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p Comrades, allow me to proceed to the second fundamental question of our economic policy—the resources that we must mobilise to fulfil our tasks. Where can we obtain these resources and, in particular, the means for the accelerated development of the branches which we are accentuating?

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p Something may be obtained by re-locating resources from one branch to another, but that source is naturally limited. The so-called extensive factors of economic growth, too, are becoming more limited; the supply of additional manpower will decline in 1971-1975 as compared with the previous five years. And the rates of growth of investment also have their limits.

p Consequently, we must rely mainly on enhancing the effectiveness of production. In simpler terms, the crux of the problem is to achieve a substantial increase of output and of the national income per unit of labour and material and financial inputs. That, in the final analysis, is what raising the productivity of social labour amounts to.

p Higher labour productivity in the coming five years should yield at least 80 per cent of the accretion in the national income, 87-90 per cent of the accretion in industrial production, 95 per cent of the accretion in building and assembly, and the entire accretion in railway freight carriage. The envisaged accretion in farm output must be secured entirely by raising the productivity of labour.

p It is precisely from this angle—bearing in mind the need for speeding up the growth of the productivity of labour—that we should approach the main questions of economic development. In so doing, acceleration of scientific and technical progress forges into first place both from the point of view of the current tasks and that of the long-term perspective.

p THE SCIENTIFIC AND TECHNICAL REVOLUTION. FUSION OF SCIENCE AND PRODUCTION

p For Soviet science and technology the past five years have been a period of rapid development and we are legitimately proud of its gains. All the same, rapid acceleration of scientific and technical progress is still one of the main tasks. At a time when the role of science as an immediate productive force keeps growing, separate scientific achievements, no matter how brilliant, are no longer central; what is central is a high scientific and technical level of production as a whole.

p For our science this poses still more responsible tasks, requiring its higher effectiveness, a further unfolding of fundamental research, and concentration of the scientists’ 386 energy and attention on the most important and promising long-term trends in scientific and technical progress. Research and design organisations and pilot enterprises must take more pains in perfecting new machinery and new production processes for adoption in the economy. The tasks facing the State Committee for Science and Technology, the Academy of Sciences and the ministries, are becoming greater.

p If we examine all the links of the intricate chain that binds science to production, we shall easily see that the weakest links are those relating to the practical realisation of scientific achievements, to their adoption in mass production. To be sure, we have many positive examples in this field; suffice it to recall, say, the work of the Paton Electrical Welding Institute or the development work on isoprene rubber. Unfortunately, however, this is far from being the rule in all cases.

p To eliminate the existing difficulties we should achieve a still greater reorientation of the respective scientific organisations on the most important production problems, on the one hand, and, on the other, create conditions compelling enterprises to manufacture the latest types of products, to literally chase after scientific and technical novelties, and not to shy from them, figuratively speaking, as the devil shies from holy water. Those collectives that really fight for modernising plant and production processes, for producing output meeting the latest demands, should be put in a more privileged position. (Prolonged applause.)

p The national economic plan should become a powerful lever of scientific and technical progress. So far, our plans dealt with questions relating to the use of achievements of science and technology in the economy to an insufficient extent, and, what is more, a considerable number of the ministries have been falling short of the set targets. This applies, among others, to the Ministry of the Timber and Wood-Working Industry and the Ministry of Tractor and Farm Machinery Engineering. The approach should be different. What we need is a comprehensive programme for the further development of plant and technology, one which would take into account all the sections of the plan, its main indicators. This approach is already reflected in the draft Directives.

p To accelerate scientific and technical progress it is 387 important to improve the forms of organising industry, securing, so to speak, the kind of production pattern that would be abreast of the demands of the times. This implies a considerable extension of research and studies in industry itself, the establishment in the enterprises of design bureaus, of a resourceful experimental base, and an influx into industry of a large number of researchers. Naturally, only big amalgamations and combines can accomplish this, which makes their establishment particularly topical. In many cases good results may be obtained by merging research institutions with enterprises, creating powerful science-production complexes. Relevant are the problems of improving scientific and technical information and working out effective methods of control and of independent, extra-administrative experts’ panels, which would preclude the creation of machines, devices and production processes falling short of the top modern requirements.

p It is essential, comrades, that not only our planning and economic organs, but also all Party cadres should display a full measure of concern for accelerating scientific and technical progress. The importance of this derives both from the vital needs of our present-day economic practice and from future requirements. (Applause.) Scientific and technical progress is the main lever for building the material and technical basis of communism. In so important a matter as developing science and technology, therefore, we should see the long-term prospects clearly and take them into account in our practical work.

p And the prospects are that the revolution in the development of the productive forces, touched off by science and its discoveries, will become increasingly significant and profound. The task we face, comrades, is one of historical importance: organically to fuse the achievements of the scientific and technical revolution with the advantages of the socialist economic system, to unfold more broadly our own, intrinsically socialist, forms of fusing science with production. (Applause.)

p As we take steps to speed up scientific and technical progress, we must see to it that it should combine with a rational treatment of natural resources and should not cause dangerous air and water pollution or exhaust the soil. The Party demands most emphatically that the planning and economic bodies and design organisations, all our cadres, 388 should keep the question of nature protection within their field of vision when designing and building new enterprises or improving the work of existing ones. Not we alone, but the coming generations should also be able to use and enjoy all the gifts of our country’s splendid natural environment. We are also prepared to participate in collective international schemes for nature protection and the rational use of natural resources. (Applause.)

p TO IMPROVE THE STRUCTURE, ENHANCE THE EFFECTIVENESS OF INDUSTRIAL PRODUCTION

p Comrades, the policy of increasing the effectiveness of production poses a number of important and complicated tasks aimed at securing the most effective proportions of the economic branches.

p The rates of economic growth, the possibility of accumulation required for the development of the economy and for raising the living standard depend in many ways on a correct solution of the structural problems. Everybody knows that the effect per invested ruble is greater in some branches than in others, that investments are recouped more quickly in some branches than in others. It is important to bear this in mind in any economy, and doubly so in a big one like ours.

p Apart from increasing material benefits for the people, the acceleration in the development of agriculture, of industries manufacturing consumer goods and of the service industries will help improve the proportions in our economy, help to balance it, to expand the sources of the growth of the national income and of accumulations, and to step up the circulation of money.

p Improvement of the structure of heavy industry contains considerable potentialities for increasing the effectiveness of production. This implies accelerated development of those of its branches which secure lower production costs, bigger output of the end product and a higher labour productivity both in heavy industry and in other sectors.

p In the years ahead the work of raising the effectiveness of production in industry should follow several basic directions. One of these is lowering the consumption of materials per unit of production, economy of raw and other materials. This is of truly national importance.

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p The growth of the national economy creates a rapidly increasing demand in various raw materials. To meet this demand we shall continue to expand the extractive industries at a high rate. In so doing, it is important to act to achieve their more effective operation, securing fuller processing of raw materials, improving quality and reducing waste. It should be borne in mind, however, that the extractive industries are much more capital- and labour-intensive per unit of production than the manufacturing industries.

p Consequently, from the standpoint of the national economy, it is much more advantageous to economise on raw materials by perfecting production in the manufacturing industries, rather than additionally to produce that much more raw materials. Reducing the per unit consumption of materials by a mere one per cent on a countrywide scale is equivalent to an additional 3-4 thousand million rubles’ worth of accretion to the national income.

p The other important direction in working for the greater effectiveness of production is to use the manpower resources more rationally, to reduce labour outlays, principally by cutting down on manual and physically arduous labour. Apart from improving production processes and the organisation of labour in enterprises, this requires an all-round development of those industries which secure the boost in the rate of renewing and replacing obsolete plant. This applies to industries manufacturing new highly productive equipment, whole systems of machines facilitating conversion to comprehensive mechanisation of jobs and automated production processes. Of great importance, too, is expanding branches that provide technical services to industry and mechanise ancillary jobs.

p And the third direction is a substantial improvement of the quality of products and, accordingly, the development of production sectors that facilitate the solution of this problem. In the present conditions, seen from the standpoint of its effect for the entire national economy, better nearly always also means more. One up-to-date programmed machine tool replaces ten of obsolete design, one heavy-duty lorry replaces several ordinary ones and one aircraft engine with a longer life-span replaces two or three of the old type.

p To raise the effectiveness of industrial production and improve its structure, we are setting our course on improving 390 whole complexes of inter-connected industries, the development of which follows a definite programme.

p A more effective priority development of the fuel and power complex is one of the key objectives in the coming five years. We shall work for it by improving the structure of the pertinent branches, accelerating the growth of those which are the most promising and economically effective. First and foremost, this means increasing the share of oil and gas in the country’s fuel balance and technically reequipping the coal industry, starting up highly economical hydraulic and thermal, and building more atomic power stations, and raising the economic effectiveness of power installations.

p Responsible tasks face the metallurgical industry and engineering. Here, too, factors assuring higher effectiveness of production are being placed in the fore.

p This requires improving production processes and modernising the operating metallurgical enterprises, and expanding those sectors of production which secure the improvement of the quality and extension of the grading range of metals, and a higher output of precision shapes and blanks.

p The engineering industries should develop along the same lines. Their attention will be centred on increasing the output of high-powered, highly economical, high-precision and dependable machines and equipment. It is planned to increase the share of forge and press machines, and of foundry and assembly equipment, and to give priority to the expansion of the manufacture of programmed machine tools and automated and semi-automated transfer lines.

p Electronics, the radio industry and instrument-making, that is, the entire complex of industries creating the technical basis for automating production and management will continue to develop at a high rate. This complex may be legitimately described as the catalyst of scientific and technical progress. Here, particular importance attaches in the coming five years to organising large-scale manufacture of sophisticated electronic computers.

p In the new five-year period, much attention is devoted to the development of the chemical and petrochemical industry. Chemisation of the economy is a powerful lever for increasing the effectiveness of social production. There are many uses to which chemicals can be put in most branches of the economy, replacing expensive natural raw materials, 391 helping to improve the quality of the products and to raise the productivity of labour.

p In recent years, work was begun on radically altering the organisation of production in the timber, wood-working, and pulp and paper industry. The task is to increase considerably the output of what is the end product of that industry—timber, woodpulp, paper, cardboard, furniture and fibre boards—without substantially expanding timbering.

p In the present stage of economic development the role increases of those branches of the national economy which service the production process, such as transport, communications, material and technical supplies, and others. The effectiveness of the economy depends largely on the work of these branches, in which nearly 16 million of our people are employed. Although substantial advances have been made in this sphere, it requires consistent improvement; its development must be brought into line with the increasing volume and complexity of production.

p The work of the transport system, for example, does not meet the present requirements, has become a bottleneck. One of the reasons for this, apparently, is that insufficient funds were allocated for transport development in the preceding five years.

p Measures are envisaged in the ninth five-year period to remedy the situation. It is planned to build new and increase the carrying capacity of the existing railway trunk lines and station side-tracks, to build new motor-roads and pipelines, and to continue expanding the maritime and river merchant fleets. On the Kama River construction has begun of a major plant that will produce 150 thousand heavy-duty lorries annually; one more auto works will be built; work has begun on the construction site of a new large railway-car plant in Abakan. In view of the large size of our country ever growing importance attaches to the further development of air transport. We shall put into operation new types of highly economical, comfortable planes and improve the airport ground services. In the new five-year period, Aeroflot, which is already the world’s largest airline, will carry almost 500 million passengers and 11 million tons of freight. Growing importance also attaches to such types of activity of our civil aviation as assistance to agriculture and the health services, forest protection and participation in geological surveying. While further developing all types of transport, 392 there is need to ensure their more co-ordinated operation, to create a single and highly efficient transport system for the country.

p Radio, television and all types of communications will be developed on the basis of the latest scientific and technical achievements.

p Improving the system of foreign economic relations offers considerable opportunities for increasing the effectiveness of the economy. Political factors relating to the consolidation of the socialist community and the strengthening of the economic basis of the peaceful coexistence of states, as well as factors flowing from the requirements of our economy, make it important to increase the output of export goods in all branches of industry. This will also help enlarge imports of needed commodities. Beyond question, expanding international exchanges will have a beneficial effect on improving the work of all our industry.

p The increased role of economic, scientific and technical contacts with other countries will, of course, require certain measures designed to improve the administration of all foreign economic activity and eliminate any parochial approach in this important field. Foreign economic activity must be based increasingly on a combination of production and commercial functions so as to react quickly to the requirements and possibilities of the world market and to use them to the utmost in the interests of our economic development.

p TO IMPROVE UTILISATION OF PRODUCTION ASSETS AND INVESTMENTS

p Comrades, the Soviet Union now possesses a vast economic potential and the effectiveness of our economy depends increasingly on how this potential and, above all, the operative production assets, are used. Improving their use and raising the product-to-assets ratio is still one of the most important tasks, though our industry has made some advances in this respect in the past five years.

p In this connection, I should like to draw attention to just the one question of the low shift coefficient of industrial enterprises. This was discussed at the 23rd Congress and at a number of CC CPSU plenary meetings, but matters have practically not improved, especially in "the 393 engineering industry. Instead of increasing the number of shifts, some economic organs want to build more and more new enterprises. And when the question of increasing the number of shifts is raised, it is countered by references to manpower shortages. But who, may we ask, will work in the new enterprises—people or the holy spirit? No, comrades, we must deal with the matter more strictly, work out and carry through a set of measures ensuring fuller use of the equipment; we must place the matter under the unrelenting control of the Party committees in the enterprises, the city and regional Party committees.

p This will help to resolve one of the most urgent problems of our national economy—the problem of capital construction.

p In the sphere of material production we are now building more than any other country in the world. Older people remember what noteworthy events the commissioning of the Dnieper Hydropower Station, the Magnitogorsk Iron and Steel Works and the Volgograd and Kharkov tractor factories were in our history. Many larger and technically more advanced enterprises and projects are now being placed in operation every year. The major projects completed in recent years included the Krasnoyarsk Hydropower Station (the biggest in the world); the unique Konakovo, Burshtyn and Krivoi Rog thermal power stations; the giant WestSiberian and the Karaganda iron and steel works; the oilproducing complexes in Tyumen Region and Western Kazakhstan; the Volzhsky Auto Works and Pavlodar Tractor Works; huge chemical complexes and plants; the Bratsk and Syktyvkar timbering complexes. Construction on the Chernogorsk Worsted Mill, the Kursk Knitwear Factory and other large enterprises of the light and food industries has been completed.

p However, the situation as regards capital construction cannot be recognised as being satisfactory. To put the matter briefly, the problem is that we are investing enormous sums of money while the returns are not fast enough, and so are smaller than they should be. There are several reasons for this.

p One is that when plans are drawn up they frequently envisage excessively large volumes of capital construction and an excessively large number of projects without taking real possibilities into account. As a result, funds are 394 scattered, the number of unfinished projects grows and large resources are frozen.

p Every time state plans are considered it is found necessary to cut the requests of ministries and Union republics. But even these plans are not entirely fulfilled. Nonetheless, many comrades continue to submit obviously overstated requests. It is time this practice was ended. We must build, and live, according to our means. (Applause.)

p Another reason for the difficulties lies in the irrational distribution of a considerable part of the capital investments. Experience shows that, as a rule, it is economically more profitable to ensure a growth of production by reconstructing and technically modernising factories. But a much too large share of the funds is still channelled into new projects and a clearly inadequate share is used for the modernisation of production and the renewal of plant, with the result that the reconstruction of many factories is intolerably dragged out. In the coming five-year period the emphasis must be on enlarging and reconstructing operating enterprises.

p Lastly, there are major shortcomings in construction itself. Plan and financial discipline are sometimes violated. Insufficient use is made of new, effective materials and building elements. The quality of construction remains poor. It must become a law that no economic executive should start the building of new projects without blueprints and estimates. (Applause.)

p In recent years the Central Committee and the Council of Ministers of the USSR have made a detailed and comprehensive analysis of the state of affairs in capital construction. A number of decisions have been passed which change the very principle by which the work of builders is evaluated: this evaluation must be based on end results, the commissioning of capacities, and the completion of the entire volume of construction, and not on various intermediate stages.

However, in order to effect a radical improvement of the situation in capital construction, very much remains to be done also by the Party organisations linked with this important sphere of the national economy and, of course, by the builders themselves.

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p Comrades, the analysis of the possibilities at the disposal of our national economy shows that we do have reserves for making production more efficient and accelerating economic growth, and that these reserves are very considerable. As has been said, these reserves lie in scientific and technical progress, improvement of the structure of the national economy, fuller use of production assets and improvement of capital construction. But that is not the whole point, for these reserves are also available at every individual enterprise, at every collective and state farm.

p What I have in mind is elimination of losses in working time, reduction in fluidity of personnel, elimination of unrhythmic operation, and idling of equipment. Much importance attaches to the saving of raw and other materials, fuel and electric power, careful handling of machinery, machine tools and equipment, tractors, harvesters and motor vehicles. There is now such a vast quantity of diverse machinery in the country that if we use it ineptly or less than fully we tend unjustifiably to reduce its service life, and this inflicts considerable damage on the people’s interests. At each individual plant or collective farm the effort to achieve economies may yield hundreds or thousands of rubles, but on the scale of the national economy this will come to many hundreds or even thousands of millions of rubles.

p A year ago the CC CPSU, the Council of Ministers of the USSR, the All-Union Central Council of Trade Unions and the CC of the All-Union Leninist Young Communist League addressed a letter to the Soviet working people on improving the use of reserves in production and intensifying the effort to achieve savings in the national economy. This letter has become the basis of extensive work amongst the masses which has yielded good results. But the use of all the reserves, greater efforts to save, and the combating of mismanagement, wasteful and superfluous spending do not amount to a short-term campaign. This is one of the most important lines in the day-to-day activity of Party, government, economic, trade union and Young Communist organisations. We must do our utmost to intensify our work in this direction.

p The Central Committee considers it necessary to emphasise that for the successful fulfilment of the tasks of the new five-year plan it is important to have our cadres make 396 a definite change in their approach to economic questions, and modify some of their habitual conceptions.

p For historical reasons, by virtue of the conditions in which we found ourselves, things developed in such a way that quantitative assessments had always been given priority: the point was to produce so many tons of steel, so many of oil, so many of grain, and so many tractors. Of course, the quantitative side continues to be of importance for us even today. But it must be more fully and consistently supplemented with indicators bearing on the quality of products and on the economic aspect of industrial operations. For example, when this or that executive reports on output, a well-grounded evaluation of his work may be given only when the cost at which this has been achieved is established. And where the cost has been excessive or where he has fulfilled the plan himself, but failed in his inter-enterprise delivery commitments, letting down other enterprises, where success in one sector has entailed a short-fall elsewhere, such an executive does not merit praise but criticism. (Applause.) We criticise our executives when they make mistakes or commit this or that offence. This is right, because our standard of exactingness must be raised. But we feel that there must be criticism not only of those who make mistakes but also of those who fail to use all the possibilities for developing production, and fail to display initiative, and sit on their hands. (Applause.)

Our success in fulfilling the plans the Party has put forward for the current five-year period will be the greater, the higher the standard of exactingness all of us apply to our own work and to the work of others.