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News | May 16, 2019

This Week in DIA History: Predicting the Economic Collapse of the Soviet Union

By DIA Public Affairs

In the mid-1980s, DIA began an unclassified initiative with CIA to provide Congress with a yearly analysis of the Soviet economy.

In 1986, DIA and CIA published "The Soviet Economy Under a New Soviet Leader," highlighting that the Soviet gross national product during the 11th Five Year Plan (1981-85) had its worst showing since World War II. In 1988, in "Gorbachev's Economic Program: Problems Emerge," DIA and CIA stated, "Whichever direction Gorbachev follows, we believe that if the economy continues to perform poorly over the next few years, tension within society and the leadership will increase... Soviet citizens will need to see some improvement in living standards if the regime is to achieve necessary gains in worker productivity and avoid widespread discontent." One year later, DIA and CIA produced, "The Soviet Economy Stumbles Badly in 1989," which demonstrated that economic problems reached near-crisis proportions in 1989.

The final product of the series, in June 1991, specified that "[G]reat political skill will be needed to retain--and, in the case of the central government, regain--popular trust and put through effective but often initially painful reform measures. However, the alternative is a completely bleak Soviet future."

What DIA and CIA outlined in the years leading up to the collapse indicated the Soviet economy would implode, leading to a crisis--the analysis proved correct.