Soviet Union-Defense Spending MILITARY ECONOMICS

In 1988 military spending was a single line item in the state budget, totaling 21 billion rubles (for value of the ruble--see Glossary), or about US$33 billion. Given the size of the military establishment, however, the actual figure was at least ten times higher. Western experts have concluded that the 21 billion ruble figure reflects only operations and maintenance costs. Other military spending, including training, military construction, and arms production, may be concealed within the budgets of all-union ministries and state committees. The amount spent on Soviet weapons research and development was an especially well-guarded state secret. Since the mid-1980s, the Soviet Union has devoted between 15 and 17 percent of its annual gross national product ( GNP--see Glossary) to military spending, according to United States government sources. Until the early 1980s, Soviet defense expenditures rose between 4 and 7 percent per year. Since then, they have slowed as the yearly growth in Soviet GNP slipped to about 3 percent. In 1987 Gorbachev and other party officials discussed the extension of glasnost' to military affairs through the publication of a detailed Soviet defense budget. In early 1989, Gorbachev announced a military budget of 77.3 billion rubles, but Western authorities estimated the budget to be about twice that.

Data as of May 1989

With the notable exceptions of Khrushchev and possibly Gorbachev, Soviet leaders since the late 1920s have emphasized military production over investment in the civilian economy. As a result, the Soviet Union has produced some of the world's most advanced armaments, although it has been unable to produce basic consumer goods of satisfactory quality or in sufficient quantities (see Industrial Organization; The Consumer Industry , ch. 12).

Defense Spending

In 1988 military spending was a single line item in the state budget, totaling 21 billion rubles (for value of the ruble--see Glossary), or about US$33 billion. Given the size of the military establishment, however, the actual figure was at least ten times higher. Western experts have concluded that the 21 billion ruble figure reflects only operations and maintenance costs. Other military spending, including training, military construction, and arms production, may be concealed within the budgets of all-union ministries and state committees. The amount spent on Soviet weapons research and development was an especially well-guarded state secret. Since the mid-1980s, the Soviet Union has devoted between 15 and 17 percent of its annual gross national product ( GNP--see Glossary) to military spending, according to United States government sources. Until the early 1980s, Soviet defense expenditures rose between 4 and 7 percent per year. Since then, they have slowed as the yearly growth in Soviet GNP slipped to about 3 percent. In 1987 Gorbachev and other party officials discussed the extension of glasnost' to military affairs through the publication of a detailed Soviet defense budget. In early 1989, Gorbachev announced a military budget of 77.3 billion rubles, but Western authorities estimated the budget to be about twice that.

Data as of May 1989