to the basis for the cal-
count of the evidence that a good many Soviet divi-
one of two basic approaches to an estimate of Soviet
culations seems to have been made recently, analysts
sions are not at full strength, but certainty in this
military expenditures in rubles.
indicated in 1974 testimony that a major share of
case may be difficult to establish, and the tendency
Add-on-One approach attempts to flesh out the
the Soviet science budget was assumed to be military.
would be to assume full complement where it is un-
Soviet announced military budget by adding elements
CIA stated in 1978 testimony with "high confi-
known.
such as research and development, which are believed
dence" that the Soviet military RDT&E effort is
In addition to the numbers involved, there are un-
to be missing from the official figures. The missing
"large and growing". The estimated increase in this
knowns relating to the operational use of Soviet
elements are generally extracted from other parts of
component in the 1970's has been the predominant
forces for which adjustments may be especially diffi-
the state budget.
factor (along with procurement and maintenance of
cult. The Soviet draft provides a work force at the
Building-block - The other approach is independent
hardware) pushing the overall expenditure total higher
command of the state. For example, recruits are used
of the Soviet announced budgets except in the valua-
(ref. 6).
for agricultural work during the harvest period. The
tion of research expenditures. This method breaks
An independent study prepared for the National
CIA analysts report that they cannot separate out the
down military expenditures into physical quantities
Science Foundation by a specialist in the field reveals
portion of time the forces are used in essentially
(manpower, equipment, construction), and operating
some of the practical difficulties in identifying mili-
civilian work. In other words, Soviet forces are valued
costs and research. Each major component is com-
tary R&D in Soviet budgets for science (ref. 1).
as though fully employed in military functions
posed of many individual elements which are sepa-
The report provides a careful analysis of definitional
throughout the year.
rately assigned monetary values. Considering the
and other problems which cannot be adequately sum-
Whether adequate cost adjustment can be made
thousands of elements which must be identified and
marized here, but two of the general points made
for relatively low operational use of equipment and
also valued, it is evident that this is an extraordinarily
seem particularly relevant: a) Soviet reported science
lower levels of readiness than in the US is also a
complex procedure, feasible only through a vast ex-
budgets appear to be significantly inflated compared
question. Officials have at various times referred to
penditure of effort on surveillance, data collection,
with US concepts and b) whether, or how much,
these factors, stating that only one-sixth of Soviet
and analysis. So far, only US intelligence agencies
Soviet military R&D is included in the science budget
navy ships are deployed at sea (US one-third): Soviet
have the arsenal of electronic and other resources re-
is still an unresolved issue.
strategic subs operate 11 percent; of the time (US 50
quired for calculations of this detail and scope.
From this, one could conclude that Soviet budget-
percent); pilots with the Soviet air force in Europe fly
The building-block approach is used by CIA to
ing for science is still a largely mysterious area. It
roughly one-third as much as American pilots; only
produce annual estimates of Soviet military expendi-
may not provide the only basis for the CIA estimate
part of the Soviet ICBM force is kept at peak readi-
tures in both ruble values and dollars. The dollar
of Soviet expenditures on military R&D, but as a
ness.
foundation for confident estimates of level or trend it
While CIA reports that they do make allowances
1. Unless specific references are noted, the summary
clearly has serious weaknesses.
for these differences in operating practice, the prob-
of CIA methodology is drawn from the public record
Investment-The component covering procurement
lems illustrate the complexity of the cost-estimating
in the annual hearings of the Joint Economic Com-
and construction is the part of the estimate in which
process even in an area where there is a fair degree
mittee of the US Congress (#5, page 38).
analysts state they have the greatest confidence. Pre-
of direct knowledge.
36
World Military and Social Expenditures 1981
Soviet expenditures in dollars
distortion which arises in the dollar pricing. National
tions, and somewhat lower than the purchasing power
economies tend to use relatively more of that factor
estimate previously used in this publication. In adopt-
Basis of estimates
of production in which they have a cost advantage.
ing an exchange rate conversion in place of purchas-
If, for example, labor is cheap relative to capital,
ing power, we are following the procedure used for
more labor is used. If that labor is valued at prices
other countries.
The dollar equivalent of the Soviet military effort
in effect in an economy where labor costs are high,
is now usually determined through one of two basic
however, it becomes an extremely expensive item.
In view of the uncertain value of the ruble as com-
approaches.
This is the basis of the distortion which occurs when
pared with normally traded currencies, any estimate
all elements of the Soviet military effort are given
of its exchange value at this point must be judg-
Converting aggregates-Military expenditures in
dollar price tags. For a review of the "index number
mental. Further observation may suggest that it
rubles are converted to dollars using the total, or
effect", see ref. 4.
should be assigned a higher value against the dollar
broad categories, of expenditures, with appropriate
which of course would raise the dollar estimate.
exchange rates. This is the approach now used in
In this limited space it is not possible to summarize
this study. It makes possible the comparison of the
the problems and results in detail, or the alternative
On the other hand, further review of the CIA cal-
military "burden" relative to GNP and other na-
method of valuing expenditures in dollars. Two ex-
culations, by intelligence or other specialists, are
tional budgets, and also rough comparisons among
amples of the distortions implicit in the dollar valua-
quite likely to yield a lower, and we think, a more
countries.
tions are given below.
realistic value of Soviet military expenditures in
rubles:
Pricing elements-The alternative method, which is
In arriving at the dollar valuation of Soviet man-
used by CIA, constructs the dollar value of Soviet
power, CIA breaks down the Soviet force into ranks
military expenditures through a building-block ap-
and skill components, applying a dollar-cost factor to
proach which parallels that described above for the
Other Warsaw Pact
each skill level. The average pay for the Soviet force
ruble calculation. In this case every element of the
in the dollar calculations comes to about $12,500 per
Soviet military force is valued at the price that it
man. The very large Soviet army, bought at low cost
WMSE approach-The estimates of military expendi-
would have if purchased in the US. The objective is
in rubles, accounts for about $50 billion when priced
tures in the centrally planned economies of Eastern
not to establish the basis for international comparison
at US pay scales. Statements about the 1977 esti-
Europe that are members of the Warsaw Pact (page
but to produce a summary indicator of the value of
mates indicated that personnel costs then were 14
6) are based on estimates in national currencies by
the Soviet military effort in US terms.
percent of total spending in rubles, and 36 percent
Dr. Thad Alton and associates (ref. 7). In the Alton
when calculated in dollars.
estimates, some adjustments are made in the official
national figures to conform more closely to US defi-
The CIA method allows for a difference in com-
nitions of defense. In converting to dollars, the
position of US and USSR forces, but it is not at
WMSE method again uses the rates implicit in the
Implications of CIA methodology
all clear that it adequately covers differences in qual-
World Bank's calculation of GNP.
ity, i.e. the technical qualifications of the force and
At first glance the product of the CIA approach
the equipment available to them. Approximately
While there appear to be some differences in fac-
three-fourths of Soviet manpower are short-term
tors used, this in general is also the approach adopted
seems to meet the requirement for a simple binary
conscripts. Many draftees are unacquainted with the
by IISS and SIPRI. The total dollar figures for these
match-up: the total of the Soviet military effort, ex-
operation of even simple motorized equipment. In
countries are in fairly close agreement.
pressed in US costs, appears to have been made com-
parable with total US military expenditures. In fact,
contrast, the US has a volunteer, career force, subject
Official US approach-The method used in the offi-
as we have tried to show, the method of calculation
to intensive on-the-job training during their years of
cial US report of military expenditures in the "other
is not only based on an extremely fragile structure of
service. Lower readiness standards in the USSR also
WP countries" differs from the above in an important
evidence but also has built into it an upward bias be-
reduce training effectiveness, eg. the Soviet air force
cause of the worst-case assumptions applied to the
has relatively less flying time, the army less front-of-
respect: the conversion to dollars calculates military
forces separately at equivalent US pay scales. The
many unknowns in the estimating process.
the-line equipment for training.
procedure may be summarized briefly as follows: a)
The quality differential is also significant in the
the personnel component of military expenditures is
In the CIA dollar calculation, the problems noted
dollar pricing of Soviet equipment. In the CIA ruble
separately estimated in national currencies; b) armed
above for the ruble estimate are amplified by the
calculation, some ruble values can be established di-
forces (regular and paramilitary) in those countries
rectly. Dollar valuations, however, are based on US
are then priced in dollars at US pay rates (at 100
industry's estimates of production costs of samples of
percent for officers and at 75 percent for enlisted
CHART 22
Soviet equipment, or on US analogs, which overall
men); c) the remainder of the budget is converted to
dollars at the purchasing power equivalent rate im-
Military Expenditures of the Major
are more sophisticated than the Soviet inventory.
The adjustments made for quality are subjective
plicit in the GNP calculations.
Alliances, 1978 - Five Views
judgments and, as recognized by CIA, will have a
billion dollars
tendency to overstate Soviet costs.
The results of this method appear in the ACDA
annual report, where they produce military expendi-
Other Warsaw Pact
Other NATO
The agencies preparing the estimates are, of course,
tures for the "other WP countries" roughly double
Soviet Union
United States
aware of the methodological bias inherent in the
the overall estimates of the other sources. The same
dollar calculations. In their testimony in 1979, for
report also shows health and education budgets for
example, they noted that their "dollar comparisons of
these countries. No comparable adjustment is made
US and Soviet defense activities do have a potential
for the manpower component of these social pro-
bias favoring the Soviets, resulting from the index
grams, although both have a significant personnel
number problem". Despite it, they express a relatively
component which is also likely to be "underpriced"
high degree of confidence in the estimates. In the
compared with US pay rates. This is a curious in-
-150
overall cost estimate, they have usually described the
consistency of method which would appear to distort
possible margin of error as plus or minus 15 percent.
the budget comparisons shown in the ACDA table.
In the 1979 testimony they reduced this to plus or
The special personnel adjustment made in the of-
minus 10 percent for the current period.
ficial US estimate of military expenditures for the
Professor Holzman's review of the method suggests
"other WP countries" also affects comparisons be-
that because of the tendency to worst-case analysis in
tween the WP and other countries. There is no indi-
-100
exercises like this, the range of error in the US-USSR
cation on the record that this adjustment is made for
dollar comparisons is likely to be relatively smaller
any other country in the world. If it were done world-
on the low side and much larger on the high side,
wide, it would sharply increase the US Government
perhaps of an order of minus 5 to plus 25 percent.
estimates of military expenditures in other countries.
Testimony in 1978 indicates that pricing of other
NATO forces at US pay scales would raise the total
dollar equivalents of military expenditures for those
-50
WMSE calculations
countries by 22 percent.
Soviet Union
To attempt alternatives to the elaborate official
The CIA ruble estimate is the basis of the dollar
calculations of WP military expenditures is perhaps
even more simplistic and risky than to attempt an
valuation in this publication. For the reasons stated
0
abbreviated description of the problems. We recog-
above, it appears to have an upward bias, with the net
Official
Official
nize that the results shown in this publication are not
IISS
SIPRI
WMSE
effect of substantially exaggerating Soviet military ex-
Warsaw
U.S.
the final answer. Yet somewhere between the un-
3
4
5
penditures.
Pact
Govt.
realistically low official WP version of their military
1
2
The CIA ruble estimate is converted to dollars, in
expenditures, which is perhaps the $35 billion on
the WMSE method, through exchange rates which
chart 22, and the upwardly biased official US version
the World Bank uses for calculations of GNP. A.new
of $177 billion, there must be a reasonable estimate.
1. Defense budgets and official rates of exchange, as
reported to UN.
method of determining GNP in the centrally-planned
economies of Europe, tentatively adopted by the Bank
At present our approach suggests that military ex-
2. US Arms Control and Disarmament Agency,
in 1979, uses the noncommercial (tourist) rates for
penditures of the WP countries in 1978 were in total
World Military Expenditures and Arms Transfers
the ruble and other Eastern European currencies;
about $62 billion lower than the US Government
1969-78.
3. International Institute for Strategic Studies, The
values established for 1970, the benchmark year, are
estimates. Rather than being equal to the NATO
moved forward using the US price change in the
expenditures, this would make them lower by more
Military Balance, 1979-80. (IISS has since discon-
implicit GNP deflator.
than one-third. A gap like that could make quite a
tinued publication of an estimate for USSR).
difference in NATO's planning for a continually
4. Stockholm International Peace Research Institute,
The World Bank method assigns a substantially
rising military effort against the competition-and
SIPRI Yearbook 1981.
lower value to the ruble than that implicit in the pur-
save taxpayers a whale of a lot of money.
5. This publication, Table II.
cashing power estimate of the intelligence calcula-
References-see page 38.
World Military and Social Expenditures 1981
37
RANKING OF COUNTRIES, MILITARY AND SOCIAL INDICATORS
TABLE III
141 Countries, 1979
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic-
Public
School-Age
% School-Age
% Women in
Expenditures
Expenditures
Expenditures
Social
Expenditures
Population
Population
Total University
Literacy
per Capita
per Soldier'
per Sq. Km.
Standing2
per Capita
per Capita
per Teacher³
in School
Enrollment
Rate1
Rank US$
Rank
US$
Rank
US$
Avg. Rank
Rank US$
Rank US$
Rank Number
Rank Number
Rank %
Rank %
108
19,536
3,618
2,395
124
46
54
40
70
WORLD
6,777
7,698
435
26
70
44
99
Developed
348
38,475
7,510
1,438
730
27
56
51
33
59
Developing
34
AMERICA
60,133
6,536
10,436
680
23
83
47
99
North America
508
United States
5
543
5
60,474
25
13,060
14 10,554
9 676
10
23
2
84
17
47
1 99
Canada
26
174
9
51,500
88
413
8
16
9,319
8 715
15
24
5
75
14
48
22
98
58
36
79
Latin America
23
6,615
386
1,651
63
44
63
55
51
11,256
84
541
44
49
2,217
57
75
22
27
67
58
26
43
32
93
Argentina
15
7
123
2,000
42
5,000
35
48
2,322
34
154
28
29
20
69
47
39
22 98
Barbados
Bolivia
108
'23
87
91
95
568
90
20
45
36
67
58
77
30
72 63
32
18
4,174
66
6,004
107
198
59
55
1,792
66
64
59
44
84
54
49
38
62
75
Brazil
90
14
52
11,247
68
1,263
47
52
1,904
61
70
54
43
9
72
41
40
36
92
Chile
13
88
109
9
115
3,118
109
186
68
68
1,133
90
20
75
52
74
56
49
38
42
86
Colombia
52
58
1,616
50
92
62
46
83
55
54
37
32 93
-
Costa Rica
-
-
Cuba
:-
79
37
6,795
34
63
1,417
39
122
10
23
17
70
21
46
27
95
109
4,116
Dominican Rep
is
18
92
5,263
53
2,053
70
76
958
84
,24
93
73
60
59
36
41
67
68
51
59
35
57
79
Ecuador
it
24
90
5,606
80
652
64
67
1,143
76
43
65
47
60
El Salvador
102
10
79
6,857
54
2,286
82
82
744
84
24
107
89
94
50
66
32
72
63
26
12
101
4,722
76
780
86
75
1,002
94
19
112
96
115
33
86
27
84
50
Guatemala
50
40
31
65
64
33
38 90
31
19
13
3,200
126
74
66
93
585
67
58
Guyana
Haiti
128
3
121
2,285
31
576
122
127
198
130
4
124
124
118
32
73
31
:13 26
83
15
103
4,546
86
446
92
96
566
90
20
100
80
101
44
54
37
77
60
Honduras
1,010
60
72
59
44
28
67
24
44
39
89
Jamaica
109
9
96
5,000
63
1,818
53
73
Mexico
10
62
6,330
95
321
58
56
1,779
56
80
62
46
23
68
82
28
55 81
20
23
81
6,750
67
415
86
89
641
94
19
97
79
85
53
73
31
75 62
Nicaragua
Panama
128
107
198
49
61
1,500
59
74
47
38
23
68
34
53
51 82
13
8
1,364
117
121
103
71
71
1,085
107
14
59
44
87
51
25
43
51
82
Paraguay
93
13
2,800
100
4,728
94
338
72
78
848
90
20
80
56
31
65
66
32
60
76
Peru
76
25
91
13
39
15,000
49
2,941
43
35
3,868
33
155
75
52
67
58
57
36
36
92
Trinidad & Tobago
72
982
45
46
2,386
74
48
36
33
60
59
17
47
30
94
Uruguay
56
59
35
6,179
37
16.595
77
764
47
42
2,952
36
135
54
43
71
57
41
40
51
82
Venezuela
68
42
EUROPE
282
32.997
31,745
7,880
399
28
63
39
93
NATO Europe
9 11,225
10
668
19
25
46
62
57
36
99
Belgium*
368
18
41,724
5 119,016
12
Denmark
297
16
43.371
15
35,220
2
7 12,461
6 789
2
19
14
71
41
40
99
13
44,525
12
41,431
3
11 10,749
12
560
10
23
23
68
14
48
99
France*
'1)
424
Germany West
404
11
6
99,742
9
6 12,464
11
566
22
27
29
66
59 35
99
50,093
35
23
68
41
40
42 86
Greece
257
43
13,103
21
18,378
30
32
4,215
46
103
42
5
13 10,571
20
380
7
22
9
72
59
35
99
Iceland*
-
.,
136
32
21,266
19
25,770
21
26
5,677
25 259
10
23
51
60
36
41
27 95
Italy
Luxembourg
34
117
16,154
13
5 13,746
5 827
15
24
46
62
30
42
22 98
17
42,000
23
82
99
4
123,603
13
12 10,660
4 850
32
32
46
62
28
Netherlands
15
359
15
43,852
Norway
357
43
4,485
3
10 10,919
3 857
3
20
17
70
49
38
99
16
21
37,282
50
70
50
11,450
35
7,459
41
50
1,973
57
75
36
33
31
65
22
45
62 75
Portugal
64
1,387
74
48
87
62
98
46
92
25
75 62
Turkey
59
57
104
4,516
18
3,274
75
United Kingdom*
17
342
7
59.306
8
78,508
16
23
7,214
21
360
7
22
4
79
59
35
99
ALL NATO
(incl. US and Canada)
9,813
8,988
523
25
72
44
96
380
44,690
Warsaw Pact
342
26,755
5,449
4,133
191
29
61
49
99
6,267
31
8,476
32
39
3,678
37
134
32
32
74
56
6 50
30 94
Bulgaria
39
106
83
23
148
49
11,598
22
17,592
25
29
5,213
32
161
42
35
60
59
36
41
99
Czechoslovakia
Germany, East
2
235
29
24,717
14
36,322
18
25
6,351
26
249
36
33
38
64
17
47
99
Hungary
41
95
60
9,808
27
10,968
28
36
3,789
31
167
22
27
71
57
14
48
99
99
35
45
26
12,472
29
37
3,785
41
112
47
38
51
60
6 50
Poland
111
12,264
Romania
64
40
5,979
33
40
3,578
45
106
36
33
51
60
26
43
22
98
54
70
7,845
USSR*
123
433
25
31,165
5,089
23
34
4,052
29
210
27
28
49
61
6 50
1 99
41
30
World Military and Social Expenditures 1982
Estimating Military Expenditures of the USSR
An independent study prepared for the National
Science Foundation by a specialist in the field reveals
and its Warsaw Pact Allies
some of the practical difficulties in identifying mili-
tary R&D in Soviet budgets for science (ref. 1).
The report provides a careful analysis of definitional
and other problems which cannot be adequately sum-
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent
marized here, but two of the general points made
calculations must be made by western authorities (table opposite). A review of the estimates made by official
seem particularly relevant: a) Soviet reported science
US sources indicates that they tend to exaggerate Soviet military expenditures. The result is a stimulus to the
budgets appear to be significantly inflated compared
with US concepts and b) whether, or how much,
arms race.
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a rela-
Soviet military R&D is included in the science budget
tively simple step: make public its military budget in the detail proposed by the United Nations for all coun-
is still an unresolved issue.
tries. At a small sacrifice of secrecy. it could thereby provide the kind of reassurance on which mutual trust
From this, one could conclude that Soviet budget-
between nations and arms restraint depend.
ing for science is still a largely mysterious area. It
may not provide the only basis for the CIA estimate
of Soviet expenditures on military R&D. but as a
foundation for confident estimates of level or trend it
The usual statistical note on Soviet military ex-
penditure of effort on surveillance, data collection,
clearly has serious weaknesses.
penditures was expanded in WMSE 1980 to give an
and analysis. So far, only US intelligence agencies
overview of the range of western estimates and a
have the arsenal of electronic and other resources re-
Investment- The component covering procurement
and construction is the part of the estimate in which
more detailed evaluation of the official US estimates.
quired for calculations of this detail and scope.
analysts state they have the greatest confidence. Pre-
The summary is repeated in this edition. with some
revisions based on CIA testimony made available in
The building-block approach is used by CIA to
sumably this is because the numbers of major
equipment can, in large part, be observed, and at
the past year. Given the limitations of space and
produce annual estimates of Soviet military expendi-
least some of the ruble prices (e.g., civilian products
time, this is necessarily a cursory examination of a
tures in both ruble values and dollars. The dollar
bought by the military) can be determined from
very complex subject. Hopefully it will provide some
figure is of principal public interest (since it is used
Soviet price lists. Others may be obtained clandes-
encouragement to others to explore further 1
for comparison with US expenditures), but it is the
tinely. In theory at least there is good, "hard" in-
Soviet military expenditures warrant special atten-
CIA ruble estimate which this study uses for its
formation in this area. Keeping it accurate and up
tion for several reasons:
calculation of Soviet military expenditures. Working
to date is quite another problem, as evidenced by
1. As a summary of the Soviet military effort and
from the ruble estimate makes it possible to follow
CIA's announcement in 1976 that Soviet military
trend. they affect US and all NATO planning. the
the same procedure for conversion to dollars which is
used for other countries in this worldwide report and
expenditures in rubles were now estimated to be
willingness of public officials to spend more to meet
twice as high as previously thought, because the
the competition, and of taxpayers to bear the burden.
for GNP and other budget expenditures. It also avoids
ruble prices paid were higher than CIA had cal-
2. Unlike other major industrial powers. the Soviet
some but not all of the exaggerating effects of the
culated.
Union fails to provide detail on its military budget. or
CIA calculation in dollars: these will be discussed
Even assuming comparatively solid information in
even to describe what expenditures are covered. It
below.
some areas, there are others which must depend
announces a single undefined figure each year. which
heavily on judgment or guesswork, for example: the
seldom changes. Since 1970 the budget has dropped
In using the CIA ruble estimate for this purpose.
quality of equipment which is not obtainable or
about 4 percent, from 17.9 to 17.2 billion rubles.
however, we do so with reservations. This is not to
visible by satellite or other observation; the range
3. The Soviet announced budget is clearly incom-
question either the competence of the analysts, who
of efficiency and cost within Soviet industry; and
plete in view of the advanced military technology and
are highly respected professionals, nor the careful as-
the amount of overhaul of old equipment, a practice
the size of the military force the USSR has produced.
sembly of a massive amount of information. The
which some analysts consider fairly common in the
4. The ruble is almost exclusively a domestic cur-
gaps in knowledge and the need for subjective judg-
Soviet Union.
rency and official rates of exchange reflect neither the
ment are still formidable. The numerous uncertainties
relation between internal prices and foreign prices,
which invite "worst-case" interpretation and the
In addition. a significant source of measurement
nor balance of payments forces.
methodology of the calculations together tend to pro-
error arises in valuing equipment for which no ruble
5. Between the official Soviet military budget, con-
duce an upward bias in the ruble as well as in the
prices are available. The estimating process then be-
verted to dollars at the official rate, and the official
dollar estimate. Even though we cannot remove this
comes very shaky indeed. For many of the procure-
US view of that budget. there was a gap of 155
bias, or determine precisely how much it may exag-
ment items, CIA must use US analogs. Values
billion dollars in 1979. a disparity which was larger
gerate the total. identifying some of the factors which
in US equivalent prices are established, then con-
than the total US military budget that year.
appear to produce it may help to indicate the scope
verted to rubles via a small sample of dollar-ruble
6. Between the official US estimate of Soviet mili-
of the problem.
ratios (about I ruble price for every 10 dollar prices).
tary expenditures. and the estimate in this study, the
Assessing quality as compared with like US equip-
gap was $67 billion in 1979, although we continue to
ment must become a major headache in this case,
use the CIA ruble estimate for the calculation.
made more difficult by the fact that Soviet technology
In the discussion following, the principal focus is on
as a rule lags behind the US, and the product
the calculations by US intelligence agencies which
Components of CIA estimate
itself tends to be more simplified.
establish the official US view of Soviet military ex-
penditures. Since this publication also has dollar es-
In ruble values, CIA calculates Soviet military ex-
For example, CIA testimony mentions micro-
timates for other Warsaw Pact countries lower than
penditures (in 1970 prices) at more than three times
miniaturization in computers as one area in which
the US official estimates, the basis for the alternatives
the budget of 17.2 billion rubles which the USSR
the Soviets are far behind US technology. The ques-
announced for 1979. While the public record does not
tion is how accurately analysts can determine the
will be described as well.
show how the 1979 figure breaks down into all of
lesser dollar value of a weapon which does not have
the components, averages for the period since 1965
built into it the accuracy and capability of remote
will give some clue to the relative importance of
command and control equivalent to its US counter-
Soviet expenditures in rubles
the major categories. The estimate of Soviet expendi-
part.
tures in rubles in that period was composed as fol-
Although CIA analysts report that they do make
lows (ref. 8):
the effort to adjust the cost basis of Soviet equipment
Basis of estimates
for physical and performance qualities, they have
-roughly one-fifth for research, development, test
stated that where their knowledge is incomplete their
In the absence of adequate reporting by the Soviet
and evaluation (RDT&E);
estimates tend to overstate the costs of producing the
Union, western analysts have generally resorted to
-one-half for investment (procurement of equipment
Soviet design.
one of two basic approaches to an estimate of Soviet
and construction);
military expenditures in rubles.
-almost one-third for operating (60 percent of
Operating s-Manpower, although rated at a low-
Add-on-One approach attempts to flesh out the
that for personnel).
er level of reliability than procurement, is considered
Soviet announced military budget by adding elements
What does the record say about some of the mea-
by CIA to be the most reliable element in the esti-
such as research and development, which are believed
surement problems associated with each of these
mates of Soviet operating costs. It is also a relatively
to be missing from the official figures. The missing
components?
small part of the overall estimate of ruble outlays.
elements are generally extracted from other parts of
While Soviet forces are very large, this is a draft
the state budget.
army and ruble pay scales are low. (The pay for a
Research-This category of expenditures is identi-
private is said to be the ruble equivalent of about
Building-block The other approach is independent
fied by the analysts as the most imprecise element
$6 per month not including upkeep).
of the Soviet announced budgets except in the valua-
in the estimates. Research outlays cannot be estimated
Estimates of manpower costs presumably depend
tion of research expenditures. This method breaks
from observable physical quantities. Instead they
on the determination of numbers in the total force,
down military expenditures into. physical quantities
appear to be derived in large part through an analysis
the table of organization, and the pay scales used.
(manpower, equipment, construction), and. operating
of Soviet information on expenditures for science.
The record is not clear on all these points. For 1978
costs and research. Each major component is com-
While no direct reference to the basis for the cal-
CIA estimated manpower at 4.2 million, IISS (the
posed of many individual elements which are sepa-
rately assigned monetary values. Considering the
culations seems to have been made recently, analysts
source used in this report) at 3.6 million. The higher
thousands of elements which must be identified and
indicated in 1974 testimony that a major share of
CIA figure may result from a definitional difference,
also valued, it is evident that this is an extraordinarily
the Soviet science budget was assumed to be military.
possibly from the CIA inclusion of civilians in uni-
complex procedure, feasible only through a vast ex-
form or of border guards. (ISS has a separate cate-
CIA stated in 1978 testimony with "high confi-
gory for paramilitary forces.) It could also result
dence" that the Soviet military RDT&E effort is
from higher assumptions of the actual complement
"large and growing". The estimated increase in this
of Soviet divisions. CIA does state that it takes ac-
component in the 1970's has been the predominant
count of the evidence that a good many Soviet divi-
1. Unless specific references are noted. the summary
factor (along with procurement and maintenance of
sions are not at full strength, but certainty in this
of CIA methodology is drawn from the public record
hardware) pushing the overall expenditure total high-
case may be difficult to establish. and the tendency
in the annual hearings of the Joint Economic Com-
er (ref. 6). It is the fastest growing of the major
would be to assume full complement where it is un-
mittee of the US Congress (#5. page 40).
components (ref. 8).
known.
38
World Military and Social Expenditures 1982
MILITARY EXPENDITURES OF THE
National economies tend to use relatively more of
were moved forward using the US price change in the
MAJOR ALLIANCES, 1979-
that factor of production in which they have a cost
implicit GNP deflator. At present, the World Bank
FOUR WESTERN
advantage. If, for example, labor is cheap relative
has this methodology under review, and may make
to capital, more labor is used. If that labor is valued
some revisions in it.
billion dollars
at prices in effect in an economy where labor costs
Warsaw Pact
NATO
are high, however, it becomes an extremely expensive
The World Bank method assigns a substantially
item. This is the basis of the distortion which occurs
lower value to the ruble than that implicit in the pur-
USSR
Other
Total
US
Other
Total
when all elements of the Soviet military effort are
chasing power estimate of the intelligence calcula-
US Govt.¹
181.4
29.3
210.7
122.3
90.2
212.5
given dollar price tags. To offset this distortion, the
tions, and somewhat lower than the purchasing power
IISS2
na
13.6
na
114.5
88.6
203.1
usual procedure would be to calculate expenditures
estimate previously used in this publication. In adopt-
SIPRI³
115.2
12.0
127.2
122.3
96.3
218.6
in the prices of both nations and to take a geometric
ing an exchange rate conversion in place of purchas-
WMSE
114.0
13.5
127.5
122.3
95.8
218.1
mean of the dollar and ruble estimates. This is not
ing power, we are following the procedure used for
done in the CIA calculations. For a review of the
other countries.
'US Arms Control and Disarmament Agency.
"index number effect", see ref. 4.
2International Institute for Strategic Studies.
In view of the uncertain value of the ruble as com-
3Stockholm International Peace Research Institute.
In this limited space it is not possible to summarize
pared with normally traded currencies, any estimate
4This publication, Table II.
the problems and results in detail, or the alternative
of its exchange value at this point must be judg-
method of valuing expenditures in dollars. Two ex-
mental. Further observation may suggest that it
amples of the distortions implicit in the dollar valua-
should be assigned a higher value against the dollar
tions are given below.
which of course would raise the dollar estimate.
In addition to the numbers involved. there are un-
In arriving at the dollar valuation of Soviet man-
On the other hand, further review of the CIA cal-
knowns relating to the operational use of Soviet
power, CIA breaks down the Soviet force into ranks
culations, by intelligence or other specialists, are
forces for which adjustments may be especially diffi-
and skill components, applying a dollar-cost factor to
quite likely to yield a lower, and we think, a more
cult. The Soviet draft provides a work force at the
each skill level. The average pay for the Soviet force
realistic value of Soviet military expenditures in
command of the state. For example, recruits are used
in the dollar calculations comes to about $12, 500 per
rubles.
for agricultural work during the harvest period. The
man, according to CIA statements in 1980. The very
CIA analysts report that they cannot separate out the
large Soviet army, bought at low cost in rubles,
portion of time the forces are used in essentially
accounts for about $50 billion when priced at US
civilian work. In other words, Soviet forces are valued
pay scales. Statements about the 1977 estimates indi-
Other Warsaw Pact
as though fully employed in military functions
cated that personnel costs then were 14 percent of
WMSE approach-The estimates of military expendi-
throughout the year.
total spending in rubles, and 36 percent when cal-
Whether adequate cost adjustment can be made
culated in dollars.
tures in the centrally planned economies of Eastern
Europe that are members of the Warsaw Pact are
for relatively low operational use of equipment and
The CIA method allows for a difference in com-
based on estimates in national currencies by Dr. Thad
lower levels of readiness than in the US is also a
position of US and USSR forces, but it is not at
Alton and associates (ref. 7). In the Alton estimates,
question. Officials have at various times referred to
all clear that it adequately covers differences in qual-
some adjustments are made in the official national
these factors, stating that only one-sixth of Soviet
ity, i.e. the technical qualifications of the force and
figures to conform more closely to US definitions
navy ships are deployed at sea (US one-third): Soviet
the equipment available to them. Approximately
of defense. In converting to dollars, the WMSE
strategic subs operate 11 percent; of the time (US 50
three-fourths of Soviet manpower are short-term
method again uses the rates implicit in the
percent): pilots with the Soviet air force in Europe fly
conscripts. Many draftees are unacquainted with the
World Bank's calculation of GNP.
roughly one-third as much as American pilots: only
operation of even simple motorized equipment. In
part of the Soviet ICBM force is kept at peak readi-
contrast, the US has a volunteer, career force, subject
While there appear to be some differences in fac-
ness.
to intensive on-the-job training during their years of
tors used, this in general is also the approach adopted
While CIA reports that they do make allowances
service. Lower readiness standards in the USSR also
by IISS and SIPRI. The total dollar figures for these
for these differences, in operating practice, the prob-
reduce training effectiveness, eg. the Soviet air force
countries are in fairly close agreement.
lems illustrate the inadequacy of number comparisons
has relatively less flying time, the army less front-of-
and complexity of the cost-estimating process even in
the-line equipment for training.
Official US approach-T method used in the offi-
an area where there is a fair degree of direct
cial US report of military expenditures in the "other
knowledge.
The quality differential is also significant in the
WP countries" differs from the above in an important
dollar pricing of Soviet equipment. In the CIA ruble
respect: the conversion to dollars calculates military
calculation, some ruble values can be established di-
forces separately at equivalent US pay scales. The
Soviet expenditures in dollars
rectly. Dollar valuations, however, are based on US
procedure may be summarized briefly as follows: a)
industry's estimates of production costs of samples of
the personnel component of military expenditures is
Basis of estimates
Soviet equipment, or on US analogs, which overall
separately estimated in national currencies; b) armed
are more sophisticated than the Soviet inventory.
forces (regular and paramilitary) in those countries
The adjustments made for quality are subjective
are then priced in dollars at US pay rates; c) the
The dollar equivalent of the Soviet military effort
judgments and, as recognized by CIA, will have a
remainder of the budget is converted to dollars at
tendency to overstate Soviet costs.
is now usually determined through one of two basic
the purchasing power equivalent rate implicit in the
GNP calculations.
approaches.
The agencies preparing the estimates are, of course,
Converting aggregates-Military expenditures in
aware of the methodological bias inherent in the
The results of this method appear in the ACDA
rubles are converted to dollars using the total, or
dollar calculations. In their testimony in 1979, for
annual report, where they produce military expendi-
broad categories, of expenditures, with appropriate
example, they noted that their "dollar comparisons of
tures for the "other WP countries" roughly double
exchange rates. This is the approach now used in
US and Soviet defense activities do have a potential
the overall estimates of the other sources.
this study. It makes possible the comparison of the
bias favoring [i.e., exaggerating] the Soviets, resulting
military "burden" relative to GNP and other na-
from the index number problem". Despite it, they
The special personnel adjustment made in the of-
express a relatively high degree of confidence in the
ficial US estimate of military expenditures for the
tional budgets. and also rough comparisons among
results. In the overall cost estimate, they have usually
"other WP countries" affects comparisons between
countries.
described the possible margin of error as plus or
the WP and other countries. There is no indi-
Pricing elements-The alternative method, which is
minus 15 percent. In the 1979 testimony they re-
cation on the record that this adjustment is made for
used by CIA, constructs the dollar value of Soviet
duced this to plus or minus 10 percent for the
any other country in the world. If it were done world-
military expenditures through a building-block ap-
current period.
wide, it would sharply increase the US Government
proach which parallels that described above for the
estimates of military expenditures in other countries.
ruble calculation. In this case every element of the
Professor Holzman's review of the method suggests
Testimony in 1978 indicates that pricing of other
Soviet military force is valued at the price that it
that because of possible tendencies to worst-case
NATO forces at US pay scales would raise the total
would have if purchased in the US. The objective is
not to establish the basis for international comparison
analysis in exercises like this, the range of error in
dollar equivalents of military expenditures for those
but to produce a summary indicator of the value of
the US-USSR dollar comparisons is likely to be
countries by 22 percent.
the Soviet military effort in US terms.
relatively smaller on the low side and much larger
on the high side.
To attempt alternatives to the elaborate official
calculations of WP military expenditures is perhaps
even more simplistic and risky than to attempt an
abbreviated description of the problems. We recog-
Implications of CIA methodology
WMSE calculations
nize that the results shown in this publication are not
the final answer. Yet somewhere between the up-
Soviet Union
wardly biased official US estimate of $211 billion and
At first glance the product of the CIA approach
the unrealistically low fraction of that which seems
seems to meet the requirement for a simple binary
match-up: the total of the Soviet military effort, ex-
The CIA ruble estimate is the basis of the dollar
to be the official WP version, there must be a reason-
pressed in US costs, appears to have been made com-
valuation in this publication. For the reasons stated
able estimate.
parable with total US military expenditures. In fact,
above, it appears to have an upward bias, with the net
as we have tried to show, the method of calculation
effect of substantially exaggerating Soviet military ex-
At present our approach suggests that military ex-
is not only based on an extremely fragile structure of
penditures.
penditures of the WP countries in 1979 were in total
about $83 billion lower than the US Government
evidence but also has built into it an upward bias be-
The CIA ruble estimate is converted to dollars, in
cause of the worst-case assumptions applied to
estimates. Rather than being equal to the NATO
the WMSE method, through exchange rates which
unknowns in the estimating process.
expenditures. this would make them lower by 40
the World Bank has been using for calculations of
percent. A gap like that could make quite a dif-
GNP. These rates, tentatively adopted by the Bank
In the CIA dollar calculation, the problems noted
in 1979, are the noncommercial (tourist) rates for
ference in NATO's planning for a continually rising
above for the ruble estimate are amplified because
military effort against the competition-and
the ruble and other Eastern European currencies;
all components are priced in dollars.
save taxpayers a whale of a lot of money.
values established for 1970, the benchmark year,
References-see page 40.
World Military and Social Expenditures 1982
39
RANKING OF COUNTRIES. MILITARY AND SOCIAL INDICATORS
142 Countries, 1980
TABLE III
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic-
Public
School-Age
% School-Age
% Women in
Expenditures
Expenditures
Expenditures
Social
Expenditures
Population
Population
Total University
Literacy
per Capita
per Soldier¹
per Sq. Km.
Standing2
per Capita
per Capita
per Teacher3
in School
Enrollment
Rate
Rank
US$
Rank
US$
Rank
US$
Avg. Rank
Rank
US$
Rank
US$
Rank.
Number
Rank
Number
Rank
%
Rank
%
WORLD
122
22,032
4,123
2,619
130
45
54
40
70
Developed*
403
44,668
7,897
8,477
448
25
69
44
99
Developing
34
7,737
1,504
794
31
54
51
34
59
AMERICA
North America
590
69,834
7,688
11,233
591
22
84
49
99
United States*
8
632
8
70,231
26
15,377
9
16
11,347
16
571
7
22
1
85
12
49
1
99
Canada*
25
195
6.
59,519
90
471
11
19
10,159
8
784
17
24
8
72
12
49
22
98
Latin America
25
7,514
451
2,172
75
45
58
37
80
Argentina
61
58
50
11,629
84
588
37
37
4,361
40
157
28
28
48
61
32
42
34
93
Barbados
71
36
70
9,000
19
22,500
33
48
3,301
30
233
21
26
5
76
52
39
22
98
Bolivia
84
19
111
4,417
123
96
84
76
1,071
79
38
45
36
81
55
76
30
78
63
Brazil
97
13
95
5,678
113
182
62
57
2,002
69
63
63
45
87
53
55
38
62
76
Chile
36
132
40
16,545
64
1,923
49
51
2,506
50
113
57
43
8
72
45
40
37
92
Colombia
102
12
109
4,576
104
265
68
70
1,251
91
24
72
49
73
57
55
38
16
86
Costa Rica
-
-
-
52
58
1,923
47
117
67
46
81
55
55
38
34
93
Cuba
40
114
09
5,340
34
9,565
35
60
1,864
39
162
10
23
24
68
20
46
27
95
Dominican Rep.
84
19
14
5,684
50
2,204
69
72
1,175
91
24
96
72
66
58
40
41
64
74
Ecuador
5
26
:00
5,333
81
732
63
66
1,358
76
49
69
47
53
60
62
36
57
81
El Salvador
104
11
76
7,714
55
2,571
88
92
725
84
29
113
97
99
47
3,
27
74
65
Guatemala
94
14
67
6,313
76
927
86
75
1,096
95
21
112
95
120
33
86
27
90
50
Guyana
78
24
120
2,857
124
93
69
95
680
72
59
54
42
48
61
82
29
39
90
Haiti
126
4
121
2,750
79
786
119
124
266
130
4
118
114
119
34
92
29
:8
29
Honduras
102
12
113
4,091
93
402
94
96
633
97
20
101
76
98
48
59
37
31
60
Jamaica
111
9
104
5,000
57
1,818
56
77
1,069
63
76
63
45
31
66
26
44
10
89
Mexico
104
11
81
7,065
95
383
60
50
2,590
60
78
53
45
20
69
76
30
55
83
Nicaragua
73
28
17
14,000
86
538
81
87
837
86
26
25
68
85
54
66
35
71
66
Panama
111
9
128
1,636
'06
237
48
61
1,666
59
87
48
38
24
68
5
54
19
85
Paraguay
81
21
112
4,313
116
170
66
67
1,346
102
18
62
44
87
53
28
43
46
86
Peru
75
26
106
4,760
98
356
73
78
1,056
99
19
78
54
31
66
70
32
58
80
Trinidad & Tobago
04
14
42
16,000
50
3,200
44
32
5,268
38
170
76
51
81
55
62
36
27
95
Uruguay
49
90
72
8,667
TO
1,477
41,
46
3,398
60
78
42
35
60
59
6
53
3:
94
Venezuela
66
46
37
18,875
78
828
50
43
3,726
33
188
57
43
73
57
45
40
56
82
EUROPE
NATO Europe
330
38,921
37,292
8,939
458
27
63
40
94
Belgium*
16
402
19
44,989
5
127,710
13
12,023
9
732
17
24
42
63
59
37
99
Denmark*
20
314
10
46,000
14
37,442
10
12,504
6
868
3
19
16
70
32
42
99
France*
0
492
13
53,467
13
48,384
12
12,156
13
599
10
23
24
68
12
49
99
Germany, West*
14
434
12
54,018
7
107,382
6
8
13,399
12
616
21
26
34
65
62
36
i
99
Greece
24
236
51
12,522
25
17,265
32
36
4,384
54
101
40
34
24
68
40
41
42
88
Iceland*
-
-
14
12,009
19
500
7
22
8
72
66
35
99
Italy*
28
171
30
26,224
16
31,887
21
27
7,012
27
321
10
23
60
59
32
42
27
95
Luxembourg*
33
143
14
52,000
24
17,333
15
5
14,297
5
920
17
24
66
58
32
42
22
98
Netherlands*
17
373
17
45,887
4
128,707
13
15
11,399
4
947
35
31
43
62
76
30
1
99
Norway*
15
409
13
45,135
44
5,154
9
13,357
2
1,197
5
20
16
70
45
40
99
Portugal
51
87
44
14,400
35
9,391
39
52
2,393
56
91
31
30
8
72
20
46
58
80
Turkey
62
55
110
4,450
49
3,230
:80
68
1,327
81
35
85
56
99
47
86
27
7-1
65
United Kingdom*
11
478
5
81,386
6
109,738
14
22
9,213
20
494
10
23
4
77
59
37
99
ALL NATO
(incl. US & Canada)
443
52,355
11,538
9,937
516
25
72
46
96
Warsaw Pact
391
30,793
6,271
4,614
214
28
59
49
99
Bulgaria*
35
133
7.1
7,919
31
10,631
39
4,219
36
176
36
32
73
57
6
53
31
94
Czechoslovakia*
27
180
45
14,103
21
21,484
27
28
5,821
35
182
42
35
60
59
40
41
99
Germany, East*
18
360
23
37,160
9
55,741
19
21
7,226
28
304
42
35
43
62
17
47
99
Hungary*
44
103
53
11,828
29
11,828
28
40
4,200
32
201
21
26
60
59
17
47
:
99
Poland*
38
121
49
13,522
27
13,738
34
41
3,929
41
135
47
37
81
55
9
50
:
99
Romania*
60
61
77
7,337
42
5,672
35
42
3,851
47
117
37
33
43
62
28
43
22
98
USSR*
10
490
26
35,490
41
5,803
25
34
4,564
31
231
21
26
60
59
9
50
1
99
36
World Military and Social Expenditures 1983
CHART 21
method of calculation is not only based on an extremely
fragile structure of evidence but also has built into it an
tentatively adopted by the Bank in 1979, are the noncom-
Military Expenditures of the Major
upward bias because of the worst-case assumptions ap-
mercial (tourist) rates for the ruble and other Eastern
Alliances, 1980 Four Views
plied to unknowns in the estimating process.
European currencies; values established for 1970, the
billion dollars
benchmark year, were moved forward using the US price
In the CIA dollar calculation, the problems noted above
change in the implicit GNP deflator. At present, the World
for the ruble estimate are amplified because all compo-
Bank has this methodology under review, and may make
USSR
USA
nents are priced in dollars.
some revisions in it.
Other Warsaw Pact
Other NATO
National economies tend to use relatively more of that
factor of production in which they have a cost advantage.
The World Bank method assigns a substantially lower
If, for example, labor is cheap relative to capital, more
value to the ruble than that implicit in the purchasing
labor is used. If that labor is valued at prices in effect in an
power estimate of the intelligence calculations, and some-
economy where labor costs are high, however, it becomes
what lower than the purchasing power estimate previously
200
an extremely expensive item. This is the basis of the
used in the publication. In adopting an exchange rate con-
distortion which occurs when all elements of the Soviet
version in place of purchasing power, we are following the
procedure used for other countries.
military effort are given dollar price tags. To offset this
distortion, the usual procedure would be to calculate ex-
In view of the uncertain value of the ruble as compared
penditures in the prices of both nations and to take a geo-
with normally traded currencies, any estimate of its ex-
metric mean of the dollar and ruble estimates. This is not
change value at this point must be judgemental. Father ob-
100
done in the CIA calculations. For a review of the "index
servation may suggest that it should be assigned a higher
number effect," see ref. 4.
value against the dollar-which of course would raise the
In this limited space it is not possible to summarize the
dollar estimate.
problems and results in detail, or the alternative method
USSR
n.a.
of valuing expenditures in dollars. Two examples of the
On the other hand, further review of the CIA calcula-
distortions low. implicit in the dollar valuations are given be-
tions, by intelligence or other expecialists, are quite likely
to yield a lower, and we think, a more realistic value of So-
0
US
Govt.
WMSE3
liss
viet military expenditures in rubles.
SIPAR
WMSE3
IISSA
In arriving at the dollar valuation of Soviet manpower.
'US Arms Control and Disarmament Agency.
CIA breaks down the Soviet force into ranks and skill
2Stockholm International Peace Research Institute.
This publication. Table II
components, applying a dollar-cost factor to each skill
Other Warsaw Pact
International Institute for Strategic Studies
level. The average pay for the Soviet force in the dollar
calculations comes to about $12,500 per man, according
WMSE approach-The estimates of military expendi-
which adjustments may be especially difficult. The Soviet
to CIA statements in 1980. The very large Soviet army,
tures in the centrally planned economies of Eastern Eu-
bought at low cost in rubles, accounts for about $50 billion
draft provides a work force at the command of the state.
rope that are members of the Warsaw Pact (WP) are based
when priced at US pay scales. Statements about the 1977
For example. recruits are used for agricultural work dur-
on estimates in national currencies by Dr. Thad Alton and
ing the harvest period. The CIA analysts report that they
estimates indicated that personnel costs then were 14 per-
associates (ref. 7). In the Alton estimates, some adjust-
cent of total spending in rubles, and 36 percent when cal-
cannot separate out the portion of time the forces are used
culated in dollars.
ments are made in the official national figures to conform
in essentially civilian work. In other words, Soviet forces
more closely to US definitions of defense. In converting to
are valued as though fully employed in military functions
The CIA method allows for a difference in composition
dollars, the WMSE method again uses the rates implicit in
throughout the year.
of US and USSR forces, but it is not at all clear that it ade-
the World Bank's calculation of GNP.
Whether adequate cost adjustment can be made for rela-
quately covers differences in quality, i.e. the technical
tively low operational use of equipment and lower levels
qualifications of the force and the equipment available to
While there appear to be some differences in factors
of readiness than in the US is also a question. Officials
them. Approximately three-fourths of Soviet manpower
used, this in general is also the approach adopted by IISS
have at various times referred to these factors, stating that
are short-term conscripts. Many draftees are unaquainted
and SIPRI. The total dollar figures for these countries are
with the operation of even simple motorized equipment.
in reasonably close agreement (chart 21).
only one-sixth of Soviet navy ships are deployed at sea
(US one-third); Soviet strategic subs operate 11 percent; of
In contrast, the US has a volunteer, career force, subject to
Official US approach-The method used in the official
the time (US 50 percent); pilots with the Soviet air force in
intensive on-the-job training during their years of service.
US report of military expenditures in the "other WP
Lower readiness standards in the USSR also reduce train-
Europe fly roughly one-third as much as American pilots:
countries" differs from the above in an important respect:
only part of the Soviet ICBM force is kept at peak readi-
ing effectiveness, e.g. the Soviet air force has relatively
less flying time, the army less front-of-the-line equipment
the conversion to dollars calculates military forces sepa-
ness.
for training.
rately at equivalent US pay scales. The procedure may be
summarized briefly as follows: a) the personnel compo-
While CIA reports that they do make allowances for
The quality differential is also significant in the dollar
nent of military expenditures is separately estimated in
these differences in operating practices, the problems il-
pricing of Soviet equipment. In the CIA ruble calculation,
national currencies; b) armed forces (regular and paramil-
lustrate the inadequacy of number comparisons and the
complexity of the estimating process even in an area
some ruble values can be established directly. Dollar valu-
itary) in those countries are the priced in dollars at US pay
ations, however, are based on US industry's estimates of
rates; c) the remainder of the budget is converted to dollars
where there is a fair degree of direct knowledge.
production costs of samples of Soviet equipment, or on US
at the purchasing power equivalent rate implicit in the
analogs, which overall are more sophisticated than the
GNP calculations.
Soviet inventory. The adjustments made for quality are
Soviet expenditures in dollars
subjective judgments and, as recognized by CIA, will
The results of this method appears in the ACDA annual
have a tendency to overstate Soviet costs.
report, where they produce military expenditures for the
Basis of estimates
"other WP countries" roughly double the overall esti-
The agencies preparing the estimates are, of course,
mates of the other sources.
aware of the methodological bias inherent in the dollar
The dollar equivalent of the Soviet military effort is
calculations. In their testimony in 1979, for example, they
The special personnel adjustment made in the official
now usually determined through one of two basic ap-
noted that their "dollar comparisons of US and Soviet de-
US estimate of military expenditures for the "other WP
proaches.
fense activities do have a potential bias favoring [i.e.,
countries" affects comparisons between the WP and other
exaggerating] the Soviets, resulting from the index num-
countries. There is no indication on the record that this ad-
Converting aggregates-Military expenditures in ru-
ber problem." Despite it, they express a relatively high de-
justment is made for any other country in the world. If it
bles are converted to dollars using the total, or broad cate-
gree of confidence in the results. For the overall estimate,
were done worldwide, it would sharply increase the US
gories, of expenditures, with appropriate exchange rates.
they have usually described the possible margin of error as
Government estimates of military expenditures in other
This is the approach now used in this study. It makes possi-
plus or minus 15 percent. In 1982 testimony they said
countries, including its NATO allies. Testimony in 1978
ble the comparison of the military "burden" relative to
"our estimates are unlikely to be in error by more than 10
indicates that pricing of other NATO forces at US pay
GNP and other national budgets, and also rough compari-
percent for each year" (ref. 5).
scales would raise the total dollar equivalents of military
sons among countries.
Professor Holzman's review of the method suggests
expenditures for those countries by 22 percent.
Pricing elements-The alternative method, which is
that because of possible tendencies to worst-case analysis
used by CIA, constructs the dollar value of Soviet mili-
in exercises like this, the range of error in the US-USSR
To attempt alternatives to the elaborate official calcula-
tary expenditures through a building-block approach
dollar comparisons is likly to be relatively smaller on the
tions of WIP military expenditures is perhaps even more
which parallels that described above for the ruble calcula-
low side and much larger on the high side.
simplistic and risky than to attempt an abbreviated de-
tion. In this case every element of the Soviet military
scription of the problems. We recognize that the results
force is valued at the price that it would have if purchased
shown in the publication are not the final answer. Yet
in the US. The objective is not to establish the basis for in-
somewhere between the upwardly biased official US esti-
ternational comparison but to produce a summary indica-
WMSE calculations
mate of $241 billion and the unrealistically low fraction of
tor of the value of the Soviet military effort in US terms.
that which seems to be the official WP version, there must
be a reasonable estimate.
Soviet Union
At present our approach suggests that military expendi-
Implications of CIA methodology
The CIA ruble estimate is the basis of the dollar valua-
tures of the WP countries in 1980 were in total about $94
tion in this publication. For the reasons stated above, it ap-
billion lower than the US Government estimates. Rather
At first glance the product of the CIA approach seems to
pears to have an upward bias, with the net effect of sub-
than being equal to the NSTO expenditures, this would
meet the requirement for a simple binary match-up: the
stantially exaggerating Soviet military expenditures.
make them lower by 40 percent. A gap like that could
total of the Soviet military effort, expressed in US costs,
appears to have been made comparable with total US mili-
The CIA ruble estimate is converted to dollars, in the
make quite a difference in NATO's planning for a contin-
WMSE method, through exchange rates which the World
ually rising military effort against the competition-and
tary expenditures. In fact, as we have tried to show, the
Bank has been using for calculations of GNP. These rates,
save taxpayers a whale of a lot of money.
References-see page 46
World Military and Social Expenditures 1983
45
Estimating Military Expenditures of the USSR
An independent study prepared for the National
Foundation by a specialist in the field ""#" 16111
and its Warsaw Pact Allies
practical difficulties in identifying natury of the
careful analysis of definitional and other problems
viet budgets for science (ref. 1). The below III So. a
cannot be adequately summarized here. IIIII "II of
general points made seem particularly
the
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent calculations
reported science budgets appear to tw Guviet
must be made by western authorities (chart 21-opposite). A review of the estimates made by official US sources indi-
flated compared with US concepts and 111 In the 111-
cates that they tend to exaggerate Soviet military expenditures. The result is a stimulus to the arms race.
much, Soviet military R&D is included III 1111 hire
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a relatively simple
get is still an unresolved issue.
111
111111-
step: make public its military budget in the detail proposed by the United Nations for all countries. At a small sacrifice of
From this, one could conclude that
secrecy, it could thereby provide the kind of reassurance on which mutual trust between nations and arms restraint depend.
science is still a largely mysterious area II unitily for
provide the only basis for the CIA estimate of 11)
The usual statistical note on Soviet military expendi-
elements which are separately assigned monetary values.
dent penditures estimates of military of level R&D, trend but it as clearly a formation were
or
tures was expanded in WMSE 1980 to give an overview of
Considering the thousands of elements which must be
nesses.
york-
the range of western estimates and a more detailed evalua-
identified and also valued, it is evident that this is an
tion of the official US estimates. The summary is repeated
extraordinarily complex procedure, feasible only through
in this edition, with some revisions based on CIA testi-
a vast expenditure of effort on surveillance, data collec-
construction is the part of the estimate In "his ###### and
Investment-The component covering 1400
mony made available in the past year. Given the limita-
tion, and analysis. So far, only US intelligence agencies
tions of space and time, this is necessarily a cursory exam-
have the arsenal of electronic and other resources required
because the a
state they have the a a
ination of a very complex subject. Hopefully it will
for calculations of this detail and scope.
provide some encouragement to others to explore fur-
part, be observed, and at least some of the while III large
The building-block approach is used by CIA to produce
(e.g. civilian products bought by the millial CS
ther.*
annual estimates of Soviet military expenditures in both
termined from Soviet price lists. Others may In. " In. de-
Soviet military expenditures warrant special attention
ruble values and dollars. The dollar figure is of principal
clandestinely. In theory at least there is Pend obtained
for several reasons:
public interest (since it is used for comparison with US ex-
formation in this area. Keeping it accurate and hant
in-
1. As a summary of the Soviet military effort and
penditures), but it is the CIA ruble estimate which this
is quite another problem, as evidem of by In date
trend, they affect US and all NATO planning, the willing-
study uses for its calculation of Soviet military expendi-
ness of public officials to spend more to meet the competi-
tures. Working from the ruble estimate makes it possible
rubles were now estimated to be twice 1
nouncement in 1976 that Soviet military
tion, and of taxpayers to bear the burden.
to follow the same procedure for conversion to dollars
which is used for other countries in this worldwide report
than CIA had calculated.
ously thought, because the ruble prices Paid *** 4" higher IIIIVI-
2. Unlike other major industrial powers, the Soviet
and for GNP and other budget expenditures. It also avoids
Even assuming comparatively solid
Union fails to provide detail on its military budget, or
some but far from all of the exaggerating effects of the
some areas, there are others which must in
even to describe what expenditures are covered. It an-
CIA calculation in dollars; these will be discussed below.
nounces a single undefined figure each year, which sel-
judgment of guesswork, for example: the Polity "
In using the CIA ruble estimate for the purpose, how-
ment which is not obtainable or visible by "prip-
dom changes. Since 1970 the budget has dropped about 4
percent, from 17.9 to 17.1 billion rubles.
ever, we do so with reservations. This is not to question
observation; the range of efficiency and Had within other
either the competence of the analysts, who are highly re-
industry; and the amount of overhaul of uhl Inviet
3. The Soviet announced budget is clearly incomplete
spected professionals, nor the careful assembly of a mas-
practice which some analysts consider Inity a
in view of the advanced military technology and the size
sive amount of information. The gaps in knowledge and
the Soviet Union.
in
of the military force the USSR has produced.
the need for subjective judgment are still formidable. The
In addition, a significant source of
4. The ruble is almost exclusively a domestic currency
numerious uncertainties which invite "worst-case" inter-
arise in valuing equipment for which
"tor
and official rates of exchange reflect neither the relation
pretation and the methodology of the calculations to-
available. The estimating process then 1.4 are
between internal prices and foreign prices, nor balance of
gether tend to produce an upward bias in the ruble as well
payments forces.
as in the dollar estimate. Even though we cannot remove
shaky indeed. For many of the procunt """n" 11, very
this bias, or determine precisely how much it may exag-
must use US analogs. Values in US equivation 1110 CIA
5. Between the official Soviet military budget, con-
gerate the total, identifying some of the factors which ap-
established, then converted to rubles via Il "mail are
verted to dollars at the official rate, and the official US
pear to produce it may help to indicate the scope of the
dollar-ruble ratios (about I ruble price In - "Tuple of
view of that budget, there was a gap of $182 billion in
problem.
equipment must become a major headar In. in like. US
prices). Assessing quality as company "1th dollar
1980, a disparity which was larger than the total US mili-
made more difficult by the fact that the use.
tary budget that year.
rule lags behind the US, and the 05 a
6. Between the official US estimate of Soviet military
more simplified.
In
be
expenditure, and the estimate in this study, the gap was
Components of CIA estimate
$77 billion in 1980, Although we continue to use the CIA
For example, CIA testimony mentions Into
ruble estimate for the calculation.
zation in computers as one area in who " He. manimisturi-
In ruble values, CIA calculates Soviet military expend-
far behind US technology. The question to are
In the discussion following, the principal focus is on the
itures (in 1970 prices) at almost four times the budget of
17.1 billion rubles which the USSR announced for 1980.
analysts can determine the lesser dollar Value. of 'I cittutely
calculations by US intelligence agencies which establish
the official US view of Soviet military expenditures.
While the public record does not show how the 1980 fig-
which of does not have built and into it the accurer "nt "*"pon
Since this publication also has dollar estimates for other
ure breaks down into all of the components, averages for
counterpart.
ity remote command control equipationt 11, gubil- 114
US
Warsaw Pact countries lower than the US official esti-
the period since 1965 will give some clue to the relative
mates, the basis for the alternatives will be described as
importance of the major categories. The estimate of So-
Although CIA analysts report that the its, mules.
well.
viet expenditures in rubles in that period was composed as
follows (ref. 8):
ical and performance qualities, they In the phys-
fort to adjust the cost basis of Soviet equipment the of-
-roughly one-fifth for research, development, test and
to overstate the costs of producing lend
where their knowledge is that
evaluation (RDT&E);
Soviet expenditures in rubles
-one-half for investment (procurement of equipment and
level of reliability than procurement, 15 1411.11 " "
Operating costs-Manpower, although
construction);
lower
Basis of estimates
-almost one-third for operating (60 percent of that for
personnel).
to be the most reliable element in the calimated by CIA
operating costs. It is also a relatively small 111 Seviet
In the absence of adequate reporting by the Soviet
What does the record say about some of the measure-
overall estimate of ruble outlays. While 1911 of the
Union, western analysts have generally resorted to one of
ment problems associated with each of these components?
very large, this is a draft army and nible Inn by are
two basic approaches to an estimate of Soviet military ex-
low. (The pay for a private is said to be 1114 199 "why are
penditures in rubles.
lent of about $6 per month not including infib Hild. Hquiva-
Add-on or residual-One approach bases estimates on
Research-This category of expenditures is identified by
the analysts as the most imprecise element in the esti-
Estimates of manpower costs presumable
official Soviet statistics, either adding presumably miss-
mates. Research outlays cannot be estimated from observ-
determination of numbers in the total 11111.2 the
ing elements to the announced defense budget or, by a re-
able physical quantities. Instead they appear to be derived
organization, and the pay scales used 11am III. table of
sidual method, deriving implicit military expenditures
from the published Soviet statistics.
in large part from Soviet aggregate statistical data-and
clear on all these points. For 1978 CIA 11.1 14 not
converted from rubles into dollars with a ratio (ref. 9).
power of 4.2 million, IISS (the source In man-
Building-block-The other approach is independent of
definitional difference, possibly from 111a / """h 110mm a
at 3.6 million. The higher CIA figure may the "port)
While not direct reference to the specific sources for the
the Soviet announced budgets except in the valuation of
calculations appears to have been made recently, analysts
research expenditures. This method breaks down military
of civilians in uniform or of border guard. 11n. in Inclusion
in 1974 testimony referred to the state budget for science
expenditures into physical quantities (manpower, equip-
and indicated that space and military R & D took up most
excludes some 560,000 border guards, internal 1144 total
ment, construction), and operating costs and research.
of the allocation for science.
railroad and construction troops. It could w/nes "**urity.
Each major component is composed of many individual
higher assumptions of the actual complement 111 from
CIA stated in 1978 testimony with "high confidence"
visions. CIA does state that it takes havel di-
that the Soviet military RDT&E effort is "large and grow-
dence that a good many Soviet divisions "th of the evi-
ing." The estimated increase in this component in the
strength but certainty in this case may In 1111111 Ind III full
*Unless specific references are noted, the summary of CIA
1970's was the predominant factor (along with procure-
tablish and the tendency would be to assession full 11/1 to es-
methodology is drawn from the public record in the annual
ment and maintenance of hardware) pushing the overall
ment where it is unknown.
imple-
hearings of the Joint Economic Committee of the US Con-
expenditure total higher (ref. 6). It is regarded as the fast-
In addition to the numbers involved
gress (#5, page 46).
est growing of the major components (ref. 8).
knowns relating to the operational " then Inn ⑉⑈ un-
for
44
World Military and Social Expenditures 1983
COUNTRIES. MILITARY AND SOCIAL INDICATORS
142 Countries, 1982
TABLE III
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic-
Public
School-Age
Expenditures
Expenditures
% School-Age
% Women in
Expenditures
Social
Expenditures
per Soldier¹
Population
per Capita
Population
per Sq. Km.
Standing²
Total University
Literacy
per Capita
per Capita
per Teacher3
In School
Enrollment
Rate4
'ank
US $
Bank
US $
Bank
US $
Rank US $
Rank
US
$
Rank Number
Bank
%
Rine
%
Bank %
WORLD
147
26,373
5,074
2,789
140
Developed
45
53
487
52,141
41
9,665
71
9,227
495
Developing
25
43
68
46
9,808
1,934
99
827
32
53
50
35
60
AMERICA
North America
788
88,742
10,476
12,980
710
United States
23
845
77
89,228
50
-3
20,975
99
4
C 13,160
:
686
Canada
is
23
252
77
75,707
50
622
:
99
7
15 11,330
-
936
is
23
79
51
98
Latin America
31
9,054
576
2,170
96
Argentina
42
72
60
11,783
42
5
766
44
81
43 3,060
19
113
Barbados
C3
27
.a
32
62
8,000
43
:5
20,000
30
94
..|
3,840
39
Bolivia
216
'9
24
18
81
3,741
48
_E
92
89
98
82
940
03
Brazil,
34
58
39
20
57
9,436
30
303
68
56
55 2,140
CO
Chile
93
64
42
100
57
11,186
":
49
1,433
76
50
:4 2,210
:6
129
88
43
2
71
39
94
Colombia
18
7,441
3
444
68
10
1,380
31
41
Costa Rica
73
53
50
44
64
86
73 1,080
72
Cuba
63
31
55
.1
111
50
8,516
,7
38
9,478
39
93
76 1,180
40
174
Dominican Rep
9
22
17
.5
66
4,417
52
51
2,163
80
95
73 1,260
95
Ecuador
26
33
66
28
60
5,795
:-
41
796
61
74
16
1,570
56
78
49
36
71
36
82
El Salvador.
31
5,800
in
6,905
91
-5
760
j4
Guatemala
28
115
94
12
46
4,895
-;
27
853
93
66
77
1,140
18
Guyana
22
10
87
28
12
33
3,143
22
23
102
72
53
&
600
-1
Haiti
56
52
37
i
5
68
3,125
A0
32
893
119
92
22
290
:34
Honduras
3
119
15
101
5,000
38
-
32
536
96
30
5:
660
3
28
18
75
:
50
39
62
Jamaica
20
15,000
-
L.
4,091
51
2 1,300
54
Mexico
85
54
38
14
74
8,317
11
44
506
58
92
Nicaragua
51 2,660
49
113
34
72
42
9,091
70
33
1,538
69
84
-1)
950
Panama
83
38
39
15
61
:
59
2,900
:
377
48
45
88
.5 2,160
52
Paraguay
108
--9
36
21
67
4,500
177
57
74
87
.5 1,670
37
24
70
44
7
52
43
86
Peru
29
3,882
:
411
73
;:
Trinidad & Tobago
1,210
32
40
75
41
48
:
23,000
69
35
9,200
32
82
Uruguay
7 6,840
22
416
35
140
31
13,600
73
03
.2
2,318
40
37
95
Venezuela
.5 3,440
62
86
27
26
...
72
28,342
70
of
1,274
56
48
95
3 4,250
32
276
52
37
:
59
--
40
83
EUROPE
NATO Europe
328
33,293
37,489
Belgium
8,530
448
27
362
32,427
62
.11
115,064
42
12
94
Denmark,
? 10,540
13
653
is
315
24
?
53,800
62
:
37,535
39
2
99
12,330
7
France
851
3
482
20
45,458
71
47,951
43
8
99
Germany, West
.1 11,520
20
462
21
414
25
52,131
5
;
66
102,586
49
10
99
Greece
12 12,280
5
625
21
280
25
.7
:
14,628
63
't.
20,833
38
32
99
9 4,170
41
157
35
31
71
42
90
Iceland
-
-
-
6
Italy
'3 12,140
:8
532
6
180
21
19,665
70
.b
33,777
35
18
99
_3 6,750
Luxembourg
23
413
5
140
21
51,000
60
N
17,000
44
13
95
Netherlands
3 14,260
3
975
353
is
23
:-
47,679
60
136,595
15
40
100
Norway
18 10,780
:
833
31
447
29
..:
44,902
60
->>
5,682
33
1
99
i 14,300
5
926
3
20
13
70
42
100
Portugal
90
10,112
(3)
9,783
38
52
Turkey
2,480
18
116
67
21
25
:
4,216
;
23
65
4,151
50
82
80
1
United Kingdom
1,310
63
38
488
33
56
81,766
5,
48
111,469
30
14
65
.13
9,580
19
525
12
23
76
39
99
ALL NATO
(incl. US and Canada)
529
56,164
13,986
10,480
562
25
69
47
96
Warsaw Pact
492
38,809
7,995
Bulgaria
5,480
258
186
27
...
11,216
60
18
14,955
27
50
99
Czechoslovakia
C6 5,160
36
246
225
30
28
17,653
03
61
31
27,031
29
51
95
Germany, East
32 5,540
C5
254
307
13
35
30,904
:7
60
( )
47,500
24
43
99
Hungary
16 7,010
23
297
125
13
35
:
12,642
29
58
14,565
DE
27
48
99
Poland
C5 5,180
C4
257
121
21
25
je
13,786
62
1
13,962
36
is
48
99
-)
4,020
-4
134
49
36
--
57
C
50
i.
98
Romania
47
of
5,856
:-,
4,454
45
USSR
:5
3,160
61
87
630
43
35
45,884
3
58
7,589
26
-)
43
25 97
31
5,790
31
288
21
25
60
is
50
3 99
38
World Military and Social Expenditures 1985
Estimating Military Expensitures of the USSR
An independent study prepared for the National Science
Foundation by a specialist in the field reveals some of the
and its Warcaw Allies
practical difficulties in identifying military R&D in So-
viet budgets for science (ref. 1). The report provides a
careful analysis of definitional and other problems which
cannot be adequately summarized here, but two of the
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent calculations
general points made seem particularly relevant: a) Soviet
must be made by western authorities (table opposite). A review of the estimates made by official US sources indicates
reported science budgets appear to be significantly in-
that they tend to exaggerate Soviet military expenditures. The result is a stimulus to the arms race.
flated compared with US concepts and b) whether, or how
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a relatively simple
much, Soviet military R&D is included in the science bud-
step: make public its military budget in the detail proposed by the United Nations for all countries. At a small sacrifice of
get is still an unresolved issue.
secrecy, it could thereby provide the kind of reassurance on which mutual trust between nations and arms restraint
From this, one could conclude that Soviet budgeting for
depend.
science is still a largely mysterious area. It is unlikely to
provide the only basis for the CIA estimate of Soviet ex-
penditures of military R&D, but as a foundation for confi-
dent estimates of level or trend it clearly has serious weak-
The usual statistical note on Soviet military expendi-
Considering the thousands of elements which must be
nesses.
tures was expanded in WMSE 1980 and subsequent edi-
identified and also valued, it is evident that this is an
tions to give an overview of some western estimates and a
extraordinarily complex procedure, feasible only through
Investment-The component covering procurement and
more detailed evaluation of the official US estimates. The
a vast expenditure of effort on surveillance, data collec-
construction is the part of the estimate in which analysts
summary is repeated in this edition, with some revisions
tion, and analysis. So far, only US intelligence agencies
state they have the greatest confidence. Presumably this is
based on CIA testimony made available in recent years.
have the arsenal of electronic and other resources required
because the numbers of major equipment can, in large
Given the limitations of space and time, this is necessarily
for calculations of this detail and scope.
part, be observed, and at least some of the ruble prices
a cursory examination of a very complex subject. Hope-
(e.g. civilian products bought by the military) can be de-
fully it will provide some encouragement to others to ex-
The building-block approach is used by CIA to produce
termined from Soviet price lists. Others may be obtained
plore further*
annual estimates of Soviet military expenditures in both
clandestinely. In theory at least there is good, "hard" in-
Soviet military expenditures warrant special attention
ruble values and dollars. The dollar figure is of principal
for several reasons:
public interest (since it is used for comparison with US ex-
formation in this area. Keeping it accurate and up to date
penditures), but it is the CIA ruble estimate which this
is quite another problem, as evidenced by two major revi-
sions announced by CIA. In 1976 the Agency announced
1. As a summary of the Soviet military effort and
study uses for its calculation of Soviet military expendi-
that Soviet military expenditures in rubles were estimated
trend, they affect US and all NATO planning, the willing-
tures. Working from the ruble estimate makes it possible
to be twice as high as previously thought because the So-
ness of public officials to spend more to meet the competi-
to follow the same procedure for conversion to dollars
which is used for other countries in this worldwide report
viet defense industry was operating less efficiently than
tion, and of taxpayers to bear the burden.
had been calculated-i.e. ruble costs were higher And in
2. Unlike other major industrial powers, the Soviet
and for GNP and other budget expenditures. It also avoids
1983 the Agency announced that it had been overestima-
Union fails to provide detail on its military budget, or
some but far from all of the exaggerating effects of the
CIA calculation in dollars; these will be discussed below.
ting the rate of growth of Soviet military expenditures
even to describe what expenditures are covered. It an-
since 1976. The main reason given was that it had made an
nounces a single undefined figure each year, which sel-
In using the CIA ruble estimate for this purpose, how-
error in counting the number of new weapons that had
dom changes. Between 1970 and 1984 the budget dropped
ever, we do so with reservations. This is not to question
been produced and deployed.
about 4 percent, from 17.9 to 17.1 billion rubles, but in
either the competence of the analysts, who are highly re-
Even assuming comparatively solid information in
1985 it rose by 12 percent to 19.1 billion rubles.
spected professionals, nor the careful assembly of a mas-
sive amount of information. The gaps in knowledge and
some areas, there are others which must depend heavily on
3. The Soviet announced budget is clearly incomplete
the need for subjective judgment are still formidable. The
judgment or guesswork, for example: the quality of equip-
in view of the advanced military technology and the size
ment which is not obtainable or visible by satellite or other
of the military force the USSR has produced.
numerous uncertainties which invite "worst-case" inter-
observation; the range of efficiency and cost within Soviet
pretation and the methodology of the calculations to-
4. The ruble is almost exclusively a domestic currency
gether tend to produce an upward bias in the ruble as well
industry; and the amount of overhaul of old equipment, a
and official rates of exchange reflect neither the relation
as in the dollar estimate. Even though we cannot remove
practice which some analysts consider fairly common in
between internal prices and foreign prices, nor balance of
this bias, or determine precisely how much it may exag-
the Soviet Union and which may give an impression of
new production.
payments forces.
gerate the total, identifying some of the factors which ap-
5. Between the official Soviet military budget, con-
pear to produce it may help to indicate the scope of the
In addition, a significant source of measurement error
verted to dollars at the official rate ($23 billion) and the
problem.
arises in valuing equipment for which no ruble prices are
official US view of that budget ($244 billion), there was a
available. The estimating process then becomes very
gap in 1982 which was larger than the total US military
shaky indeed. For many of the procurement items, CIA
budget that year.
must use US analogs. Values in US equivalent prices are
Components of CIA estimate
established, then converted to rubles via a small sample of
6. Between the official US estimate of Soviet military
dollar-ruble ratios (about 1 ruble price for every 10 dollar
expenditure, and the estimate in this study, the gap was
$74 billion in 1982, although we continue to use the CIA
In ruble values, CIA calculates Soviet military expend-
prices). Assessing quality as compared with like U.S.
ruble estimate for the calculation.
itures (in 1970 prices) at more than four times the budget
equipment must become a major headache in that case,
of 17.1 billion rubles which the USSR announced for
made more difficult by the fact that Soviet technology as a
In the discussion following, the principal focus is on the
1982. While the public record does not show how the 1982
rule lags behind the US, and the product itself tends to be
calculations by US intelligence agencies which establish
figure breaks down into all of the components, averages
simpler.
the official US view of Soviet military expenditures.
for the period since 1965 will give some clue to the rela-
For example, CIA testimony mentions microminiaturi-
Since this publication also has dollar estimates for other
tive importance of the major categories. The estimate of
zation in computers as one area in which the Soviets are
Warsaw Pact countries lower than the US official esti-
Soviet expenditures in rubles in that period was composed
far behind US technology. The question is how accurately
mates, the basis for the alternatives will be described as
as follows (ref. 8):
analysts can determine the lesser dollar value of a weapon
well.
-roughly one-fifth for research, development, test and
which does not have built into it the accuracy and capabil-
evaluation (RDT&E);
ity of remote command and control equivalent to its US
expenditures in rubles
-one-half for investment (procurement of equipment and
counterpart.
construction);
Basis of estimates
Although CIA analysts report that they do make the ef-
-almost one-third for operating costs (60 percent of that
fort to adjust the cost basis of Soviet equipment for phys-
for personnel).
ical and performance qualities, they have stated that
In the absence of adequate reporting by the Soviet
What does the record say about some of the measure-
where their knowledge is incomplete their estimates tend
Union, western analysts have generally resorted to one of
ment problems associated with each of these components?
to overstate the costs of producing the Soviet design.
two basic approaches to an estimate of Soviet military ex-
penditures in rubles.
Research-This category of expenditures is identified by
Operating costs-Manpower, although rated at a lower
Add-on or residual-One approach bases estimates on
the analysts as the most imprecise element in the esti-
level of reliability than procurement, is considered by CIA
official Soviet statistics, either adding presumably miss-
mates. Research outlays cannot be estimated from observ-
to be the most reliable element in the estimates of Soviet
ing elements to the announced defense budget or, by a re-
able physical quantities. Instead they appear to be derived
operating costs. It is also a relatively small part of the
sidual method, deriving implicit military expenditures
in large part from Soviet aggregate statistical data-and
overall estimate of ruble outlays. While Soviet forces are
from published Soviet statistics for civilian programs.
converted from rubles into dollars with a ratio (ref. 9).
very large, this is a draft army and ruble pay scales are
While no direct reference to the specific sources for the
low. The pay for a private is said to be the ruble equivalent
Building-block-The other approach is independent of
calculations appears to have been made recently, analysts
of about $6 per month not including upkeep. (While very
the Soviet announced budgets except in the valuation of
in 1974 testimony referred to the state budget for science
low compared with US pay scales, the rate is on a par with
and indicated that space and military R & D took up most
pay for conscripts in NATO countries such as Portugal and
research expenditures. This method breaks down military
Greece.)
expenditures into physical quantities (manpower, equip-
of the allocation for science.
ment, construction), operating costs, and research. Each
CIA stated in 1981 that "we are confident that the So-
Estimates of manpower costs presumably depend on the
major component is composed of many individual ele-
viet military RDT&E effort is large and that the resources
determination of numbers in the total force, the table of
ments which are separately assigned monetary values.
devoted to it are growing" (ref. 10). The estimated in-
organization, and the pay scales used. The record is not
clear on all these points. For 1982 the official US estimate
*Unless specific references are noted, the summary of CIA
crease in this component in the 1970's was the predomi-
methodology is drawn from the public record in the annual
nant factor (along with procurement and maintenance of
of Soviet forces is 4.4 million, which includes all special
hearings of the joint Economic Committee of the US Con-
hardware) pushing the overall expenditure total higher
forces judged to have national security missions, eg. KGB
gress (#5, page 48).
(ref. 6). It is regarded as the fastest growing of the major
border guards. (In this publication, border guards and in-
components (ref. 8).
ternal security forces of countries are not included in reg-
ular forces but are included in paramilitary.)
46
World Military and Social Expenditures 1985
In the CIA dollar calculation, the problems noted above
Estimated Military Expenditures
Herbert Block for the US Department of State report on
for the ruble estimate are amplified because all compo-
the Planetary Product.
of the USSR-Three Views
nents are priced in dollars as though purchased in the US.
billion 1982 dollars
National economies tend to use relatively more of that
In view of the uncertain value of the ruble as compared
with normally traded currencies, any estimate of its ex-
ACDA¹
SIPRI²
WMSE³
factor of production in which they have a cost advantage.
change value at this point must be judgmental. Further ob-
1980
233
154
162
If, for example, labor is cheap relative to capital, more
1981
labor is used. If that labor is valued at prices in effect in an
servation may suggest that it should be assigned a higher
237
157
value against the dollar-which of course would raise the
166
economy where labor costs are high, however, it becomes
dollar estimate.
1982
244
159
170
an extremely expensive item. This is the basis of the dis-
1983
tortion which occurs when all elements of the Soviet mili-
On the other hand, further review of the CIA calcula-
248
162
176
tary effort are given dollar price tags. To offset this distor-
tions, by intelligence or other expecialists, are quite likely
'US Arms Control & Disarmament Agency
tion, the usual procedure would be to calculate
to yield a lower, and we think, a more realistic value of So-
2 Stockholm International Peace Research Institute
3 World Military and Social Expenditures
expenditures in the prices of both nations and to take a
viet military expenditures in rubles. Because of the uncer-
geometric mean of the dollar and ruble estimates. This is
tainties involved in both the CIA ruble estimate and the
not done in the CIA calculations. For a review of the "in-
conversion factor used here, the estimate of Soviet mili-
dex number effect," see ref. 4.
tary expenditures shown in this report can only be termed
Also affecting the reliability of cost estimates is the
difference between the actual number of men in Soviet di-
In this limited space it is not possible to summarize the
a rough approximation or informed guess, as one alterna-
tive to inflated US official estimates.
problems and results in detail, or the alternative method
visions as compared with the number called for in the
table of organization. CIA does state that it takes account
of valuing expenditures in dollars. Two examples of the
In comparison with Soviet GNP, the WMSE estimates
below. distortions implicit in the dollar valuations are given
suggest a defense burden of about 11 percent. This is less
of the evidence that a good many Soviet divisions are not
than the 14 percent shown in official US estimates as pub-
at full strength, but certainty in this case may be difficult
lished by ACDA but that ratio is based on two values
to establish, and the tendency would be to assume full
In arriving at the dollar valuation of Soviet manpower,
complement where it is unknown.
CIA breaks down the Soviet force into ranks and skill
which cannot be compared directly*. In publishing the ra-
tio, ACDA calls attention to the difference in the methods
In addition to the numbers involved, there are un-
components, applying a dollar-cost factor to each skill
level. The average pay for the Soviet force in the dollar
of calculating GNP and military expenditures but does
knowns relating to the operational use of Soviet forces, for
calculations comes to about $12,500 per man, according
not in its latest edition provide a basis for comparing the
which adjustments may be especially difficult. The Soviet
two.
draft provides a work force at the command of the state.
to CIA statements in 1980. The very large Soviet army,
bought at low cost in rubles, accounts for about $50 billion
Other Warsaw Fact
For example, recruits are used for agricultural work dur-
ing the harvest period. The CIA analysts report that they
when priced at US pay scales and, under this method of
cannot separate out the portion of time the forces are used
calculation, rises every time US forces receive pay raises.
WMSE approach-The estimates of military expendi-
in essentially civilian work. In other words, Soviet active-
Statements about the 1977 estimates indicated that per-
tures in the centrally planned economies of Eastern Eu-
sonnel costs then were 14 percent of total spending in
rope that are members of the Warsaw Pact (WP) are based
duty forces are valued as though fully employed in mili-
rubles, and 36 percent when calculated in dollars.
on estimates in national currencies by Dr. Thad Alton and
tary functions throughout the year; no allowance is made
associates (ref. 7). In the Alton estimates, some adjust-
for the Soviet custom of using forces in the harvest. On the
The CIA method allows for a difference in composition
ments are made in the official national figures to conform
other hand, uniformed forces primarily performing non-
of US and USSR forces, but it is not at all clear that it ade-
more closely to US definitions of defense. In converting to
combatant services (construction, railroad, civil defense,
quately covers differences in quality, i.e. the technical
dollars, the WMSE method again uses the rates implicit in
and internal security forces) are excluded from the CIA
qualifications of the force and the equipment available to
our calculation of GNP.
count.
them. Approximately three-fourths of Soviet manpower
are short-term conscripts. Many draftees are unaquainted
Official US approach-The method used in the official
Whether adequate cost adjustment can be made for rela-
with the operation of even simple motorized equipment.
US report of military expenditures in the "other WP
tively low operational use of equipment and lower levels
of readiness than in the US is also a question. Officials
In contrast, the US has a volunteer, career force, subject to
countries" differs from the above in an important respect:
intensive on-the-job training during their years of service.
the conversion to dollars calculates military forces sepa-
have at various times referred to these factors, stating that
only one-sixth of Soviet navy ships are deployed at sea
Lower readiness standards in the USSR also reduce train-
rately at equivalent US pay scales. The procedure may be
(US one-third); Soviet strategic subs operate 11 percent of
ing effectiveness, e.g., the Soviet air force has relatively
summarized briefly as follows: a) the personnel compo-
the time (US 55 percent); pilots with the Soviet air force in
less flying time, the army less top-of-the-line equipment
nent of military expenditures is separately estimated in
Europe fly roughly one-third as much as American pilots;
for training.
national currencies; b) armed forces (regular and paramil-
itary) in those countries are then priced in dollars at US
only part of the Soviet ICBM force is kept at peak readi-
The quality differential is also significant in the dollar
pay rates; c) the remainder of the budget is converted to
ness.
pricing of Soviet equipment. In the CIA ruble calculation,
dollars at the purchasing power equivalent rate implicit in
While CIA reports that they do make allowances for
some ruble values can be established directly. Dollar valu-
the GNP calculations.
these differences in operating practices, the problems il-
ations, however, are based on US industry's estimates of
production costs of samples of Soviet equipment, or on US
The results of this method appear in the ACDA annual
lustrate the inadequacy of number comparisons and the
complexity of the estimating process even in an area
analogs, which overall are more sophisticated than the
report, where it produces military expenditures for the
Soviet inventory. The adjustments made for quality are
"other WP countries" more than double the overall esti-
where there is a fair degree of direct knowledge.
subjective judgments and, as recognized by CIA, will
mates in this report.
have a tendency to overstate Soviet costs.
Personnel costs, under the ACDA pricing method, jump
in dollars
The agencies preparing the estimates are, of course,
from ratios of 12-35 percent of military expenditures in
aware of the methodological bias inherent in the dollar
the domestic currencies of these six countries to 42-80
Basis of estimates
calculations. In their testimony in 1979, for example, they
percent of military expenditures in dollars. As ACDA
noted that their "dollar comparisons of US and Soviet de-
points out, the result is to make the proportion of military
fense activities do have a potential bias favoring [i.e.,
expenditures to GNP twice as large when expressed in
The dollar equivalent of the Soviet military effort
is now usually determined through one of two basic
exaggerating] the Soviets, resulting from the index num-
dollars as it is in domestic currencies.
approaches.
ber problem." Despite it, they express a relatively high de-
The special personnel adjustment made in the official
Converting aggregates-Military expenditures in ru-
gree of confidence in the results. For the overall estimate,
US estimate of military expenditures for the "other WP
they have usually described the possible margin of error as
countries" affects comparisons between the WP and non-
bles are converted to dollars using the total, or broad cate-
plus or minus 15 percent. In 1982 testimony they said
communist countries. There is no indication on the record
gories, of expenditures, with appropriate exchange rates.
"our estimates are unlikely to be in error by more than 10
that this adjustment is made for any non-communist coun-
This is the approach now used in this study. It makes possi-
percent for each year" (ref. 5).
try in the world. If it were done worldwide, it would
ble the comparison of the military "burden" relative to
GNP and other national budgets, and also rough compari-
Professor Holzman's review of the method suggests
sharply increase the US Government estimates of military
that because of possible tendencies to worst-case analysis
expenditures in other countries, including its NATO al-
sons among countries.
in exercises like this, the range of error in the US-USSR
lies. Testimony in 1978 indicates that pricing of other
Pricing elements-The alternative method, which is
dollar comparisons is likely to be relatively smaller on the
NATO forces at US pay scales would raise the total dollar
used by CIA, constructs the dollar value of Soviet mili-
low side and much larger on the high side.
equivalents of military expenditures for those countries
tary expenditures through a building-block approach
by 22 percent.
which parallels that described above for the ruble calcula-
tion. In this case every element of the Soviet military
WMSE calculations
To attempt alternatives to the elaborate official calcula-
force is valued at the price that it would have if purchased
tions of WP military expenditures is perhaps even more
in the US. The objective is not to establish the basis for in-
Soviet Union
simplistic and risky than to attempt an abbreviated de-
ternational comparison but to produce a summary indica-
scription of the problems. We recognize that the results
tor of the value of the Soviet military effort in US terms.
The CIA ruble estimate is the basis of the dollar valua-
shown in this publication are not the final answer. Yet
tion in this publication. For the reasons stated above, it ap-
somewhere between the upwardly biased official US esti-
Implications of CIA methodology
pears to have an upward bias, with the net effect of sub-
mate of $284 billion and the unrealistically low fraction
stantially exaggerating Soviet military expenditures.
of that which seems to be the official WP version, there
must be a reasonable estimate.
At first glance the product of the CIA approach seems to
meet the requirement for a simple binary match-up: the
The CIA ruble estimate is converted to dollars, in the
simplified WMSE method, using the adjusted exchange
At present our approach suggests that military expendi-
total of the Soviet military effort, expressed in US costs,
appears to have been made comparable with total US mili-
rate implicit in the WMSE calculations of GNP. Soviet
tures of the WP countries including the USSR were in
GNP is an extension of the series previously calculated by
total about $97 billion lower than the US Government es-
tary expenditures. In fact, as we have tried to show, the
timates. Rather than being roughly equal to NATO ex-
method of calculation is not only based on an extremely
*GNP in dollars is designed to show the average relative
penditures, this would make them lower than NATO's in
fragile structure of evidence but also has built into it an
upward bias because of the worst-case assumptions ap-
size of US and Soviet GNP when both are expressed in both
1982 by more than $100 billion. A gap like that could
plied to unknowns in the estimating process.
currencies. Military expenditures are converted directly,
make quite a difference in NATO's planning for a contin-
based on Soviet weights and US price patterns.
ually rising military effort against the competition-and
save taxpayers a whale of a lot of money.
References-see page 48
Military and Social Expenditures 1985 47
ECCIAL INDICATORS
142 Countries 1983
TABLE III
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic
Public
School-Age
% School-Age
% Women In
Expenditures
Expenditures
Expenditures
Social
Expenditures
Population
Population
Total University
Literacy
per Capita
per Soldier1
per Sq. Km.
Standing²
per Capita
per Capita
per Teacher3
In School
Enrollment
Rate
Tenk
US
$
108
US
$
TENK
US $
Bank
US $
Bank
US $
Rank Number
Rank
%
Bank
%
Bank %
WORLD
158
28,949
5,530
2,839
140
45
52
41
71
Developed
524
55,614
10,742
9,417
490
25
68
46
99
Developing
41
9,854
1,836
736
28
54
49
34
60
AMERICA
North America
862
97,086
11,556
13,991
746
22
77
50
99
United States
926
97,749
23,173
3
14,172
= ;
725
3
22
76
50
99
Canada
257
78,901
641
2
C.
12,284
951
22
80
1:
51
:
99
Latin America
28
7,748
522
1,897
67
42
60
43
82
Argentina
39
7,634
422
49
2,030
::
52
.)
27
.
63
.0
44
:-
94
Barbados
36
9,000
22,500
28
4,032
:
228
23
84
54
99
Bolivia
7
1,536
39
93
:
597
S,
18
39
59
07
30
2
70
Brazil
16
7,635
246
57
...
2,032
36
59
44
56
50
55
76
Chile
82
9,854
1,250
50
'₁
1,920
96
41
73
52
40
27
96
Columbia
17
6,771
416
69
"
1,378
10
41
?
52
51
27
47
:-
86
Costa Rica
-
-
-
65
1,016
_7
58
:
55
:
50
(.)
38
B :
93
Cuba
130
8,379
11,550
37
3
1,852
.7
117
21
65
53
:-
96
Dominican Rep
15
4,087
1,918
78
1,103
...
25
:
64
54
25
41
of
75
Ecuador
20
4,513
620
63
of
1,319
:-
48
57
39
67
:?
39
6.
82
El Salvador,
31
3,571
::
7,143
89
-8
744
00
28
93
10
48
8
42
32
66
Guatemala
21
4,200
1,541
90
1,119
,
20
87
35
3:
23
05
54
Guyana
28
3,000
98
66
in
592
::
52
35
71
38
-1)
92
Haiti,
5
3,857
964
-
115
:
282
a
3
86
44
?
32
35
Honduras
16
4,600
616
93
10
655
.:0
28
75
49
is
40
27
62
Jamaica
15
8,500
3,091
59
,
1,350
12
102
is
43
66
00
44
0
92
:
Mexico
12
7,347
451
57
12
2,154
3:
60
:
41
70
70
34
88
Nicaragua
90
5,551
;
2,092
75
:
868
:.
40
64
54
=
47
5
88
Panama
34
7,100
922
43
5
1,980
105
38
)
62
56
3
87
Paraguay
23
5,118
:
214
76
C
1,125
06
20
..;
46
" ,
50
15
43
5
88
Peru
64
8,824
934
71
1,064
73
42
5
48
69
35
15
84
Trinidad & Tobago
67
77,000
15,400
35
6,833
23
367
-1
32
69
.0
40
in
95
Uruguay
83
8,067
1,375
44
=7
2,516
54
::
36
-2
50
:
57
1:
96
Venezuela
58
21,523
J
1,038
48
C
4,027
CD
325
:-
39
.3
60
50
40
31
86
EUROPE
NATO Europe
285
29,045
32,055
7,629
392
28
63
43
94
Belgium
308
27,872
98,000
16
_3
(,)
9,120
575
:.
24
;
63
53
40
99
Denmark
292
49,700
34,674
6
2
11,538
804
117
19
71
5
43
-
99
France
438
41,372
43,717
8
C
10,481
?
468
24
3
66
51
:
99
Germany, West
385
47,726
95,068
10
4
11,403
14
582
24
.)
62
8
38
4
99
Greece
246
13,655
18,311
33
.1
3,932
::
146
JO
34
71
:-
43
12
90
Iceland
-
-
I
3
13
10,245
!!
452
21
70
a
51
1
99
Italy
168
19,112
31,621
22
in
6,549
=3
393
7
21
is
59
09
44
27
96
Luxembourg
126
46,000
15,333
15
:
14,566
-
779
23
.3
59
00
36
100
Netherlands
319
44,038
123,784
16
is
9,869
:
751
3
30
33
60
"
34
4
99
Norway
446
44,854
:
5,676
1
:
14,007
977
7
21
69
0
44
i 100
Portugal
80
8,581
:
8,674
40
2,270
:,
109
24
: ?
65
is
49
59
82
Spain.
103
11,343
7,794
28
4,780
-5
120
1,
35
=
69
31
46
34
94
Turkey
.2
59
3,445
is
3,635
82
1,210
11
40
di
55
20
51
76
34
81
67
United Kingdom
486
-
82,204
111,731
12
=
9,171
is
482
'5
23
:
74
,3
40
99
ALL NATO
(incl. US and Canada)
523
55,452
14,469
10,252
538
25
68
47
96
Warsaw Pact
601
46,387
9,851
6,273
286
27
60
50
99
Bulgaria
188
10,370
_?
15,135
28
i',
5,897
35
293
D
27
''
62
::
51
31
95
Czechostovakia
238
17,990
is
28,672
32
13
5,847
C6
263
Je
34
in
61
15
43
1
99
Germany, East
361
36,108
55,833
25
13
7,427
29
336
39
34
58
27
47
of
99
Hungary
132
13,429
..?
15,161
24
24
5,526
::
309
21
24
:)
62
!!
49
:
99
Poland
125
13,471
2
14,633
35
33
4,252
40
155
39
34
33
59
:
51
24
98
Romania
48
:
5,684
50
4,538
45
:5
3,306
62
73
47
35
76
56
:5
43
26
97
USSR
:
778
55,790
07
9,463
23
23
6,784
02
319
27
25
35
61
'7
50
4
99
36
World Military and Social Expenditures 1986
Estimating Military Expenditures of the USSR
CIA stated in 1981 that "we are confident that the So-
viet military RDT&E effort is large and that the resources
and its Warsaw Pact Allies
devoted to it are growing" (ref. 10). The estimated in-
crease in this component in the 1970's was the predomi-
nant factor (along with procurement and maintenance of
hardware) pushing the overall expenditure total higher
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent calculations
(ref. 6). It has been described as the fastest growing of the
must be made by western authorities (table, page 9). A review of the estimates made by official US sources indicates that
major components (ref. 8).
they tend to exaggerate Soviet military expenditures. The result is a stimulus to the arms race.
An independent study prepared for the National Science
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a relatively simple
Foundation by a specialist in the field reveals some of the
step: make public its military budget in the detail proposed by the United Nations for all countries. At a small sacrifice of
practical difficulties in identifying military R&D in So-
secrecy, it could thereby provide the kind of reassurance on which mutual trust between nations and arms restraint
viet budgets for science (ref. 1). The report provides a
depend.
careful analysis of definitional and other problems which
cannot be adequately summarized here, but two of the
general points made seem particularly relevant: a) Soviet
The usual statistical note on Soviet military expendi-
valued, it is evident that this is an extraordinarily complex
reported science budgets appear to be significantly in-
tures was expanded in WMSE 1980 and subsequent edi-
procedure, feasible only through a vast expenditure of ef-
flated compared with US concepts and b) whether, or how
tions to give an overview of some western estimates and a
fort on surveillance, data collection, and analysis. So far,
much, Soviet military R&D is included in the science bud-
more detailed evaluation of the official US estimates. The
only US intelligence agencies have the arsenal of elec-
get is still an unresolved issue.
summary is repeated in this edition, with revisions based
tronic and other resources required for calculations of this
on CIA testimony and other sources made available more
From this, one could conclude that Soviet budgeting for
detail and scope. Given the huge amount of detailed infor-
recently. Given the limitations of space and time, this is
science is still a largely mysterious area. The Soviet bud-
mation required, this approach also involves subjective
necessarily a cursory examination of a very complex sub-
get itself is unlikely to provide the only basis for the CIA
judgments and guess-estimates.
ject. Hopefully it will provide some encouragement to
estimate of Soviet expenditures of military R&D, but as a
The building-block approach is used by CIA to produce
foundation for confident estimates of level or trend it
others to explore further.*
annual estimates of Soviet military expenditures in both
clearly has serious weaknesses.
Soviet military expenditures warrant special attention
ruble values and dollars. (CIA has recently announced
for several reasons:
A further complicating factor is the substantial lag in
that to avoid the politicizing of the figures it will no longer
Soviet development of such basic research tools as ad-
1. As a summary of the Soviet military effort and
publish a dollar figure, but will continue the ruble esti-
vanced computers and in the general unavailability even
trend, they affect US and all NATO planning, the willing-
mate.) It is the CIA ruble estimate which this study uses
of photocopying machines and simple computers. Tech-
ness of public officials to spend more to meet the competi-
for its calculation of Soviet military expenditures. Work-
nological lags which handicap Soviet research add to the
tion, and of taxpayers to bear the burden.
ing from the ruble estimate makes it possible to follow the
difficulty of judging the relative efficiency of Soviet mili-
same procedure for conversion to dollars which is used for
2. Unlike other major industrial powers, the Soviet
tary R&D compared with US programs.
Union fails to provide detail on its military budget, or
other countries in this worldwide report and for GNP and
other budget expenditures. It also avoids some but far
even to describe what expenditures are covered. It an-
from all of the exaggerating effects of the CIA calculation
nounces a single undefined figure each year, which sel-
Investment-The component covering procurement and
in dollars; these will be discussed below.
dom changes. Between 1970 and 1984 the announced
construction is the part of the estimate in which analysts
budget dropped about 4 percent to 17.1 billion rubles, but
In using the CIA ruble estimate for this purpose, how-
state they have the greatest confidence. Presumably this is
in 1985 it rose by 12 percent to 19.1 billion rubles.
ever. we do so with reservations. This is not to question
because the numbers of major equipment can, in large
3. The Soviet announced budget is clearly incomplete
either the competence of the analysts, who are highly re-
part, be observed, and at least some of the ruble prices
in view of the advanced military technology and the size
spected professionals. nor the careful assembly of a mas-
(e.g. civilian products bought by the military) can be de-
of the military force the USSR has produced.
sive amount of information. The gaps in knowledge and
termined from Soviet price lists. Others may be obtained
the need for subjective judgment are still formidable. Rel-
clandestinely. In theory at least there is good, "hard" in-
4. The ruble is almost exclusively a domestic currency
atively few ruble prices are available to the analysts. This
formation in this area. Keeping it accurate and up to date
and official rates of exchange reflect neither the relation
means that in many cases ruble estimates are based on cal-
is quite another problem, as evidenced by two major revi-
between internal prices and foreign prices, nor balance of
culations first made in dollars and then converted to ru-
sions announced by CIA. In 1976 the Agency announced
payments forces.
bles using broad dollar/ruble ratios.
that Soviet military expenditures in rubles were estimated
to be twice as high as previously thought because the So-
5. Between the official Soviet military budget, con-
The numerous uncertainties which invite "worst-case"
viet defense industry was operating less efficiently than
verted to dollars at the official rate ($22 billion) and the
interpretation and the methodology of the calculations to-
had been calculated-i.e. ruble costs were higher. And in
official US view of Soviet military expenditures in 1983,
gether tend to produce an upward bias in the ruble as well
1983 the Agency announced that it had been overestima-
there was a gap of $236 billion.
as in the dollar estimate. Even though we cannot remove
ting the rate of growth of Soviet military expenditures
6. Between the official US estimate of Soviet military
this bias, or determine precisely how much it may exag-
since 1976. The main reason given was that it had made er-
expenditure, and the estimate in this study, the gap was
gerate the total, identifying some of the factors which ap-
rors in counting the number of new weapons that had been
$46 billion in 1983. although we continue to use the CIA
pear to produce it may help to indicate the scope of the
produced and deployed.
ruble estimate as the basis for the calculation.
problem.
Even assuming comparatively solid information in
In the discussion following, the principal focus is on the
some areas, there are others which must depend heavily on
calculations by US intelligence agencies which establish
Components of CIA estimate
judgment or guesswork, for example: the quality of equip-
the official US view of Soviet military expenditures.
ment which is not obtainable or visible by satellite or other
Since this publication also has dollar estimates for other
In new estimates announced in 1986, CIA has advanced
observation; the range of efficiency and cost within Soviet
Warsaw Pact countries lower than the US official esti-
the price base for its calculations of Soviet military spend-
industry; and the amount of overhaul of old equipment, a
mates. the basis for the alternatives will be described as
ing from 1970 to 1982. One effect of the change is to pro-
practice which some analysts consider fairly common in
well.
duce a higher level of expenditures. In 1982 rubles, the
the Soviet Union and which may give an impression of
CIA estimate for 1982 is 6-7 times the obviously incom-
new production.
Doviet expenditures in rubles
plete budget of 17.1 billion rubles announced by the
In addition, a significant source of measurement error
USSR. Soviet GNP is estimated at 720 billion rubles in
arises in valuing equipment for which no ruble prices are
Basis of estimates
1982, and Soviet defense spending at 15 to 17 percent of it.
available. The estimating process then becomes very
Under the new assessments, the shares of major re-
shaky indeed. For many of the procurement items, CIA
In the absence of adequate reporting by the Soviet
source categories are also said to have changed. The new
must use US analogs. Values in US prices are established,
Union. western analysts have generally resorted to one of
breakdowns are not yet available on the public record. Pre-
then converted to rubles via a small sample of dollar-ruble
two basic approaches to an estimate of Soviet military ex-
penditures in rubles.
viously, the composition of the estimate was approxi-
ratios (about 1 ruble price for every 10 dollar prices). As-
mately as follows (ref. 8):
sessing quality as compared with like US equipment must
become a major headache in that case, made more difficult
Add-on or residual-One approach bases estimates on
-roughly one-fifth for research, development, test and
by the fact that Soviet technology as a rule lags behind the
official Soviet statistics. either adding presumably miss-
evaluation (RDT&E);
US, and the product itself tends to be simpler.
ing elements to the announced defense budget or using a
-one-half for investment (procurement of equipment and
residual method which calculates presumed hidden de-
construction);
For example, CIA testimony mentions microminiaturi-
-almost one-third for operating costs (60 percent of that
zation in computers as one area in which the Soviets are
fense expenditures from unspecified budget categories
and adds them to the explicit defense budget.
for personnel).
far behind US technology. The question is how accurately
analysts can determine the lesser dollar value of a weapon
Building-block-The other approach is independent of
What does the record say about some of the measure-
which does not have built into it the accuracy and capabil-
ment problems associated with each of these components?
ity of remote control equivalent to its US counterpart.
the Soviet announced budgets except in the valuation of
research expenditures. This method breaks down military
Although CIA analysts report that they do make the ef-
expenditures into physical quantities (manpower, equip-
Research-This category of expenditures is identified by
fort to adjust the cost basis of Soviet equipment for phys-
ment, construction), operating and maintenance costs,
the analysts as the most imprecise element in the esti-
ical and performance qualities, they have stated that
and research and development. Each major component is
mates. Research outlays cannot be estimated from observ-
where their knowledge is incomplete their estimates tend
composed of many individual elements which are sepa-
able physical quantities. Instead they appear to be derived
to overstate the costs of producing the Soviet design.
rately assigned monetary values. Considering the thou-
in large part from Soviet aggregate statistical data-and
sands of elements which must be identified and also
converted from rubles into dollars with a ratio (ref. 9).
While no direct reference to the specific sources for the
Operating costs-Manpower, although rated at a lower
*For all references, see page 46. Unless specific refer-
ences are noted. the summary of CIA methodology is
calculations appears to have been made recently, analysts
level of reliability than procurement, is considered by CIA
drawn from the public record in the annual hearings of the
in 1974 testimony referred to the state budget for science
to be the most reliable element in the estimates of Soviet
Joint Economic Committee of the US Congress (ref. 5).
and indicated that space and military R & D took up most
operating costs. It is also a relatively small part of the
of the allocation for science.
overall estimate of ruble outlays. While Soviet forces are
very large, this is a draft army and ruble pay scales are
44
World Military and Social Expenditures 1986
low. The pay for a private is said to be the ruble equivalent
National economies tend to use relatively more of that
Since the CIA ruble estimate of defense expenditures is
of about $6 per month not including upkeep. (While very
factor of production in which they have a cost advantage.
composed in part of dollar valuations converted to rubles,
low compared with US pay, the rate is on a par with pay for
If, for example, labor is cheap relative to capital, more
the method used in WMSE obviously does not wholly re-
conscripts in NATO countries such as Portugal and Greece.)
labor is used. If that labor is valued at prices in effect in an
move the index number effect, although it may diminish it.
Estimates of manpower costs presumably depend on the
economy where labor costs are high. however, it becomes
The ruble base therefore continues to have an upward bias.
determination of numbers in the total force, the table of
an extremely expensive item. This is the basis of the dis-
In comparison with Soviet GNP, the WMSE dollar esti-
tortion which occurs when all elements of the Soviet mili-
organization, and the pay scales used. The record is not
mate suggests a defense burden of 11-12 percent. This is ap-
clear on all these points. For 1983 the ACDA estimate of
tary effort are given dollar price tags. To offset this distor-
preciably lower than the 15-17 percent of GNP in the CIA/-
Soviet forces is 4.4 million, which includes all special
tion, the usual procedure would be to calculate
DIA report, and below the 14 percent of GNP in the latest
forces judged to have national security missions, e.g. KGB
expenditures in the prices of both nations and to take a
available ACDA report. which was published before the in-
border guards. (In this publication, border guards and in-
geometric mean of the dollar and ruble estimates. This is
telligence revisions. The ACDA ratio, however. represents
done in the CIA calculations of GNP but not in the dollar
ternal security forces of countries are not included in reg-
two values which are calculated by different methods and
ular forces but are included in paramilitary.)
estimates of military expenditures. For a review of the
cannot be compared directly.* While ACDA calls attention
"index number effect," see ref. 4.
Also affecting the reliability of cost estimates is the
to the difference in the methods deriving military expendi-
difference between the actual number of men in Soviet di-
In this limited space it is not possible to summarize the
tures and GNP, it does not provide a basis for comparing the
problems and results in detail, or the alternative method of
two.
visions as compared with the number called for in the
table of organization. CIA does state that it takes account
valuing expenditures in dollars. Examples of the distor-
of the evidence that a good many Soviet divisions are not
tions implicit in the dollar valuations are given below.
at full strength, but certainty in this case may be difficult
In arriving at the dollar valuation of Soviet manpower,
to establish, and the tendency would be to assume full
CIA breaks down the Soviet force into ranks and skill
Other Warsaw Pact
complement where it is unknown.
components, applying a dollar-cost factor to each skill
In addition to the numbers involved. there are un-
level. The average pay for the Soviet force in the dollar
WMSE approach-The estimates of military expendi-
knowns relating to the operational use of Soviet forces, for
calculations came to about $15,000, according to a DIA
tures in the centrally planned economies of Eastern Eu-
which adjustments may be especially difficult. The Soviet
statement in 1983. The very large Soviet army, bought at
rope that are members of the Warsaw Pact (WP) are based
draft provides a work force at the command of the state.
low cost in rubles, accounts for about $50 billion when
on estimates in national currencies by Dr. Thad Alton and
For example, recruits are used for agricultural work dur-
priced at US pay scales and, under this method of calcula-
associates (ref. 7). In the Alton estimates. some adjust-
ing the harvest period. The CIA analysts report that they
tion, rises every time US forces receive pay raises. State-
ments are made in the official national figures to conform
cannot separate out the portion of time the forces are used
ments about the 1977 estimates indicated that personnel
more closely to US definitions of defense. In converting
in essentially civilian work. In other words, Soviet active-
costs then were 14 percent of total spending in rubles, and
the Alton estimates from national currencies to dollar
duty forces are valued as though fully employed in mili-
36 percent when calculated in dollars.
equivalents. the WMSE method again uses the rates im-
tary functions throughout the year; no allowance is made
The CIA method allows for a difference in composition
plicit in the calculations of GNP.
for the Soviet custom of using forces in the harvest. On the
of US and USSR forces, but it is not at all clear that it ade-
Official US approach-The method used in the official
other hand, uniformed forces primarily performing non-
quately covers differences in quality, i.e. the technical
US report of military expenditures in the "other WP
combatant services (construction. railroad, civil defense,
qualifications of the force and the equipment available to
countries" differs from the above in an important respect:
and internal security forces) are said to be excluded from
them. Approximately three-fourths of Soviet manpower
the conversion to dollars calculates military forces sepa-
the CIA count of forces.
are short-term conscripts. Many draftees are unaquainted
rately at equivalent US pay scales. The procedure may be
Whether adequate cost adjustment can be made for rela-
with the operation of even simple motorized equipment.
summarized briefly as follows: a) the personnel compo-
tively low operational use of equipment and lower levels
In contrast, the US has a volunteer, career force, subject to
nent of military expenditures is separately estimated in
of readiness than in the US is also a question. Officials
intensive training during their years of service. Lower readi-
national currencies; b) armed forces (regular and paramil-
have at various times referred to these factors, stating that
ness standards in the USSR also reduce training effective-
itary) in those countries are then priced in dollars at US
only one-sixth of Soviet navy ships are deployed at sea
ness, e.g., the Soviet air force has relatively less flying time,
pay rates; c) the remainder of the budget is converted to
(US one-third); Soviet strategic subs operate 11 percent of
the army less top-of-the-line equipment for training.
dollars at the purchasing power equivalent rate implicit in
the time (US 55 percent); pilots with the Soviet air force in
The quality differential is also significant in the dollar
the GNP calculations.
Europe fly roughly one-third as much as American pilots:
pricing of Soviet equipment. In the CIA ruble calculation,
The results of this method appear in the ACDA annual
only part of the Soviet ICBM force is kept at peak readi-
some ruble values can be established directly. Dollar valua-
report, where it produces military expenditures for the
ness.
tions, however, are based on US industry's estimates of pro-
"other WP countries" more than double the overall esti-
While CIA reports that they do make allowances for
duction costs of samples of Soviet equipment, or on US ana-
mates in this report.
these differences in operating practices, the problems il-
logs, which overall are more sophisticated than the Soviet
inventory. The adjustments made for quality are subjective
Personnel costs, under the ACDA pricing method, jump
lustrate the inadequacy of number comparisons and the
complexity of the estimating process even in an area
judgments and, as recognized by CIA, will have a tendency
from ratios of 12-35 percent of military expenditures in
the domestic currencies of these six countries to 42-80
where there is a fair degree of direct knowledge.
to overstate Soviet costs.
percent of military expenditures in dollars. As ACDA
The agencies preparing the estimates are, of course,
points out, the result is to make the proportion of military
aware of the methodological bias inherent in the dollar cal-
expenditures to GNP twice as large when expressed in
culations. In their testimony in 1979, for example, they
dollars as it is in domestic currencies.
noted that their "dollar comparisons of US and Soviet de-
Soviet excenditures in dollars
fense activities do have a potential bias favoring [i.e.,
The special personnel adjustment made in the official
exaggerating] the Soviets, resulting from the index number
US estimate of military expenditures for the "other WP
Basis of estimates
problem." Despite it, they express a relatively high degree of
countries" affects comparisons between the WP and non-
communist countries. There is no indication on the record
confidence in the results. For the overall estimate, they have
The dollar equivalent of the Soviet military effort
usually described the possible margin of error as plus or mi-
that this adjustment is made for any non-communist coun-
is now usually determined through one of two basic
nus 15 percent. In 1982 testimony they said "our estimates
try. If it were done worldwide, it would sharply increase
approaches.
are unlikely to be in error by more than 10 percent for each
the US Government estimates of military expenditures in
year" (ref. 5).
other countries, including its NATO allies. Testimony in
Converting aggregates-Military expenditures in ru-
1978 indicates that pricing of other NATO forces at US
bles are converted to dollars using the total, or broad cate-
Professor Holzman's review of the method suggests that
pay scales would raise the total dollar equivalents of mili-
gories, of expenditures, with appropriate exchange rates.
because of possible tendencies to worst-case analysis in ex-
tary expenditures for those countries by 22 percent.
This is the approach used in this study.
ercises like this, the range of error in the US-USSR dollar
Pricing elements-The alternative method, which is
comparisons is likely to be relatively smaller on the low side
To attempt alternatives to the elaborate official calcula-
used by CIA, constructs the dollar value of Soviet mili-
and much larger on the high side.
tions of WP military expenditures is perhaps even more
tary expenditures through a building-block approach
simplistic and risky than to attempt an abbreviated de-
which parallels that described above for the ruble calcula-
scription of the problems. We recognize that the results
tion. In this case every element of the Soviet military
shown in this publication are not the final answer. Yet
force is valued at the price that it would have if purchased
somewhere between the upwardly biased official US esti-
in the US. The objective is not to establish the basis for in-
WMSE calculations
mate of $300 billion for the Warsaw Pact countries in
ternational comparison but to produce a summary indica-
1983 and the unrealistically low fraction of that which
Soviet Union
tor of the value of the Soviet military effort in US terms.
seems to be the official WP version, there must be a rea-
sonable estimate.
The dollar valuations of Soviet military expenditures
used in this publication continue to be based on the CIA ru-
At present our approach suggests that military expendi-
ble estimate of defense and the implied conversion factor for
tures of the WP countries including the USSR were $230
Implications of CIA methodology
GNP. Since CIA methodology on the 1982 price base is not
billion in total, $70 billion lower than the US Government
yet spelled out in any detail, a provisional method of reflect-
estimates for these countries. Rather than being roughly
At first glance the product of the CIA approach seems to
ing these numbers has been adopted for this edition. Briefly
equal to NATO expenditures, this would make them lower
meet the requirement for a simple binary match-up: the
stated, the calculations are as follows:
than NATO's in 1983 by approximately $100 billion. A
total of the Soviet military effort, expressed in US costs,
gap like that could make quite a difference in NATO's
appears to have been made comparable with total US mili-
a) The previously published intelligence estimate of 50
planning for a continually rising military effort against
tary expenditures. In fact, as we have tried to show, the
billion rubles for 1970 (ref. 9) is roughly adjusted to exclude
the competition-and save taxpayers a whale of a lot of
method of calculation is not only based on an extremely
civilian space, railroad and construction troops, and inter-
money.
fragile structure of evidence but also has built into it an
nal security forces.
upward bias because of the worst-case assumptions ap-
b) This estimate is advanced to 1982 using the average
plied to unknowns in the estimating process.
annual growth rate stated in the 1986 report by CIA/DIA.
(ref. 11).
*GNP in dollars is designed to show the average relative size
In the CIA dollar calculation, the problems noted above
of US and Soviet GNP when both are expressed in both cur-
for the ruble estimate are amplified because all compo-
c) and converted to 1982 dollars using the CIA implied
rencies. Military expenditures are converted directly, based
nents are priced in dollars as though purchased in the US.
conversion ratio for GNP in 1982 (ref. 12).
on Soviet weights and US price patterns.
World Military and Social Expenditures 1986
45
RANKING OF COUNTRIES, MILITARY AND SOCIAL INDICATORS
142 Countries, 1984
TABLE III
MILITARY
GNP
EDUCATION
Public
Public
Public
Economic
Public
School-Age
% School-Age
% Women In
Expenditures
Expenditures
Expenditures
Social
Expenditures
Population
Population
Total University
Literacy
per Capita
per Soldier1
per Sq. Km.
Standing²
per Capita
per Capita
per Teacher3
in School³
Enrollment
Rate4
Mank
US $
Rank
US
$
Bank
US $
Rank
Rank
US $
Rank
US $
Rank Number
Rank
%
Rank
%
Rank %
WORLD
163
28,494
5,788
2,911
140
44
53
41
72
Developed
550
58,882
11,364
9,795
497
25
68
46
99
Developing
42
9,105
1,914
752
28
53
50
34
62
AMERICA
North America
935
105,259
12,653
15,321
792
23
77
50
99
United States
1,002
105,638
_-
25,291
4
6
15,541
-
771
20
24
01
77
16
50
5
99
Canada
--'
309
3
94,878
'.'
780
3
10
13,250
3
983
7
20
3
80
13
51
5
99
Latin America
31
8,925
606
1,907
71
41
60
44
84
Argentina
:
60
.?
is
11,765
651
43
52
2,428
35
101
29
26
::
65
35
45
29
96
Barbados
37
¿
11,000
27,500
29
-()
3,850
37
235
32
28
"1
73
...
55
5
99
Bolivia
11
2,393
61
95
'08
438
97
21
56
38
48
63
S8
30
72
74
Brazil
-
11
=
5,693
183
63
69
1,449
73
57
67
42
83
54
15
50
65
78
Chile
:3
79
:2
9,792
1,242
51
58
1,891
58
91
61
40
13
72
34
40
36
94
Colombia
23
i.
9,357
575
63
66
1,582
77
50
60
50
86
53
32
46
48
88
Costa Rica
-
-
-
61
71
1,362
60
82
S7
55
33
50
65
38
36
94
Cuba
136
:
8,889
12,252
37
57
1,911
45
121
11
21
-5
64
9
54
29
96
Dominican Rep
12
3
3,435
1,612
77
81
1,030
98
20
96
64
-1
65
53
41
67
77
Ecuador
24
in
5,615
774
61
68
1,455
70
60
34
41
37
66
60
39
64
82
El Salvador
43
C...
-
5,024
10,048
83
87
840
96
25
'07
81
96
49
51
42
78
72
Guatemala
34
J
6,750
2,477
89
74
1,157
98
20
12
85
118
37
103
23
98
55
Guyana
31
:
4,000
..
112
68
31
647
S1
48
71
44
41
65
65
38
29
96
Haiti
5
4,143
1,036
113
120
308
'31
4
109
83
:07
45
73
35
119
38
Honduras
37
9,412
:
1,429
92
94
689
94
28
*01
76
33
50
54
40
11
60
Jamaica
17
10,250
3,727
56
72
1,293
59
83
75
45
27
66
-2
44
06
94
Mexico
is
20
8:
13,167
801
55
:7
3,027
61
79
67
42
26
69
77
34
46
90
Nicaragua
.,)
130
6,484
:
3,092
71
79
1,044
67
63
97
65
26
53
21
49
48
88
Panama
41
3
8,800
1,143
47
26
1,965
51
104
53
37
48
63
(7)
56
48
88
Paraguay
12
S
2,706
.3
113
76
60
1,038
106
17
64
41
93
50
16
43
18
88
Peru
73
it
10,375
1,098
68
78
1,066
92
31
-1
44
17
71
73
35
57
85
Trinidad & Tobago
3
64
.7
37,500
15,000
34
31
6,532
23
392
41
32
03
68
28
47
29
96
Uruguay
12
75
-3
7,367
1,256
38
49
2,636
66
64
30
27
26
69
1
57
26
97
Venezuela
31
60
1
23,045
;
1,112
49
43
3,756
38
233
55
38
62
60
54
40
52
87
EUROPE
NATO Europe
280
28,707
30,679
7,477
375
27
63
43
94
Belgium
274
.3
25,224
87,065
21
12
8,758
:7
514
25
25
75
58
54
40
5
Denmark
99
5
275
45,355
32,698
5
13
11,449
9
750
3
17
21
70
-6
43
5
France
99
421
::
40,466
42,241
8
17
10,152
14
537
20
24
37
66
'3
51
E
99
Germany, West
2
359
is
45,084
88,532
10
15
10,985
18
506
20
24
62
60
65
38
UI
Greece
99
3
308
$
15,477
3:
23,098
33
39
4,273
54
102
34
29
13
72
:6
43
-:2
92
Iceland
-
-
-
1
3
14,033
20
498
16
23
17
71
13
51
100
Italy
C
187
15
20,969
;
35,389
26
23
6,901
24
390
11
21
63
59
35
45
26
97
Luxembourg
.1
117
:-
43,000
( )
14,333
10
9
13,784
6
779
5
19
25
69
77
34
i
100
Netherlands
304
is
42,573
118,514
17
20
9,392
12
652
34
29
58
59
70
36
5
99
Norway
:
420
8
44,538
5,361
2
1.
14,344
4
971
3
17
33
68
35
45
I 100
Portugal
01
81
5
8,200
8,913
40
53
2,340
19
113
20
24
33
68
21
49
60
84
Spain
'-
117
is
13,612
2
8,895
26
37
4,808
-6
120
50
36
17
71
28
47
36
94
Turkey
3
64
'20
3,917
r".
4,087
81
70
1,420
35
37
90
56
92
51
86
31
83
69
United Kingdom
A)
470
()
78,943
108,265
12
23
8,616
21
447
16
23
9
75
54
40
5
99
ALL NATO
551
58,628
15,342
10,719
547,
25
69
47
96
(incl. U.S. & Canada)
Warsaw Pact
631
48,945
10,449
6,580
302
26
61
50
99
Bulgaria
::
199
57
12,109
.8
16,036
29
36
5,018
33
314
30
27
-5
64
11
Czechoslovakia
52
33
95
..
252
29
18,841
_:
30,469
31
32
6,267
31
327
44
34
57
61
46
43
5
99
Germany, East
.3
392
IG
37,965
:0
60,463
20
25
7,995
25
362
7
20
68
59
28
47
5
99
Hungary
a
130.
54
13,238
30
14,946
26
33
5,915
34
293
20
24
53
62
Poland
21
49
5
99
3
118
33.
13,437
:3
13,866
35
38
4,634
39
179
44
34
68
59
15
50
5
99
Romania
09
48
39
5,737
31
4,580
45
14
3,571
64
72
53
37
S3
54
42
U.S.S.R
44
26
97
816
TO
58,545
36
10,062
23
25
7,095
29
332
25
25
53
62
16
50
5
99
46
World Military and Social Expenditures 1987-88
Estimating Military Expenditures of the USSR
CIA stated in 1981 that "we are confident that the So-
viet military RDT&E effort is large and that the resources
and its Warsew Pact Allies
devoted to it are growing" (ref. 10). The estimated in-
crease in this component in the 1970's was the predomi-
nant factor (along with procurement and maintenance of
hardware) pushing the overall expenditure total higher
(ref. 6). It has been described as the fastest growing of the
In the absence of adequate reporting by the Soviet Union of its annual military expenditures, independent calcula-
major components (ref. 8).
tions must be made by western authorities. A review of the estimates made by official US sources indicates that they
tend to exaggerate Soviet military expenditures. The result is a stimulus to the arms race.
An independent study prepared for the National Science
If the Soviet Union has an interest in curbing the momentum of the arms competition, it could take a relatively simple
Foundation by a specialist in the field reveals some of the
step: make public its military budget in the detail proposed by the United Nations for all countries. At a small sacrifice of
practical difficulties in identifying military R&D in So-
secrecy, it could thereby provide the kind of reassurance on which mutual trust between nations and arms restraint
viet budgets for science (ref. 1). The report provides a
depend.
careful analysis of definitional and other problems which
cannot be adequately summarized here, but two of the
general points made seem particularly relevant: a) Soviet
valued, it is evident that this is an extraordinarily complex
reported science budgets appear to be significantly in-
The usual statistical note on Soviet military expendi-
flated compared with US concepts and b) whether, or how
tures was expanded in WMSE 1980 and subsequent edi-
procedure, feasible only through a vast expenditure of ef-
much, Soviet military R&D is included in the science bud-
tions to give an overview of some western estimates and a
fort on surveillance, data collection, and analysis. So far,
more detailed evaluation of the official US estimates. The
only US intelligence agencies have the arsenal of elec-
get is still an unresolved issue.
summary is repeated in this edition, with revisions based
tronic and other resources required for calculations of this
From this, one could conclude that Soviet budgeting for
on CIA testimony and other sources made available more
detail and scope. Given the huge amount of detailed infor-
science is still a largely mysterious area. The Soviet bud-
recently. Given the limitations of space and time, this is
mation, required, this approach also involves subjective
get itself is unlikely to provide the only basis for the CIA
necessarily a cursory examination of a very complex sub-
judgments and guess-estimates.
estimate of Soviet expenditures of military R&D, but as a
ject. Hopefully it will provide some encouragement to
foundation for confident estimates of level or trend it
The building-block approach is used by CIA to produce
others to explore further*
annual estimates of Soviet military expenditures in both
clearly has serious weaknesses.
Soviet military expenditures warrant special attention
ruble values and dollars. (CIA has recently announced
A further complicating factor is the substantial lag in
for several reasons:
that to avoid the politicizing of the figures it will no longer
Soviet development of such basic research tools as ad-
publish a dollar figure, but will continue the ruble esti-
vanced computers and in the general unavailability even
1. As a summary of the Soviet military effort and
mate.) It is the CIA ruble estimate which this study uses
of photocopying machines and simple computers. Tech-
trend, they affect US and all NATO planning, the willing-
for its calculation of Soviet military expenditures. Work-
nological lags which handicap Soviet research add to the
ness of public officials to spend more to meet the competi-
tion, and of taxpayers to bear the burden.
ing from the ruble estimate makes it possible to follow the
difficulty of judging the relative efficiency of Soviet mili-
same procedure for conversion to dollars which is used for
tary R&D compared with US programs.
2. Unlike other major industrial powers, the Soviet
other countries in this worldwide report and for GNP and
Union fails to provide detail on its military budget, or
other budget expenditures. It also avoids some but far
even to describe what expenditures are covered. It an-
from all of the exaggerating effects of the CIA calculation
Investment-The component covering procurement and
nounces a single undefined figure each year, which sel-
in dollars; these will be discussed below.
construction is the part of the estimate in which analysts
dom changes. Between 1970 and 1984 the announced
state they have the greatest confidence. Presumably this is
budget dropped about 4 percent to 17.1 billion rubles, but
In using the CIA ruble estimate for this purpose, how-
because the numbers of major equipment can, in large
in 1985 it rose to 19.1 billion rubles and in December
ever, we do so with reservations. This is not to question
part, be observed, and at least some of the ruble prices
1986 it rose again, this time to 20.6 billion rubles for
either the competence of the analysts, who are highly re-
(e.g. civilian products bought by the military) can be de-
1987.
spected professionals, nor the careful assembly of a mas-
termined from Soviet price lists. Others may be obtained
sive amount of information. The gaps in knowledge and
clandestinely. In theory at least there is good, "hard" in-
3. The Soviet announced budget is clearly incomplete
the need for subjective judgment are still formidable.
formation in this area. Keeping it accurate and up to date
in view of the advanced military technology and the size
According to the NATO Review (August 1986), ruble
is quite another problem, as evidenced by two major revi-
of the military force the USSR has produced.
prices and unit costs are available for about half the esti-
sions announced by CIA. In 1976 the Agency announced
4. The ruble is almost exclusively a domestic currency
mate.
that Soviet military expenditures in rubles were estimated
and official rates of exchange reflect neither the relation
The numerous uncertainties which invite "worst-case"
to be twice as high as previously thought because the So-
between internal prices and foreign prices, nor balance of
interpretation and the methodology of the calculations to-
viet defense industry was operating less efficiently than
payments forces.
gether tend to produce an upward bias in the ruble as well
had been calculated-i.e. ruble costs were higher. And in
5. Between the official Soviet military budget. con-
as in the dollar estimate. Even though we cannot remove
1983 the Agency announced that it had been overestima-
verted to dollars at the official rate ($22 billion). and the
this bias, or determine precisely how much it may exag-
ting the rate of growth of Soviet military expenditures
official US view (ACDA) of Soviet military expenditures
gerate the total, identifying some of the factors which ap-
since 1976. The main reason given was that it had made er-
in 1984, there was a gap of $238 billion.
pear to produce it may help to indicate the scope of the
rors in counting the number of new weapons that had been
problem.
produced and deployed.
6. Between the official US estimate of Soviet military
Even assuming comparatively solid information in
expenditure. and the estimate in this study. the gap was
Components of CIA estimate
$35 billion in 1984, although we continue to use the CIA
some areas, there are others which must depend heavily on
ruble estimate as the basis for the calculation.
In new estimates announced in 1986, CIA has advanced
judgment or guesswork, for example: the quality of equip-
the price base for its calculations of Soviet military spend-
ment which is not obtainable or visible by satellite or other
In the discussion following, the principal focus is on the
ing from 1970 to 1982. One effect of the change is to pro-
observation; the range of efficiency and cost within Soviet
calculations by US intelligence agencies which establish
duce a higher level of expenditures. In 1982 rubles, the
industry; and the amount of overhaul of old equipment, a
the official US view of Soviet military expenditures.
CIA estimate for 1982 is 6-7 times the obviously incom-
practice which some analysts consider fairly common in
Since this publication also has dollar estimates for other
plete budget of 17.1 billion rubles. announced by the
the Soviet Union and which may give an impression of
Warsaw Pact countries lower than the US official esti-
USSR. Soviet GNP is estimated at 720 billion rubles in
new production.
mates, the basis for the alternatives will be described as
1982, and Soviet defense spending at 15 to 17 percent of it.
In addition, a significant source of measurement error
well.
Under the new assessments, the shares of major re-
arises in valuing equipment for which no ruble prices are
SVIBE excenditures in rubies
source categories are also said to have changed. Previ-
available. The estimating process then becomes very
Basis of estimates
ously, the composition of the estimate was approximately
shaky indeed. For many of the procurement items, CIA
as follows (ref. 8):
must use US analogs. Values in US prices are established,
In the absence of adequate reporting by the Soviet
then converted to rubles via a small sample of dollar-ruble
Union, western analysts have generally resorted to one of
-roughly one-fifth for research, development, test and
two basic approaches to an estimate of Soviet military ex-
evaluation (RDT&E);
ratios (about 1 ruble price for every 10 dollar prices). As-
penditures in rubles.
-one-half for investment (procurement of equipment and
sessing quality as compared with like US equipment must
become a major headache in that case, made more difficult
construction);
Add-on or residual-One approach bases estimates on
-almost one-third for operating costs (60 percent of that
by the fact that Soviet technology as a rule lags behind the
US, and the product itself tends to be simpler
official Soviet statistics, either adding presumably miss-
for personnel).
ing elements to the announced defense budget or using a
According to NATO, the share of the total devoted to
For example, CIA testimony mentions microminiaturi-
residual method which calculates presumed hidden de-
zation in computers as one area in which the Soviets are
Soviet procurement has increased, while that devoted to
fense expenditures from unspecified budget categories
far behind US technology. The question is how accurately
personnel has decreased.
and adds them to the explicit defense budget.
analysts can determine the lesser dollar value of a weapon
which does not have built into it the accuracy and capabil-
What does the record say about some of the measure-
Building-block-The other approach is independent of
ity of remote control equivalent to its US counterpart.
ment problems associated with each of these components?
the Soviet announced budgets except in the valuation of
Although CIA analysts report that they do make the ef-
research expenditures. This method breaks down military
Research-This category of expenditures is identified by
fort to adjust the cost basis of Soviet equipment for phys-
expenditures into physical quantities (manpower, equip-
the analysts as the most imprecise element in the esti-
ical and performance qualities, they have stated that
ment, construction), operating and maintenance costs,
mates. Research outlays cannot be estimated from observ-
where their knowledge is incomplete their estimates tend
and research and development. Each major component is
able physical quantities. Instead they appear to be derived
to overstate the costs of producing the Soviet design.
composed of many individual elements which are sepa-
in large part from Soviet aggregate statistical data-and
rately assigned monetary values. Considering the thou-
converted from rubles into dollars with a ratio (ref. 9).
sands of elements which must be identified and also
Operating costs-Manpower, although rated at a lower
While no direct reference to the specific sources for the
level of reliability than procurement, is considered by CIA
*For all references, see page 42. Unless specific refer-
calculations appears to have been made recently, analysts
to be the most reliable element in the estimates of Soviet
ences are noted, the summary of CIA methodology is
in 1974 testimony referred to the state budget for science
operating costs. It is also a relatively small part of the
drawn from the public record in the annual hearings of the
and indicated that space and military R & D took up most
overall estimate of ruble outlays. While Soviet forces are
Joint Economic Committee of the US Congress (ref. 5).
of the allocation for science.
very large, this is a draft army and ruble pay scales are
54
World Military and Social Expenditures 1987-88
low. The pay for a private is said to be the ruble equivalent
National economies tend to use relatively more of that
Since the CIA ruble estimate of defense expenditures is
of about $6 per month not including upkeep. (While very
factor of production in which they have a cost advantage.
composed in part of dollar valuations converted to rubles,
low compared with US pay, the rate is on a par with pay for
If, for example, labor is cheap relative to capital, more
conscripts in NATO countries such as Portugal and Greece.)
the method used in WMSE obviously does not wholly re-
labor is used. If that labor is valued at prices in effect in an
move the index number effect, although it may diminish it.
Estimates of manpower costs presumably depend on the
economy where labor costs are high, however, it becomes
The ruble-based estimate therefore continues to have an
determination of numbers in the total force, the table of
an extremely expensive item. This is the basis of the dis-
upward bias.
organization, and the pay scales used. The record is not
tortion which occurs when all elements of the Soviet mili-
clear on all these points. For 1984 the ACDA estimate of
tary effort are given dollar price tags. To offset this distor-
In comparison with Soviet GNP, the WMSE dollar esti-
Soviet forces is 4.5 million. which includes all special
tion, the usual procedure would be to calculate
mate suggests a defense burden of 11-12 percent. This is ap-
forces judged to have national security missions. e.g.
expenditures in the prices of both nations and to take a
preciably lower than the 15-17 percent of GNP in the CIA/-
KGB border guards. (In this publication. border guards
geometric mean of the dollar and ruble estimates. This is
DIA report. and below the 12.6 percent of GNP in the
and internal security forces of countries are not included
done in the CIA calculations of GNP but not in the dollar
latest available ACDA report. The ACDA ratio. how-
in regular forces but are included in paramilitary.)
estimates of military expenditures. For a review of the
ever. represents two values which are calculated by differ-
"index number effect," see ref. 4.
ent methods and cannot be compared directly. While
Also affecting the reliability of cost estimates is the
ACDA calls attention to the difference in the methods
difference between the actual number of men in Soviet di-
In this limited space it is not possible to summarize the
problems and results in detail, or the alternative method of
deriving military expenditures and GNP. it does not pro-
visions as compared with the number called for in the
vide a basis for comparing the two.
table of organization. CIA does state that it takes account
valuing expenditures in dollars. Examples of the distor-
of the evidence that a good many Soviet divisions are not
tions implicit in the dollar valuations are given below.
at full strength, but certainty in this case may be difficult
In arriving at the dollar valuation of Soviet manpower,
to establish, and the tendency would be to assume full
CIA breaks down the Soviet force into ranks and skill
complement where it is unknown.
Other Warsaw Pact
components, applying a dollar-cost factor to each skill
In addition to the numbers involved, there are un-
level. The average pay for the Soviet force in the dollar
WMSE approach-The estimates of military expendi-
knowns relating to the operational use of Soviet forces, for
calculations came to about $15,000, according to a DIA
tures in the centrally planned economies of Eastern Eu-
which adjustments may be especially difficult. The Soviet
statement in 1983. The very large Soviet army, bought at
rope that are members of the Warsaw Pact (WP) are based
draft provides a work force at the command of the state.
low cost in rubles, accounts for about $50 billion when
on estimates in national currencies by Dr. Thad Alton and
For example, recruits are used for agricultural work dur-
priced at US pay scales and, under this method of calcula-
associates (ref. 7). In the Alton estimates, some adjust-
ing the harvest period. The CIA analysts report that they
tion, rises every time US forces receive pay raises. State-
ments are made in the official national figures to conform
cannot separate out the portion of time the forces are used
ments about the 1977 estimates indicated that personnel
more closely to US definitions of defense. In converting
in essentially civilian work. In other words, Soviet active-
costs then were 14 percent of total spending in rubles, and
the Alton estimates from national currencies to dollar
duty forces are valued as though fully employed in mili-
36 percent when calculated in dollars.
equivalents, the WMSE method again uses the rates im-
tary functions throughout the year; no allowance is made
The CIA method allows for a difference in composition
plicit in the calculations of GNP.
for the Soviet custom of using forces in the harvest. On the
of US and USSR forces, but it is not at all clear that it ade-
other hand, uniformed forces primarily performing non-
Official US approach-The method used in the official
combatant services (construction, railroad, civil defense,
quately covers differences in quality, i.e. the technical
US report of military expenditures in the "other WP
and internal security forces) are said to be excluded from
qualifications of the force and the equipment available to
countries" differs from the above in an important respect:
the CIA count of forces.
them. Approximately three-fourths of Soviet manpower
the conversion to dollars calculates military forces sepa-
are short-term conscripts. Many draftees are unaquainted
rately at equivalent US pay scales. The procedure may be
Whether adequate cost adjustment can be made for rela-
with the operation of even simple motorized equipment.
tively low operational use of equipment and lower levels
In contrast, the US has a volunteer, career force, subject to
summarized briefly as follows: a) the personnel compo-
nent of military expenditures is separately estimated in
of readiness than in the US is also a question. Officials
intensive training during their years of service. Lower readi-
national currencies; b) armed forces (regular and paramil-
have at various times referred to these factors, stating that
ness standards in the USSR also reduce training effective-
itary) in those countries are then priced in dollars at US
only one-sixth of Soviet navy ships are deployed at sea
ness, e.g., the Soviet air force has relatively less flying time,
pay rates; c) the remainder of the budget is converted to
(US one-third): Soviet strategic subs operate 15-20 per-
the army less top-of-the-line equipment for training.
dollars at the purchasing power equivalent rate implicit in
cent of the time (US 55 percent); pilots with the Soviet air
The quality differential is also significant in the dollar
the GNP calculations.
force in Europe fly roughly one-third as much as Ameri-
pricing of Soviet equipment. In the CIA ruble calculation,
can pilots; only part (estimated 80 percent) of the Soviet
The results of this method appear in the ACDA annual
some ruble values can be established directly. Dollar valua-
ICBM force is kept at peak readiness.
report, where it produces military expenditures for the
tions, however, are based on US industry's estimates of pro-
"other WP countries" more than double the overall esti-
While CIA reports that they do make allowances for
duction costs of samples of Soviet equipment, or on US ana-
mates in this report.
these differences in operating practices, the problems il-
logs, which overall are more sophisticated than the Soviet
lustrate the inadequacy of number comparisons and the
inventory. The adjustments made for quality are subjective
Personnel costs, under the ACDA pricing method, jump
complexity of the estimating process even in an area
judgments and, as recognized by CIA, will have a tendency
from ratios of 12-35 percent of military expenditures in
where there is a fair degree of direct knowledge.
to overstate Soviet costs.
the domestic currencies of these six countries to 42-80
percent of military expenditures in dollars. As ACDA
The agencies preparing the estimates are, of course,
aware of the methodological bias inherent in the dollar cal-
points out, the result is to make the proportion of military
Covier expenditures in dollars
culations. In their testimony in 1979, for example, they
expenditures to GNP twice as large when expressed in
dollars as it is in domestic currencies.
Basis of estimates
noted that their "dollar comparisons of US and Soviet de-
fense activities do have a potential bias favoring [i.e.,
The special personnel adjustment made in the official
exaggerating] the Soviets, resulting from the index number
US estimate of military expenditures for the "other WP
The dollar equivalent of the Soviet military effort
problem" Despite it, they express a relatively high degree of
countries" affects comparisons between the WP and non-
is now usually determined through one of two basic
approaches.
confidence in the results. For the overall estimate, they have
communist countries. There is no indication on the record
usually described the possible margin of error as plus or mi-
that this adjustment is made for any non-communist coun-
Converting aggregates-Military expenditures in ru-
nus 15 percent. In 1982 testimony they said "our estimates
try. If it were done worldwide, it would sharply increase
bles are converted to dollars using the total, or broad cate-
are unlikely to be in error by more than 10 percent for each
the US Government estimates of military expenditures in
gories, of expenditures, with appropriate exchange rates.
year" (ref. 5).
other countries, including its NATO allies. Testimony in
This is the approach used in this study.
1978 indicates that pricing of other NATO forces at US
Professor Holzman's review of the method suggests that
Pricing elements-The alternative method, which is
because of possible tendencies to worst-case analysis in ex-
pay scales would raise the total dollar equivalents of mili-
used by CIA, constructs the dollar value of Soviet mili-
ercises like this, the range of error in the US-USSR dollar
tary expenditures for those countries by 22 percent.
tary expenditures through a building-block approach
comparisons is likely to be relatively smaller on the low side
To attempt alternatives to the elaborate official calcula-
which parallels that described above for the ruble calcula-
and much larger on the high side.
tion. In this case every element of the Soviet military
tions of WP military expenditures is perhaps even more
force is valued at the price that it would have if purchased
simplistic and risky than to attempt an abbreviated de-
in the US. The objective is not to establish the basis for in-
scription of the problems. We recognize that the results
shown in this publication are not the final answer. Yet
ternational comparison but to produce a summary indica-
tor of the value of the Soviet military effort in US terms.
WMSE calculations
somewhere between the upwardly biased official US esti-
mate of $305 billion for the Warsaw Pact countries in
Implications of CIA methodology*
Soviet Union
1984 and the unrealistically low fraction of that which
seems to be the official WP version, there must be a
The dollar valuations of Soviet military expenditures
reasonable estimate.
At first glance the product of the CIA approach seems to
used in this publication continue to be based on the CIA ru-
meet the requirement for a simple binary match-up: the
At present our approach suggests that military expendi-
ble estimate of defense and the implied conversion factor for
total of the Soviet military effort, expressed in US costs,
tures of the WP countries including the USSR were $244
GNP. Since CIA methodology on the 1982 price base is not
appears to have been made comparable with total US mili-
billion in total, $61 billion lower than the US Government
yet spelled out in any detail, a provisional method of reflect-
tary expenditures. In fact, as we have tried to show, the
estimates for these countries. Rather than being roughly
method of calculation is not only based on an extremely
ing these numbers has been adopted for this edition. Briefly
equal to NATO expenditures, this would make them
stated, the calculations are as follows:
fragile structure of evidence but also has built into it an
lower than NATO's in 1984 by almost $100 billion. A
upward bias because of the worst-case assumptions ap-
a) The previously published intelligence estimate of 50
gap like that could make quite a difference in NATO's
plied to unknowns in the estimating process.
billion rubles for 1970 (ref. 9) is roughly adjusted to exclude
planning for a continually rising military effort against the
In the CIA dollar calculation, the problems noted above
civilian space, railroad and construction troops, and inter-
competition-and save taxpayers a whale of a lot of
nal security forces.
money.
for the ruble estimate are amplified because all compo-
nents are priced in dollars as though purchased in the US.
b) This estimate is advanced to 1982 using the average
annual growth rate stated in the 1986 report by CIA/DIA.
*Although CIA no longer reports its dollar estimates, the
(ref. 11).
*GNP in dollars is designed to show the average relative size
series for the USSR which ACDA publishes is based on
c) and converted to 1982 dollars using the CIA implied
of US and Soviet GNP when both are expressed in both cur-
these calculations.
conversion ratio for GNP in 1982 (ref. 12).
rencies. Military expenditures are converted directly, based
on Soviet weights and US price patterns.
World Military and Social Expenditures 1987-88 55
RANKING OF COUNTRIES, MILITARY AND SOCIAL INDICATORS
142 Countries, 1986
TABLE III
WATER AND
MILITARY
GNP
EDUCATION
SANITATION
Economic
Public
% School-Age
School-Age
Female
Population
Population
Public
Armed
Social
Expenditures
Population
Population
Literacy
with
with
E
Expenditures
Forces
Standing1
per Capita
per Capita
per Teacher2
In School²
Rate³
Safe Water4
Sanitation⁵
million
% of
US $
GNP
Tank 1,000
Rank
Rank US $
Rank
US $
Rank Number
Rank
%
Bank %
Rank %
Rank %
WORLD
858,635
5.6
25,730
3,150
159
43
54
65
66
42
Developed
716,098
5.6
10,115
11,195
581
24
69
98
97
77
Developing
142,538
5.3
15,615
719
27
51
51
51
54
28
AMERICA
North America
289,111
6.3
2,227
17,156
940
22
78
99
100
94
US
281,001
6.7
2,144
4
17,478
:
928
13
23
3
78
99
100
5
98
Canada
8,110
2.2
is
83
1
14,124
1,051
:
13
161
80
-
99
8
97
60
Latin America
11,271
1.5
1,335
1,872
62
40
61
81
71
45
Argentina
1,094
1.5
73
44
::
2,373
43
20
25
03
67
37
95
64
69
Barbados
8
0.6
-
29
5,124
:-
290
19
23
86
19
98
99
100
Bolivia
86
2.4
2
28
94
.7
541
:5
13
50
39
.5
61
""
65
...
49
?
21
Brazil.
2,330
0.9
283
66
?
1,809
32
62
=
40
21
55
03
76
C
77
C
24
Chile
583
3.6
101
53
1,309
61
68
39
41
is
3
72
37
92
1.
94
..
.
84
Colombia
367
1.0
66
71
33
1,290
7
36
79
49
8
55
!:
87
.9
70
68
Costa Rica
24
0.6
55
-
-
1,458
00
69
36
54
-3
51
33
93
:
91
4
Cuba
95
1,480
7.4
162
40
1,999
:7
124
21
43
64
8
93
in
If
82
2
31
Dominican Rep
74
1.4
21
80
!'
816
5
13
3:
63
16
67
00
77
62
13
27
Ecuador
174
1.6
42
67
1,097
73
40
72
42
-)
65
=8
80
47
.!
65
El Salvador
148
3.7
43
90
821
33
19
05
76
07
50
- 3
69
40
1.1
62
Guatemala
132
1.3
32
85
:-
1,292
10
23
39
70
0
41
&
47
52
23
Guyana
50
12.2
6
83
422
:1
34
89
55
8
51
27
;
95
73
Haiti
90
33
1.5
7
112
369
27
4
106
78
'C4
47
12
35
35
2
Honduras
21
202
5.9
:
19
86
-
752
14
38
103
73
23
51
::
58
69
29
Jamaica
34
1.5
2
55
if
993
35
56
74
43
L3
68
27
95
)
86
:
Mexico
90
1,348
0.6
140
50
8
2,678
is
74
59
39
03
69
88
75
57
Nicaragua
457
16.0
72
76
23
845
>9
52
98
66
33
51
;,
88
56
9
Panama
27
95
2.0
12
46
:
2,150
13
119
56
38
31
62
88
,5
82
7
Paraguay
80
34
1.0
16
80
921
'5
13
56
38
19
53
:-,
85
26
2
85
Peru
1,503
6.5
:
127
73
1,153
25
18
68
41
i.
72
91
78
M
55
47
Trinidad & Tobago
64
1.0
2
35
:..
5,095
3
296
C3
32
28
69
27
95
.0
99
'5
Uruguay
98
141
2.5
32
46
-
1,900
3
57
8
28
22
70
32
94
80
8
Venezuela
59
811
1.6
49
49
:,
2,922
3
194
84
37
in
60
in
86
i.
83
78
45
EUROPE
NATO Europe
106,258
3.4
3,270
8,295
405
26
64
93
96
Belgium
80
2,811
3.1
91
18
9,298
:
517
23
25
57
99
Denmark
95
99
1,375
2.1
:
30
5
12,907
:
962
2
14
23
69
99
France
100
100
23,976
3.9
558
10
10,986
648
11
21
22
70
99
:
Germany, West
99
L3
85
22,681
3.1
486
13
is 12,049
2
542
13
23
61
60
99
Greece
100
5
88
2,604
5.7
209
31
-
4,617
:1
115
35
29
2
73
-
88
95
...
Iceland
-
-
-
2
: 16,444
:7
592
19
23
:2
73
100
100
i
100
Italy
12,060
2.3
385
22
:0 9,330
!!!
373
11
21
3
58
23
96
is
99
is)
Luxembourg
99
44
0.8
:
1
7
:
15,740
.
I
818
7
19
28
69
100
Netherlands
100
100
4,373
3.1
101
14
10
9,861
11
651
35
29
55
61
99
100
Norway
100
1,989
3.2
:
37
2
-
15,109
on
1,031
5
18
33
68
100
99
is
85
Portugal
895
3.3
:
68
38
50
2,628
-2
114
6.
23
33
68
58
80
92
Spain
7.
41
4,577
2.3
326
25
3
5,248
is
167
6
32
to
71
C7
92
:
Turkey
95
2
90
3,546
4.9
654
78
"-
1,409
35
29
89
55
39
53
32
62
in
United Kingdom
78
0
10
25,327
5.0
:
324
15
02
9,009
22
474
7
22
8
76
99
100
100
ALL NATO
(incl. U.S. & Canada)
395,369
5.1
5,497
11,981
627
24
69
96
97
86
Warsaw Pact
293,328
9.8
4,885
7,663
377
25
63
98
Bulgaria
94
52
1,610
3.6
148
33
39
4,955
33
219
31
27
:3
64
33
Czechoslovakia
93
::
96
...
4,228
4.1
-3
.
201
29
28
6,688
35
241
46
34
55
61
4
Germany, East
99
:7
74
54
60
7,196
4.9
01
179
16
23
8,808
32
335
7
19
51
62
1.
99
46
90
14
Hungary
70
1,551
2.4
105
28
10
6,212
CS
234
26
24
51
62
Poland
19
98
in
84
Ti
60
6,264
3.3
402
37
33
5,034
37
228
42
33
61
60
6
98
P.
67
54
50
Romania
1,424
1.6
CE
190
46
42
4,024
59
73
56
38
89
53
U.S.S.R.
27
95
60
77
34
50
271,055
11.5
:
3,660
25
24
8,442
24
442
26
24
43
64
19
98
100
94
50
50
World Military and Social Expenditures 1989
lostmaxing
Millitary
Impenditures
of
the
USSR
This section of the report has repeatedly called for Soviet disclosure of the military budget in the detail
proposed by the United Nations. This is important for at least two reasons: budget comparisons can be
used to fuel an arms race; when they are available only from an opponent, they may exaggerate the facts.
The new policy of glasnost (openness) has begun to unveil the budget. What was assumed to be a closely
guarded secret, known only to a very privileged few, may turn out to be a well of ignorance and weak
accounting. However, the information is beginning to flow. Whether or how soon it will answer the
questions is still unclear.
Since the last edition of World Military and Social Expenditures,
and resolve, and some of its members have exchanged visits and
the policy of glasnost has opened the window a crack on the shrouded
views with the members of the savvy Armed Services Committee of
and mysterious Soviet military budget. Rather than the usual report in
the US House of Representatives.
these pages on the procedures followed by western observers in esti-
Meanwhile the revised budget announced by Gorbachev in the
mating Soviet military expenditures, these notes will review recent
spring, although almost four times the size of budgets previously
disclosures and their effects, if any, on our knowledge of the actual
declared, stands well below the estimates that US intelligence has
level of military expenditures of the USSR.
been reporting. CIA/DIA calculate the Soviet defense burden at 15 to
] The Soviet leadership has on at least two recent occasions referred
17 percent of GNP, rather than the 9 percent stated in the Soviet
announcement. In ruble terms, the CIA/DIA estimate may well
to plans for specific unilateral reductions in their military expendi-
tures. In January of this year President Gorbachev pledged a unilateral
be more than 60 percent higher than the recently-disclosed official
cut of 14.2 percent by 1990-91 and in June there was a further
budget.
announcement that by the mid-1990's military expenditures would be
Even a complete military budget in ruble terms would be only half
reduced by one-third.
of the story. The other part of the problem is how to convert it to
] These announcements followed several other statements that were
dollars to get a sense of how it compares with US military expendi-
more in the nature of revelations. At the Party Conference in July
tures and what it shows over time in terms of the major reductions that
1988, Foreign Minister Shevardnadze had spoken openly of the short-
Gorbachev has promised to make in the military budget. The conver-
age of statistical information to guide national economic policy, infer-
sion problem is a headache for all international comparisons in value
ring also that the leadership was having some trouble extracting full
terms, and especially so for economies like the USSR which has a
information from the bureaucracy.
complex system of subsidies and government-administered prices,
not only for the military-industrial complex, but throughout the econ-
IN At a meeting in Washington, Gorbachev told President Reagan-as
omy, including at the retail level.
former US Ambassador Arthur Hartman reports-that they really did
not know how much they were spending on defense. Since they do not
Conversion on the basis of the market exchange rate in this case
have a national accounts system, Hartman comments, he believes that
would be hopeless. Officially the value of the ruble is pegged at about
this is true, and that they are only beginning to understand what an
$1.59 (or 0.63 rubles to the dollar). At another extreme is the illegal
enormous drain on their resources their military burden has been.
black market rate; there the ruble is said to trade in the range of $0.06
(or about 16 rubles to the dollar).
The overall Soviet budget deficit, disclosed for the first time, was
said in October 1988 to be running at 7 to 8 percent of GNP. This year
Conversions used by US intelligence generally use neither of the
the Soviet legislative body, the Supreme Soviet, was told that it was
above and can produce quite different results, depending on the
soaring toward 14 percent of GNP. (By comparison, the worrisome
choice made. In converting Soviet foreign trade to dollars, CIA does
use the official Soviet exchange rate for the ruble. In expressing
US deficit is about 3 percent of GNP.)
Soviet GNP in dollars, however, the agency uses the geometric mean
] In May 1989 Gorbachev announced that Soviet military spending
of the ruble and dollar comparisons. And in calculating Soviet mili-
this year would be 77.3 billion rubles, or roughly 9 percent of the
tary expenditures, it uses a third method: it values Soviet military
GNP. Subsequently his economic advisors said that the estimate
equipment, forces, etc. in terms of the dollar costs of similar items if
includes expenses for manpower, weapons procurement, and
bought in the US. Because of the "index number effect," the third
research, except for some scientific research with possible military
method has the effect of overstating Soviet military expenditures in
applications. Prior to these statements the official Soviet defense bud-
international comparisons.* ACDA, which presents GNP and mili-
get had been put at 20 billion rubles for the latest years. In 1988 the
tary expenditures as calculated by CIA, acknowledges the inconsis-
Soviet Chief of Staff acknowledged that this amount covered only
tency but no longer provides alternative estimates which would permit
expenses for manpower, supplies, construction and maintenance. In
reasonable comparisons between them.
other words, two big cost categories, weapons procurement and
research, were not included.
These problems justifiably raise the question whether the Soviet
economy can effectively operate in the real world without a freely-
Despite these surprising openings in the information curtain, the
traded ruble. The record does show that Soviet economists have dis-
detail remains scanty. The ruble figures may be fleshed out further,
cussed this problem among themselves and also with western
especially when the newly-established Defense and State Security
economists. A conference of US and Soviet officials and business
Committee of the Supreme Soviet, the legislative body, begins to
people is scheduled for October 1989 to review convertibility pro-
probe. Presumably the Committee has been given carte blanche to get
posals. Meanwhile Agence France-Presse reports that earlier this
the facts and to approve or disapprove the military budget, although as
spring Abel Aganbegyan, Gorbachev's economic advisor, said that
of summer 1989 it was still without a professional staff or office
Moscow planned to offer a $25,000 prize to the person who devises
space. Nevertheless there are encouraging signs of its independence
the best way to convert the ruble into dollars.
*Index number effect
National economies tend to use relatively more of that
becomes an extremely expensive item. This is the basis of
geometric mean of the dollar and ruble estimates. This is
factor of production in which they have a cost advantage.
the distortion which occurs when all elements of the
done in the CIA calculations of GNP but not in the esti-
If, for example, labor is cheap relative to capital, more
Soviet military effort are given dollar price tags. To offset
mates of military expenditures. A geometric mean would
labor is used. If that labor is valued at prices in effect in
this distortion, the usual procedure would be to calculate
require full detail on ruble prices. For the "index number
an economy where labor costs are high, however, it
expenditures in the prices of both nations and to take a
effect," see ref. 4. opposite.
58
World Military and Social Expenditures 1989