Union of Soviet Socialist Republics

E

Mining and Manufacturing

The Soviet Union had the biggest iron ore deposits in the world and led all countries in output of iron and steel products. It was also the top maker of refined nickel, smelted zinc, and manganese; second in primary aluminum and refined lead; and third in copper mining and milling. It was believed to rank second in gold and diamond production after South Africa.

Its mineral wealth was located in many different regions. Seventy percent of iron reserves were east of the Urals in the European USSR, chiefly in the Donets Basin of the Ukrainian republic and the Kursk Magnetic Anomaly in the RSFSR. Bauxite was primarily located in the Urals but was also found in Ukraine and several other areas. Precious metals and stones were concentrated in eastern Siberia and the Far East, base metals in Central Asia and the Noril’sk area of Siberia, and nickel ores in western Siberia and the Urals. Soviet planners aimed at self-sufficiency in minerals. However, the Soviet Union exported sizable amounts of gold, diamonds, platinum, and nickel to earn convertible currency (the Soviet currency was non-convertible to foreign currencies and could not be used to purchase imports). The main mineral import was bauxite, which supplied aluminum smelters.

Manufacturing was the heart of the Soviet economy. At its dissolution in 1991, the Soviet Union had about 46,000 industrial plants and factories. Its manufacturing enterprises tended to be very large; more than 20 percent of workers were found in firms with more than 10,000 employees. Published statistics showed 35 percent of industrial output in 1989 being in machine building, 17 percent in food processing, 16 percent in light industry, 12 percent in metallurgy, 10 percent in wood products and building materials, 8 percent in chemicals, and 2 percent in other products. More than 60 percent of Soviet industry was located in the RSFSR.

The huge military-industrial complex, much of it concealed in the machine-building category, had first call on manpower, materials, and equipment. Western intelligence sources reported in the 1980s that the USSR was first in the world in the manufacture of military aircraft, tanks, artillery pieces, and submarines. The largest civilian branch of machine building was the automotive industry, which assembled mostly trucks, tractors, and farm equipment rather than passenger vehicles. The USSR in 1984 produced 1.3 million trucks and cars, 564,000 tractors, and 118,000 combine harvesters. In the consumer sphere, it put out 8.6 million television sets (all of them in defense-industrial plants), 5.7 million home refrigerators, and 68.1 million watches; it also produced the most textiles and footwear of any country in the world. It ranked first in production of cement, and its building industry, mechanized in the 1950s, put up prefabricated homes, offices, and factories.

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By any reckoning, qualitative performance of Soviet industry lagged far behind quantitative performance. Comparative studies suggested that productivity was only 25 to 40 percent of that in U.S. industry, in part because much machinery was obsolete. Industrial pollution was endemic, as environmental regulations were easy to circumvent so long as managers met their production quotas. One report found that 70 million Soviet citizens in 103 cities were vulnerable to life-shortening diseases due to levels of airborne contaminants at least five times the permitted amount.

F

Energy

The Soviet Union was blessed with abundant energy resources. Self-sufficient in natural gas, oil, and coal, it used these fossil fuels to power its industries. According to Western estimates, it possessed 40 percent of world reserves of natural gas (52 trillion cu m/1836 trillion cu ft), and some 6 percent of world reserves of crude oil (58 billion barrels). It possessed an estimated 240 billion metric tons of coal. Natural gas production constituted about 40 percent of world output, oil production about 20 percent, and coal production about 15 percent. Soviet energy production was predominantly in natural gas (38 percent) and oil (36 percent). Coal, the primary fuel until about 1970, accounted for 20 percent of Soviet energy production in 1989, and hydroelectric generation accounted for 3 percent. The nuclear power program, the third largest in the world, covered 3 percent of Soviet energy needs and 13 percent of total electricity generation. Sixteen percent of all domestic energy production was exported.

Most of the Soviet Union's energy resources, or 90 percent, were located in the RSFSR, mainly in Siberia. The most bounteous reserves were in the Samotlar oil fields, the Tyumen’, Urengoy, and Yamal gas fields, and the Kuznetsk Basin coal pits, all in western Siberia, and the Sakhalin oil and gas fields in the Russian Far East. Oil was found in significant volume in Ukraine, Azerbaijan, and Turkmenistan, and coal was primarily located in Ukraine and Kazakhstan.

The USSR’s energy wealth did not make this a trouble-free sector. Energy was so cheaply priced that few efforts were made to conserve it in industry, which absorbed three-quarters of output, or other areas. Energy used per unit of GNP was thus 2.5 times higher than in the Western market economies, and there was no trend toward more efficient consumption. The placement of so many oil and natural gas reserves in remote areas east of the Urals necessitated colossal outlays of capital, especially in the construction of pipelines, to transport them to major industrial centers. Investment in energy production escalated from 30 percent to 40 percent of all industrial investment in the 1980s. The country had 90,000 km (56,000 mi) of oil pipeline and 215,000 km (134,000 mi) of gas pipeline, but maintenance was poor and expansion of the network was held back by bottlenecks in production of compressors and other components. Because of a preference for centralized grids for distribution of heat and hot water in the cities, most electricity was generated at fossil fuel-fired thermal stations that threw off large amounts of air pollution. Nuclear power, seen by many as a clean alternative to the thermal plants, expanded quickly in the 1970s and 1980s. The reactor meltdown at the Chernobyl’ nuclear power station in the Ukrainian republic in April 1986—the world’s worst known reactor disaster—highlighted safety problems with the program. Many Soviet reactors lacked adequate safeguards to protect the public in such an event.

G

Transportation and Travel

The USSR had an extensive and overburdened transportation system. Population and economic activity being highly dispersed, it had to haul five to ten times as much freight to produce a unit of GNP as the United States and Western Europe did. The backbone of the system was the railroads, which operated 147,000 km (91,000 mi) of public track, about a third of it electrified, in 1988; approximately half of the rail lines predated 1917. The absolute volume of freight traffic on the Soviet railroads that year was more than double the United States and Western Europe combined. Ninety-one percent of all ground-hauled freight was moved by rail, as compared to 48 percent in the United States and between 10 and 30 percent in Europe. The government consistently neglected highways and motor vehicle transport, evidently deterred by the cost of building a modern system in so enormous a country. There were 970,000 km (602,730 mi) of public highways in 1988, of which about 90 percent was classified as hard-surfaced. Only 3 percent of Soviet ground freight was hauled by truck in 1988. About 15 percent of all cargo traveled by sea or inland shipping. Aeroflot, the USSR’s one airline, carried a fraction of 1 percent of freight traffic.

Passenger traffic was more evenly balanced. For intercity travel, 52 percent of all travel by common carrier was done by train in 1988, 36 percent by airplane, and 12 percent by bus. Travel by air was most common for long trips and by bus for short trips. Fifty-four percent of all trips abroad were taken by rail, 42 percent by air, 5 percent by water, and 2 percent by bus. Privately owned automobiles, for many years frowned upon by the state for ideological reasons, increased from 1.4 million in 1970 to 15.1 million in 1988, still little more than one-tenth of the U.S. total.

Some 10.6 million citizens undertook foreign travel in 1988. Most of these journeys were to countries in the Soviet bloc in Eastern Europe. The regime relaxed travel restrictions in the 1970s and 1980s, but required that all persons wishing to leave the USSR apply for a special passport document from the police. To do so, they had to describe their itinerary and undergo a security check. The authorities granted foreign passports only if they were satisfied the applicant was politically reliable and had no intention of leaving permanently.

H

Communications

Mass communications was a large industry and an indispensable instructive tool, helping to disseminate and promote the government line. More than 8600 newspapers were published in 1988, about two-thirds in Russian and one-third in minority languages; their combined circulation of 230 million put them within reach of almost every citizen. The most widely read were Trud (Labor), the daily organ of the trade unions, with a print run of 19 million; Komsomol’skaya pravda (Komsomol Truth), the newspaper of the Komsomol (Communist Youth League), at 17.6 million; Pravda (Truth), the CPSU’s mouthpiece, at 10.7 million; and Izvestia (News), published by the Soviet parliament, at 10.4 million. The Soviet Union’s 5400 periodicals and 81,600 new books in 1988 reached more select readerships.

The Soviet Union’s radio and television broadcasters were under the jurisdiction of the State Committee for Television and Radio Broadcasting. The two national television networks, Radio Moscow, and about 5300 local stations and transmitters made broadcasts in 72 languages. Radios were found in most Soviet homes by the 1950s, and television made rapid inroads after 1960. Ninety-two million televisions and 85 million radio receivers were in service in 1989. Telephones were less common: only 24 million home phones were installed at the time. User demand for telephones and other telecommunications systems far exceeded the government’s supply of these services; instead, the state gave precedence to the development needs of the national economy.

The Soviet regime built on the tsarist tradition of censorship of books and publications, imbuing it with greater rigor and fervor. The main screening board for all media was the Main Administration for Safeguarding State Secrets in the Press, known by its Russian acronym of Glavlit. Established in 1922, it carried out advance checks of only some materials, leaving daily responsibility with editorial boards and with ideological specialists in the apparatus of the CPSU.

In addition to propagating the regime’s point of view, the mass media entertained their audiences and informed them about public issues. Some reporters and commentators also indulged in discreet criticism of shortcomings in Soviet life. From time to time the media were caught up in political power struggles, conveying the positions of rival patrons. Liberalization in the mass media was the gist of the policy of glasnost (Russian for “openness” or “candor”) that Gorbachev articulated after 1985. Censorship was greatly eased, investigative journalism was applauded, and independent newspapers and journals came forth for the first time since the early 1920s.

I

Currency and Trade

The Russian ruble lost almost all value during the Russian Civil War. The reissued Soviet ruble was stabilized during the NEP, but as a non-convertible currency that, under a decree of July 1926, could not be taken out of the country. Gosbank, the state bank, pegged the official exchange rate to the U.S. dollar in 1937, to the price of gold in 1950, and to the value of a basket of freely traded currencies in 1973. The exchange rate was artificial, responsive entirely to planning and political considerations. Soviet banks, which carried out the wishes of the CPSU and government, were charged with furnishing short-term credit to state-owned enterprises and with overseeing the fulfillment of the government’s economic plans.

Domestic retail trade proceeded through state stores and consumer cooperatives, which sold their wares at state-fixed prices, and through legal private vendors and the black market (the illicit sale of commodities), which sold at prices set by supply and demand. State outlets did the overwhelming percentage of business. The consumer cooperatives, confined to rural areas, were indistinguishable from the state outlets by the 1980s. Private vendors were limited by law to a few kinds of personal service (such as tutoring or baby-sitting) and to the urban bazaars selling produce from the peasants’ garden plots. The black market, having flourished at earlier points in Soviet history when state supply of consumer goods and other commodities fell short, grew steadily in the 1970s and 1980s. The goods sold had often been embezzled from the public sector, manufactured using state-owned equipment or materials, or smuggled into the country.

The Soviet rulers insulated their country from the world economy, in the belief that it would develop more smoothly with a minimum of influence from capitalism. The government’s “foreign trade monopoly,” laid down by Lenin in 1918, stipulated that all foreign commerce was to follow through a specified state agency. Under the monopoly, the Ministry of Foreign Trade handled all exports and imports. Soviet resistance to foreign trade eroded considerably after 1970, as the regime sought to plug gaps in domestic production with imports. By Soviet calculations, foreign trade added 11 percent to the value of the GNP in 1985, up from 4 percent in 1970. The USSR ran modest trade deficits in the 1980s. Fuels and electricity accounted for 40 percent of exports in 1989, machinery and equipment for 16 percent, and metals and ores 11 percent; machinery and equipment constituted 38 percent of imports, food products 17 percent, and consumer goods 14 percent. Fifty-six percent of trade flow was with the nine countries of the Council for Mutual Economic Assistance (COMECON or CMEA), the Soviet-East European trading bloc; 6 percent with other Communist countries; 26 percent with developed countries; and 12 percent with less developed nations. East Germany was the USSR’s largest trading partner among Communist countries, West Germany among developed countries, and India among less developed countries. The Soviet Union did not belong to any trade associations other than COMECON.

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