Gorbachev Puts Military Budget at $119 Billion

President Mikhail S. Gorbachev, disclosing the Soviet Union’s full military budget for the first time, said Tuesday that Moscow will spend the equivalent of $119 billion on defense in 1989 but that the sum will be cut by 14% over the next two years and the money spent on improving living conditions.

Gorbachev told the Congress of People’s Deputies, the country’s new legislature, that reduced international tensions and arms control agreements make it possible to cut military expenditures while still guaranteeing national security.

The long-secret defense budget, nearly four times the nominal figure that was announced last autumn by the country’s finance minister, was close to many Western estimates of Soviet military spending, although some diplomats and military attaches here said they believe that it still somewhat understates the costs.

Unlike the figures included in the government budget each year--about $32 billion for 1989--the figure given Tuesday includes weapons procurement and military research-and-development costs as well as expenditures on personnel, supplies, construction and maintenance. No breakdown of the total was provided, however.

“This is a full figure, an honest figure,” Marshal Sergei F. Akhromeyev, former Soviet chief of staff and now a key Gorbachev adviser, told journalists. “Everything that is defense, that is military has been included. . . . And, for the first time, we know ourselves what we are spending.”

9% of Soviet GNP

While the figure of $119 billion, calculated at current exchange rates, is considerably lower than the U.S. defense budget of about $305 billion, it represents about 9% of the Soviet Union’s gross national product, compared to 6% of GNP in the United States.

The Soviet Foreign Ministry’s chief spokesman, Gennady I. Gerasimov, questioned about the apparent disparity in spending, noted that American soldiers are paid more than Soviet conscripts.

“There are profound differences in structure and price levels,” Gerasimov said. “For instance Soviet conscripts are paid only 7 rubles ($12) a month.”

The only questions raised among Soviet civilian economists were over the inclusion of military assistance to Third World countries, the budget of the intelligence services and the cost of military aspects of the space program. Earlier statements from Soviet officials had supported Western estimates that defense expenditures amounted to more than 15% of GNP.

But some experts in America complained that the figures still do not tell the whole story. “The Gorbachev figure seems quite short,” Abraham Becker, a RAND Corp. analyst who has published numerous studies on Soviet military spending, was quoted as telling the British news service Reuters.

Another U.S.-based expert on the Soviet economy, Jan Vanous of Planecon, told Reuters that Gorbachev’s figure was “kind of low” and said it “raises more questions than it answers.”

Converting the ruble figure directly to dollars is virtually meaningless, the experts told Reuters, because the military has access to materials and devices that are simply not available to civilian enterprises. Also, they said, the ruble estimate likely will increase considerably when the Soviets carry through long-promised changes in wholesale prices.

Gorbachev’s announcement, part of his first report to the new legislature, was intended as an important step toward giving the deputies real authority over the Soviet military, long an independent political kingdom here, and permitting them to exercise “supreme state power.”

Without control of the military and of the security services, which have remained equally independent over the years, the congress will have little ability to set the country’s policies.

Gorbachev was also responding to mounting calls for the immediate transfer of more resources--from the military, from the space program, from long-term development projects such as land reclamation and hydroelectric dams--to the production of consumer goods, construction of new housing and community facilities and the improvement of pensions and welfare benefits.

He said that more than $16 billion will be cut from the defense budget by the end of 1991 and applied directly to improving living standards.

A third element in Gorbachev’s disclosure of the defense budget was his hope, articulated at the United Nations in December, that agreements can be negotiated not only to reduce nuclear arsenals and conventional forces but also to curtail the arms race as a whole through limiting military spending and converting munitions plants into civilian factories.

“To a people who have gone through a difficult war, our Soviet army remains important,” Gorbachev said, recalling the still vivid memories here of World War II. “But in the world today it is possible to achieve security through diplomatic means. This makes it possible to cut military expenditure without any damage to the defense capability of the country.”

Moscow had long been criticized by the West, particularly Washington, for hiding much of its military spending in other parts of the budget. To many of the Kremlin’s critics, this was clear evidence that it was secretly arming itself for war and thus proof of its aggressive intention.

‘Cult of Secrecy’

Soviet officials, however, attribute the Kremlin’s practice of reporting only a nominal figure for the defense budget to the “cult of secrecy,” which began in the time of the dictator Josef Stalin and grew over the decades.

“There were always probably some intelligence considerations, but these were overtaken when the (CIA) and the Pentagon invented other ways to count how many planes and tanks we produced and how many soldiers we had here or there,” Roy A. Medvedev, a longtime dissident who has now been politically rehabilitated and who was elected to the congress, commented.

“So, the real reason the figure was secret was that government was secret. Everything the government, not just the military, did was secret. Budgets were secret, military spending was secret, the size of the armed forces was secret. . . . Everything was secret because that is the way we were governed--through secrecy. That is why saying now what is what, how much is spent and so forth, is important. No longer will we be governed by secrecy.”

Gorbachev also quickly reviewed the basic elements of the “new political thinking,” which has brought major changes to Soviet foreign policy in the last four years.

“The security of the country must be ensured, above all, by political means as a component of general and equal security in the process of demilitarization, democratization and the humanization of international relations,” he said.

The elimination of the world’s nuclear arsenals through negotiation will be a major Soviet foreign policy priority, he said, with “the reduction of countries’ defense potential to the point of reasonable sufficiency.”

The use or threat of force is unacceptable in international relations, and the respect for the sovereignty, independence and territorial integrity of other countries must be indisputable, he said. Dialogue aimed “at balancing the interests” is the only way to settle a conflict, he averred.

In addition, the Soviet Union wants to be included in the world economy on an active basis, Gorbachev said.

While reiterating broad statements of principle that he had made before, Gorbachev was seeking to bring deputies into the formulation of Soviet foreign policy for the first time. The congress and the Supreme Soviet, the country’s full-time legislature, will be consulted fully on all major foreign policy questions, he said.

“They ask a lot of questions in the West about our strategic policy,” Gerasimov said, referring particularly to President Bush’s question this week at the North Atlantic Treaty Organization summit in Brussels about whether Moscow was serious in its policy declarations. “The answer is, ‘Yes, we are serious.’

“Others ask whether our policies might not change overnight, as they might have sometime in the past.

“In the past, policies ran counter to the principles declared by the Soviet state, and so there was skepticism. In the future, all major foreign policy decisions will be taken only after thorough discussion in the Supreme Soviet and, for the most important decisions, in the Congress of People’s Deputies. That is the guarantee that our policies will not change overnight.”

LIFTING THE VEIL

Soviet President Mikhail S. Gorbachev revealed that the Kremlin will spend about $119 billion in 1989 on defense--nearly four times the previous official claim. No breakdown was given. While Soviet figure is considerably lower than U.S. defense budget, it represents higher percentage ofSoviet gross national product. Some estimates put the figure as high as 15%.

SOVIET UNION Military spending: 119 billion Estimated % of GNP: 9% UNITED STATES Military spending: about $300 billion Estimated % of GNP: 6%