The Five-Year Plans for the National Economy of the USSR (Russian: пятилетка, Pyatiletka) were a series of nation-wide centralized exercises in rapid economic development in the Soviet Union. The plans were developed by the Gosplan based on the Theory of Productive Forces that was part of the general guidelines of the Communist Party for economic development. Fulfilling the plan became the watchword of Soviet bureaucracy. (See Overview of the Soviet economic planning process) The same method of planning was also adopted by most other communist states, including India's pro-Soviet government and the People's Republic of China in the 1950–60s. In addition, several capitalist states have emulated the concept of central planning, though in the context of a market economy, by setting integrated economic goals for a finite period of time. Thus are found "Seven-year Plans" and "Twelve-Year Plans".
Several five-year plans did not take up the full period of time assigned to them (some were successfully completed earlier than expected, while others failed and were abandoned). The initial five-year plans were created to serve in the rapid industrialization of the Soviet Union, and thus placed a major focus on heavy industry. Altogether, there were 13 five-year plans. The first one was accepted in 1928, for the five year period from 1929 to 1933, and completed one year early. The last, thirteenth Five-Year Plan was for the period from 1991 to 1995 and was not completed, as the Soviet Union was dissolved in 1991.
Under the NEP, the state controlled all large enterprises (i.e. factories, mines, railways), as well as enterprises of medium size, but small private enterprises, employing fewer than 20 people (mostly tradesmen and shopkeepers) were allowed. The requisitioning of farm produce was replaced by a tax system (a fixed proportion of the crop), and the peasants were free to sell their surplus (at a state-regulated price) - although they were encouraged to join state farms (Sovkhozes, set up on land expropriated from nobles after the 1917 revolution), in which they worked for a fixed wage like workers in a factory. Money came back into use, with new bank notes being issued, backed by gold.
The NEP had been Lenin's response to a crisis. In 1920, industrial production had been 13% and agricultural production 20% of the 1913 figures. Between February 21 and March 17 1921, the sailors in Kronstadt had mutinied. In addition, the Russian Civil War, which had been the main reason for the introduction of War Communism, had virtually been won and so controls could be relaxed.
In the 1920s, there was a great debate between Bukharin, Tomsky, and Rykov on the one hand, and Trotsky, Zinoviev and Kamenev on the other. The former group considered that the NEP provided sufficient state control of the economy and sufficiently rapid development, while the latter argued in favour of more rapid development and greater state control, taking the view, among other things, that profits should be shared among all people, and not just among a privileged few. In 1925, at the 14th Party Congress, Stalin, as he usually did in the early days, stayed in the background but sided with the Bukharin group. However, later, in 1927, he changed sides, supporting those in favour of a new course, with greater state control.
Stalin introduced the first plan in 1928, and its success in achieving its goals was declared ahead of schedule, in 1932. Stalin made his motivation in formulating the plan clear when he stated, in a speech to factory managers in February 1931, that Russia was "fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or they will crush us."
The First Five-Year Plan emphasized heavy industry to lay the foundations for future industrial growth. Stalin argued that if rapid industrialization did not occur then Russia would be at risk from aggressive foreign, capitalist countries, which, was a very accurate prediction as it turned out, if not for the five year plans it is doubtful that the Soviet Union would have defeated Nazi Germany in the Second World War. The five year plans did have some remarkable results. For instance, coal and iron production both quadrupled their output, electric power production increased and 1500 new industrial plants were built. The First Five-Year Plan ended up being a success in the welfare of Russia, the lifestyle for poorer people improved and it was catching up in time with other countries. However, there was a also a great deal of suffering for many peasants. Prisoners were forced into work at Gulags, or labour camps, and the chances of freedom were slim.
Because of the success of the first plan, the government went ahead with the Second Five Year Plan in 1932, although the official start-date for the plan was 1933. The Second Five-Year Plan gave heavy industry top priority, although communications, especially railways, became important to link cities and industrial centers. New industries, such as chemicals and metallurgy, grew enormously. It also brought a spectacular rise in steel production, more than 17 million tonnes, placing the Soviet Union not far behind Germany as one of the major steel-producing countries of the world. As was the case with the other five-year plans, the second was not uniformly successful, failing to reach the recommended production levels in such crucial areas as coal and oil.
The first two years of the Third Five-Year Plan proved to be even more of a disappointment in terms of proclaimed production goals. Even so, the value of these goals and of the coordination of an entire economy's development of central planning has been undeniable. For the 12% to 13% rate of annual industrial growth attained in the Soviet Union during the 1930s has few parallels in the economic history of other countries. Since Russia's economy had always lagged behind the rest of Europe, these increases appeared all the more dramatic. Additionally, this high rate of growth was continued after World War II, as much devastation needed to be repaired, and continued into the early fifties, after which it had gradually declined.
Much of the USSR at this stage had been devastated by the war. Officially, 98,000 collective farms had been ransacked and ruined, with the loss of 137,000 tractors, 49,000 combine harvesters, 7 million horses, 17 million cattle, 20 million pigs, 27 million sheep; 25% of all capital equipment had been destroyed in 35,000 plants and factories; 6 million buildings, including 40,000 hospitals, in 70,000 villages and 4,710 towns (40% urban housing) were destroyed, leaving 25 million homeless; about 40% of railway tracks had been destroyed; officially 7.5 million servicemen died, plus 6 million civilians, but perhaps 20 million in all died (cf. 250,000 from the US). In 1945, mining and metallurgy were at 40% of the 1940 levels, electric power was down to 52%, pig-iron 26% and steel 45%; food production was 60% of the 1940 level. After Poland, the USSR had been the hardest hit by the war. Reconstruction was impeded by a chronic labour shortage due to the enormous number of Soviet casualties in the war. Moreover, 1946 was the driest year since 1891, and the harvest was poor.
The USA and USSR were unable to agree on the terms of a US loan to aid reconstruction, and this was a contributing factor in the rapid escalation of the Cold War. However, the USSR did gain reparations from Germany, and made Eastern European countries make payments in return for the Soviets having liberated them from the Nazis. In 1949, the Comecon (Council for Mutual Economic Aid) was set up, linking the Eastern bloc countries economically. One-third of the Fourth Plan's capital expenditure was spent on Ukraine, which was important agriculturally and industrially, and which had been one of the areas most devastated by war.
In 1947, food rationing was ended, but agricultural production was barely above the 1940 level by 1952. However, industrial production in 1952 was nearly double the 1941 level.
Some 14 million tonnes of grain was imported by the USSR. Détente and improving relations between the Soviet Union and the United States allowed for more trade.
Leonid Brezhnev declared the slogan "Pyatiletka of Quality and Efficiency" for this period.