Soviet Economic Challenge

June 26, 1957

Report Outline
Preparation for Struggle with United States
Shifts in Soviet Economic Policies, 1917–1957
Implications of Khrushchev Economic Program

Preparation for Struggle with United States

Khrushchev Plan to Overhaul Soviet Industry

Russia's drive to overtake the United States and make the U.S.S.R. the world's leading economic power is being pressed forward under a far-reaching plan of industrial reorganization proposed by Nikita S. Khrushchev, first secretary of the Soviet Communist Party, in March and ordered into effect by the Supreme Soviet in May.

The Khrushchev plan calls for abolition by July 1 of more than two dozen ministries in Moscow, establishment of over 90 so-called councils of national economy throughout the Soviet Union, and transfer of more than 200,000 industrial enterprises formerly under control of the central ministries to the jurisdiction of the new regional councils.

The sweeping shake-up is of interest to American experts on Russia both for what it reveals and for what it portends. The need to institute such a drastic reorganization testifies to the serious faults that persist in the economic order after four decades of totalitarian rule. The wholesale reshuffling of administrators required by the program points up the continuing struggle in the Kremlin and the need of the Khrushchev group to entrench itself more firmly in power. And the scope of the changes indicates how formidable an adversary the United States will face if the reorganization is carried through successfully and accomplishes its purposes.

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