Soviet leader Mikhail S. Gorbachev's economic reform program ran into problems last year and things aren't likely to improve in the near future, U.S. intelligence agencies said in a report released Sunday. Unless Gorbachev can do something to turn the economy around, he may find himself in trouble, said the bleak review which was conducted jointly by the Central Intelligence Agency and the Defense Intelligence Agency. ``Tension within society and the leadership will increase,'' it said. ``Bureaucrats will become increasingly frustrated by loss of privileges and status and by demands that they show greater initiative. Military leaders are likely to become more and more uneasy if benefits from the industrial modernization fail to materialize.'' ``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,'' the study said. The report concluded that ``failure to head off these tensions would, at a minimum, make it more difficult to pursue his economic program vigorously and could, ultimately call into question his strong political position at home.'' Gorbachev and supporters of his reforms have acknowledged resistance at the highest levels, and there have been reports in Moscow of conflict over reform measures between Gorbachev and No. 2 Kremlin leader Yegor K. Ligachev. Criticism of the slow pace of Gorbachev's reforms earlier led to the firing of Boris N. Yeltsin as Moscow Communist Party boss. The U.S. intelligence study was presented April 13 to the congressional Joint Economic Committee, and a declassified version was released by the panel. The study is the annual review of the Soviet economy, three years after Gorbachev came to power. He inherited an aging, extremely inefficient economy and made its modernization one of his top priorities, the study noted. After some early success, ``Gorbachev's ambitious program to create a modern, more dynamic Soviet economy ran into trouble in 1987,'' the study said. ``Familiar problems with poor weather and transportation bottlenecks were compounded by the disruptions caused by the introduction of economic reforms,'' it said. The Soviet gross national product, the total value of all goods and services produced, grew only .5 percent last year, the study noted. That rate was ``reminiscent of the late Brezhnev period,'' it said, referring to Leonid Brezhnev, a Gorbachev predecessor who prevailed over a largely stagnant economy in the late 1970s and early 1980s. The study noted that the Soviet GNP grew by 3.9 percent in 1986, the first full year of Gorbachev's term, compared with .6 percent in 1985. By contrast, the U.S. gross national product grew 2.9 percent, both in 1986 and 1987. However, the American economy measures a much larger base and comparisons are difficult. The Soviet economy was hampered by bad weather last year, particularly in agriculture, where output fell three percent, the study said. But industrial quality control measures also ``proved to be particularly disruptive, especially early in the year.'' Thus, industry only grew 1.5 percent and the civilian machine-building sector didn't grow at all. ``The real loser in 1987 appeared to be the consumer, who _ now three years into Gorbachev's economic program _ has seen almost no increase in his standard of living,'' the study said. It also said that for a variety of reasons, ``the short-term outlook for Gorbachev's economic program is not good.'' Among those reasons are confusion about guidelines for self-financing reforms, deficiencies in 1987 machine-building that will slow the speed of modernization, transportation problems, and poor prospects for improved worker productivity. Gorbachev also needs to be better organized, the study concluded. ``Although Gorbachev's program is comprehensive, it is in some respects inconsistent, particularly with regard to timing. For example, his goals for an immediate acceleration in the growth of national income and a pronounced improvement in the quality of output are, in our view, fundamentally incompatible.'' In addition, ``his plan to change traditional economic planning and administrative procedures dramatically has been thrust upon a largely unprepared bureaucracy,'' the study said.
