Five-year plan

Five-year plan (п’ятирічка; piatyrichka). Abbreviation of the term ‘five-year plan for the development of the national economy of the USSR.’

Theory. The USSR decree of 22 February 1921 establishing the State Planning Committee emphasized that short-term economic plans are based on a long-term plan, which at that time was supposed to be the plan for the electrification of Soviet Russia (GOELRO). As experience showed, it was difficult to fulfill the basic tasks set forth in a long-term plan by means of annual short-term plans because of the inherent incompatibility between the two types of plans. Hence, a middle-term plan was necessary, and the five-year plan was introduced to meet this need. However, since in the meantime GOELRO had lost its meaning as a long-term plan and a new long-term plan was not yet prepared, the five-year plan adopted in 1928 became not a middle-term plan, but a long-term plan for the development of the national economy of the USSR. In the 1950s it was admitted that five-year plans did not guarantee continuity in planning because by the fifth year of any plan neither the ministries nor the enterprises knew what they would be doing in the following year. Attempts to introduce long-term plans and to demote the five-year plans to middle-term plans proved unsuccessful at first because of errors in calculations. A long-term plan of 20 years was adopted only in 1979 and the five-year plan was reduced to a middle-term plan.

From 1928 the one-year plan was the main form of planning for all Soviet state agencies and enterprises, while the five-year plan was compulsory only for the central agencies and served as a guideline for one-year planning. As soon as enterprises were given an active role in developing one-year plans, it was necessary to widen the temporal framework of the planning by enterprises and industrial complexes. Hence, the USSR law of 12 July 1979 resolved that five-year plans, not one-year plans, were to be the main form of planning for all state agencies, enterprises, and complexes whether they were central, republican, or local. Thus, five-year plans became compulsory for enterprises and complexes, whose subordinate divisions worked out their one-year plans on the basis of the five-year plans.

To ensure that five-year plans were developed in an orderly way, the State Planning Committee of the USSR prepared uniform methodological instructions that provided concrete direction for the complex process of planning in all the branches of the economy. On the basis of the so-called control figures the central ministries prepared very detailed drafts of five-year plans for Union enterprises located in the Ukrainian SSR, and the Council of Ministers of the Ukrainian SSR prepared detailed drafts of plans for the enterprises under its jurisdiction. The structure of the five-year plans included the following sections: (1) the basic general indicators of the development of the national economy; (2) scientific research publications and scientific and technical data on the national economy; (3) the development of industry; (4) agriculture and forestry; (5) transportation and communications; (6) investments; (7) geological works; (8) labor and cadres; (9) income; (10) trade; (11) consumer services and communal economy; (12) public education, culture, and health care; (13) improvement of the standard of living; (14) the distribution of productive forces and the development of the Union republics; and (15) foreign economic relations.

The State Planning Committee of the USSR, along with other central agencies, examined the draft plans of the USSR ministries and of the Council of Ministers of the Ukrainian SSR, co-ordinated them, and prepared on their basis a draft five-year plan of economic and social development for the USSR. This plan was approved on the basis of the most important indicators, those that defined the basic direction and rate of development. In the next stage the approved plan was sent in the form of suitable extracts to the ministries of the USSR and the Council of Ministers of the Ukrainian SSR. The ministries and the Council of Ministers used this plan to correct their own earlier five-year draft plans, which were then approved. In these approved plans concrete tasks were assigned to the Council of Ministers of the Ukrainian SSR for the economy that was under the management of the republic’s ministries and departments and for the economy that was under local (oblast) management. The agencies responsible for executing these tasks were informed by means of copies of the government’s resolutions. On the basis of these resolutions the draft plans of the ministries, departments, and oblasts of the Ukrainian SSR were revised and were then confirmed by decrees of the heads of these agencies. In these approved plans the ministries of the Ukrainian SSR defined the tasks of the enterprises, complexes, and organizations under their jurisdiction, and the oblast executive committees set the tasks of the oblast departments and agencies, and of the cities and raions. The ministries and departments of the USSR defined the tasks of the enterprises, conglomerates, and organizations on Ukrainian territory that were under all-Union jurisdiction.

In the early years, five-year planning took place primarily in branches of the economy and secondarily on a territorial basis. Moreover, the territories of the Union republics were treated very unequally as to their development. From an economic point of view, territorial planning was important for the interconnected development of the branches and territories, for the resolution of infrastructural problems, and for the proper supply of labor, modes of construction, materials, and so on. Experience showed that branch planning, no matter how carefully prepared, could not guarantee optimal decisions for the national economy as a whole unless it was linked with territorial planning. Furthermore, the autonomy of the Union republics had to be taken into account.

The First Five-Year Plan covered 24 territories. The second took into consideration the development of the union republics and regions. The Third Five-Year Plan encompassed 10 republics and 13 economic regions. In 1946 a law was passed calling for a five-year plan for the reconstruction and development of the national economies of the Union republics and particularly of the regions that were devastated during the Second World War. The directives on the Fifth Five-Year Plan of the USSR (1951–5) did not contain a separate section on the Union republics. Many investment goals were included in the branch plans.

In the 1970s more attention was given to territorial planning. The law of 12 July 1979 states that the central ministries of the USSR had to inform the Council of Ministers of the Ukrainian SSR and the planning commissions of the oblasts about their control figures and had to draft five-year plans and those parts of approved five-year plans that refer to the Union enterprises, complexes, and organizations located within Soviet Ukraine (except for the defense industry). They were to consult the Council of Ministers of the Ukrainian SSR in developing draft plans. The Council of Ministers of the Ukrainian SSR not only developed draft five-years plans for the enterprises under its jurisdiction, but also made suggestions to the USSR State Planning Committee and appropriate ministries of the USSR government about plans for the Union enterprises in order to facilitate the complex territorial economic and social development of the Ukrainian SSR. The key indicators of the plans for Union enterprises that were located in Ukraine had to be included in the five-year plans of Soviet Ukraine’s economic and social development. The Council of Ministers of the Ukrainian SSR and the executive committees of the oblast and city soviets developed and approved the collective plans for the production of local building materials and consumer goods and for the construction of residential, communal, and recreational buildings. These plans also included the indicators from the plans of all-Union enterprises in Soviet Ukraine. The government of the Ukrainian SSR was responsible for the implementation of these plans.

Implementation

The First Five-Year Plan, 1928–33. Instructions for drawing up the First Five-Year Plan were approved by the 15th Congress of the All-Union Communist Party (Bolshevik) in 1927. This was to be a five-year plan for the accelerated industrialization of the USSR, and at first a fierce political struggle over its contents developed between Joseph Stalin and the Troskyists. The final text of the five-year plan was approved only in April 1929 by the 16th Party Conference. Yet, the controversy over the distribution of industry continued: the State Planning Committee of the USSR argued for the development of the Ural-Kuznetsk region, while the State Planning Committee of the Ukrainian SSR defended the economic preferability of concentrating economic development in Soviet Ukraine. On 15 May 1930 the Central Committee of the All-Union Communist Party (Bolshevik) decided the issue in favor of Ukraine and the Kuzbas. The plan was appropriately revised to reflect this decision. The First Five-Year Plan made no provisions for the forcibly accelerated collectivization of agriculture and for the quantity of agricultural exports that turned out to be necessary to pay for imported machinery during the world agrarian and financial crisis.

During the First Five-Year Plan, in addition to the agricultural crisis, a fuel crisis, a metals shortage, and a transportation crisis developed. The plan was not fulfilled. Yet, about 1,500 new industrial plants were built, of which about 400 were located in Ukraine. Machines were mostly imported from abroad. Besides the Ural-Kuznetsk metals and coal region, a new machine-building and arms industry was developed in central Russian Soviet Federated Socialist Republic, while the Dnipro Hydroelectric Station, other electric stations, and tractor, combine, and mining-machinery plants were built in Ukraine. During this period the Soviet economic system assumed the shape it later maintained.

The implementation of the First Five-Year Plan, at the cost of consumer goods, and the accompanying total collectivization led to a catastrophic Famine-Genocide of 1932–3 in Ukraine and to a radical and permanent decline in the standard of living.

The Second Five-Year Plan, 1933–7. Instructions for drawing up the Second Five-Year Plan were passed by the 17th Party Conference in 1932, and the plan was approved by the 17th Party Congress in 1934. Unlike the first plan, the Second Five-Year Plan for the Ukrainian SSR was worked out and approved in Moscow. The State Planning Committee of the Ukrainian SSR merely published the official article ‘The Direction and Orientational Limits of the Economic Development of the Ukrainian SSR’ in Hospodarstvo Ukraïny (1932, nos 3–4). Neither the Communist Party (Bolshevik) of Ukraine nor the government of Ukraine approved this plan. The main goals of the plan were the completion of the Ural-Kuznetsk complex, the development near Moscow of an automobile and aircraft industry, and the development of shipbuilding in Leningrad. In Soviet Ukraine the development of the coal industry and metallurgical industry and of heavy machine building was emphasized. New plants of the aluminum industry, chemical industry, and arms industry were built in Ukraine. According to official statistics the whole metalworking industry in the RSFSR grew by a factor of 3, while in Ukraine it grew by a factor of only 2.6. The crises in agriculture, transportation, and metallurgy persisted. Great strides were made in training workers and technical personnel. The standard of living stopped falling only in 1935–6 and even rose somewhat. The Second Five-Year Plan was generally more fully realized than the first, although the plan for 1937 was seriously underfulfilled because of political terror. About 4,500 new plants were built throughout the USSR, about 1,000 of which were in Ukraine.

The Third Five-Year Plan, 1938–42. This plan for all the USSR and Soviet Ukraine was approved by the 18th Congress of the All-Union Communist Party (Bolshevik) in 1939. The declared main goal of the Third Five-Year Plan was to surpass the main capitalist countries in per capita production. This was an impossible task. Because of the threat of war, large resources were allocated to modernizing armaments and the development of the arms industry, mostly in the eastern USSR. For Ukraine the plan emphasized the development of the coal industry, metallurgy, the production of pipes, machine tools, airplanes, tanks, and ships for the navy. Before the eruption of the Second World War 600 new plants were built in Ukraine (about 3,000 in the USSR). The fuel shortage was critical. The plan could not be fulfilled because of the war.

The Fourth Five-Year Plan, 1946–50. This plan was approved in 1946 by special laws passed by the Supreme Soviet of the USSR and Supreme Soviet of the Ukrainian SSR. The all-Union plan emphasized the continued, all-sided development of the eastern regions of the Russian Soviet Federated Socialist Republic. The main goal for Soviet Ukraine was to rebuild the war-ruined economy. For this purpose Ukraine was assigned 20.7 percent of all the capital investment distributed among the republics—the largest percentage it ever received. Over 2,000 plants were rebuilt, and a number of large plants were built in Lviv. The natural gas industry was set up. The electric power industry was expanded considerably. Many other goals of the plan were not met, however. As a result of the destruction caused by the Second World War and the focus on the development of the eastern regions of RSFSR, the relative importance of Soviet Ukraine’s economy within the USSR economy declined noticeably.

The Fifth Five-Year Plan, 1951–5. This plan was implemented on the basis of instructions passed by the 19th Congress of the Communist Party of the Soviet Union in October 1952. Soviet Ukraine was not treated in this plan as a separate economic region. Planning centralization reached its highest peak in this five-year plan. A ten-year (1951–60) hydroelectric-development plan (stations on the Volga River and in Siberia) and an environmental development plan (dealing with canals, forestation, etc) had been approved back in 1949. Because of the Korean War significant resources were reallocated for military projects. During this period over 3,000 new industrial plants were erected in the USSR, only about 500 of them in Soviet Ukraine. The development of the petroleum industry in Ukraine and of the Lviv-Volhynia Coal Basin was begun. The Kakhovka Hydroelectric Station was put into operation. Economic relations between Soviet Ukraine and the socialist countries of Eastern Europe began to expand. Towards the end of the period the grain production crisis grew more acute. To overcome the crisis extensive resources were assigned to the cultivation of the virgin lands in Central Asia.

The Sixth Five-Year Plan, 1956–60. The first version of this plan was approved by the 20th Congress of the CPSU in February 1956, but as early as December 1956 the Central Committee of the CPSU approved a new set of control indicators for the plan and beginning in 1957 the Supreme Soviet of the USSR and the Supreme Soviet of the Ukrainian SSR regularly passed one-year plans into law. The Sixth Five-Year Plan was in force formally until 1958 only; it was actually undercut by the territorial restructuring of the USSR’s economic planning and management. The annual plans set much lower targets than did the five-year plans. The main tasks of the Sixth Five-Year Plan for the USSR was to improve agriculture and animal husbandry, to continue the rapid development of industry in Siberia, and to limit the construction of energy-consuming branches in the European part of the USSR. Special attention was devoted to technological modernization of the economy. Development of the radio-electronic industry, the computer industry, and the equipment-building industry was started in the Soviet Union, including Soviet Ukraine. Residential housing for the population was to be expanded at a faster rate. The plan provided for a significant increase in the production of fuel and energy, grain, meat, milk, sugar, and textiles in Soviet Ukraine. By 1958, 563 large plants were built in Soviet Ukraine, compared to 2,690 in the whole USSR.

The Seven-Year Plan, 1959–65. This plan was drafted according to the new territorial principle and was intended to form a part of a 20-year plan for the building of the ‘foundations of communism’ (according to the CPSU program adopted in 1961 the USSR was to surpass the United States of America in per capita production by 1970). The control indicators of the Seven-Year Plan were approved at the beginning of 1959 by the special 20th Congress of the Communist Party of Ukraine and the 21st Congress of the Communist Party of the Soviet Union. The main tasks according to the all-Union plan were technological progress, development of the chemical industry, conversion of railways to diesel and electric power, further development of Siberia’s industry, and accelerated improvement in the people’s standard of living. Provisions were made for at least a slow development of nuclear arms and rockets, as well as for extending the mechanization of agriculture and economic aid to non-socialist countries. In Soviet Ukraine the main goals of the plan were increasing the mining of iron ores; starting the mining of uranium ores, titanium ores, and nickel ores; constructing four hydroelectric stations on the Dnipro River; a large increase in the production of special metals for rocket, nuclear, and electronic technology; mastering the chemical synthesis of organic substances; building about 2,000 new types of machines, implements, and instruments; greatly increasing the production of petroleum and natural gas; increasing the production of grain, particularly of corn, by a large amount; and expanding the fund of residential and communal housing. The plan neglected the coal industry, and when the planned transmission of electric power, natural gas, and petroleum from Siberia did not materialize, a critical shortage of fuel occurred in the European part of the USSR, Soviet Ukraine, and Eastern Europe at the beginning of the 1960s. In 1963 the Supreme Soviet of the USSR officially changed the seven-year plan. Even before then the Central Committee of the CPSU decided to increase the pace of re-arming the army with nuclear arms and rockets and to begin an ambitious program of naval construction. The agricultural crisis was not overcome, and the USSR began to import wheat regularly. The plans for residential housing were left to a large extent underfulfilled. The monetary income of the people increased greatly, but their real income grew more slowly than planned because prices were rising. In the seven years covered by the plan, 5,470 new plants were built in the USSR, including 899 in Soviet Ukraine.

The Eighth Five-Year Plan, 1966–70. This plan was drawn up according to the old branch principle of economic management. Instructions on the planning were approved by the 23rd Congress of the CPU and of the CPSU in March 1966. Because the rate of development for the whole economy was noticeably declining, new methods and indicators of effectiveness for capital investment, new technology, and income were introduced. Mathematical methods began to be used, especially interbranch balance sheets, but territorial balance sheets were again neglected. The main goals of the five-year plan were a faster rate of scientific and technological development, modernization of the basic funds, intensification of agriculture, and improvement in the standard of living. There was a little less emphasis on the development of Siberia because this goal had no economic justification. The shortage of energy, fuel, and grain (particularly feed grains) was not solved. Furthermore, new problems arose: local shortages of skilled labor accompanied by unemployment of unskilled workers, a decline in natural population growth, and widespread transience. In Soviet Ukraine the plan emphasized the following goals: a large increase in the production of fuel and energy, construction of eight thermoelectric stations, extensive development of the chemical industry, and greater agricultural production. In 1966 the first Ukrainian territorial interbranch balance sheet was prepared, but it was not used in the plan. The Eighth Five-Year Plan was generally poorly implemented, but the structure of Ukraine’s fuel balance improved and Soviet Ukraine became increasingly economically integrated with the countries of the Soviet bloc. In 1967 the Supreme Soviet of the USSR and the Supreme Soviet of the Ukrainian SSR significantly changed the plans for 1969–70 by lowering their impossible targets.

The Ninth Five-Year Plan, 1971–5. This plan recognized the slower rates of development as inevitable. The instructions of the 24th Congress of the CPSU, which were approved in April 1971, no longer demanded accelerated rates, but rather insisted on a general intensification of the economy. Higher rates of development were projected for those branches that determined technological progress. For the first time in the history of the USSR the plan called for a faster rate of growth in the production of consumer goods than in the production of the means of production. Also, an attempt was made for the first time to balance the delivery plans for equipment and machines. Until then the discrepancy between these plans led to the fragmentation and squandering of resources and to construction projects that could not be completed on time. In the territorial cross-section the regionalization of economic balances was defined somewhat more precisely, but again the plan stressed the accelerated development of western Siberia and ignored the mathematical model of Soviet Ukraine’s economy that was prepared in 1970. During the period covered by the plan the industrial production of the RSFSR was to have grown by 44–47 percent, while Soviet Ukraine’s production was to have grown by only 38–41 percent. New methods of ‘social planning’ in respect to the movement of population and labor were introduced. The plan emphasized the following goals for Soviet Ukraine: a faster growth in the electric power, chemical industry, petroleum industry, petrochemical industry, machine building, and textile industry. Eight thermoelectric, one nuclear, and two hydroelectric stations were to be completed. The construction of two nuclear-power stations and two petroleum-processing plants was to start. Industry in western Ukraine was to grow more quickly than in eastern Ukraine. A probably unrealistic goal was set for agriculture—to produce 40 million tonnes of grain. At last some attention was given to the acute problem of water shortage. The plan called for the construction of the Dnipro-Donbas Canal and the widening of existing canals.

The Tenth Five-Year Plan, 1976–80. This plan came into being on the instructions of the 25th Congress of the CPSU in 1976 and addressed itself to the chronic shortages of fuel, calling for an increase in the output of natural gas to 436 billion cu m and of petroleum to 695 million tonnes by 1980. Electrical power to be generated by all types of power plants was to reach 830 billion kW. The coal output was also scheduled to increase as in the preceding five-year plan. Considerable emphasis was placed on agriculture. With a view to easing the chronic shortage of grain, investments were planned to increase the supply of agricultural machinery. Plans were made also for incentives to encourage initiative in overfulfilling the quotas. In order to narrow the technological gap between the Soviet Union and the United States of America, emphasis was again placed on high labor productivity in the fields of computer technology, machine building, and the like. The Ninth Five-Year Plan emphasized heavy industry at the expense of light industry and the production of consumer goods, and only one-sixth of the total industrial investment was actually devoted to consumer goods. The priority again given to heavy industry, which had a 38–42 percent projected growth compared with a 30–32 percent increase in consumer goods, once again indicated the basic failure of the five-year plans to raise the standard of living.

BIBLIOGRAPHY
Gladkov, I. Ot plana GOELRO k planu shestoi piatiletki (Moscow 1956)
Krasheninnikov, V.; Nahirniak P. ‘Pro rozrobku pershoho mizhhaluzevoho balansu suspil'noho produktu Ukraïny,'’ ERU, 1968, no. 6
Sorokin, G.; et al. Shagi piatiletok (Moscow 1968)
Bandera, V.; Melnyk, Z. (eds). The Soviet Economy in Regional Perspective (New York 1972)
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Koropeckyj, I. S. (ed). The Ukraine within the USSR: An Economic Balance Sheet (New York 1977)

Andrii Bilynsky, Vsevolod Holubnychy

[This article originally appeared in the Encyclopedia of Ukraine, vol. 1 (1984).]