USSR REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00992R000100190001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 72
• Document Creation Date: December 27, 2016
• Document Release Date: September 17, 2013
• Sequence Number: 1
• Publication Date: September 1, 1988
• Content Type: REPORT

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Directorate of Secret
Intelligence
USSR Review
September 1988
0019996
SLVUR8G-01CX
FILE CCPY/SOURCED CCPY
CPAS/IPC/CCNTRCL BRANCH
RioLM 7G07
HQS (NC ADHCC REQUIREMENTS)
0605-0605
( A? 2/ A-1:L bi
Secret
SOV UR 88-010X
September 1988
Copy 605
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Directorate of Secret
Intelligence
Reverse Blank
USSR Review
September 1988
The USSR Review is published by the Office of
Soviet Analyks.
Secret
SOV UR 88-010X
September 1988
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Contents
Page
Articles
The Soviet Economy at Midyear 1988: Growth Resumes 1
but Perestroyka Sputters
Following a poor showing in 1987, Soviet economic indicators have
improved somewhat in 1988. Economic reform, however, seems
stalled on all fronts because of lack of resolve in the leadership and
resistance in the bureaucracy, and consumers are not seeing benefits
from Gorbachev's program.
Gorbachev Promotes New Party Line on the Nature
of the Capitalist Threat
General Secretary Gorbachev is arguing for a change in the party
line on key issues that have formed the theoretical basis of East-
West relations since the days of Lenin. The policy implications of
the changes he is promoting are that competition with the West can
be shifted from a military to an economic basis, making a lengthy
period of detente both possible and desirable. Although Gorbachev's
new formulations clearly serve Soviet propaganda interests, the
sharp debate they have unleashed within the Soviet elite makes it
clear that more is at stake.
Breaking With the Past: Implications of Recent Attacks 15
on Brezhnev's Foreign Policy
The foreign policy of the Brezhnev regime has been criticized
implicitly by Gorbachev and more directly by foreign policy special-
ists and commentators in the press. If these criticisms lead to a
change in policy, the Soviet Union could make more sophisticated
and cautious foreign policy decisions to avoid triggering Western
reactions.
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SOV UR 88-010X
September 1988
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Implications of the Withdrawal of Soviet Forces 19
From Hungary
Moscow and Budapest apparently have discussed?and may
have agreed on?the reduction of Soviet forces in Hungary.
Moscow probably believes that such a reduction would com-
plicate NATO's decisionmaking on issues like force structure
and modernization?while promoting European arms con-
trol?without unduly disrupting Soviet military capabilities or
opening the door to widespread unrest in Eastern Europe.
Soviet Equities in an End to the Iran-Iraq War: 23
Opportunities and Risks
For the USSR an end to the war would lead to a reduced US
naval presence in the Gulf and open up opportunities for the
Soviets to improve relations with Iran. At the same time,
Moscow is already concerned that the US-Iranian relationship
will improve and that both Tehran and Baghdad will turn to
the West to rebuild their war-damaged economies.
New Review Process Affects Economic Reform
In recent months, three important pieces of Soviet economic
legislation have been remanded for further work after exten-
sive debate at "open" sessions of the Council of Ministers'
Presidium. If this practice continues, it will postpone needed
economic changes and complicate the task of quickly provid-
ing the fruits of perestroyka to a skeptical Soviet citizenry.
Such delays are preferable, however, to the adoption of ill-
conceived reform legislation that could ultimately prove un-
workable and further undermine popular support.
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The Impact of Perestroyka on Employment in the USSR
After many years of continuous growth in employment,
Moscow has reported a decline of 400,000 in the total number
of state employees in the first half of 1988 and a reduction of
1 million in the work force in material production. Gorba-
chev's wage reform, which requires enterprises to finance new
and higher pay scales from their own resources, is forcing the
release of redundant workers. Demographic trends and indus-
trial modernization probably are also contributing to a con-
traction of the labor force.
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Criticism of Soviet Science at the June Party Conference
During the CPSU Conference in June 1988, many speakers?
led by General Secretary Gorbachev?expressed dissatisfac-
tion with the poor state of Soviet science. Significantly, the
speeches also surfaced widespread concern that at least some
of the measures Gorbachev has taken to improve scientific
and technical performance are not having the intended effect.
We expect the debate over science policy to intensify over the
next several months, spurred by admissions at the conference
that the regime has no clear strategy of how to address and
improve the situation quickly.
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The Soviet Aircraft Carrier Program: A Potential Victim
of "Reasonable Sufficiency"?
as part of the debate on the
implications of "reasonable sufficiency," the Soviets are reex-
amining their plans for the construction of aircraft carriers.
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USSR?North Korea: Implications of Soviet 49
Arms Deliveries
For the first time in over a decade, the Soviets have delivered
advanced weapons to North Korea. The delivery is intended to
counter US deliveries to South Korea, compensate for Mos-
cow's participation in the Olympics and its expanding ties to
the South, and gain influence with the North Korean military.
Moscow's desire to advance the Sino-Soviet dialogue and
improve relations with Japan and South Korea, however,
probably will preclude the provision of weapons that could
alter the military balance on the Korean Peninsula.
Unrest in the USSR Since January 1987:
A Statistical Analysis
Since January 1987, we have noted 600 cases of unrest in the
USSR. Incidents of unrest began to climb rapidly in the
second quarter of 1987 when ethnic minorities siezed the
opportunity to press for long-held nationalist goals. While
unrest has shown continuous growth, the nationalist activism
has grown most rapidly, accounting for over 60 percent of all
cases during the first two quarters of 1988. Meanwhile,
nonnationalist activism, ranging from environmental protests
to workers' strikes continued to grow, albeit more slowly.
Individual cases of unrest may have peaked in the second
quarter of 1988; cases in July were fewer than in either May
or June. Large nationalist demonstrations in the Baltic states
in August, however, clearly indicate that public activism itself
has not subsided.
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Notes Akhromeyev Comments on the Defense Council
67
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Tatar Movement Muted
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Articles
The Soviet Economy at
Midyear 1988: Growth Resumes
but Perestroyka Sputters
Soviet economic performance picked up somewhat
during the first half of 1988, but major problems
persist. For ministries and enterprises, still largely
responsible for fulfilling plan targets, the improve-
ment after an exceedingly poor showing in 1987 is
encouraging. For architects of the reform program,
however, the growing evidence that many basic struc-
tural problems are proving highly resistant to the new
reform measures is alarming. Moreover, consumer
welfare still has not improved appreciably under
Gorbachev, and complaints about shortages, queues,
and rationing seem to be rising.
Moscow's economic policies remain in a state of flux.
Attention appears to have shifted from industrial
modernization and economic reform toward a new
emphasis on doing more for the consumer. If sus-
tained, this new emphasis could mark a fundamental
change in Soviet resource allocation policy so that
heavy industry, including the defense sector, would
lose some of its traditionally high priority
Higher Growth Rates
Nearly all sectors of the economy grew more rapidly
in the first half of 1988 than they did in the same
period of 1987. The better performance, we believe,
can be attributed largely to:
? Improved weather and the consequent easing of
transportation bottlenecks.
? A possible reduction in disruption from the quality
control program.
? Some adjustment on the part of enterprises to new
management and reform measures.
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? The low statistical base from which growth was
calculated, which resulted from poor performance in
the first half of 1987.
In addition, productivity improved in several sectors
because the gradual implementation of wage reform
and enterprise self-financing forced enterprises to
disgorge some of their redundant labor.'
Industry. Civilian industrial production, according to
our estimates,' rose by 3 to 3.5 percent during the
period January-June 1988, while it had risen only 1.5
percent during January-June 1987 (see table). Most
noteworthy was the better performance of the ma-
chinery sector, which accounts for about one-third of
industrial production and is critical to General Secre-
tary Gorbachev's modernization program. Its recov-
ery, however, was led by a 9-percent increase in
output of consumer durables, with producer dura-
bles?a category that includes such critical items as
machine tools?growing at a considerably slower rate,
about 2.5 to 3.0 percent.
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' See "The Impact of Perestroyka on Employment in the USSR" in
this issue.
'The Soviets have not published statistics in 1988 on some types of
machinery, chemical products, and industrial materials that are
part of the sample we use to estimate the growth of industrial
output. We estimated the growth of production in these branches
during the period January-June 1988 on the basis of official plan
fulfillment statistics and the relationship that has held between
these data and our estimates of growth for recent years when the
statistics in question were published.
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SOV UR 88-010X
September 1988
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USSR: Comparison of Rates of Growth
in Industrial Production a
Percent Figure 1
USSR: Agricultural Production Growth
1985
1986
1987b
1988b
Industry
1.8
2.6
1.5
3.4
Machinery
2.4
2.8
-2.3
3.3
Ferrous metals
0.7
3.4
1.4
3.0
Fuel
0.9
3.5
2.7
2.4
Electric power
3.4
3.3
3.9
2.9
Chemicals
3.8
4.7
2.3
3.8
Wood, pulp, and paper
2.2
5.0
1.2
3.8
Construction materials
1.5
3.6
3.0
3.0
Light industry
2.6
1.3
0.5
3.2
Food industry
-1.7
-4.5
6.1
3.3
Percent growth in value added at factor cost.
b Percent growth of first half of the year over first six months of the
preceding year.
The overall performance of the fuel and energy
branches was mediocre-oil output increased by 0.4
percent, coal by nearly 2 percent, and gas by a robust
6 percent; electricity generation was up by nearly 3
percent.' Although the chemicals and ferrous-metal
branches showed respectable growth, Soviet press
reports indicate that not enough high-demand modern
chemicals and steel products were produced. Output
of construction materials, meanwhile, grew at about
the same rate as in 1987, but the Soviet Council of
Ministers singled out this industry's performance as
"utterly unsatisfactory."
Agriculture. At midyear we estimate that crop output
will be about 4 percent higher than in 1987 (see figure
1). Assuming average weather for the remainder of
'These are growth rates in daily production, calculated from
reported out ut fi ures with an adjustment for the extra day in the
leap year.
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Percent
10
8
6
4
2
0
-2
-4
M 1986
? 1987
? 1988
(projected)
-6
Total a Crops Animal
products
a Growth of production net of feed, seed, and
waste valued in 1982 average realized prices.
318741 9-88
the crop season, grain output should reach 205 million
tons-slightly less than the past two years-and the
harvest of potatoes and fruit should be substantially
higher than in 1987 when a late spring and heavy
rains cut production.
Production of milk and eggs during the January-June
period exceeded 1987's record highs, and meat pro-
duction in the socialized sector was up by 8 percent.
But the continuing decline in herd numbers-
although slowing-and rain-related problems in the
forage harvest will make it difficult to sustain this
rate for the rest of 1988. Still, we estimate that meat
production will reach, and may even surpass, this
year's planned target of 18.9 million tons. Considering
the prospects for crops and livestock together, we
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project that net agricultural output will be 3 to 3.5
percent higher than in 1987 and slightly more than
the record 1986 level.
Economic Perestroyka Sputters
Gorbachev scored a major success at the party ple-
num in June 1987 when the Osnovnyye polozheniye
(Basic Position) adopted incorporated most of his
initiatives. Since the plenum, however, the General
Secretary's programs have lost momentum?a devel-
opment that greatly worries the regime. In particular,
Gorbachev has made it clear that he is dissatisfied
with the rates of progress in raising living standards,
retooling industry, and improving the quality of indus-
trial output.
Consumer Welfare. Supplies of consumer goods and
services increased significantly in the first half of
1988, but the leadership still has far to go to convince
consumers that real improvement in living conditions
is likely soon. State retail sales of goods?the primary
source of goods purchased by Soviet shoppers?were
up by 6.4 percent (see figure 2). The Soviets also
reported a 17-percent increase in sales of consumer
services.' But complaints of shortages, increased ra-
tioning, and higher prices belie these statistics.
Gorbachev's efforts to improve the lot of the consumer
have not produced the results hoped for. Expansion of
private business?Gorbachev's most potentially re-
warding consumer initiative?is off to a slow start.
Moscow in May 1988 approved a law aimed at
bolstering the legal underpinning of cooperatives.
However, popular and official ambivalence toward
income inequality continues to hamper private busi-
ness. Output of cooperatives, in fact, fell in the second
quarter of 1988, according to lzvestiya.
Moscow has also expressed keen disappointment with
the results of its efforts to improve food supplies. At
the party plenum in July 1988, Gorbachev called for
"urgent and radical measures of a current and long-
term nature" to address the food problem. Although
'Specifically, personal care, repair, passenger transportation, com-
munications, utilities, and legal services. Moscow also reported an
increase of 600,000 jobs in consumer services. Nonetheless, the
reported increase in services probably reflects in part substantial
inflation resulting from a steep increase in wages of service
personnel.
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Figure 2
USSR: Trends in Consumer Welfare, 1985-88
Percent growth
7
Retail sales
volume a
Disposable
money income b
0
1985 86 87 88
a Calculated in comparable rubles.
b Calculated in current rubles.
First half of 1988 compared with first half of 1987.
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meat output from the state sector rose by 8 percent in
the first half of 1988, the increases in output have not
been sufficient to satisfy growing demand. Growth of
purchasing power accelerated in 1988 as wage re-
structuring contributed to a runup of 6 percent?
twice the rate of recent years?in average wages for
state employees during January-June. Inflationary
pressures were reflected in an 8-percent increase in
collective-farm market prices in January-March
1988, as well as in lengthy queues and large incre-
ments in personal savings deposits.
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The leadership is concerned that sluggish perfor- 25X1
mance in the consumer sector is undermining econom-
ic restructuring and is taking steps to bolster the
consumer program:
? The 1988 plan calls for a shift in investment
resources from "material production" to housing
construction and consumer services.
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? The Soviets are also negotiating purchases of West-
ern manufacturing equipment for consumer indus-
tries. The Soviets recently signed a $2.1 billion line
of credit with West German bankers to finance
purchases of machinery for the consumer sector.
? Defense industries have been called on to furnish
additional resources and facilities to support the
new emphasis on the consumer.
? The Council of Ministers also recently approved
three resolutions that outline plans to improve the
provision of consumer goods and services. The reso-
lutions increase production targets for clothing and
appliances in 1988-90 and call for substantial in-
creases in 1995 in sales of services as well as
improved performance in retail trade.
Foreign Trade. The leadership is banking on joint
ventures and the extension of foreign-trade rights to
enterprises to expand the USSR's exports of manufac-
tured goods. The six-month plan fulfillment report
noted that there had been an increase in the number
of approved joint ventures and an expansion of minis-
tries and enterprises granted trading rights but com-
plained that the pace of restructuring in foreign trade
was too slow. The leadership has criticized the slow
growth in exports of manufactured goods and the fact
that fuels and raw materials continue to dominate
sales.
Official statistics show trade turnover grew by 5
percent over the first half of 1987 (see figure 3).
Imports rose by 7 percent and exports by 3 percent.
The import push resulted in a trade deficit of $740
million, whereas there was a surplus of over a billion
dollars during the same period of 1987.
Industrial Modernization. Moscow has made it clear
that civilian machine building will continue to receive
priority access to resources, but industrial moderniza-
tion is no longer a major theme of General Secretary
Gorbachev's speeches as it was when he first assumed
power. The investment surge that began in 1986 has
failed to bring on line ("commission") planned in-
creases in new production capacity. Most recently,
official figures indicate that investment spending this
year has exceeded planned levels, but completion of
new factories probably has fallen considerably short
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Figure 3
USSR: Trends in Foreign Trade a
Billion current rubles
80
60
50
Total turnover
40 Exports
Imports
30
20
10
I
0 1984 85 86 87 88
aAll data are for six-month periods.
318743 9-88
of goals again (see figure 4). The Soviet centrally
planned economy continues to encourage the startup
of investment projects rather than their completion,
causing long delays.
Direction of Quality Control Uncertain. The quality
of a wide range of production extending from machin-
ery to textiles was criticized in Goskornstat's report
on six-month performance. Measuring the degree of
change in overall quality is difficult, but the Soviet
leadership clearly is dissatisfied with the progress that
is occurring. The status of gospriyemka, the state
acceptance program intended to raise quality stan-
dards in industry (particularly in machine building), is
unclear. The Presidium of the Council of Ministers
tabled indefinitely a proposal to administer quality
guidelines more strictly, which suggests that debate
on how best to improve product quality is continuing.
Many ministries oppose the concept of compulsory,
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Figure 4
USSR: Investment Versus Commissionings
? Plan a
? Actual
Note scale change
Total Investment
Percent growth
10
Total Commissionings
Percent growth
16
1986
1987
1988b
a Plan goals are for growth over actual levels achieved in the previous year.
b Actual growth of investment and commissionings is for the first six months of
1988 compared with the same period in 1987. Moscow has not published an
annual goal for 1988 commissionings growth, but on the basis of the high
1986-87 targets it probably is at least 10 percent.
1986 1987
1988b
centrally administered quality control, but some gov-
ernment leaders believe such an approach is necessary
to upgrade product quality.
System Overhaul. Under the economic reform pro-
gram, many enterprises have had to manage their
finances differently since 1 January 1988. The central
role of directive planning in the economy, however,
has been preserved by manipulating the new system of
"state orders." Many enterprises have been tasked to
A factory or enterprise works to a state order when it receives a
contract from its parent ministry and/or Gosplan to produce a
certain quantity of output. Such orders entitle an enterprise to a
guaranteed supply of the materials needed to fulfill the contract,
largely eliminating the need for an enterprise to obtain these inputs
from other enterprises or, in other words, to operate independently
in wholesale trade. Gorbachev conceded this point in his speech to
the party plenum in July 1988, saying that "the state order. ... has
become a covert form of planning of the volume of production."
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allocate 100 percent of their production capacity to
state orders, giving them no freedom to arrange
interfirm contracts or otherwise act independently of 25X1
central planners. A sense is growing this year that
some new measures need to be adopted to lessen the
still largely undiminished role of directive planning in
the economy, and give a greater role to markets (see
inset). The Council of Ministers report on the half-
year plan results, in addition to taking a highly
critical tone with regard to performance and castigat-
ing three ministers by name, expressed "concern over
the fact that the state of affairs in the national
economy is improving only slowly, and the creation of
the necessary prerequisites for effecting a fundamen-
tal breakthrough in economic and social development
is not being properly ensured." 25X1
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The Reform Debate
The foundation of Gorbachev's reform program?
introduced on a large scale on 1 January 1988?was
laid at the Central Committee plenum in June 1987.
The reforms are off to a rocky start, and the leader-
ship has been discussing some fixes to its program.
Most recently, however, a debate over the larger
direction of the economic reform has broken out, with
"Second Secretary" Ligachev questioning the desir-
ability of allowing a genuinely free market system
and private ownership, and Politburo member Yakov-
lev defending the concept of a market system and
individual property rights.
The leadership seems to be both more sharply divid-
ed over the general concept of market-oriented reform
and unable to agree on initiatives to restore some
momentum to the reform effort. Proposals under
discussion include:
? A reduction in the extent of the state order system
(now encompassing 90 percent of industrial produc-
tion) in the hope of forcing enterprises to cut back
on production of unneeded and low-quality goods.
One report stated that restrictions would be set at
60 and 40 percent of production in 1989 and 1990,
respectively. But after much discussion, a "tempo-
rary regulation" on state orders appeared at the
end of July 1988 that does little to change the
present system.
? Shrinking state budget deficits, in part by ending
bailouts to troubled enterprises. The hope is to
control the growth of personal incomes that is
contributing to inflation by forcing enterprises to
cut back on wages unless supported by enterprise
earnings. Embarking on such a course, however,
would be extremely difficult because it would
threaten unemployment on a scale the leadership
seems unwilling to accept.
? Expansion of the compulsory, centrally adminis-
tered program of quality control. This issue has
been shelved for the time being.
? Long-term leasing of land and machinery in the
countryside so as to increase incentives to produce
and market agricultural output. Gosagroprom, the
State Agroindustrial Committee, published recom-
mendations that, if enacted, would allow individual
and small groups to lease land for up to 50 years.
? Moving up the timetable on price reform?in our
opinion, the most necessary element to the develop-
ment of an efficient economy. Although Gorbachev
broached the idea of quicker action on prices, a
wide spectrum of society fears market prices, and
the odds on near-term action are slim.
Outlook
Because of continuing controversy on the role of
markets and the private sector, the General Secretary
will probably remain focused on political reform. We
project that?against a plan goal of 4.1 percent?
GNP probably will increase by about 2 to 3 percent in
1988, on the basis of expected growth in industrial
output of about 1.5 to 2.5 percent and a rise of 2.5 to
3.5 percent in value added in agriculture (see
figure 5).
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Meanwhile, the expansion in consumer demand in
1988 is likely to outpace the availability of consumer
goods and services, and enterprise finances may dete-
riorate somewhat as the regime tries to cut back the
amount of credit available to cover operating losses.
Enterprises will still have insufficient incentive to
concentrate resources on the completion of investment
projects. The leadership may be able, however, to get
a somewhat better grip on light-industry retooling by
requiring greater defense industry participation in the
program.
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Figure 5
USSR: Trends in Economic Performance a
Percent growth
10
El GNP
? Industry
El Agriculture
-4
Average 1986 1987 1988
annual
1981-85
(projected)
'Calculated using value added in 1982 rubles.
318745 9.88
7
The regime, still vacillating between efforts to sustain
growth and to change the way the economy works (see
inset), probably will make little progress on either
count in 1988. It will continue to be hindered by its
own piecemeal agenda for introducing elements of the
reform and by its inability to put in place a combina-
tion of carrots (fully stocked store shelves) and sticks
(income differentiation based on contribution to pro-
duction) necessary to motivate the work force. Past
mistakes not yet corrected?such as excessive invest-
ment in energy production to the detriment of energy
conservation and a poorly developed farm-to-market
infrastructure?will continue to take their toll. Mean-
while, Gorbachev seems to be shifting his ground on
when his policies will prove themselves. He recently
declared that the range of economic problems con-
fronting the USSR is far more extensive than he had
originally believed (legacies of the ineptness of previ-
ous regimes) and will take longer than planned to
solve.
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Growth Versus Change
Is it feasible to continue planning high rates of
economic growth at the same time that the economy
is being restructured? Debate over this issue is
heating up in the Soviet Union. Two prominent
economists recently argued, for instance, against such
a strategy. According to Nikolay Shmelev of the
Institute for Study of the USA and Canada:
It is impossible to restructure and "accelerate"
at the same time. First, we must stop in order to
change the structure of the national economy in
favor of new sectors, to reduce the proportion of
raw materials in production, and to reduce the
share of sectors requiring major investments.
Only after this has been done will it be realistic
to return to the task of achieving high growth
rates.
What is needed, according to Shmelev, is a lower-
ing of growth rates in the 1986-90 period in order
to concentrate on "qualitative improvements and
the introduction of advances in scientific and
technological progress."
Leonid Abalkin, director of the Economics Insti-
tute of the Academy of Sciences, also addressed
this issue at the party conference in June 1988:
It must be clearly understood. .. that, by con-
tinuing to opt for purely quantitative, volume
[oriented] economic growth, we are unable to
solve the problem of fundamentally improving
output quality, retooling the national economy,
improving efficiency, and we cannot turn the
economy around toward the consumer.
The regime seems uncertain about how to handle
the "growth versus reform" issue. On the one
hand, Gorbachev continues to emphasize high
rates of growth. In his address to the national
party conference, he said that the "economy is
gradually gaining momentum . . . national income
is increasing more rapidly than envisaged by the
plan [this yearr and commented that "all this is
the real fruit of restructuring." At the same time,
he admitted that the economic reforms still have
not taken hold. Part of the indecision may result
from the fact that gauging economic progress in
other than traditional terms raises the question of
how the progress of restructuring could be mea-
sured.
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Gorbachev Promotes New Party
Line on the Nature of the
Capitalist Threat
General Secretary Gorbachev and his allies are argu-
ing for a change in the party line on key issues that
have formed the theoretical basis of East-West rela-
tions since the days of Lenin. They are promoting the
view that the decline of capitalism is not inevitable,
that capitalism is not inherently militaristic, and that
relations with the capitalist world should not be
totally dominated by class interests. The policy impli-
cations of these formulations are that competition
with the West can be shifted from a military to an
economic basis, making a lengthy period of detente
both possible and desirable. This, in turn, would help
to lay the groundwork for a reduction in defense
spending.
While these new formulations clearly serve Soviet
propaganda interests?by helping to promote a less
threatening image of the Soviet Union abroad?the
sharp debate they have unleashed within the Soviet
elite makes it clear that there is more at stake.
"Second Secretary" Ligachev, other party conserva-
tives, and top military spokesmen have openly ques-
tioned these new formulations and continue to ad-
vance the traditional assessment of the West.
"New Thinking "About the West
Gorbachev's "new thinking" is based on the idea that
the greatest strength of the West and its essential
challenge to Soviet socialism is economic, rather than
military, and that an arms race plays into the hands of
the West by undermining the Soviet economy. His
arguments on the nature of capitalism are aimed at
bringing Soviet doctrine into line with this new view
of East-West competition, but they have not yet been
adopted as party policy. Indeed, when Gorbachev first
raised them in his speech in November 1987 on the
70th anniversary of the revolution, he posed them only
as rhetorical questions. His remarks, however, clearly
suggested that they could be answered in the affirma-
tive. He asked:
? "Is the capitalist economy capable of developing
without militarism?" and "can it function and
develop without it?" He indicated that he believes it
9
can, pointing out that West Germany and Japan
went through a period "of rapid capitalist develop-
ment with minimal military expenditure."
? Can human values come to play a larger role than
"narrow, class-based features of the capitalist sys-
tem?" In response, he suggested there could be a
long-term alliance of sorts between capitalism and
Communism against common enemies, such as nu-
clear war or environmental dangers.
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The top members of the Soviet leadership responsible 25X1
for foreign policy?Foreign Minister Shevardnadze
and party secretaries Yakovlev and Dobrynin?have
publicly supported Gorbachev's position, and party
secretary Medvedev elaborated the new view of capi-
talism at a conference of social scientists shortly after
Gorbachev's November speech. Medvedev sharply
criticized past Soviet analysis of the West for focusing
only on "capitalism's decay and the inevitability of its
collapse" and ignoring its strengths. He stressed that
Soviet thinking should also look at "the ability of
contemporary capitalism to rise to new levels of
production socialization" and adapt to challenges, 25X1
pointing out that Lenin believed that "the trend
toward stagnation and decay under imperialism is not
absolute." Because Soviet policy has been based on
the incorrect notion that capitalism is in decline, he
said, "it is necessary to look afresh at our understand-
ing of the nature and forms of coexistence" and to
think about them in terms "of protracted coexis-
tence." 25X1
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Soviet academics have responded to Gorbachev's
questions by arguing that a "distorted" view of the
West developed during the Stalin era. The editor of
the journal of the Institute for World Economics and
International Relations argued in its June 1988 issue
that Stalin played up the danger of external and
internal enemies "to instill fear" in the population and
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justify his harsh methods. The author took issue with
other Soviets who argue that this redefinition of
relations is a "betrayal" of revolutionary thinking,
specifically denouncing the Andreyeva letter of
March 1988 that served as a platform for conservative
views on a broad range of issues. Similarly, an article
in the December 1987 issue of the journal of the
Institute for the Study of the USA and Canada
attributed the idea of East-West confrontation to the
period immediately after the Bolshevik revolution
when armed struggle between the two sides seemed
imminent.
Although other Soviet academics have previously
argued along lines similar to those now being ad-
vanced, their views have not been reflected in authori-
tative party statements. Instead, party doctrine has
maintained that the West is in a state of decline,
making it increasingly dangerous as it tries to shore
up its economy by relying on militarism. From the
doctrinal perspective, therefore, there was little pros-
pect of abatement in East-West military competition.
This traditional line was contained in the Communist
Party of the Soviet Union Program adopted at the
27th Party Congress in 1986, as well as in Gorba-
chev's own remarks at the session (see inset).
Controversy among the leadership over these issues
has also surfaced at other critical points in Soviet
history when fundamental questions of international
relations were being reassessed. It first arose in the
1920s in connection with a debate within the Soviet
leadership over whether the Soviet Union should focus
on actively promoting world revolution or, in Stalin's
words, building "socialism in one country." The stan-
dard Soviet position of East-West confrontation
emerged from this debate. As part of the effort to tar
this view of the West as a Stalinist error, an article in
a December 1987 issue of a Moscow weekly pointed
out that Nikolay Bukharin had argued against the
view of Stalin and Trotsky that capitalism is "disinte-
grating" and "tottering," claiming instead that it was
very resourceful and able to overcome its problems.
Similar high-level debates took place in the Soviet
Union on the eve of the Cold War, when a leading
economist, Eugene Varga, unsuccessfully maintained
that capitalism would remain viable in the long term.
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Soviet View of the West at the 27th Party Congress
At the 27th Communist Party of the Soviet Union
(CPSU) Congress in early 1986, the traditional view
of capitalism was still evident in the Soviet leader-
ship's thinking.
1986 CPSU Program:
? Capitalism "is strong and dangerous, but has al-
ready passed its zenith. The general crisis of capi-
talism is deepening."
? In the West, militarism is a "constant and increas-
ing source of the danger of war."
? "No 'modifications' and maneuvers by present day
capitalism can or will abrogate the laws of its
development, eliminate the acute antagonism be-
tween labor and capital and between monopolies
and society, or extract the historically doomed
capitalist system from a state of all-embracing
crisis."
Gorbachev's Speech to the 27th Congress:
? "The past period has amply confirmed that the
general crisis of capitalism is growing deeper. . . .
Militarism, which has spread to all areas, is ap-
plied as the most promising means of shoring up the
economy."
? "The US and its military-industrial machine,
which so far does not intend to slow its pace, remain
the locomotive of militarism. This must be taken
into account."
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Gorbachev's Motives
Gorbachev appears to have both domestic and foreign
policy objectives in advancing "new thinking" about
the West. Like the doctrine of "reasonable sufficien-
cy," which attempts to redefine Soviet military re-
quirements, this less confrontational posture toward
the West is clearly intended to help defuse the
"enemy" image of the Soviet Union by persuading
public opinion that it does not have aggressive mili-
tary intentions. The sharp debate it has provoked,
however, makes it clear that there is more to this issue
than propaganda.
First of all, the debate over the nature of capitalism is
also part of a broader debate now taking place over
Soviet national security priorities, which has been
most evident in the discussion of "reasonable suffi-
ciency." By questioning the very need for military
competition with the West, Gorbachev is shifting the
debate from an area over which the military has the
central role?defining what is a sufficient defense?to
one that is more the prerogative of civilians?defining
the West's long-term prospects and intentions. By
arguing that the West can prosper without militarism
and is not in decline, Gorbachev is in effect arguing
that competition with the West must take place
primarily on economic grounds, not military ones.
This, in turn, helps to justify his policy of relying more
on political than military means to protect Soviet
security interests, while holding down defense spend-
ing and engaging in arms control negotiations. By
contrast, the traditional party line has suggested that
there is no alternative to long-term military competi-
tion with the West and consequently implies a need
for keeping Soviet defense spending at high levels.
Gorbachev's immediate purpose in raising these ques-
tions, however, may well have been to stimulate Soviet
thinking on East-West issues, helping to pave the way
for future policy shifts. Indeed, since his speech of
November 1987, Soviet specialists have begun to
blame Brezhnev's overemphasis on military power for
fueling the arms race and contributing to the deterio-
ration of East-West relations in the late 1970s. One
Soviet specialist wrote in May 1988, for example, that
Brezhnev's policies led to a perception in the West
that the "Soviet leadership was actively exploiting
11
detente in order to build up its own military forces"
and that this led to a "colossal" increase in military
spending on both sides.
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Gorbachev also apparently hopes that a more benign
portrayal of the West will help build support for his
arms control and defense policies within the Soviet
Union. According to one Soviet foreign policy special-
ist, Gorbachev is pushing these ideas to help change
Soviet public opinion. The specialist explains that
large segments of the Soviet military are still worried
about the possibility of a Western invasion and that, 25X1
therefore, Gorbachev wants to soften the image of the
West as the traditional enemy. The discussion of the
INF Treaty in the Soviet media showed that many in
the civilian population are also suspicious about West-
ern intentions and thus skeptical of Gorbachev's arms
control initiatives and the prospect of reducing Soviet
military capabilities. Indeed, having seen East-West
relations portrayed in confrontational terms for their
entire lives, many Soviet citizens will not easily accept
Gorbachev's less threatening assessment of Western
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"Old Thinking" Lives On
Gorbachev's "new thinking" about the West is clearly
controversial and has not yet been accepted as party
policy. USA and Canada Institute Director Georgiy
Arbatov said as much at a press conference in No-
vember 1987, declaring that the "question of whether
or not capitalism could survive without the 'narcotic'
of militarism" was "still an open one." The traditional
portrayal of the West is still predominant in military
writings on this subject as well as in the public
statements of some conservative members of the party
leadership.
"Second Secretary" Ligachev in particular has
strongly defended the traditional portrayal of East-
West relations. At the Soviet hearings on the INF
Treaty in February 1988, he warned that "there are
powerful forces in the United States and Western
Europe which are solidly behind militarization of the
economy and public life." Later that month at a
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Central Committee plenum, he stressed the need for
young people to "learn a class view of the world."
This traditional characterization of East-West rela-
tions was also contained in the conservative platform
set out in the widely publicized Andreyeva letter of
March 1988, with which Ligachev has been closely
associated. Andreyeva sharply criticized the argument
of "respected academics" that class struggle is an
"obsolete term" and that East-West relations now
"lack any class content." She asked rhetorically,
"Does the international working class no longer op-
pose world capitalism as embodied in its state and
political organs?"
Ukrainian party boss Shcherbitskiy, who has long
taken a hard line on East-West issues, has continued
to reflect "old thinking" in his public statements.
Only a few days after Gorbachev's speech, he ex-
pressed his reservations, warning that "we must al-
ways take into account the aggressive nature of
imperialism," pointing out that "many influential
circles in the West are still obviously unable to think
in the new way" and still have "hopes of upsetting
military-strategic parity." Similarly, at a meeting
with voters in May 1988, he charged that "militaristic
circles of the West" have "not abandoned the inten-
tion to gain military superiority over us and win
commanding positions in international affairs and the
world economy."
Military spokesmen have also continued to articulate
a traditional view of capitalism and the Western
military threat that is at odds with "new thinking" on
this subject. Given the military leaders' responsibil-
ities for defending the country, they are more likely
than civilians to plan on the basis of a worst-case
scenario, focusing on the threat posed by Western
military capabilities.
About the time that Gorbachev first publicly raised
this issue, Deputy Chief of the General Staff Colonel
General Gareyev argued forcefully for maintaining
the traditional party line. In a short book on military
doctrine, he maintained that:
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The general crisis of capitalism is deepening.
The United States, like the other leading capi-
talist countries, is experiencing serious difficul-
ties; the economic and financial crisis is intensi-
fying, and unemployment is growing. As
historical experience indicates, the imperialists
have always sought a way out of a crisis in the
militarization of society, in an arms race, and in
military provocations.
Other military spokesmen have also continued to
speak of East-West relations in more traditional terms
that question the notion advanced by Gorbachev that
the West could become less militaristic:
? In May 1988, Defense Minister Yazov warned in
Pravda that "we have no right to close our eyes to
the fact that in the leading capitalist states influen-
tial reactionary circles are repositories of the spirit
of militarism."
? Shortly after Gorbachev's speech, Chief of the
Soviet General Staff Akhromeyev wrote that impe-
rialism has not abandoned and "has not shown a
willingness to abandon any of its long-term, large-
scale military programs," claiming that "with each
passing year, US and NATO armed forced become
increasingly offensive and aggressive."
? In November 1987, Rear Admiral Kostev said that
"the West is still incapable of abandoning its obso-
lete views and regards the world in terms of con-
frontation between two systems" and is seeking
"complete and indisputable superiority."
? In January 1988, General Chervov wrote that so-
cialism is "confronted by the powerful and danger-
ous world of capitalism. Its general crisis is deepen-
ing ... it is constantly generating an aggressive and
adventuristic policy. 'Warfare is rooted in the very
essence of capitalism,' Lenin pointed out."
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? A Krasnaya zvezda editorial in June 1988 warned
that while there has been "definite improvement" in
US-Soviet relations, "this does not mean, of course,
that the militarist danger inherent in the nature of
imperialism can be disregarded from now on."
Prospects
Faced with the concerns of conservatives and the
military, Gorbachev and his allies have not yet suc-
ceeded in redefining the official party line on the
Western threat. The theses for the party conference in
June 1988 strongly endorsed Gorbachev's conduct of
foreign policy but temporized on the threat, stating
that, while there has been an improvement in East-
West relations that has increased the prospects for
reducing the military burden, "we are not casting
aside the militaristic danger which lurks in the es-
sence of imperialism." Gorbachev also appeared at
the conference, asserting that "we are not forgetting
the threat to peace from imperialist militarism and we
believe that for the moment no guarantees have been
provided for the irreversibility of the positive process-
es that have begun." Foreign policy issues were
secondary at the party conference, and Gorbachev
was probably reluctant to push in this area, preferring
to save his political capital for more pressing domestic
issues.
Reverse Blank 13
Since the party conference, these issues have come to
the fore. At a major conference at the Ministry of
Foreign Affairs in July 1988, Shevardnadze set off
high-level polemics by pushing the idea of a noncon-
frontational approach to East-West relations even
further. Breaking with traditional ideological formu- 25X1
lations, he endorsed a new definition of peaceful
coexistence that explicitly rejected "class struggle,"
adding that the "struggle between two opposing sys-
tems is no longer a determining tendency of the
present-day era." The following month, his remarks
drew a sharp response from Ligachev, who warned
that "class interests" must predominate in interna-
tional relations and that "raising the question in
another way" could only cause confusion. A few days
later, party secretary Yakovlev entered the fray,
arguing that the interests of mankind as a whole are
more important than class interest.
These sharp polemics suggest that highly contentious
foreign policy issues are now on the leadership agen-
da. Indeed, they are critical questions the Politburo
will need to come to grips with over the next year as it
makes key decisions on the next five-year defense
plan.
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Breaking With the Past:
Implications of Recent Attacks
on Brezhnev's Foreign Policy
The foreign policy of the Brezhnev regime has been
criticized implicitly by Gorbachev and more directly
by foreign policy specialists and commentators in the
press. They have sharply attacked the decisions to
deploy SS-20s against Western Europe and to invade
Afghanistan, arguing that the Brezhnev leadership
failed to anticipate Western reactions to its policies,
emphasized military force over political solutions, and
reached decisions through a closed process that ex-
cluded expertise. If these criticisms lead to a change
in policy, the Soviet Union could make more sophisti-
cated and cautious foreign policy decisions.
Criticism of the Decisionmaking of the Brezhnev
Leadership
Gorbachev has criticized Brezhnev's foreign policy
without mentioning him by name, and these general
remarks have been expanded into an extensive cri-
tique in the writings of commentators and foreign
policy specialists associated with the institutes of the
Academy of Sciences. While these academics go
further than Gorbachev in criticizing Brezhnev, they
appear to both reflect and influence his thinking. The
fact that they are not in policymaking positions allows
them to be more outspoken than higher officials.
Both Gorbachev's speech and the Central Committee
Theses presented at the 19th All-Union Party Confer-
ence criticized Brezhnev's foreign policy decisions and
implied that he allowed the USSR to be drawn into an
unnecessary arms race. The Theses, published in
Pravda on 27 May, stated that a critical analysis of
the past had shown that dogmatism had left its mark
on foreign policy, implying that ideological rigidity
had distorted decisionmaking. In his speech to the
conference, Gorbachev's meaning was clear when he
criticized major decisions that were taken "by a
narrow circle of persons" without sufficient analysis
and adequate consideration of the policies of other
states.
15
These attacks on Brezhnev's policy were foreshad-
owed in Gorbachev's and Shevardnadze's speeches in
1986 and 1987. In a speech to the Foreign Ministry in
May 1986, Gorbachev told diplomats to jettison prej-
udices that lead to "dead ends" and prevent a realistic
assessment of events. He argued that the USSR must
not be so persistent in defending its positions that its
behavior amounts to "thoughtless obstinacy," saying
that this pattern had earned Soviet diplomats the
sobriquet "Mr. Nyet." A year later, Foreign Minister
Shevardnadze indicated in a speech at the Foreign
Ministry that a clearer evaluation of past policies
could prevent repetition of mistakes, and he empha-
sized the need for alternative views on foreign policy
questions. In an apparent swipe at Gromyko's man-
agement style, he condemned "claims of infallibility."
The foreign policy apparatus during 1988 has joined
in finding fault with Brezhnev's failure to preserve
detente in the 1970s, and no foreign affairs officials
have defended his actions. Authoritative figures in the
Foreign Ministry, the International Department, the
military, and the academic institutes have criticized
Brezhnev's policies:
? In a speech to the Council on Foreign Relations in
New York on 11 July 1988, Marshal Sergei Akhro-
meyev stated that, in working to establish military-
strategic parity, the USSR failed to take advantage
of opportunities to relax military tension and reach
for better understanding.
? In an address on the 19th Party Conference to
students, which was quoted in Pravda on 9 July
1988, International Department Chief Anatoliy Do-
brynin spoke about the "underestimation in the past
of political possibilities for ensuring security and
easing tension, as a result of which we allowed
ourselves to be drawn into the arms race."
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.
Lev Isaakovich Mendelevich, chief of
the Ministry of Foreign Affairs Evaluation and
Planning Administration, declared in mid-April
1988 that the USSR "through its own actions" had
been responsible for the collapse of detente in the
1970s.
? In an article in Kommunist (No. 5) in March 1988,
USA Institute Director Georgiy Arbatov wrote that
the "stagnation experienced by the USSR played a
role in undermining the process of detente in the
late 1970s." In his view, Soviet understanding of
international relations in those years "did not corre-
spond to reality," and policy was characterized by a
lack of initiative and "oversimplified reactions to
various moves by the West."
In an article published in Literaturnaya gazeta (18
May 1988), Vyacheslav Dashichev, head of the De-
partment of International Relations of Socialist Coun-
tries in the Institute of the Economics of the World
Socialist System, presented the most detailed critique
of Brezhnev's foreign policy to date. According to
Dashichev's analysis, the severe exacerbation of ten-
sion in Soviet-Western relations in the late 1970s and
early 1980s was caused chiefly by "the miscalcula-
tions and incompetent approach of the Brezhnev
leadership" and could have been avoided. He argued
that the Brezhnev leadership had "no clear ideas of
the Soviet Union's true national interests," which did
not lay in chasing "petty and essentially formal gains
associated with leadership coups in certain developing
countries."
Dashichev's arguments apparently are intended to
support Gorbachev's position in the current policy
debate that unilateral military actions do not neces-
sarily enhance security.
Criticism of the SS-20 Decision
The decision by the Brezhnev leadership to field the
SS-20 intermediate-range ballistic missile has been
put forth as a specific example of a deployment
decision based upon worst-case analysis. Soon after
Gorbachev announced in February 1987 that the
USSR was willing to negotiate the elimination of all
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INF systems from Europe without linking their re-
moval to the resolution of issues in the START and
Defense and Space Talks, criticisms of the deploy-
ment decision began to appear in the press:
? In a Moscow News (8 March 1987) column, com-
mentator Aleksandr Bovin implicitly criticized the
SS-20 decision by asking why the missiles were
deployed.
? Deputy Foreign Minister Aleksandr Bessmertnykh
said in an interview in New Times (12 November
1987) that the decision to deploy scores of SS-20s
may have been a political mistake.
After the signing of the INF Treaty, attacks on the
decision to deploy SS-20s became more frequent and
open. Commentators were able to say that the deploy-
ment had provoked the NATO "dual track" decision
that led to the deployment of Pershing 2 and cruise
missiles in Western Europe. Commentators justified
the destruction of more Soviet intermediate- and
short-range rockets than American rockets by arguing
that the deployment of the SS-20s had been a mis-
take. Criticism of the SS-20 decision also has been
used to substantiate the more general charges against
Brezhnev's foreign policy by Dashichev and lzvestiya
commentator Aleksandr Bovin, who have linked it to
the use of "strong-arm military methods" and "an
exaggerated concept of the danger we were facing."
More critical information on the SS-20 decision may
be released within a year or two.
Director of the Institute of European
Studies Vitaliy Zhurkin said in May 1988 that the
USSR had recently established a commission to re-
view the decision to deploy SS-20s. Its establishment
may indicate that the Soviet Government will publish
new documents or historical studies in an effort to
further discredit Brezhnev's foreign policy.
Criticism of the Afghanistan Decision
Like the decision to deploy the SS-20, the decision to
invade Afghanistan is portrayed as an example of the
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Brezhnev leadership's failure to foresee the conse-
quences both of its actions and of relying excessively
on the use of force. Before the announcement in
February 1988 of the Soviet intention to withdraw
from Afghanistan, a number of signs indicated that
foreign policy specialists viewed the decision to inter-
vene as a blunder. During the early 1980s, USA
Institute Director Arbatov and some of his colleagues
told foreigners that they opposed the intervention.
Criticism of the 1979 decision, however, could not be
found in the press.
Since Gorbachev made his withdrawal announce-
ment, foreign policy specialists have frequently at-
tacked the invasion decision:
? In his Soviet television commentary of 22 May
1988, Bovin claimed that a lesson to be drawn from
Moscow's experience in Afghanistan is the recogni-
tion that "the victorious proletariat cannot make
other people happy by force."
? In his Komsomolskaya pravda interview of 19 June
1988, Dashichev maintained that, when the decision
was made to send troops into Afghanistan, "all the
possible consequences of this step were not thor-
oughly weighed," and it "gave a powerful boost to
the arms race."
Also, Gorbachev and other members of the leadership
conveyed to an American delegation early in 1988
that he and other members of the Secretariat agreed
that responsibility for the intervention rested primari-
ly on Brezhnev and the International Department,
that Brezhnev was virtually "senile" at the time, and
that he had ignored reporting of experts that interven-
tion would be counterproductive.
Director of the Insti-
tute of European Studies Vitaliy Zhurkin said in May
1988 that, in addition to the commission investigating
the SS-20 decision, a commission was conducting an
inquiry into the decision to invade Afghanistan.
The Krasnoyarsk Radar?Another Brezhnev Error?
Like Afghanistan and the SS-20 force, Krasnoyarsk is
a problem Gorbachev inherited. Although the Soviets
have not been willing to admit in public or in the
17
Standing Consultative Commission discussions that
they made a mistake by building the radar, a number
of Soviets in private comments have acknowledged as
much:
in mid-March 1984, 25X1
Yevgeniy Pavlovich Velikhov, vice president of the
USSR Academy of Sciences, remarked that the
building of the Krasnoyarsk radar was a mistake.
? In off-the-record comments at a conference in Au-
gust 1987 in West Germany, retired Lt. Gen.
Mikhail Mil'shteyn, a senior staff member of the
Institute of the USA and Canada, said it was his
belief that the Krasnoyarsk radar was illegal. He
added that he wondered what the bosses were
thinking when they built it.
? At a Dartmouth conference in April 1988, General-
Major Boris G. Surikov of the Ministry of Defense
said that he regretted he did not fight harder
against the location of the radar at Krasnoyarsk
when the decision was first made. He said that there
was a debate within the Ministry of Defense be-
cause everyone understood that placing the radar at
Krasnoyarsk would violate the Antiballistic Missile
(ABM) Treaty, but that most military leaders be-
lieved the United States would realize the radar was
useless for ABM purposes.
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The Soviets have offered to dismantle the equipment
at Krasnoyarsk in exchange for United States agree-
ment on nonwithdrawal from the ABM Treaty. Signs
point to Soviet contemplation of full dismantlement,
although Moscow has stopped short of publicly mak-
ing an offer. If such a decision is announced, there
probably will be a public airing of the "mistake" of 25X1
building the radar, another example of flawed deci-
sionmaking under Brezhnev. 25X1 25X1
Criticism of the Structure of Foreign Policy Decision
Making
Dashichev and Bovin have criticized the procedures
by which the decisions of the late 1970s were made
and have called for opening up the foreign policy
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making process to substantive input from rank-and-
file members of the Supreme Soviet as well as the
general public. Bovin argued in an article dated 16
June 1988 that "if we are really serious about demo-
cracy" it will be necessary to place the diplomatic
service in the "zone of glasnost and control 'from
below." In a Komsomolskaya pravda interview dated
19 June 1988, Dashichev declared that previous policy
errors came about largely because "policy was not
subject to public monitoring" and that there is still a
need for a "major improvement" in the foreign policy
apparatus to ensure greater public participation.
Implications
The recent criticisms of Brezhnev's foreign policy
have been intended to differentiate Gorbachev's ap-
proach to East-West relations from that of his prede-
cessors, to refute the domestic defenders of Brezhnev's
legacy, and to convince the West that the Soviet
Union will not undermine the atmosphere of East-
West accord created in the last three years by repeat-
ing the mistakes of the 1970s. The criticisms are not
only an effort to reexamine the history of the decline
of detente but also a rejection of the traditional line
that the Soviet Union bears no responsibility for the
arms race. In this regard, the critics of Brezhnev's
policies stress the point that unilateral military moves
intended to increase Soviet strength can undermine
security by provoking reactions from the United
States. An increased role for specialists on the West in
military and foreign policy decisions may be one
result of this new understanding, along with an
increased emphasis on dialogue with the West
Foreign Minister Shevardnadze called for Supreme
Soviet debates on major foreign policy and military
decisions in his address to a Ministry of Foreign
Affairs conference on 25 July 1988. He spoke of the
decision of the 19th Communist Party of the Soviet
Union Conference to create a "constitutional-plenipo-
tentiary mechanism" that would introduce a "legisla-
tive procedure" to bring military and foreign policy
under the control of the supreme elected bodies. This
would, he said, affect questions of the use of military
force outside the country's national frontiers, plans for
defense construction, and the openness of military
budgets. It is still too early, however, to determine the
significance of the changes made at the party confer-
ence.
Secret
The criticisms of Brezhnev's foreign policy have been
closely related to the argument for a model of East-
West relations that emphasizes action-reaction cycles.
For example, in lzvestiya (16 June 1988), Bovin
compared the SS-20 and Afghanistan decisions, writ-
ing that "in both cases we clearly overestimated our
own potential and underestimated what could be
called the 'resistance of the medium." Bovin argued
that each of these decisions provoked an unexpectedly
harsh Western reaction because military consider-
ations dominated decisionmaking, and little effort was
made to predict Western responses. In each case,
political solutions were not given adequate attention,
and there was an exaggerated concept of the danger
faced.
If the full implications of this criticism are realized in
practice, Soviet policy could move in new directions.
For example, efforts to avoid a new Afghanistan could
lead to a less ideological and more cautious approach
toward the use of military force in the Third World.
The Soviet Government may look more closely at
future military programs, with or without additional
arms control agreements, to prevent triggering an
action-reaction cycle like that caused by the SS-20
decision.
The view that Brezhnev's military buildup and his
decision to invade Afghanistan undermined support
for detente in the West and allowed the USSR to be
drawn into an expanded arms race probably is still
controversial in the Politburo. Gorbachev's cautious
expression of this argument and Ligachev's recent
emphasis on the role of class struggle in Soviet foreign
policy indicate that significant divisions remain. The
traditional view of Stalin's foreign policy was recently
argued, for example, in Pravda (29 August 1988) by
commentators Valentin Falin and Lev Bezymensky,
who accused the United States of singlehandedly
starting the Cold War and accelerating the arms race.
Although Gorbachev probably will continue to be
cautious in his public statements, criticism of the
policy of the 1970s is likely to continue as Gorbachev
and his allies attempt to make the transition to "new
thinking" in foreign policy irreversible.
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Implications of the Withdrawal
of Soviet Forces
From Hungary
the Soviets have seriously con-
sidered withdrawing some or all of their Southern
Group of Forces (SGF) from Hungary. Following
recent articles in the Western media about a possible
unilateral Soviet drawdown in Hungary, the Soviets
have publicly ruled out such a move. Some Soviet
officials have consistently declared that any unilateral
gesture is unacceptable. Moreover, the Warsaw Pact
Political Consultative Committee session ended on 16
July 1988 without mention of unilateral Soviet with-
drawals from Eastern Europe or any other unilateral
Warsaw Pact moves.
Nonetheless, there is considerable evidence that the
issue was contemplated and some groundwork was
laid, possibly including an agreement in principle
between Moscow and Budapest. Moreover, Hungar-
ian officials have indicated publicly that they are
continuing to discuss with Moscow the timing of a
reduction of Soviet forces.
but any step contingent on a Western
response would differ little from previous Soviet offers
and would be difficult for Moscow to portray as a bold
new initiative.
A Review of the Evidence
19
The evidence includes:
? The statement by a
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have drawn 25x1
up and approved a plan to remove two (of their four)
divisions from Hungary and that they might do so
unilaterally if they decided an agreement on mutual
withdrawals was not likely.
? Public comments by Hungarian party leader Grosz,
and other party officials, stating that Hungary
wants to be among the first countries where conven-
tional forces are reduced and that, given Hungary's 25X1
location "off the main strategic direction," it would
be an appropriate place to "experiment with unilat-
eral steps."
? Former party leader Kadar's assertion in an inter-
view in late April 1988 that there were no Hungar-
ian internal reasons, only international ones, for the
presence of Soviet forces in Hungary, and that they 25X1
could be withdrawn when the appropriate broader :.25X1
East-West context was right. 2bAl
? A report that a senior Hungarian Foreign Ministry
official told US officials that extensive conversa-
tions with the Soviets have resulted in an agreement
in principle to the departure of Soviet forces. The
Soviets and the Hungarians, according to the offi-
cial, now agree that there is little rationale for
Soviet forces to remain in Hungary. They will be
moved in toto in order to gain the greatest political
impact. The official suggested that a Western ges-
ture?possibly concerning West German policy to- 25X1
ward force modernization or military cooperation
with France?could trigger the removal of Soviet
forces.
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,l,...l N.,..
? Grosz's comment during an interview at the War-
saw Pact summit that the Hungarian Defense Com-
mittee has been instructed to examine the question
of how reciprocal reductions as part of the ongoing
process of arms negotiations might affect Hungary.
? Hungarian Defense Minister Karpati's remarks to a
Yugoslav reporter that the withdrawal or reduction
of Soviet forces in Hungary would be realistic in the
context of the United States reducing its troops in
Europe.
? Grosz's admission during his visit to the United
States that he and Gorbachev have talked about the
removal of Soviet forces from Hungary. Grosz
denied any knowledge of the source of recent reports
of a Soviet withdrawal, but said he and Gorbachev
would continue their discussions. He noted that
cutbacks in Soviet forces would not be unilateral.
Moscow's Evaluation of the Military Costs
To be politically significant, a withdrawal would have
to be large enough to capture public attention?
upward of 60,000 soldiers. The Soviets could achieve
this level of reduction by thinning units throughout
their forces based in Eastern Europe, by removing
units from several different countries, or withdrawing
the entire number from one country:
? Thinning of units probably would have little visibili-
ty to West European publics and leaders, even if it
amounted to a large number of troops overall.
? The Soviets would be reluctant to remove any of
their forces from Poland because of the Soviet lines-
of-communication and theater-level support units
there.
? The removal of several divisions from East Germa-
ny or Czechoslovakia, both of which border West
Germany, would increase Soviet requirements for
wartime reinforcement in the Central Region.
some degree by any cut in the SGF. But the Soviets
probably would retain forces withdrawn from Hunga-
ry at reduced readiness levels in the USSR. The
wartime missions of the SGF could be performed by
the withdrawn forces from bases in the USSR, or
their initial tasks could be reassigned to other forces.
As a result, the Soviets probably would conclude that
the SGF was their best candidate for withdrawal and
that a sufficiently large removal elsewhere would be
risky in the absence of some significant Western
reductions. The capability of forces in Eastern Europe
to conduct military operations would be reduced to
Secret
Initially, senior Soviet military officers would be
likely to resist any withdrawal on the grounds that it
would reduce their ability to conduct operations
against NATO and to oppose a unilateral step. If,
however, the withdrawn units were to be relocated to
the USSR and their readiness to be reduced, the
military leadership would be hard pressed to argue
against the move because there would be no overall
reduction in forces. Moreover, they might be persuad-
ed that future improvements in Hungary's defense
forces would be adequate to compensate for the
departure of Soviet units.
Their principal objection?and one for which they
would probably find some support within the political
leadership?would be to the unilateral character of
the withdrawal. Defense Minister Yazov, Chief of the
General Staff Akhromeyev, and other senior officers
have consistently opposed unilateral reductions. Akh-
romeyev publicly denied their utility during his recent
visit to Washington. These military leaders would
probably be joined in their arguments by those who
have special concerns about security or Eastern
Europe, such as KGB Chief Chebrikov or "Second
Secretary" Ligachev. They would argue that any
unilateral move sets a dangerous military and political
precedent. Counterarguments that unilateral reduc-
tions have the advantage of not requiring a negotiated
timetable or being subject to verification might carry
some weight. Some military leaders might also be
swayed by the prospect that a unilateral withdrawal
could place enough pressure on Western governments
to bring about some reductions in NATO forces or to
forestall some aspects of planned NATO moderniza-
tion.
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oCCfe
Soviet Perceptions of the Risks of Instability in
Eastern Europe
The Soviets would probably anticipate that the most
negative consequence of a unilateral withdrawal from
Hungary would be the potential for increased unrest
in Hungary and elsewhere in Eastern Europe. The
Soviets might expect that East European opposition
elements and leaders would interpret a unilateral
withdrawal from Hungary as a signal that local
Communist regimes were to shoulder more of the
responsibility for maintaining order. By encouraging
reformers within party leaderships, as well as opposi-
tion groups, to lobby for change with renewed vigor, a
withdrawal could sharply increase the risk of open
conflict within the region.
Moscow's evaluation of these risks would affect the
timing for announcing and implementing a withdraw-
al, but the Soviets probably would calculate that
Eastern Europe could be insulated from the risks if
the withdrawal was carefully designed:
? A lengthy withdrawal timetable?perhaps up to two
years?would give the Soviets an opportunity to
limit potential instability in Eastern Europe. Mos-
cow would gain immediate international credit for
withdrawing the SGF, but the actual removal of
forces would be gradual and could be adapted to
changing events in the region.
? Soviet and East European leaders could agree in
advance on measures to blunt the impact of a
withdrawal announcement on East European pub-
lics and coordinate their responses to possible popu-
lar unrest.
? The Soviets would expect a withdrawal to boost
Hungarian party chief Grosz's popularity, but they
would also be alert to the possibility that a with-
drawal could generate increased unrest in Hungary.
They might encourage some steps before withdraw-
al?such as upgrading Hungary's informal security
forces?to improve the regime's ability to deal with
dissent.
? Reformers and dissidents elsewhere in the Bloc
might temper their demands if Grosz successfully
contained any signs of increased unrest in Hungary.
21
? In the end, the Soviets probably would view the
continued presence of their forces elsewhere in
Eastern Europe as an effective deterrent to any
ferment possibly sparked by a withdrawal from
Hungary.
Western Europe: Implications for the NATO Alliance
From the Soviet perspective, the major benefit of
unilaterally removing the SGF would be the likeli-
hood of a positive reaction from West European
leaders and publics. At the very least, Moscow would
reinforce its other efforts to portray the Soviet Union
as a peaceful superpower. At best, the Soviets would
expect a withdrawal to generate public pressure on
controversial issues within the NATO Alliance, such
as improving force structures and increasing defense
spending.
The Soviets probably would hope to generate enthusi-
asm among West European leaders to move forward
on future conventional arms control negotiations. In
current arms control forums, Moscow is already
courting those who favor a significant degree of
accommodation with the USSR?like West German
Foreign Minister Genscher?and would encourage
them to argue for some Western reciprocation. Gor-
bachev would use the public relations initiative of a
withdrawal to counter the more cautious counsel of
leaders like French President Mitterrand and Italian
Prime Minister De Mita, and, by emphasizing the
symbolism of such a dramatic gesture, he would hope
to strengthen calls in the US Congress for a with-
drawal of at least some US forces from Europe,
especially in a Presidential election year.
Timing and Form of a Withdrawal Announcement
On balance then, the Soviets could garner significant
political gains in Western Europe by unilaterally
removing their forces from Hungary. The military
risks would be tolerable?more tolerable than similar-
ly large force reductions elsewhere?and the danger
of increased instability in Eastern Europe or of strong
opposition from senior Soviet military leaders proba-
bly could be contained. Moreover, by reducing both
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3ecret
costs and manpower requirements, a withdrawal
would contribute to solving some of Gorbachev's more
pressing domestic problems. Given the attractiveness
of the benefits and the acceptability of the risks, it is
not surprising that the Soviets have been discussing
the possibility with the Hungarians
Shortly after Western media stories, which were
intended to preempt any Soviet withdrawal announce-
ment, appeared, Grosz commented
that there
was a "kernel of truth" in the Western reports. He
went on to note that Hungary intended to ask that
Soviet troops in Hungary be the first withdrawn after
an eventual conventional arms control agreement
between NATO and the Pact. Also after the Western
press reports, a Hungarian Foreign Ministry official
stated that there is agreement in principle to the
piecemeal withdrawal of Soviet forces?but not in the
immediate future. He suggested that a Western "ges-
ture" might "trigger" a withdrawal. These comments
indicate that the issue of when (not if) Soviet troops
will be removed continues to be discussed and that
Moscow might time its announcement to the pace of
arms negotiations.
We believe the Soviets and their allies prefer to
negotiate with NATO to achieve mutual reductions
of conventional forces, because it is militarily sensible
to "trade" reductions. Nonetheless, because they rec-
ognize that an agreement with NATO could be years
away, the Soviets might favor a unilateral gesture as a
means of speeding negotiations. Such a gesture would
be a gamble to secure some type of reciprocal West-
ern response or to encourage cuts/freezes on Western
defense spending.
Secret
A unilateral step might also be used to influence the
content of negotiations. For example, Gorbachev's
recent offer concerning the rebasing of F-16 aircraft
proposed a bilateral, equal, and mutual reduction?
considerably different parameters than a unilateral
withdrawal of the SGF would set. If, however, Gorba-
chev intended to announce the removal of Soviet
Ground Forces from Hungary at the Warsaw Pact
summit only a few days after offering the F-16 deal,
he may have sought to create a relationship between
the two. Removal of the SGF might have been an
incentive offered to influence the United States to
accept the F-16 deal?not simply to secure the remov-
al of 72 aircraft from Europe, but to link aircraft to
conventional force reductions. The Soviets might use
such a tactic in the future?if and when they decide
to announce their withdrawal from Hungary.
The evidence on Soviet timing is insufficient to pre-
dict with confidence when a withdrawal announce-
ment might be made. If the Western media reporting
did put Gorbachev off stride, he might now delay until
formal talks on reductions of conventional forces
begin or even until a new US administration is in
place. On the other hand, considerable groundwork
apparently has been laid, and Gorbachev, whose
timing in making foreign policy gestures has some-
times been startling, might be prepared to unveil the
plan sooner.
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3ecret
Soviet Equities in an End
to the Iran-Iraq War:
Opportunities and Risks
The Soviets probably view the cease-fire and possible
end to the Iran-Iraq war with mixed feelings. Re-
duced tensions in the Gulf remove the rationale for
the large US naval presence there, while the Soviets
now have their own naval presence in the Gulf. They
have also established themselves as major players in
the diplomacy of the Gulf region and are better placed
than they were before the war began to take advan-
tage of the likely new political fluidity in the region.
In particular, Moscow is likely to have an opportunity
to expand its relationship with Tehran without direct-
ly threatening Soviet relations with Baghdad. But, as
Iran and Iraq begin to rebuild their war-damaged
economies, Western capital and technology will be-
come increasingly important to them. Moreover, the
Kremlin is already showing concern that the overall
US-Iranian relationship will improve once the war is
over.
In our view, the Soviets will move quickly once the
cease-fire takes hold to ensure the reduction of the US
naval presence and to capitalize in Tehran on the
diplomatic support they gave Iran in the war over the
past year. They are likely to offer some economic and
military assistance to Iran but probably will not
provide it in significant quantities until they can be
more certain the war will not resume. Even then,
Moscow will be limited by its own economic con-
straints, uncertainties over Iranian policies as long as
the clerical regime remains in power, and a desire not
to jeopardize relations with Iraq and the other Gulf
Arab states.
The Balance Sheet
The Soviets have long attempted to increase their
influence in both Iran and Iraq and have sought to
ensure that neither becomes predominant in the
Gulf?a development that would limit Soviet maneu-
vering room in the region. The Iran-Iraq war has
greatly complicated this policy. Moscow's policy to-
ward the war fluctuated from an initial tilt toward
Tehran for the first six months, until it was clear Iraq
23
was not going to score a quick victory, to a clear tilt
toward Baghdad from the spring of 1982?when Iran
first crossed into Iraqi territory?until the summer of
1988, and back almost full circle since then to a policy
favoring Iran. During each "tilt" to one side, the
Soviets attempted to limit the damage to their rela-
tions with the other.
Although Moscow, on the whole, has managed to
preserve its influence in the region during these policy
gymnastics, has earned massive amounts of hard
currency stocking Iraq's war machine, and has even
been able to expand the Soviet diplomatic presence in
the Gulf, it probably welcomes the apparent end to a
large and unpredictable war near the USSR's south-
ern border. An end to the war would:
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? Eliminate the reason for the greatly increased US 25X1
naval presence in the Gulf.
? Probably make the conservative Gulf Arabs less
nervous about Iranian expansionism, decreasing
their need and willingness to cooperate militarily
with the United States.
? Remove one of the most contentious issues between
the USSR and the Gulf Arabs?the Kremlin's
opposition to an arms embargo against Iran.
? Reduce the significance of one of the prime irritants
in Soviet-Iranian relations?Moscow's weapons
sales to Baghdad.
? Allow the Soviets to court Iran?which they have
long seen as the greatest "prize" in the region?with
economic and military assistance without the risk
that the Iranians would use such aid to defeat Iraq
and threaten the other Gulf Arab states.
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LCI Vt
Peace between Iran and Iraq, however, would also
carry with it some potentially dangerous consequences
for Moscow:
? The Soviets will worry that US-Iranian relations
will gradually improve.
? Both Iran and Iraq are likely to turn more toward
the West than toward the USSR for the technology,
know-how, and credits to rebuild their economies.
? Soviet-Iraqi relations are likely to be more conten-
tious. An end to the war would obviate Baghdad's
need to mute its longstanding political differences
with its main arms supplier and to supress its anger
over Moscow's failure to support Iraq on the cease-
fire negotiations in the United Nations during the
past year. With a less acute need for Soviet weapon-
ry, the Iraqis are also likely to resume their diversi-
fication of weapons suppliers.
? Iran would have a freer hand to increase aid to
Afghan insurgents.
? The United States has gained enhanced credibility
in the region and worldwide for its successful use of
military force in protecting its own and its allies'
interests and in ending a regional conflict.
Near Term: Removing the US Fleet, Courting
Tehran, Placating Baghdad
Reduction, if not the permanent ouster, of US forces
in the Gulf is high on the Kremlin's agenda. The
Soviets view the growth of the US naval presence in
the Gulf and the support given to it by the Arab Gulf
states to be a highly negative consequence of the war.
The convergence of Iranian and Soviet views on this
score was the basis of the improvement in relations
between the two countries after the US naval buildup
began in the summer of 1987. The Soviets are likely
to continue to claim that the "massive US military
presence" heightens tension in the area and will try to
press the United States to remove its forces from the
GHlf by reviving their proposal for a UN naval force.
A reduced US naval presence, however, could also
lead to better US-Iranian relations?a development
that Moscow hopes to prevent. Recent statements by
Secret
US officials on prospects for better relations with Iran
have been highlighted by the Soviet media, and a
Soviet official predicted to a Japanese newspaper in
early August 1988 that Washington and Tehran are
likely to move closer in the post-war period. In part to
head off any warming of US-Iranian relations, the
Soviets are likely to move quickly in an attempt to
cash in the credit accumulated with Iran by their
refusal to support a follow-on embargo resolution to
UN Resolution 598. They will remind Tehran how, in
the weeks before the cease-fire agreement was
reached, they pressed Baghdad to halt its incursions
into Iran and urged the UN Secretary General to put
Iraq on the spot by declaring a D-Day for the cease-
fire.
The Soviets are also likely to try, during the early
weeks of the cease-fire, to initiate discussions with
Iran on economic and military cooperation. They have
long told the Iranians that they could not return most
of the Soviet economic advisers and technicians?
withdrawn because of Iraqi bombings?or consider
resuming military sales until the war was over. Re-
turning their personnel would magnify the Soviet
presence (which now includes approximately 200 eco-
nomic advisers and technicians) and demonstrate
Soviet willingness to help Iran.
Moscow probably would prefer to avoid major new
military commitments to Iran until it determines that
no new hostilities are likely. But the Kremlin is likely
to use the lure of future arms sales?the Iranians see
Soviet supply of weapons as a barometer of Moscow's
desire to improve ties?to try to induce Iran to be
more receptive to improvement in the overall Soviet-
Iranian relationship. To assuage probable Iranian
impatience during the intentionally protracted negoti-
ations for major new weapon systems, the Soviets
probably will offer Tehran spare parts for and addi-
tional quantities of Soviet-made weaponry already in
Iranian inventories. Soviet restraint, however, will be
sorely tested if the West and the Chinese rush to sign
military contracts with Tehran. In that case, the
Soviets probably will feel forced to sell Iran at least
some major weapon systems, such as air defense
missiles.
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Iraq
Although peace in the region would give Moscow
greater freedom of action in dealing with Iran, the
USSR's interest in preserving its relationship with
Iraq and the memory of Egypt's surprise eviction in
1972 of Soviet forces would be likely to temper its
overtures to Tehran. The Soviets will play down their
overtures to Iran, attempting to convince Iraqi leaders
that the USSR is trying to moderate the Iranian
regime. They will continue to reassure President
Saddam Husayn?as First Deputy Foreign Minister
Vorontsov did during his visit to Baghdad in late July
1988?that they are fully behind him and will try to
discourage Iraq from increasing its ties to the West.
To deflect Iraqi anger over Soviet arms sales to Iran
and to blunt Baghdad's desire to diversify its arms
suppliers, the Soviets would almost certainly continue
to supply the Iraqis with sophisticated hardware and
may even be flexible in the renegotiation of Iraqi
military debt. The Soviets are planning to sell SU-24
Fencer aircraft to Iraq, according to
This, along with
the delivery during the past two years of MIG-29
Fulcrum aircraft and advanced air-to-surface mis-
siles, demonstrates Moscow's commitment to keeping
Iraq equipped with the latest in Soviet arms.
Beyond the Cease-fire
The key variable for Soviet policy toward the region
over the longer term will be the impending succession
in Tehran. Uncertainty over what type of regime will
succeed Ayatollah Khomeini's is likely to impose
some limits on Moscow's willingness to provide mate-
rial aid to Iran before the Imam dies. In an attempt to
build influence in preparation for the post-Khomeini
era, however, the Soviets probably will expand their
offers of economic and military assistance when it
becomes clear that the war with Iraq will not resume.
The Soviets may focus on a few showcase economic
projects in an effort to compete with the West.
Support of Iranian heavy industry and development
along the Soviet-Iranian border and in the Caspian
Sea are areas in which the USSR is well suited to play
a major role. Moscow designed and built Iran's only
25
steel plant, as well as two of its power stations, and the
Iranians could sorely use Soviet help in refurbishing
and expanding these facilities. In addition, the two
sides may revive talk of the energy pipelines and lrail
links that they discussed in 1988, although thes 1
projects would require major capital investment.
With the exception of these few specific areas of
cooperation, Moscow's overall prospects of competing
economically with the West in Iran following the war
are not good. Gorbachev's focus on revitalizing the
Soviet economy militates against the USSR providing
any sizable economic aid to Iran. Moreover, the
Iranians are likely to turn to Western know-how and
capital to rebuild their most important resource?
their oil industry. The Soviet inability to provide
technology or capital to compete with Western com-
panies in this key sphere will deny the USSR a major
foothold in the Iranian economy.
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The Kremlin is likely to be more forthcoming in arms
sales?the area where it can compete more effectively
with the West. The Soviets may start by increasing 25X1
the amount and sophistication of weapon sales to In2525X1
indirectly through their East European allies. This
type of Soviet-sanctioned arms supply would increase
Iran's dependence on Soviet-made weaponry, while
giving the Kremlin at least a degree of plausible 25X1
deniability with the Iraqis. 25X1
Although the Soviets could offer Iran a major weapon
system in the immediate post-war period, they proba-
bly will not sell large amounts of modern weapons to
Iran until the political situation in Tehran has sorted
itself out following the death of the Ayatollah. The
Soviets would not want to arm a regime that is likely
to resume Khomeini's quest to spread Iran's brand of
Islamic fundamentalism, whether through renewed
hostilities with Iraq, increased material aid to Afghan
insurgents, or an expansion of efforts to proselytize
Soviet Muslims. If Soviet leaders determine that Iran 25X1
is not likely to take that course, logical candidates for
initial arms sales are air defense systems. The Irani-
ans have a need for affordable and effective air
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defense, and antiaircraft systems will not threaten
Iraq nearly as much as the supply of other advanced
weapons, such as aircraft.
Once the taboo of selling modern weaponry to Iran
has ebbed, Moscow probably would be willing to sell
the Iranians most of the systems that it has already
exported to the Third World, including tanks, infan-
try fighting vehicles, artillery, and helicopters. None-
theless, the Soviets almost certainly would ensure that
the weapons they provided to Iraq, an ally by treaty,
allowed it to maintain an overall military edge over
Iran.
Moscow will have tough competition in the rivalry to
become the major arms supplier to Iran. As the
effects of the Western arms embargo diminish, the
Iranians, as a cash customer, will be in a good position
to exploit the many arms sources they have cultivated
over the past eight years. West European, Asian,
South American, and possibly even US firms will be
competing for Iranian arms purchases. Western tech-
nology, in many instances, will be more attractive to
Iran than comparable Soviet systems, while the Chi-
nese have proved to be low-cost, reliable suppliers.
This competition will put pressure on the Soviets to
move sooner in providing Iran with sophisticated
weapon systems.
Outlook
The USSR is in a number of ways better placed to
compete for influence in the Gulf region than it was
when the war began in September 1980. The Soviets
have:
? Established a naval presence in the Gulf for the first
time.
? Expanded their ties to the conservative Gulf states:
in 1980, Moscow had diplomatic relations only with
Kuwait?today it has relations with Oman, the
United Arab Emirates, and Qatar, and has estab-
lished a political dialogue with Saudi Arabia.
? Proved, despite the brief arms embargo at the outset
of the war, to be a reliable supplier of weapons to
Iraq.
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? Been a major player in the past year's diplomatic
efforts on the Gulf war. The USSR was the only
major power in close contact with both belligerent's,
and it played a prominent role in formulating and
then delaying action on UN cease-fire Resolution
598.
Moscow is certain to attempt to build on the increased
influence it has gained in the Gulf. Soviet diplomats
in Kuwait have already publicly floated the idea of a
conference on collective security in the Gulf region.
Whether the Kremlin officially proposes such a
scheme, it is likely to claim to the Gulf Arabs with
some credibility that Soviet arms played a major role
in preventing the spread of the Iranian revolution and,
with less credibility, that adroit Soviet handling of
Iranian sensitivities on UN Resolution 598 led to
Tehran's eventual acceptance.
The Soviets have long lamented that the Gulf war
undercut Arab unity on the Arab-Israeli dispute.
They will probably attempt to get the Arabs to
refocus their energies away from Iran and toward the
Palestinian question?an issue on which the USSR
and most Arab states see eye-to-eye and the United
States is generally perceived by the Arabs as blocking
a settlement.
Moscow probably is encouraged by the potential for
increasing its influence in post-war Iran. As long as an
openly anti-Soviet regime does not come to power,
Soviet efforts are likely to result in improved relations
with Tehran?at least relative to the frostiness that
has characterized them during most of the war years.
Soviet economic advisers will almost certainly return
to Iran, arms sales are likely to begin, and the
relationship, in general, has the potential to become
established on firmer ground.
Nonetheless, the Soviets have reasons to be apprehen-
sive about Iran. The attractiveness to Iran of Western
technology, capital, and military hardware could over-
shadow any gains Moscow may make there. The
USSR does not have the wherewithal to compete
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economically with the West in Iran. Some improve-
ment in US-Iranian relations seems inevitable, and,
while any Iranian regime would want tolerable rela-
tions with the superpower on its border, Moscow and
Tehran have a long history of animosity and intrinsi-
cally divergent objectives in the region, both of which
will hinder close ties unless a leftist regime takes
power in Iran?an unlikely development over the next
few years.
Reverse Blank
27
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New Review Process Affects
Economic Reform
In recent months, three important pieces of Soviet
economic legislation?on cooperative taxes, quality
control, and state orders?have been remanded for
further work after extensive debate at "open" sessions
of the Council of Ministers' Presidium. The immedi-
ate impact of this action generally has been to slow
the implementation of General Secretary Gorbachev's
economic reform program. In the long term, however,
this more rigorous and open review process, if contin-
ued, could significantly improve the effectiveness of
Soviet reform legislation. In two of these cases, the
process moved the laws in a liberalizing direction that
would increase the role of economic incentives, and, in
the third, it may have saved a reform from overzeal-
ous supporters who would have acted without prepar-
ing the necessary groundwork.
The Process
The perception that this kind of legislation is undergo-
ing greater scrutiny may be partly a consequence of
glasnost: we have now become more privy to debates
that went unreported in the past. But the evidence
also suggests that the review process, once confined
mostly to government and party administrators, has
been expanded to give a greater voice to reform
economists and those most involved in implementing
the legislation. Only in 1987, Soviet economists in a
roundtable discussion had openly complained that the
review of economic legislation was conducted solely
within the confines of the bureaucracy.
The decision to broaden the review process may have
come from Gorbachev himself, given his recent stress
on the need to "democratize" Soviet political institu-
tions. Except for the decision to limit the participation
of government and party administrators (whom the
reformers contend have exercised too much influence
in the past), the debates appear to have been genuine-
ly open, with a wide range of opinions expressed. And
the positive influence this new process appears to have
had on the legislation will buttress the case Gorbachev
has been making about the beneficial effects a more
participatory political system will have on economic
reform.
29
Tax Rates Rejected by Supreme Soviet Rubles
Income of Cooperative Taxes
Members
300 34.20
500 60.20
501 to 700
60.20 plus 30 percent over 500
701 to 1,000 120.20 plus 50 percent over 700
1,001 to 1,500
Over 1,500
270.20 plus 70 percent over 1,000
620.20 plus 90 percent over 1,500
A Taxing Debate
Additional impetus for this more open review process
may have been provided by the problems engendered
by the new taxation schedule for cooperatives, drafted
by the Ministry of Finance. It was adopted by the
Presidium of the Supreme Soviet in March 1988
without the involvement of reform economists or
representatives of the cooperative movement, who
later complained that the new rates were too high.
When the same rates were incorporated into a new
draft law on cooperatives that was presented to the
Supreme Soviet in May 1988, the deputies refused to
ratify the law if the new tax schedule was included.
The tax was heavily progressive, and many expressed
concern that it would effectively stymie expansion of
the cooperative movement. As a result, approval of
the law was delayed for a day?the first time the
Supreme Soviet had failed to approve a bill presented
to it in the allotted time since the 1920s?and the tax
schedule was remanded for further study (see table).
When Finance Minister Gostev presented the revised
tax schedule in July 1988 to a meeting of the
Presidium of the USSR Council of Ministers, he was
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the only government official allowed to participate in
the debate (with the exception of Premier Ryzhkov
who presided). The other invitees included the chair-
men of cooperatives and reform economists. Gostev's
plan, which apparently would have reduced the taxes
on individual cooperative members at the price of
increased taxes on the cooperatives themselves, was
promptly attacked as still being too confiscatory (see
inset) and remanded for further work by a group that
included reform economists and representatives of the
cooperative movement as well as the usual state
agencies.'
A Question of Quality
Another Presidium meeting was called in July 1988 to
review a new draft law on quality control. Once again,
in a move Ryzhkov described as the "beginning of a
good tradition," those invited to convene in the Presi-
dium's oval hall included reform economists and those
most directly affected by the law?enterprise manag-
ers and workers. The new law, originally scheduled
for completion by the first quarter of 1987, had
required two years to produce and was immediately
criticized for its failure to reflect other reform legisla-
tion, such as the Law on State Enterprises, that had
been approved in the interim.
Most of the participants in the debate faulted the
draft for its continued reliance on administrative
measures, such as the state acceptance system (gos-
priyemka), to improve output quality, calling instead
for "economic levers that combine the interests of the
producer and consumer." 2 After hearing several
' Gostev's revised tax plan for individual cooperative members was
not published, but an article by a Gosplan official that appeared
shortly before the Presidium meeting claimed that one of the
options the Finance Ministry was considering called for the follow-
ing tax rates (all figures in rubles): for monthly incomes between
501 and 1,000-60.2 plus 25 percent in excess of 500; for incomes
between 1,001 and 1,500-185.2 plus 35 percent in excess of 1,000;
and for incomes of 1,501 and above-360.2 plus 50 percent in
excess of 1,500. Gostev proposed at the meeting that the tax rates
on the incomes of the cooperatives themselves be set at from 5 to 30
percent, depending on the type of cooperative. In 1987 the Council
of Ministers had established that all cooperatives would pay income
tax of 2 to 3 percent in the first year of operation, 3 to 5 percent in
the second year, and 10 percent in subsequent years.
'The state acceptance system, which calls for monitoring by
representatives of an independent service as a check on the factory's
own quality review, was introduced at 1,500 plants in 1987 and
expanded to 732 more in January 1988. Almost half the new
participants were suppliers to plants already in the program.
Secret
Defending the Cooperatives
A typical argument in favor of lower tax rates for
cooperatives and their members was made by Leonid
Onushko, chairman of a city cooperative association
in Naberezhnyye Chelny:
We have average earnings of 350 rubles [per
month]. . . . But comrades, those earnings are for
a 14- or 16-hour working day. Go back to an
eight-hour working day, and it will be the same
old 210 to 220 rubles. We currently pay a
minimum of three taxes, comrades. We pay tax
on raw materials, equipment, and transport. We
buy a. . . truck for 70,000 rubles, against its
selling price of 17,000. We fill its tank with
diesel costing 30 kopeks per liter instead of 6
kopeks . . . . What is more, we keep this [truck]
beneath the windows in our own yard, not in a
well appointed garage. . . . In other words, it is
still too early to compare cooperative workers'
conditions with those of workers in the state
sector, comrades . . . . There are none of those
strong cooperatives about which one might be
able to say: "There they are, getting fat."
attacks on gospriyemka, Ryzhkov insisted that the
law underscore the fact that the system was intended
to be temporary:
30
I will tell you comrades: when we introduced
state acceptance, we were forced to embark on
it?consciously forced. We had no other way
out. At that time, no economic levers functioned
at all. . . . Apparently we should say exactly
this in the law: that as economic relations
become more mature and economic stimuli
come into play, we will, in all probability, have
hardly any need for state acceptance.
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Judging from the account of the debate that appeared
in the press, the draft law would merely have replaced
one administrative measure with another, calling for
the establishment of a network of "certification cen-
ters" to eventually replace gospriyemka.
Ryzhkov said he originally had thought the draft
could serve as the "basis" for a new law. The speakers
had convinced him, however, that it had no redeeming
value at all, that the continued reliance on administra-
tive controls would undermine the goal of increased
enterprise autonomy, and that the proposed certifica-
tion centers would be difficult to manage and eat up
even more resources than gospriyemka. As a result,
he instructed the drafters to go back to the drawing
board and start afresh. Ryzhkov concluded that the
great shortcoming in the law was that "there were
obviously very few of our economists" involved, and it
was decided to increase the size of the drafting group
"by including prominent economists and production
workers."
Refining "State Orders"
A third Presidium meeting was called in July 1988 to
review a proposal to reduce mandatory output tar-
gets?so-called state orders for Soviet enterprises in
the last two years (1989 and 1990) of the current five-
year plan. The state orders concept was adopted as
part of the planning reform in June 1987 as a way of
distinguishing between the mandatory production re-
quirements of the state, which were to be covered by
state orders, and the production of other goods and
services, which were to be less tightly controlled. The
Presidium meeting was held to consider a proposed
"interim provision" on compiling state orders that was
drafted in response to widespread complaints that the
ministries had abused the concept in the 1988 plan
and were continuing to dictate too many decisions to
the enterprises.
Once again, the offending ministers were pointedly
excluded from the Presidium meeting. As one corre-
spondent noted, it was "not without interest" that, of
the 23 speakers (excluding Premier Ryzhkov), "only
one was a member of the government." The others
included enterprise and association directors, kolkhoz
and construction site managers, and economic
experts.
31
Gosplan Chairman Maslyukov proposed that the fol-
lowing changes be made in state orders for the 1988
and 1989 annual plans:
? State orders would be determined by Gosplan?not
the ministries.
? The current overall proportion of state orders (80
percent of industrial production) would be reduced
by one-half to two-thirds.
? The number of centrally determined "success indi-
cators" would be reduced to one-sixth the current
level.
? Centralized planning of types of output?the assort-
ment plan?would be reduced to one-fifteenth that
of 1988.
Maslyukov made it clear, however, that state orders
would continue to cover 100 percent of production in
certain sectors that were essential "to satisfy public
needs," citing as examples consumer goods (with the
exception of the Ministry of Light Industry) and the
fuel and energy complex.
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In the ensuing eight-hour debate, some speakers
supported the effort to reduce the proportion of state
orders or possibly even eliminate them. But a majority
of the enterprise directors in the group expressed the
fear that, without the supplies guaranteed by state
orders, production at their enterprises would suffer.
Most speakers advocated a go-slow approach, arguing
that enterprises are still required to meet the high
growth targets of the current five-year plan, that the
wholesale trade system intended to alleviate their
supply problems is still in the early stages of imple-
mentation, and that reforms designed to give them
more authority to set prices are still in the discussion
stage. 25X1
In doing so, these speakers may have saved the
planning reform from the kind of premature imple-
mentation that would have doomed it to failure and 25X1
discredited the whole reform program. Ryzhkov in-
structed Maslyukov to consider the arguments pre-
sented at the meeting and to "select the 'golden mean'
from the different and at times even extreme view-
points" and "enshrine that which would be most in
line with the complex conditions of this transition
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period." 3 The document that was approved a week
later prohibited the ministries from amending Gos-
plan-approved state orders, as Maslyukov had pro-
posed, but specified categories, rather than percent-
ages, of products to be covered by state orders.
Because the original draft was not published, howev-
er, no direct comparison of the two documents is
possible.4
Costs and Benefits
Although final judgment must await the release of all
of the finished documents,
this more open and rigorous review process has avert-
ed at least some of the potential pitfalls in these three
pieces of legislation. In the absence of such a thorough
review, legislation would have been adopted that:
? The percentages cited by Maslyukov in his speech may have been
Gosplan calculations based on the categories of products to be
covered by state orders and may not have been cited in the original
"interim provisions" document either.
Secret
? Imposed prohibitively high taxes on cooperatives
and their members, thus thwarting Gorbachev's
effort to encourage the development of cooperatives
to improve supplies of consumer goods and services.
? Called for a continued reliance on administrative
measures, rather than economic levers, to improve
the quality of Soviet products.
? Failed to adequately consider all the ramifications
of reducing state orders before the enterprises re-
ceived the tools they need to operate more
independently.
If the practice of sending draft reforms back to the
drawing board is continued, it will postpone needed
economic changes and complicate the task of quickly
providing the fruits of perestroyka to a skeptical
Soviet citizenry. Such delays almost certainly are
preferable, however, to the adoption of ill-conceived
reform legislation that could ultimately prove un-
workable and further undermine popular support.
32
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The Impact of Perestroyka
on Employment in the USSR
The official report on plan fulfillment for the first six
months of 1988 marks a milestone in Soviet employ-
ment trends. After many years of continuous growth
of the total number of state employees, Goskomstat,
the state statistical committee, reported that this
figure fell by 0.3 percent in the January-June 1988
period?a decline of some 400,000 workers and em-
ployees since the same period in 1987 (see figure). The
work force in the sectors of material production
dropped by a reported 1 million workers.' The reduc-
tion is attributed to better management, automation,
and wage reform?in Soviet parlance, "new wage
payment conditions." The six-month report claims
that jobs for many of the released workers were found
in consumer services, where employment increased by
600,000 workers, and in cooperatives.
The reduction by 1 million persons in the work force
of industry and other sectors of material production is
almost certainly an overstatement of the number
actually laid off:
? Soviet writers have said that the number of workers
reported to have been laid off under the reform
program is often exaggerated because the data
include jobs that have been eliminated, retirements,
and workers who have been moved to production or
nonproduction jobs within the same enterprise. In
the Belorussian railroad experiment, which was a
model for the current wage reform, a hiring freeze
and attrition contributed about two-thirds of the
released labor.
? The campaign aspect of the Gorbachev wage reform
program encourages enterprises and ministries to
inflate their reports of labor savings.
Ihe reduction was said to have taken place in the "basic
production sectors," which probably include not only the industrial
work force but also workers in state agriculture, construction, and
other sectors producing material goods rather than services.
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reflect the dislocation and concern we would expect
to see accompanying the large and rapid reduction
in employment claimed in the midyear plan fulfill-
ment report.
Nevertheless, layoffs are probably occurring on a
significant scale. Indeed, according to a mix of press
and Embassy reports, laid-off workers are having
trouble finding new jobs, and worker anxiety about
the possibility of unemployment is rising.
Gorbachev Proposes Wage Reform 25X1
Before Gorbachev came to power, efficiency in the
Soviet workplace had taken a backseat to job security.
Underemployment in enterprises was widespread. The25X1
"guaranteed job" had eroded discipline, and wage-
leveling had weakened the incentive to excel. For
example, as a result of the state's egalitarian wage
policy, as well as a proliferation of bonus payments to
workers for meeting production targets, blue-collar
wages on average were about 90 percent of white-
collar earnings by 1986. Moreover, in the 1980s the
sharp slowdown in labor-force growth in the industri-
alized regions of the USSR tightened the labor
market and further raised incentives to retain even
less productive labor. Enterprises typically attempted
to hire excess workers to provide insurance for meet-
ing ambitious plan targets and also to meet outside
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Gorbachev proposed to overcome the weak incentives
to conserve labor through a reform of the wage
33
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USSR: State Employment, 1970-88
Note scale change
Employment Level
Million persons
120
100
80
60
40
20
I
0 1970
I I I I I IIII!
75 80 85 88
Source: Soviet official statistics on annual employment of
"workers and employees," defined as all persons employed by
the state. Employment in 1988 is estimated by assuming that
growth for the year equals growth reported for the first
6 months of 1988 (-0.3 percent).
Annual Change
Million persons
3.0
0
-0.5 1971 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88
system. The strategy was outlined in his speech to the
27th Party Congress in February 1986:
The state's policy in the sphere of wages should
also ensure that wages are strictly dependent
upon the quantity and quality of labor. Taking
this into account, the increase in wages and
salaries . . . in production industries planned for
the 12th Five-Year Plan period will for the first
time be carried out basically at the expense of
and within the limits of funds earned by the
enterprises themselves.
Key Features of the Reform
The wage reform is based on a decree dated 17
September 1986 of the Communist Party of the
Soviet Union Central Committee, the USSR Council
Secret
318746 9-88
of Ministers, and the Central Council of Trade
Unions. The basic aims of the reform are, on the one
hand, to improve productivity by enhancing enterprise
incentives to economize on labor and, on the other, to
stimulate people to work harder and better. In partic-
ular, it is intended to make pay received correspond
more closely to the results of the work performed by
the individual, the brigade, the section, and the
enterprise.
The core of the program is a new and sharply higher
set of basic wage and salary rates. In recent years, the
share of earnings represented by basic wage rates had
fallen below 50 percent for blue-collar workers as
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bonuses and various supplements to the basic rate
grew rapidly. Under the reform, the new basic wage
and salary rates are to determine up to 70 to 75
percent of worker earnings, with a corresponding
reduction in the importance of bonuses and
supplements.
Moreover, the new rates are intended to correspond
more closely to differences in skill, experience, and
responsibility among jobs and occupations. This is a
sharp departure from the two previous postwar wage
reforms, which reduced wage differentials. Wage
rates are to be raised by an average of 25 to 30
percent, with the larger increases for skilled workers.
Salaries of managerial personnel, specialists, and of-
fice workers are scheduled to increase an average 30
to 35 percent. Specialists, such as designers, process
engineers, and others at the forefront of technical
progress, are to receive higher-than-average percent-
age salary increases. According to the midyear plan
fulfillment report, the average monthly wage of work-
ers and employees during the first six months of 1988
was up 6 percent over the same period in 1987.
The critical feature of the current reform, however, is
that the enterprise must finance the wage and salary
raises from its own resources. Self-financing is intend-
ed to force the enterprise to:
? Seek out and make use of internal reserves.
? Tighten up performance norms.
? Modernize its production processes.
? Improve the organization of labor.
? Get rid of redundant workers.
In earlier reforms, the state budget covered the cost of
wage increases, at least in the initial year, while the
state also appropriated one-half, and sometimes more,
of enterprise savings from economizing on labor. In
this latest reform, enterprises have been promised?
again?that the state will not intervene.
Inequities in the implementation of the wage reform
are inevitable. Enterprise earnings are partly beyond
management control?a function of the Soviet admin-
istered-price system and the central allocation of
production inputs. Employees of more profitable en-
terprises will tend to receive more pay than persons
doing similar work in less profitable enterprises
Implementation Under Way
According to the 1986 decree, the wage reform is
scheduled to be completed during the 12th Five-Year
Plan period (1986-90). By the beginning of 1988,
according to a Soviet official, 26 million people had
switched to the new pay conditions. He also said that25X1
nearly 70 million people are to be working under the
new pay conditions by 1990. This figure probably
includes almost all wage earners, salaried workers,
and collective farm workers. 25X1
Enterprises are supposed to work out their own pro-
grams for introducing the new wage system and then
submit their plans to the ministry for approval. But
doing this successfully requires the mastery of an
enormous amount of documentation and therefore a
substantial investment on the part of management
and others in the enterprise (see inset). Just dissemi-
nating this documentation is a major undertaking.
Indeed, lack of the appropriate documents is one
reason cited by Soviet writers for failure of many
enterprises to begin implementation of the wage re-
form.
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The experience of a number of enterprises in imple-
menting the reforms has been reported regularly in
the Soviet press, especially in Sotsialisticheskiy trud.
Where the wage reform has been introduced with
reasonable care, positive results have been reported.
According to one Soviet economist, in almost all
enterprises making the transfer, there is a significant
saving of labor?in the range of 4 to 10 percent. As a
consequence, labor productivity gains, sometimes
large, have been reported for many enterprises and
associations that have implemented the wage reform.
35
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But implementation has not everywhere followed the
intent of the reform program. In some cases, enter- 25X1
prises have not reorganized work and wage arrange-
ments to meet the new pay scales and instead have
raised their product prices or received the needed
funds from sources outside the enterprise. For exam-
ple, according to Sotsialisticheskiy trud, in the
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?...,???r? 11.
Soviet Wage Reform: The Redtape Burden
To implement the wage reform, enterprise manage-
ment must obtain and digest the following
documents:
? Schedules of wage and salary rates.
? Handbooks describing wage-earner occupations and
salaried positions with skill levels and educational
requirements.
? Regulations on evaluation of conditions of work
and lists of the kinds of work that justify a
supplement for heavy or dangerous work.
? Regulations on the procedures for certification of
managerial and professional personnel.
? Lists of the branch and interbranch norms obliga-
tory for the enterprise.
? Regulations on the methods of determining work
norms.
? Procedures and conditions for raising piece and
time wage rates.
? Branch regulations concerning certifications, ratio-
nalization, and planning of work places.
? Regulations concerning the organization of person-
nel in production units at the enterprise.
? Instructions of Gosplan, the Ministry of Finance,
and Goskomtrud (the State Labor Committee) con-
cerning the proper relation between increases in
wages and productivity.
Managers must adapt these regulations to enterprise
conditions, prepare the plan, and defend it before
officials of the parent ministry.
Ukrainian Republic, about 200 bakeries that went
over to the new pay conditions during the first half of
1987 obtained most of the funds to increase wages by
changing the assortment of bread products and rais-
ing some bread prices. Other enterprises have reduced
bonuses, abolished skill supplements, or instituted
mass demotions in occupational grading in order to
finance wage rate increases. An article in Sovetskaya
rossiya cites a letter from workers in a bridge-
building detachment complaining that they were as-
tonished to arrive at work one Monday to find a notice
on the bulletin board that everyone had been demoted
in the occupational grade scale?and without any
explanation.
Secret
An important element of the wage reform is the
revision of work norms to establish more differentiat-
ed pay rates according to conditions of work, special
worker qualifications, and quality of work perfor-
mance. Enterprises are to set more stringent norms to
ensure that gains in workers' productivity match their
higher pay. There have been many complaints, howev-
er, that norms were not raised or that they have been
tied to the wrong indicators. For example, an article
in Voprosy ekonomiki reports that bonuses reserved
for improvements in output quality have been instead
improperly awarded on the basis of output and profits.
More generally, a strong belief in egalitarianism
among the population, managerial inclination to avoid
resentment on the shop floor, and reluctance to raise
the salaries of engineering and technical personnel
already in oversupply all are likely to hinder achieve-
ment of greater wage differentiation.
The Specter of Unemployment
The wage reform is but one of several developments
contributing to lower industrial employment. Soviet
demographic data indicate a steady decline in the
number of new entrants to the labor force, particular-
ly in the highly industrialized European region. The
massive investments in industrial modernization are
emphasizing production automation, particularly in
materials handling, which is extremely labor inten-
sive. Nevertheless, the size and pervasiveness of the
employment decline suggest that the wage reform
made an important contribution. Soviet data on 24
civilian industrial ministries indicate that employment
dropped in 21. While the declines were most pro-
nounced in basic industries (an average of 2.4 per-
cent), employment also fell in all but two of eight
civilian machine-building ministries currently favored
in Gorbachev's economic program (by an average of
0.7 percent for the eight).
Soviet economists have estimated that 3 million work-
ers in the nonservice sectors of the economy will be
released before 1990 and probably another 3 million
workers during the period 1991-95 as the effects of
industrial modernization and the reforms work their
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way through the economy. Vladimir Kostakov, Direc-
tor of Gosplan's Economics Research Institute, has
estimated that the number of workers engaged in the
production of goods (that is, the sectors of material
production) must decline by 16 million by the year
2000 if the official goals for labor productivity and
national income increases are to be met. On the basis
of demographic trends, we estimate retirements could
account for more than half of these projected reduc-
tions.
Despite the large scale of the projected displacement
of workers, Moscow insists that jobs will be available
for laid-off workers in new enterprises, in services and
private cooperatives, and in "labor-deficit" areas of
Siberia and the Soviet Far East. Apparently some
laid-off workers do not actually leave their place of
employment: up to 60 to 80 percent of the workers
released from machine-building enterprises where the
wage reform was introduced in 1987 were reported to
have obtained jobs at the same place?on second or
third shifts or on tasks associated with plant modern-
ization. In remarks in June 1987, Gorbachev said that
the socialist system is equipped to handle the transfer
of workers between sectors and regions without the
creation of unemployment. However, steps to set up
local centers for job placement, retraining, and coun-
seling of dismissed employees have been late in com-
ing. Recently, there is increasing evidence of high-
level disagreement within the party about the very
concept of unemployment in the Soviet system, with
the reform faction emphasizing a greater role for
markets and, implicitly, increased unemployment. In
speeches in August 1988, for example, Politburo
members Ligachev and Yakovlev engaged in a public
debate on Soviet ideology, including the role of mar-
kets. Both accepted markets as an economic fact of
life?Ligachev grudgingly, and Yakovlev
wholeheartedly:
? Ligachev stressed that markets are not a panacea
for the country's woes. He warned against simply
copying Western models, which are based on private
property. And he rejected the very notion of a labor
market: there would be no unemployment in the
Soviet Union, he declared.
Reverse Blank
37
? Yakovlev portrayed markets as one important way
of linking individual and state interests. He claimed
that the difference between capitalist and socialist
markets did not lie in how they worked but in what
values informed them: socialism presented man as
the highest goal, while capitalism saw him only as a
means to profit. He implicitly accepted unemploy-
ment as a possibility. 25X1
Moreover, as layoffs become more widespread, wor- 25X1
kers' resentment of the loss of traditional job security
is bound to increase, particularly if the populace sees
little or no improvement in living standards from
perestroyka. Many workers laid off in industry will
face the unwelcome prospect of moving to lower
paying jobs in the services sector. Even reform-
minded economists believe that the high income re-
ceived by workers in some newly formed cooperative
enterprises is a temporary phenomenon that will fade
away as the number of cooperatives increases, bring-
ing competition and forcing down the prices they can
obtain for their services. 25X1
Outlook for Continued Growth in Labor Productivity
The certification and rationalization of positions in
the work force required by the wage reform and the
resulting layoffs have already led to some marked
gains in labor productivity. Above-trend productivity
improvement seems likely to continue in the next year
or two. However, the reform is being dictated from
the top, with Moscow setting the new wage rates and
strongly influencing the norms for wage supplements
and bonuses. Once enterprises have implemented their
plans under this reform, which is to be completed by
1990, the productivity gains will probably diminish
sharply. At that point, other determinants of labor
productivity such as technology, innovation, and ma-
chinery will be needed to sustain continued increases
in productivity. Substantial success in other reforms
will be required to approach the goal of a 130- to 150-
percent increase in labor productivity by the year
2000. 25X1
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Criticism of Soviet Science
at the June Party Conference
Although the leadership has placed enormous de-
mands on science and technology to serve as the
linchpin of economic modernization, the scientific
community continues to perform poorly. During the
Communist Party of the Soviet Union Conference,
from 28 June to 1 July 1988, many speakers?led by
General Secretary Gorbachev?expressed serious
concern over the condition of Soviet science. The
regime is clearly worried that the scientific sector's
disappointing performance is slowing the pace of
technological progress and undermining the industrial
modernization program. Criticism and complaints
from the rostrum echoed the growing debate on
science carried in the Soviet press in recent months.
The State of Soviet Science
Conference participants deplored the state of Soviet
science and the inertia that impedes its advance.
Anatoliy Logunov, Academy of Sciences' vice presi-
dent and rector of Moscow State University, noted
that the Soviet Union "can certainly claim a leading
place among developed countries as regards the preva-
lence of the virus of conservatism in science."
Conference speakers registered particular concern
over the USSR's increasing scientific lag behind the
West and the threat this poses for its position as a
world power in a high-technology age. Gorbachev
harshly criticized the stagnation of the Brezhnev
years, emphasizing "the most disturbing thing is . . .
Soviet science fell behind in a number of leading
areas, and scientific development became predomi-
nantly an attempt to 'catch up." Reform economist
Leonid Abalkin stressed, "We are lagging further and
further behind the world in science and technology,
and the lag is becoming increasingly dangerous, giv-
ing rise to particular anxiety."
Criticism of Science Reform Initiatives
Regime unease over the state of Soviet science is not
new: the sector's problems and limitations have all
been previously identified and well aired. In addition,
39
the science sector has been undergoing "restructur-
ing" since shortly after Gorbachev assumed power in
1985. Over the past three years the leadership has
issued several decrees and adopted various new mea-
sures designed to remedy the sector's ills.
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While the sad state of Soviet science was not a new 25X1
revelation, the conference speeches did surface wide-
spread concern with at least some of the measures
that Gorbachev has taken to improve scientific and
technical (S&T) performance. Many of the delegates
used the opportunity to criticize regime initiatives.
Gorbachev himself admitted, "These measures have
had a positive influence, but so far we have still not
managed to change the situation radically." Other 25X1
delegates went further and implied that the reform
initiatives are flawed?either in their implementation
or in their design?and were disrupting and impeding
research and development (R&D) activity. In his
speech, Academy of Sciences' President Guriy Mar-
chuk acknowledged that, although the party at a
Central Committee conference in June 1985 had
examined the problems impeding S&T progress and
had taken actions to address them, in face of the
disappointing results, a special Central Committee
plenum devoted to questions of the development of
science should be convened.
Criticism at the party conference focused primarily on
three problem areas:
? Methods of financing R&D.
? The role of basic research.
? Organization and management of science.
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Switching Science to Self-Financing
The regime, seeking to make science more responsive
to the needs of production, in the fall of 1987
mandated that most scientific organizations switch to 25X1
"self-financing" rather than be supported by the state
budget or central ministerial funds. The leadership
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expects that requiring scientific institutes to cover all
costs through profits earned from contracts with
industry will force them to improve the quality,
relevance, and timeliness of research and development
activity. In 1988, nearly 1,200 (about one-fourth) of
the USSR's scientific organizations are slated to
switch to self-financing. Research in basic science and
"strategic areas"?including defense?will reportedly
continue to be funded by the state budget.
Conference speeches indicate that there is sharp
disagreement over how broadly self-financing should
be introduced. Vladimir Kabaidze, the dynamic gen-
eral director of the Ivanovo Machine Tool Building
Production Association, called for all science to shift
to self-financing, contending?to audience applause?
that science has been "living off the central budget for
far too long." Marchuk, however, defended the need
to continue funding basic research through the state
budget, stressing that no one but the State would be
willing to finance such long-term, high-risk, and often
costly efforts.
Significantly, the conference revealed that the defense
sector is apprehensive regarding self-financing. G. I.
Zagaynov, a department head at a Ministry of Avia-
tion Institute, reported that organizations within his
ministry are "worried about the upcoming transition
to self-financing." He added that organizations in the
radio industry?also a defense-industrial ministry?
think that the transition should be postponed, con-
tending "otherwise disaster lies in store for them."
Zagaynov complained that, because they had not been
given adequate time or information, both ministries
were unprepared for the shift.
Beyond the problems associated with implementation,
Zagaynov was unhappy about the measure itself. He
criticized as "simplistic" Kabaidze's idea that "all
science should be switched to self-financing." Like
Marchuk, Zagaynov was concerned that this could
have negative consequences for "big science,"
emphasizing:
On the basis of economic accountability you
cannot make a powerful accelerator or unique
wind tunnel. . . . You cannot explore the Moon,
Venus, or Halley's Comet. Only purposeful
Secret
investment can insure modern standards in
science's experimental base, without which the
organization of leading-edge fundamental re-
search is inconceivable.
The Role of Basic Research
Remarks by Gorbachev and Marchuk indicat& belat-
ed leadership recognition of the importance of main-
taining a broad and viable dedication to basic re-
search to ensure long-term scientific competitiveness
and progress. As a result, the regime is rethinking the
appropriate level and pattern of scientific expendi-
tures (between basic and applied research) as well as
the appropriate research focus of the Academy of
Sciences. Over the last 20 years, according to a Soviet
authority on science, basic research has fallen from 14
to 7 percent of all spending on science.
Increased Funding for Basic Science. Delegates called
for an immediate and substantial increase in the
allocations for basic science. Gorbachev decried as an
"abnormal circumstance" that only 6.8 percent of all
funds allocated for scientific research go to the aca-
demic sector of science?led by the Academy of
Sciences?which conducts the preponderance of Sovi-
et basic research. Gorbachev acknowledged that Sovi-
et spending on science was already high, but he also
argued that "the price for lagging behind would be
incomparably greater." Marchuk reported that the
Council of Ministers was examining proposals to
substantially increase expenditures for fundamental
research in the remaining two years of the 1986-90
plan period.
Marchuk implied that critical to the regime's decision
to revitalize basic science was the recognition that the
Soviet Union was becoming increasingly less competi-
tive with the West?particularly the United States?
in this area. Other delegates stressed that the situa-
tion was particularly grim when comparing the avail-
ability of test equipment and scientific instruments,
with one speaker stating, "We are absolute paupers as
regards equipment and modern apparatus."
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avul CL
Refocusing the Academy of Sciences. Gorbachev's
adamant support for increased funding of basic re-
search is a clear endorsement for the Academy to
make this its principal focus. Further, it represents a
noticeable shift from his previous position as laid out
in his speech on S&T issues to the Central Committee
conference in June 1985. At that meeting he explicitly
directed the Academy and its institutes to reorient
their research focus to better meet the needs of
industry and to spearhead the development and intro-
duction of new technologies. Subsequently, the Acad-
emy has been under constant pressure to support the
modernization campaign through more applications-
oriented research. At the party conference, however,
Marchuk implied that the regime has pushed the
Academy too far down the applied science path, to the
neglect of basic research.
Fear that the Soviet Union is falling behind the West
in basic science is not the only reason motivating the
regime to rethink its views about the proper role of the
Academy. The regime's shift is probably triggered
also by the Academy's failure to serve as an effective
leading force in the modernization campaign. The
Academy has been generally unsuccessful in expedit-
ing or improving progress in key areas. At the confer-
ence, academician Logunov was the most outspoken
on this matter:
In the sphere of mutual relations between fun-
damental science and industry everything has
been turned topsy-turvy. Many people in the
leadership of party and state organs and even
science itself have reached the totally erroneous
conviction, based on individual successes in the
application of scientific achievements, that sci-
entists and fundamental science are capable of
catapulting industry into leading positions.
,Organization and Management of Science
Almost all of the speakers who spoke about the sad
state of Soviet science and the ineffectiveness of
reforms directed their fire primarily at the bureaucra-
cy. They stressed that science suffers from overcentra-
lized organization and bureaucratic methods of man-
agement.
41
Democratization. The need to democratize science
and end dictatorial control by incompetent adminis-
trators was central to all criticism. Participants point-
ed to petty tutelage and abuse of authority by scien-
tists to squelch personal rivals and divergent opinions.
Logunov called the loss of professionalism among
scientists "a very dangerous disease." Marchuk
stressed that "science, more than any other sphere,
needs the clash of ideas, opinions, and approaches."
Gorbachev also called for more open competition in
science to overcome the stifling effects of bureaucra-
tism and monopoly.
Up to now, the regime has blamed much of the
stagnation within the S&T community on the "geria-
tric" nature of its leadership. Soviet science?espe-
cially the Academy of Sciences?has been dominated
by a small group of aging, conservative scientists who
are seen to be blocking the advance of fresh ideas and
new blood. The regime has instituted a mandatory
retirement policy, forcing scientists to resign their
administrative posts when they become 65 years old
(70 for Academy members). Moscow has also sought
to broaden participation by the scientific rank and file
in decisionmaking and to move toward filling most
managerial positions through competitive elections.
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Remarks at the conference?and recent articles in the
Soviet press?indicate that there is interest in some
scientific and political circles in extending the scope of
democratization of science. Some scientists have pro-
posed that a system of peer review by experts?
patterned after the system used by the US National
Science Foundation?be established to decide which
research projects should be funded. Others have
pressed for greater competition among scientific pro-
grams and the creation of research groups outside
state-control mechanisms, such as scientific and engi- 25X1
neering cooperatives. The party's willingness to sanc-
tion increased competition represents a shift from the
longstanding Soviet practice of viewing competition
and parallel efforts as duplicative and wasteful of
scarce resources. 25X1
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Secret
At the same time, some delegates indicated that
efforts to democratize science are encountering prob-
lems. Logunov, while favoring a freer exchange of
ideas, contended that some scientists are using democ-
ratization to curtail discussion and research in areas
viewed as threatening to their own by forming so-
called majority opinions. Logunov told the conference
attendees, "When it comes to scientific problems,
questions are not resolved by a majority vote." Anoth-
er speaker warned that democracy frequently served
as a shield for demagoguery.
Organizational Restructuring. Several delegates
dwelt on the need "to search for new forms and
mechanisms for organizing scientific research." In his
report, Gorbachev endorsed as "one way" the forma-
tion of interbranch scientific and technological com-
plexes (so-called MNTKs), engineering centers, and
ad hoc collectives for accomplishing targeted tasks.
He also noted, however, that a number of scientists
are calling for more diverse methods of organizing
science and of adopting "a sensible combination of
state and cooperative forms."
On the one hand, dissatisfaction was expressed with
established scientific structures. Research institutes?
long the basic building block in Soviet science?came
in for harsh criticism. Many institutes have grown
unmanageably large. Marchuk observed that many
Academy institutes have "now outlived the structure
that once seemed quite natural." He insisted that an
"abrupt transformation" was needed to make them
more flexible and productive. Kabaidze, while deny-
ing that it was his intention to "chew out science,"
claimed that it was possible to count on two hands the
number of really excellent scientific institutes in the
country.
On the other hand, complaints were voiced about
efforts to create new organizational structures. The
conference heard veiled criticism of MNTKs?major
S&T complexes created by the Politburo in December
1985 to speed the development of technologies critical
for industrial modernization. To date, however, the
MNTKs are generally performing dismally. The few
successful MNTKs, like the Paton Electro-Welding,
Rotor, and Eye Microsurgery complexes, are all led
by strong, innovative scientist-entrepreneurs?Boris
Secret
Paton, Nikolay Koshkin, and Svyatoslav Fedorov,
respectively. Their success appears to be highly per-
sonality-dependent, a factor that has not been lost on
the Soviet public. For example, Fedorov told the
conference delegates that several ministers had visited
his organization but had rejected it as a model for
their own ministries. All said, "Nothing like this will
work in our area. We don't have any leaders."
Logunov's criticism of regime efforts to use basic
science and scientists to drive S&T progress most
certainly refers to the MNTKs and similar organiza-
tional efforts that placed the Academy at the helm.
Closer Ties to the West
The need for closer integration with the international
scientific community emerged as another theme at the
conference. Several speakers pointed out that the
isolation of Soviet science from the West was retard-
ing their research efforts, and they saw in expanded
cooperation a partial solution to bringing Soviet sci-
ence up to world levels. Perhaps in response to
defense- sector concerns over closer contacts with the
West, Marchuk called for extensive international
cooperation, stressing that "the desire not to be
isolated from world science is no less an important
objective than holding on to the lead in a particular
area." Logunov urged vastly increased scientific and
educational exchanges, involving sending abroad "not
just individual students but many hundreds and possi-
bly thousands of them."
The Regime's Dilemma
In general, those who spoke on science at the confer-
ence were long on criticism of problems, but they were
short on offering solutions for resolving science's ills.
Ivanovo Director Kabaidze scolded Academy Presi-
dent Marchuk, saying he had expected Marchuk to
present "bold, new proposals." For this statement
Kabaidze reportedly received louder applause than
Marchuk did during his whole speech. Other dele-
gates also called for more aggressive actions and a
quicker pace of restructuring science.
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Key leaders admitted, however, that they did not have
any answers, that the regime has no clear strategy to
quickly address and improve the situation. Logunov
said that the regime was operating on a "trial-and-
error basis, constantly introducing corrections as we
go along." Marchuk confessed that restructuring of
the Academy has been inconsistent, but he said, "We
do not know better how to proceed. We are probing,
experimenting."
The discussion at the conference suggests the leader-
ship will be increasingly pressed to address the state of
Soviet science. It is also clear from the speeches that
reforms have not produced the desired effect and that
further perestroyka in science is a vital necessity if
the USSR is to meet the technological challenge. How
this sector performs and develops is key to how
prepared the Soviet Union will be for the 21st centu-
ry. As Marchuk told the delegates, "It would be no
exaggeration to say that science's contribution will
determine to an enormous extent our country's place
and role in the high-tech, automated world of the
future."
In restructuring science, however, the regime finds
itself on the horns of a dilemma: how to encourage
and give freer reign to creativity and new ideas, yet
still maintain centralized control over the R&D com-
munity to ensure the provision of resources needed for
critical civilian and defense programs. As the speech-
es show, there is concern that the pace and scope of
reform measures are disrupting the country's R&D
efforts. At the same time, some elements are pushing
for bolder measures that would lead to less central
involvement and intervention. This is much the same
dilemma the regime faces as it seeks further reforms
in the economy and political system. In science too the
course will be rough because resistance can be expect-
ed from conservative and reformist elements.
much scientific research remains classified . . . and
too much other research is immune to criticism." At a
roundtable discussion on the eve of the party confer-
ence, one specialist decried as "absolutely intolerable"
the fact that science is such a closed sector. He
complained that there is more information on how
science is organized in China, Hungary, and even
Seychelles than in the Soviet Union. At the party
conference in June 1988, Marchuk called for the 25X1
establishment of an all-union newspaper specifically
devoted to airing science issues. The creation of such a
paper would be one indication of the leadership's
commitment to a serious and more public debate on
science. As the issues are surfaced more openly, we
expect there will be a broadening and intensification
of perestroyka in Soviet science.
We should also expect the regime to pursue increased
integration of the country's science sector with the
international scientific community. The leadership is
likely to be especially eager to support cooperation in
basic science research areas and even to be willing to
include in the exchanges?to at least a limited de-
gree?institutes and scientists previously excluded
because of security concerns.
the regime intends to open some of its
25X1
facilities previously closed to outsiders. Soviets meet-
ing with Western scientists in the spring of 1988 25X1
stated that the regime has reportedly given permission
for the 1989 International Laser Radar Conference to
be held in Tomsk, a city previously closed to Western-
ers. Academician Zuyev, who will host the meeting,
contended that permission had come from the "num-
ber-two man in the Soviet Union."
Looking Ahead
During the next several months, the debate over
science policy is likely to grow hotter. We can expect
more calls for greater glasnost in science. Academi-
cian Roald Sagdeyev recently emphasized, "Far too
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The Soviet Aircraft Carrier
Program: A Potential Victim
of "Reasonable Sufficiency"?
Recent comments by the Chief of the Soviet General
Staff suggest that the Soviet aircraft carrier program
may be in trouble. Marshal of the Soviet Union Sergei
Akhromeyev, when asked about the status of "the
Brezhnev-class aircraft carrier" in July 1988, replied
that the Soviet construction program is under review
and that the Soviets "probably would not continue
more of the class." Although ambiguous, Akhro-
meyev's remarks could mean that the Soviets are
considering the option of deferring or abandoning the
construction of additional large aircraft carriers capa-
ble of operating high-performance aircraft.
Status of the Construction Program
Two aircraft carriers are under construction at Niko-
layev shipyard Nosenko 444 on the Black Sea. The
first unit, widely referred to in the West as the
Brezhnev but now reportedly named Tbilisi, was laid
down in early 1983, launched in December 1985, and
probably will begin sea trials late in 1989. The second
unit was laid down in December 1985 and probably
will be launched later in 1988, with sea trials in 1992.
With an estimated full-load displacement of some
70,000 tons, these will be the largest ships in the
Soviet Navy?almost twice the size of the Kiev-class
aircraft carriers now in service Unlike the
Kievs, which carry vertical take-off-and-landing
(VTOL) aircraft and helicopters, the new ships proba-
bly also will carry high-performance aircraft such as
the Flanker, using a ski-jump ramp for takeoffs and
arrestor wires for landings.
The "Reasonable Sufficiency" Debate
Before Akhromeyev's comments, there had been indi-
cations that the carrier program had become an issue
in the debate on the implications of "reasonable
sufficiency" for Soviet defense policy. Recent writings
suggest that some participants in the debate believe
that the carrier program is a candidate for cutbacks in
the interest of reducing resource allocations to the
military.
45
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An article dated December 1987 by civilian analysts
from the Institute for the Study of the USA and
Canada discussed the concept of "reasonable suffi-
ciency." The authors?V. V. Zhurkin, S. A. Kara-
gonov, and A. V. Kortunov?have been the foremost
exponents of an interpretation of the concept that
would allow maximum flexibility for reductions in the
Soviet armed forces through arms control negotiations
and unilateral actions. In the article, the authors
argue that to break the spiral of the arms race it is
necessary for states to accept the concept of an
"asymmetrical response" to provocative actions, that 25X1
is, to do something other than simply imitate the
opponent's action:
At first sight, the simplest and most natural
method of preventing the strategic balance from
being upset is to repeat the actions of the
initiator of an arms buildup?to create and
deploy analogous weapons systems. In reality,
however, such an approach is linked to a num-
ber of negative consequences.
To support their argument, they use the historical
example of the Soviet development of ICBMs being
an effective "asymmetrical response" to the US deve125X1
opment of bombers. 25X1
A current situation that the authors believe calls for
an asymmetrical response is described as the US
desire "to challenge the USSR to a competition in the 25X1
sphere of building a large naval surface combat fleet,
including aircraft carriers." According to the authors,
the United States is attempting to provoke the USSR
into "an exhaustive symmetrical response," partly
with the intention of weakening the Soviet economy.
Although they do not specifically call for abandon-
ment or curtailment of some Soviet surface ship
programs, they probably intended their readers to
draw that conclusion from their line of argument.
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The Soviet military is resisting the argument that
military programs could be sacrificed in the name of
"reasonable sufficiency," especially if such sacrifices
were made unilaterally rather than through agree-
ments requiring similar cutbacks in Western forces. If
the political leadership were to require such sacrifices,
however, the Navy would have to absorb a share of
the cutbacks. There even are indications that the
Navy has been criticized within the General Staff for
receiving an inordinately large share of defense re-
sources and could therefore be singled out for dispro-
portionately large cuts. Colonel General Gareyev, a
deputy chief of the General Staff, treated the historic
role of the Navy in an unusually derogatory fashion in
his book published in 1984, M. V. Frunze?Military
Theorist. In discussing the period of the 1920s,
Gareyev invoked the hallowed names of Lenin and
Frunze to suggest, by historical analogy, that too
much was being spent on the Navy. Although ac-
knowledging that both men recognized the impor-
tance of the Navy, Gareyev selectively used quotes
from their writings to stress that they wanted cut-
backs in naval programs in the name of economy.
Gareyev's slighting of the Navy also manifested itself
in discussions of contemporary situations where the
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other services are treated in more favorable terms
than is the Navy.
Naval Views on Carriers
The carrier program could be a particularly vulnera-
ble one in the broad political-military-economic dis-
cussion of "reasonable sufficiency" because it is a
high-visibility program and has apparently been the
subject of controversy even within the Soviet Navy.
Soviet naval writings indicate that the Navy's views
on this subject have shifted over the years and that
disagreements probably continue to exist.
For much of the 1950s and 1960s, writings in Soviet
open-source publications such as Morskoy sbornik,
the Navy's professional journal, tended to denigrate
the aircraft carrier as extremely vulnerable and less
effective than submarines or land-based aircraft. Ad-
miral Isakov, for example, wrote in 1962 "My opinion
is that these colossal aircraft carriers would be float-
ing corpses should they be used against a powerful
opponent who has modern means of conducting war."
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Advocates of carrier construction apparently existed
within the Navy, however, because Admiral Gorshkov
in 1967 found it necessary to call them to heel. In a
Morskoy sbornik article, he noted that, although
Western navies relied heavily on aircraft carriers,
such ships were not appropriate for the Soviet Navy.
Soviet policy changed, however, and in 1970 the first
unit of the Kiev class was laid down. The introduction
of these ships coincided with a change in the treat-
ment of aircraft carriers in Soviet naval writings,
which began generally to assess aircraft carriers?
normally in discussions of Western navies?more
favorably. Perhaps the highest praise accorded them
was by Vice Admiral Stalbo, Gorshkov's chief spokes-
man, in a Morskoy sbornik article in 1978. Stalbo's
assessment was, however, challenged in 1979 in an
article by Rear Admiral Pushkin, the chief editor of
Morskoy sbornik and a former submariner. Pushkin's
article, which stressed the vulnerability of carriers to
submarine attack, suggested a lack of enthusiasm for
carrier construction on the part of those who believe
resources would be better spent on the submarine
forces.
Since construction of the Tbilisi began, Soviet naval
writings generally have discussed carriers in favorable
terms, using examples such as the Falklands war to
demonstrate the value of sea-based airpower under
contemporary conditions. The spirit of glasnost in
discussing Soviet history also has been enlisted in
support of the carrier program. Recent discussions of
the career of Admiral Kuznetsov, commander of the
Soviet Navy during the periods 1939-47 and 1950-55,
have emphasized his efforts to persuade Stalin and
Khrushchev of the need for aircraft carriers and have
criticized both political leaders for their failure to
order such construction.
Despite its endorsement of aircraft carriers, the Soviet
naval leadership has been careful to stress that such
ships are not as important to the Navy as submarines
and land-based aviation. Fleet Admiral Chernavin,
for example, when specifically asked about the Soviet
carrier program in 1986 indirectly acknowledged its
existence but stressed that "aircraft-carrying ships are
47
not our chief strike force. This role belongs to nuclear-
powered missile submarines." In 1987 he emphasized
that "nuclear submarines constitute the basis of the
fleet's striking power." In July 1988, Admiral Ma-
karov, Chief of the Main Naval Staff, was asked
about the structure of the Navy. He replied that:
Its basis is provided by nuclear submarines and
high-mobility, long-range naval aviation. Its
composition also includes nuclear or conven-
tionally powered surface ships of different
classes armed with missile weapons, including
aircraft-carrying ships, coastal missile artillery
forces, and marine units.
The careful prioritization of forces in such statements
suggests the development of a fallback position. If the
Navy must take cuts in force procurement, Chernavin
probably would be inclined to sacrifice the carrier
program to protect the submarine programs.
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Carriers and "Defensive Doctrine" 25X1
One of the major themes in recent Soviet statements
is that Soviet military doctrine has undergone a
significant change under Gorbachev to place even 25X1
greater emphasis on "defense." Although Soviet
spokesmen have been hard pressed to explain what the
practical implications of this supposed change are,
they have indicated that the question of force restruc-
turing was being examined. In this context, deferment
or abandonment of additional aircraft carrier con-
struction would be a significant signal to the West of
the force structure implications of the professed
change in doctrine. Soviet writings over the years have
tended to emphasize the carrier's role as an instru-
ment of Western aggression and offensive operations.
The Soviets also know that their carrier program has
received great attention in the West as an indicator of
Soviet expansionist intentions, particularly for its
ability to project power in distant areas. Its cancella-
tion after two units would therefore be a major
gesture of restraint and probably would be cited by
the Soviets in support of their recent claims that their
defense spending had decreased.
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The abandonment of the carrier program would weak-
en the Soviet Navy's capability to provide air support
for, forward-deployed naval units and to cooperate in
the air defense of Soviet territory. The Soviets would,
however, still have four Kiev-class ships and two
Tbilisi-,class units to perform such tasks by the early-
to-middle 1990s. In the absence of additional large
carriers, the Navy probably would press even harder
for improved shipboard air defense systems, including
surface-to-air missiles, laser weapons, and electronic
warfare systems. The Navy probably would also seek
closer cooperation with the Air Defense Forces in
those sea areas within range of land-based aviation
and might attempt to acquire land-based, long-range
fighters for Soviet Naval Aviation.
Prospects
It is too early to tell whether the Soviets will continue
their carrier program. A conservative assessment of
Soviet intentions, consistent with past trends in Soviet
naval programs, would conclude that carrier construc-
tion will continue beyond the two units now under
construction. In that case, the launching of the second
unit later in 1988 or in 1989 should be followed
shortly by the beginning of construction of a third
unit. In fact, procurement of long-leadtime items for
this ship should already have begun,
I Gorbachev has demonstrated, however, by the
nuclear test moratorium, the INF Treaty, and the
withdrawal of Soviet forces from Afghanistan that he
is willing to make the grand gesture in the hope of a
bigger payoff.
Gorbachev could view cancellation of a modern,
highly visible ship as another such gesture, promising
some benefit to the economy and momentum to his
efforts to persuade the West of the Soviet Union's
adoption of a less confrontational foreign policy. We
estimate that the potential savings to the Soviets from
cancellation of the third carrier and its air wing would
be about 1.1 billion rubles between 1989 and 1995, or
somewhat less than 2 percent of the total projected
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expenditures for naval procurement during that peri-
od. Savings would be larger if advocates of cutbacks
used the cancellation of a carrier as a reason not to
build the escort ships that would form part of a carrier
task group. If, for example, six destroyers were also
canceled, the potential savings would increase to some
2 billion rubles, concentrated in the period 1992-95.
The Soviet Navy probably would resist such linkage
on the grounds that the destroyers would be needed
for other tasks, but, if forced to take further cuts,
would probably prefer to give them up rather than
submarines.
The carrier example is a good illustration of the tough
decisions that have to be made if Gorbachev is
determined to cut military procurement below the
levels now carried in Soviet planning projections.
Major programs would have to be reviewed and some
scaled back or abandoned in all of the services to
achieve, as in this example, an overall reduction in
procurement of 2 percent
We doubt that the comments on the future of the
carrier program are designed to mislead the West.
Although such a possibility cannot be discounted, any
such deception effort would be short lived in view of
our ability, recognized by the Soviets, to determine
within a year whether the program was continuing
with a third unit.
Gorbachev has unleashed a
genuine reexamination of the internal and foreign
policies of the Soviet Union in which questions of
defense priorities and programs such as that for the
carrier are coming under serious review.
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USSR?North Korea: Implications
of Soviet Arms Deliveries
Since Kim Il-song's visit to Moscow in May 1984,
Soviet military relations with North Korea have
improved considerably. For the first time in over a
decade, the Soviets have delivered advanced weapons,
including MIG-29 advanced-fighter aircraft and
SA-5 long-range surface-to-air missiles. The delivery
of such weapons is intended to counter US deliveries
to South Korea, compensate the North for Moscow's
attendance at the Olympics in Seoul and its expand-
ing ties to the South, and gain increased influence
with the North Korean military as a way for Moscow
to hedge its bets during the succession in the North.
In return, Soviet reconnaissance aircraft are permit-
ted to overfly North Korea to collect data on Chinese,
US, and South Korean targets, and the Soviets seem
to be making greater use of North Korean ports and
airfields for refueling and repairs. We believe that
Moscow's desire to advance the Sino-Soviet dialogue
and improve relations with Japan and South Korea
will keep the Soviets from providing weapons that
could alter the balance of military power on the
Korean Peninsula. For the same reason, and also
because P'yongyang would be likely to object strenu-
ously, we do not expect the Soviets to press for
military bases in North Korea, although they may
seek greater access to North Korean military facili-
ties.
Background
Soviet?North Korean relations were cool throughout
the 1970s?largely because the Soviets curtailed their
assistance to North Korea after becoming convinced
that the North Koreans had tilted toward Beijing.
The new warming spell that began in late 1983?after
the downing of the South Korean airliner by the
Soviets?has developed into more than a brief ro-
mance. North Korean President Kim Il-song's visit to
Moscow in May 1984, his first visit there in over 20
years, was the turning point. He made it clear that he
wanted better relations with the Soviets and was
willing to adopt a more balanced position between
Moscow and Beijing.
49
With Gorbachev's new foreign policy team in place,
the Soviets appear to have concluded that the USSR's
broader interests require a more balanced approach to
both Koreas. The Gorbachev regime has adjusted its
policy accordingly?increasing its cooperation with
P'yongyang in certain areas, particularly in the mili-
tary sphere, while resuming earlier contacts with
Seoul and looking for new opportunities for economic
cooperation with the South Koreans.
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Arms Deliveries 25X1(1
The most dramatic development in Soviet?North 25X1
Korean relations has been the expansion of military
ties?especially Soviet arms shipments.
North Korea also received a number of
SA-3 low-to-medium altitude surface-to-air missiles
the first time the
Soviets had made that weapon system available to the
North.
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The Soviets have been even more forthcoming in 25X1
recent months?providing for the first time SA-5 25X1
long-range, surface-to-air missiles, which extend the
North's air defense reach well beyond its own borders; 25X1
MIG-29 fighters; and other weapons that augment its
mobile ground forces. North Korea has now received:
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The MIG-29 Delivery
The North Koreans probably will receive up to a
regiment of MIG-29s?about 40 aircraft?if the So-
viets follow the pattern of their earlier MIG-23
aircraft deliveries. A regiment of MIG-29s would
provide a counterweight to the 36 F-16s the South
Koreans will have in their inventory by early 1989.
The Soviet decision to resume these arms sales almost
certainly was a major factor behind the North Korean
decision to allow Soviet reconnaissance aircraft to
overfly North Korea to collect data on Chinese as well
as US and South Korean targets.
Soviet Motives
We believe the Soviets had several reasons for resum-
ing their shipments of advanced weapons to North
Korea in 1985:
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? A belief that the planned US sales of F-16s to Seoul
in the mid-1980s required a response to maintain
Soviet credibility with P'yongyang.
? A heightened concern about growing Sino-US mili-
tary exchanges, which apparently made the Soviets
more determined to find a way to offset perceived
US gains in East Asia and the Western Pacific.
? A desire to convince the North Koreans to tolerate
the Soviet opening to South Korea, resumed with
the revival of the unofficial exchanges between
Moscow and Seoul in late 1984.
? An interest in gaining greater access to the North
Korean military to help the Soviets better follow
developments in North Korea and to hedge their
bets on the leadership succession in P'yongyang,
which could be influenced by the military.
The Soviet decision to up the ante in 1987 by
providing P'yongyang more capable equipment ap-
pears to have been prompted by:
? A mounting sense that the military card is the best
one that Moscow can play in trying to increase its
influence in North Korea. For the North, Moscow
remains the sole source of supply for such hardware
since Beijing cannot offer comparable systems.
? A wish to temper P'yongyang's anger over Mos-
cow's plans, announced earlier in 1988, to attend the
Olympics and its efforts to expand economic and
cultural contacts with South Korea. At a minimum,
the Soviets will expect North Korea to view these
arms transfers as proof of Moscow's willingness to
protect P'yongyang's basic security interests while it
seeks better relations with Seoul.
? A desire to persuade Washington and Seoul that
Moscow is prepared to counter increases in US
security assistance to the South. The MIG-29 deliv-
eries are probably meant as a warning that South
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Korea's proposed purchase of 120 more frontline
fighters could lead to further Soviet arms shipments
to the North. The announcement in November
1986 that US Lance missiles would be deployed in
South Korea in 1987 probably strengthened the
Soviets' resolve to increase their military assistance
to the North.
? A hope that these arms deliveries will eventually
convince the United States and South Korea to
agree to P'yongyang's calls for mutual force reduc-
tions or the creation of a nuclear-free zone there.
Pressure for More
Despite these latest arms acquisitions, P'yongyang has
not yet acquired enough modern equipment to keep up
with the more capable weapons entering the South
Korean forces. The North Koreans presumably are
intensifying pressure on Moscow to supply more
advanced weapons?for example, a new main battle
tank?to maintain their current military edge over
the South. Seoul has introduced the highly publicized
"88 Tank"?a US-designed, South Korean?manufac-
tured vehicle superior to current North Korean ar-
mor?and the North Koreans almost certainly are
pressuring Moscow to allow them to build a tank like
the T-72 to counter the special armor on the new
South Korean tank. There is a precedent for Soviet
assistance in producing a new tank: Moscow helped
the North Koreans manufacture both the T-55 and T-
62 tanks. It also is conceivable that future Soviet arms
shipments will include T-72 tanks to take up the slack
until the North Koreans are able to produce tanks of
their own that are a match for the South's new "88
Tank."
The main significance of some of these shipments may
be symbolic?demonstrating that the Soviets have
added North Korea to the list of clients eligible for
such assistance. The Soviets may hope that such a
gesture would allow them to purchase added influence
in P'yongyang "on the cheap," without damaging
their interests with other Asian countries. At the same
time, the North Koreans know that more favored
clients?such as India, Syria, Cuba, Iraq and Libya?
continue to receive much larger arms shipments and
more modern arms from the USSR than North Korea
has received.
53
Soviet Bases in North Korea?
During the early 1980s the Brezhnev administration
reportedly had told P'yongyang that the USSR would
not ship any advanced weapons to North Korea until
the North Koreans allowed Soviet military bases on
their territory. According to a reliable source of the
US Embassy in Beijing, the Soviets also wanted
landing rights for their military aircraft and the use of
North Korean port facilities for their naval ships.
When the Kim regime declined, the Soviets reportedly
curtailed their fuel and raw material supplies to 25X1
North Korea?a move that the source claimed
prompted the Chinese to step in to compensate.
It is not clear what the Soviets are getting in return
for the military assistance they have given North
Korea in recent years, especially the more modern
equipment provided in the past year.
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other benefits as well from their closer defense ties to
the North Koreans, but we do not believe that they 25X1
have obtained military basing rights in North Korea.
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For Gorbachev, the bases issue presents something of
a dilemma. He may have concluded that it would be
counterproductive to press the North Koreans for
military bases at this time because it could jeopardize
much that the Soviets have accomplished in improv-
ing their relations with P'yongyang in recent years.
The Soviets also may be concerned that their acquisi- 25X1
tion now of military facilities could:
? Constrain their ability to avoid direct involvement in
a new Korean war, in the event of a new round of
hostilities on the peninsula.
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? Prompt the United States, Japan, and South Korea
to strengthen their cooperation on defense matters,
and possibly set off a new arms race in the Soviet
Far East, while complicating Moscow's efforts to
cultivate the USSR's Asian neighbors, especially
South Korea and Japan.
? Provoke Chinese fears of a return to a more aggres-
sive Soviet policy of encirclement, and thus possibly
disrupt the Sino-Soviet dialogue.
Other Efforts To Expand Military Ties
The Soviet Navy and North Korean navy have traded
port visits on several occasions in the past three years,
air squadrons have had similar exchanges, and air and
naval forces from the two countries have held a joint
exercise off the northeast coast of North Korea two
years in a row.
These joint exercises have contributed
to an improved atmosphere for Soviet?North Korean
relations. The two sides probably also view them as a
useful response to the annual "Team Spirit" exercises
conducted by South Korean and US forces.
The Gorbachev regime has also made other efforts to
develop a better channel to the North Korean military
establishment?for example, by sending Gen. Aleksey
Lizichev, the top political commissar of the Soviet
armed forces, on a weeklong visit in December 1986.
Soviet and North Korean defense leaders had addi-
tional exchanges in May 1987, when party secretary
Vladimir Dolgikh, the Politburo candidate member
responsible for science and technology, and Deputy
Ministers of Defense Vladimir Chernavin and Vladi-
mir Govorov visited P'yongyang. According to the
North Korean media, Soviet military leaders have
pledged on these occasions to protect North Korean
security. Such statements?which would have been
considered interference in P'yongyang five years
ago?are now a symbol of Soviet?North Korean ties.
The timing of the visits by Dolgikh, Chernavin, and
Govorov?on the eve of Kim II-song's trip to Beijing
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later that month?also suggests an attempt by the
Soviets to protect their interests at a time when Kim
seemed interested in putting his relations with Beijing
on a more solid footing.
Prospects
The Soviets will continue to curry favor cautiously
with P'yongyang. We believe that they will provide
additional aircraft, surface-to-air missiles, and other
advanced weapons to North Korea over the next few
years as they have since 1985. They probably will
keep those shipments within certain limits, however?
upgrading some equipment to keep North Korea from
falling too far behind South Korea in military tech-
nology, without attempting to alter significantly the
existing balance of power on the peninsula.
Moscow's policy will in part depend on US behavior.
A major increase in US arms deliveries to South
Korea or US deployments to Japan, for example,
could prompt the Soviets to provide even more ad-
vanced weapons to P'yongyang, and in larger
amounts. Moscow's interest in becoming a more
active player elsewhere in Asia and in expanding
economic relations with Japan and the newly industri-
alizing Asian countries may, however, curb its will-
ingness to provide large amounts of sophisticated
weaponry that could be widely interpreted as fostering
North Korean aggressiveness and otherwise raising
tensions in the region.
Soviet and North Korean armed forces may conduct
another joint exercise in the fall of 1988, after the
Seoul Olympics have ended, but we believe that the
two sides will move slowly in expanding these exer-
cises.
The Soviets also may make
greater use of North Korean ports and airfields for
refueling stops and repairs, but Soviet access to such
facilities probably will continue to be limited to
emergency situations for the most part.
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We doubt that Moscow will seek?or that P'yongyang
would grant?much in the way of increased Soviet
military access to North Korean territory. The North
Koreans may be unwilling to allow Soviet bases on
their soil under almost any circumstances because
doing so would put a number of their basic interests at
risk. Soviet military bases in North Korea would
compromise the independence of which P'yongyang is
so fiercely proud. The presence of Soviet forces in the
North would also increase the potential for bilateral
frictions without improving significantly Moscow's
military position in the Far East. Moreover, such
deployments would threaten to increase US-Soviet
tensions and undercut P'yongyang's bedrock demand
for the withdrawal of US troops from the South.
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Unrest in the USSR
Since January 1987:
A Statistical Analysis
Since early 1987, when General Secretary Mikhail
Gorbachev unveiled his policy of "democratization"
at a Communist Party of the Soviet Union Central
Committee plenum and ordered the release of a large
number of political prisoners already experienced in
organizing dissent, the incidence of unrest has risen
throughout the USSR.' At first, the growth of unrest
was most readily apparent in Moscow and Leningrad,
where Jewish refuseniks demonstrated almost daily
for emigration and where new, nonofficial groups
pressed their respective cases for a clean environment,
human rights, and systemic changes. During the
summer of 1987, however, unrest spread rapidly
beyond the RSFSR and acquired a more nationalistic
flavor. Crimean Tatars and ethnics from the Baltic
republics seized new opportunities to articulate their
demands. Then the disturbances in the Caucasus in
late 1987 and early 1988, dramatically increased the
volume of unrest in the Soviet Union.
The Statistics of Unrest
During the past 19 months, we have noted approxi-
mately 600 cases of unrest in the USSR (see inset).
Incidents of unrest?from 1 January 1987 until the
beginning of July 1988? have shown continuous
growth (see figure 1). The number of incidents
climbed by approximately 25 percent over the preced-
ing period in each of the first two quarters of 1988.
This trend, however, seems to have peaked because
the number of incidents in July 1988 was below the
levels in either May or June. The decline may well be
the result of the crackdown in the Caucasus and
tighter enforcement of existing antidemonstration
rules. Large demonstrations in the Baltic during
August, however, clearly suggest the numbers could
quickly surge to match or surpass earlier levels and
show that public activism is not subsiding.
57
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Quantifying Unrest in the USSR
We have used a broad based definition of unrest to
include politically motivated incidents ranging from
those that are immediately destabilizing to the re-
gime to those that may prove to be destabilizing in
the future. These include such seemingly benign
incidents as one man standing on a street corner in
Moscow appealing for the right to emigrate to inci-
dents like the march on Zvartnots Airport and the
massacre of Armenians at Sumgait that have an
immediate, negative connotation for the regime. 25X1
25X1
They generally agree 25X1
with Soviet reports such as that of Vasiliy Ignatov of
the Interior Ministry who said "more than 600 rallies
and meetings" had been held in the Soviet Union over
the past year. Justice Minister Boris Kravtsov's claim 25X1
of 250 large rallies and demonstrations in the 25X1
RSFSR over the last two years is also consistent with
our information.
Chief of Moscow Militia Lt. 25X1
Gen. Pyotr Bogdanov claimed 339 cases of unrest in
Moscow alone over the past year. Bogdanov's num-
bers, however, may include brawls and other nonpo-
litical incidents that are not included in the data base
underlying this article. 25X1
Manifestations of unrest in the Soviet Union range in
size from very minor incidents of petitioning involving
one or two persons, to the massive demonstrations
involving up to 1 million participants during the
Caucasus unrest. During the 1987-88 period, both the
number of demonstrations and the size of individual
demonstrations grew (see figure 2). The larger demon-
strations, those of 1,000 people or more, do not make
up a significant percentage of the total until the last
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Figure 1
USSR: Incidents of Unrest, January 1987-July 1988 a
Number of incidents
58
27
63
104
135
176
1 Jan 1987- 1 Apr 87-
31 Mar 1987 30 Jun 87 30 Sep 87 31 Dec 87
1 Jul 87-
1 Oct 87-
1 Jan 88-
1 Apr 88-
31 Mar 88 30 Jun 88 31 Jul 88
Jul 88-
quarter of 1987. From this point on, the growth in
these larger demonstrations is dramatic; in the first
quarter of 1988, there were almost twice as many
demonstrations involving 1,000 people or more as in
all of 1987. Almost 60 percent of these larger demon-
strations have taken place in the Baltics or the
Caucasus, while all of the demonstrations of 50,000 or
more, with the exception of an environmental demon-
stration in November 1987 in Irkutsk and a national-
ist demonstration in June 1988 in Lvov, occurred
there.
During the period January 1987-July 1988, unrest
manifested itself most frequently in demonstrations,
which accounted for about 400 incidents or 65 percent
of the total (see figure 3). Other political acts (meet-
ings of informal groups, hunger strikes, and unsanc-
tioned religious activity) accounted for another 15
percent. Petitioning, signature gathering, and leaflet
distribution contributed 8 percent of the total. Three
Secret
Projected b
72
Actual
36
318748 9-88
other groupings accounted for the remaining unrest: 6
percent?riots and fighting; 4 percent?workplace-
related unrest such as strikes and work stoppages; and
2 percent?violent actions.
Although the number of violent and/or terrorist acts
in the USSR was small, incidents of this kind oc-
curred in many areas of the country. Examples in-
clude a hijacking in March 1988 of an Aeroflot
airliner en route from Irkutsk to Leningrad, a bomb
exploding during a soccer match in April 1988 in
Leningrad, individuals carrying homemade explosive
devices to a 1987 May Day parade in Moscow, the
bombing in October 1987 of a Bolshevik writer's tomb
in Georgia, the assassination in December 1987 of a
Turkmen party official, and homemade production of
Molotov cocktails and other weapons in Armenia and
Azerbaijan.
58
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Figure 2
USSR: Distribution of Demonstrations, by Size, January 1987-July 1988
Number of demonstrations
Demonstrators
? 1-100a
I. 100-1,000
1,000-10,000
Over 10,000
1 Jan 1987-
31 Mar 1987
1 Apr 87-
30 Jun 87
1 Jul 87-
1 Oct 87-
30 Sep 87 31 Dec 87 31 Mar 88 30 Jun 88 31 Jul 88
1 Jan 88-
1 Apr 88-
1 Jul 88-
'Approximately 10 percent of the reports of demonstrations did not
include the numbers of demonstrators involved. These have been
grouped in the 1-100 category.
The regional distribution shows cases of unrest
throughout the USSR, with most concentrated in
Moscow, the Baltics, and the Caucasus. Moscow
accounts for 30 percent of all the incidents of unrest
(figure 4), while Leningrad contributes 12 percent,
and the rest of the RSFSR, 13 percent. Armenia,
Azerbaijan, and Georgia account for 17 percent of
total unrest; and Estonia, Latvia, and Lithuania for
13 percent. Incidents in the Ukraine, Belorussia, and
Moldavia represent 9 percent of the total; and the
Central Asian republics, 6 percent.
Reaction of Authorities
The response of local authorities to demonstrations
has varied. Regionally, Moscow and Baltic republics
have responded by breaking up demonstrations nearly
half the time (see figure 5). During the second quarter
of 1988, the percentage of times the authorities
reacted with repression, especially in the Baltic and in
59
318749 9-88 25X1
Moscow, declined.' On the opposite end of the spec-
trum, Armenians demonstrating in the Armenian
SSR or in Nagorno-Karabakh have hardly ever been
stopped by overt police action. The major exception to
this trend was the Armenian march on 5 July on
Zvartnots Airport and the resulting clash there. This,
of course, illustrates that there is still a line that
demonstrators must not cross or they will risk provok-
ing a forceful response by the authorities.
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These percentages refer to the number of times the authorities
have acted directly to end a demonstration?for example, using
snowplows to break up a demonstration in Moscow and water
cannons to end a demonstration in Leningrad, detaining demonstra-
tors, and simply using physical force. The count does not include
those times when police or military forces were present but did not
directly intervene.
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Figure 3
USSR: Incidents of Unrest, by Type,
January 1987-July 1988
Figure 4
USSR: Incidents of Unrest, by Location,
January 1987-July 1988
Number of incidents Number of incidents
Demonstrations
Other political acts a
Petitions/
signature gathering
Leaflet distribution
Fighting 22
Riots 10
Strikes/ 21
work stoppages
Other violent acts b
Bombings
Assassinations
Sabotage
47
96
a Includes meetings of unofficial groups, hunger strikes,
collection of funds for nonofficial functions, unsanctioned
reglious activities, and so on.
b Includes production of homemade weapons, threats of
violence, and an airline hijacking.
Secret
377 Moscow
318750 9.88
Leningrad
RSFSR
(non Moscow/
Leningrad)
Belorussia
Moldavia
Ukraine
Estonia
Latvia
Lithuania
Armenia
Azerbaijan
Georgia
Kazakhstan
Kirghiziya
Tajikistan
Turkmeniya
Uzbekistan
60
195
318751 9-88
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Figure 5
USSR: Regime Response to Demonstrations,
by Location, January 1987-July 1988
I. Number of demonstrations
M Demonstrations broken up by regime
Moscow
Leningrad
RSFSR
(non Moscow/
Leningrad)
Ukraine
Belorussia
Estonia
Latvia
Lithuania
Armenia
Azerbaijan
Georgia
Uzbekistan
Tajikistan
14
42
76
139
318752 9?88
61
On 28 July 1988, the Presidium of the Supreme
Soviet issued a new decree on demonstrations and
street rallies. Although this decree does not prohibit
demonstrations, it does place restrictions on them,
including making demonstrators liable for any proper-
ty damage. The two largest republics?the RSFSR
and the Ukraine? have subsequently instituted tough
penalties against demonstrators, including adminis-
trative jail terms and fines. Earlier rules imposed in
Georgia threatened demonstrators with three years of
hard labor.'
The growing volume of unrest has strained law en-
forcement capabilities. The Ministry of Internal Af-
fairs (MVD) operational and special police troops?
units specifically trained in crowd control? apparent-
ly cannot cover the entire USSR. When incidents of
large-scale unrest occurred simultaneously in several
areas, as they did to different degrees in the Baltics
and the Caucasus from late May through early July
1988, it was evident that the number of these troops
was insufficient. In the Caucasus, this resulted in the
callup of MVD reservists and the deployment of
MVD Internal Troop school cadets and Ministry of
Defense airborne forces in the region.
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Nationalist demonstrations are most likely to be
repressed by authorities. By contrast, environmental
demonstrations have generally been tolerated. Indeed,
demonstrations against pollution, nuclear power, or
wholesale destruction of the natural environment have
served as a catalyst for change?from closing the
Kirishi biochemical plant to suspending construction
of nuclear reactors in the Ukraine.
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'Events in August 1988 seem to indicate these antidemonstration 25X1
laws are being implemented unevenly from republic to republic. To
date, they have been used to crack down on demonstrations more 25X1
often in the RSFSR, particularly in Leningrad, than in the Baltics
or Caucasus, where nationalist activity has been centered.1
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Figure 6
USSR: Participation of Nationalities
in Unrest, January 1987-July 1988
Number of incidents
All cases of unrest: 599
Armenians
Jews
Crimean
Tartars
Estonians
Lithuanians
Latvians
25
19
41
Figure 7
USSR: Incidents of Nationalist Unrest,
by Objective, January 1987-July 1988
Number of incidents
82 Irredentist
64 Interethnic
Cultural/
historical
Autonomy
Religious/
national
Environmental/
national
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318753 9?88
Nationalism Dominates Incidents of Unrest
Nationalist activity accounted for slightly more than
half of all unrest in the Soviet Union from 1 January
1987 until 31 July 1988 (if activity by Ukrainian
Catholics and demands for Jewish emigration had
been included in this category, this percentage would
have been noticeably higher). Cases of unrest were
concentrated in Moscow and Leningrad until July
1987, but since then incidents have moved to other
areas of the Soviet Union where nationalist activity
has become increasingly dominant.
Six nationalities have played a preponderant role in
unrest (see figure 6). Armenians, Crimean Tatars,
Jews, Estonians, Latvians, and Lithuanians collective-
ly make up 7 percent of the total population of the
Soviet Union, yet they are the primary participants in
half of all the cases of unrest in the Soviet Union from
1 January 1987 to 31 July 1988. Jews, who have
accounted for 11 percent of all unrest in the Soviet
Union since January 1987, were the first to seize the
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120
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new opportunities that became available under glas-
nost. Crimean Tatars, who accounted also for about
11 percent of all unrest in the USSR, and the three
Baltic nationalities (Estonians, 8 percent of total
unrest; Latvians, 3 percent; and Lithuanians, 4 per-
cent) began their demonstrations and protests during
the summer of 1987. Armenians only began demon-
strating in the fall of 1987, but they have more than
made up for lost time. They have been responsible for
approximately 14 percent of all cases of unrest during
this time frame.
Irredentism is behind much of the nationalist unrest.
Irredentist demands figured prominently in 20 per-
cent of all incidents (see figure 7). This category is
almost the exclusive province of two ethnic groups,
the Crimean Tatars and the Armenians. Beginning in
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July 1987 the Tatars demonstrated in Moscow, Cen-
tral Asia, Krasnodar Kray, and the Crimean Peninsu-
la for the return of their Crimean homeland. The
Armenians, since late 1987, have repeatedly pressed
their demands for the unification of the Nagorno-
Karabakh region in Azerbaijan with Armenia.
Crowds of up to 1 million people have gathered in
Yerevan, while smaller numbers demonstrated in
Azerbaijan, Georgia, and the RSFSR.
Interethnic incidents (involving clashes between two
or more ethnic groups), the second-most-numerous
form of nationalist unrest, accounted for 10 percent of
all unrest and have occurred throughout the USSR.
Examples include a race riot in Moscow between
Russians and Central Asians, fighting between Che-
chens and Russians in Urengoj, Yakuts rioting over
Russians representing them in the government in
Yakutsk, and the Azeri massacre of Armenians at
Sumgait.
Cultural/historical nationalist unrest constituted 9
percent of all unrest in the USSR. Examples include
Armenians commemorating those who died during
the deportations from Turkey in 1915, members of the
unofficial group "Committee for the Defense of the
Ukrainian Language" demonstrating for the primacy
of their language and customs, Baltic ethnics protest-
ing Stalin's deportation of their countrymen to Sibe-
ria, Georgians petitioning to protect their culture, and
Jews commemorating the victims of the Warsaw
ghetto uprising. Among ethnic Russians, this form of
activism is apparent in many of the activities of
informal groups like "Pamyat" in various cities of the
RSFSR and "Otechestvo" ("Fatherland") in Sverd-
lovsk.
Demands for separatism or greater autonomy made
up about 9 percent of total unrest. Almost all the
incidents in this category have been initiated by
nationals of Baltic origin. In the past few months
Ukrainians have become increasingly active in pro-
moting an independent Ukraine. Given the republic's
tradition of nationalist opposition, particularly in the
Western Ukraine, a surge in separatist agitation there
may be in the offing.
63
Religious-oriented nationalist incidents form a small-
er category, making up approximately 2 percent of the
whole. Whether particular incidents are primarily
religious or nationalist in character is often difficult to
determine. For example, the Ukrainian Catholics, or
"Uniates," fight for legalization within the Soviet
system, yet some church members espouse Ukrainian
independence and most demand the primacy of
Ukrainian language and culture. Similarly, the Word
of Life Church and the New World Church in Estonia
fight for recognition within the system, but many of
their members support Estonian independence.
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Environmental/national demonstrations figured in
about 1 percent of all instances of unrest. Like the
religious/national variety, they are hard to categorize.
For example, are the Georgians protesting against the
Transcaucasian railroad to protect the environment or
because they perceive a new rail line will allow more
Russians to move into their republic? Probably the
best example of an unofficial group that fits into the
framework of the environmental form of nationalist
unrest is the Estonian Green Party whose goal ap-
pears to be a clean environment in an independent
Estonia.
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Nonnationalist Forms of Unrest
Half the cases of unrest in the Soviet Union since
January 1987 have been principally nonnationalist in
origin.' In contrast with the explosive growth of
nationalist unrest, the incidence of nonnationalist
unrest has climbed much more slowly. During the
first two quarters of 1987, nonnationalist unrest made
up roughly 60 percent of all incidents in the Soviet
Union, but, by the second quarter of 1988, it account-
ed for about 37 percent of all cases.
Incidents involving longstanding human rights is-
sues?including demands for the freedom of political
prisoners and those by nonofficial religious groups
It is often difficult to put individual incidents of unrest into easily
identifiable categories. Most cases outside the RSFSR, and many
within it, have at least some semblance of nationalism inherent in
them.
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Figure 8
USSR: Incidents of Unrest, by Objective,
January 1987-July 1988
Number of incidents
Nationalism
Humari rights
Political/
ideological
Emigration
Environmental
Economic
87
79
69
29
28
307
318755 9-88
(primarily Uniates, Hare Krishnas, and Pentacosta-
lists) for official status?represented about 15 percent
of all unrest (see figure 8). Incidents of human rights
unrest occurred most frequently within the cities of
the European USSR, primarily in Moscow and Lenin-
grad. Nonofficial groups having a human rights'
agenda and frequently organized by former political
prisoners?most of them released after Gorbachev's
ascension to power?have played a key role. Cross-
over into the category of nationalist unrest usually
occurs outside the RSFSR; the best example is that of
the Armenian demonstrations to free arrested dissi-
dent Paruir Ayrikyan, incidents which we have count-
ed as nationalist unrest.
About 13 percent of all unrest has involved political or
ideological issues other than those relating to ethnic
politics. Examples from this category include the
demonstrations in support of Boris Yel'tsin after his
resignation in late fall 1987, those associated with the
delegate selection to the party conference in late June
Secret
1988, demonstrations against the war in Afghanistan,
and demands for specific changes in the Soviet Con-
stitution.
Demands for emigration constitute about 11 percent
of total incidents of unrest. Although some might
argue that these demands represent a form of nation-
alism, those persons demanding to leave the Soviet
Union do so for various reasons, including religious
and artistic freedom, economic betterment, and the
desire to be with family members. While Russians,
Armenians, and Estonians have frequently demanded
the right to emigrate, Jewish demands still constitute
about 90 percent of all such incidents. Most have been
centered in Moscow and Leningrad, although a num-
ber have been recorded in other areas, primarily in the
Ukraine and the Baltic.
The purely economic form of protest?strikes, stop-
pages, and sabotage?has developed only slowly and
in the period considered in this article constituted 5
percent of all incidents. A large number of strikes and
work stoppages organized by the Crimean Tatars and
the Armenians to further their irredentist goals have
been counted as nationalist unrest. There is a strong
possibility, however, that economic unrest will become
much more important in the future, as indicated by a
broad range of reporting of widespread public dissat-
isfaction with many aspects of Gorbachev's economic
program and particular concern about the threat
economic reform poses to job and social security
benefits of the working population. Unofficial groups
associated with the economic form of unrest include
SMOT (the Free Interprofessional Union of Workers
largely suppressed by the KGB in the early 1980s) and
the Committee for the Democratization of Trade
Unions.
Purely environmental protest has also accounted for
about 5 percent of total unrest since January 1987.
Incidents of environmental unrest have consistently
occurred in all parts of the USSR. Some examples
include demonstrations in Irkutsk demanding the
cleanup of Lake Baykal, demonstrations and protests
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against the "barrage" (a series of levees and dikes
designed to end periodic floods) in Leningrad, and
antinuclear demonstrations in Armenia and the
Ukraine. As with the other forms of nonnationalist
unrest, the incidents in this category often had a
nationalist tinge, especially in Armenia, Georgia, the
Ukraine, and the Baltic states. If one adds the
incidents of nationalist environmental unrest to those
in this category, they still make up only somewhat
more than 6 percent of total incidents of unrest.
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Notes
Akhromeyev Comments on the Defense Council
Speaking publicly in New York in mid-July 1988, Chief of the General Staff
Marshal Akhromeyev reported that, following General Secretary Gorbachev's
lead, the Soviet Defense Council had formulated new Soviet military doctrine over
the last two years. He noted that both civilian and military officials belong to the
Council and said that the Soviet military prepares the bulk of papers and directives
for the Defense Council. He added, however, that the military played a subordi-
nate role in Council decisionmaking.
His observations on the Council's role in restructuring military doctrine are
consistent with our understanding that policy issues are debated and essentially
settled in the Council?leaving a largely pro forma review to the Politburo. During
his three-year tenure, Gorbachev has underscored the Council's importance several
times. For example, Gorbachev invoked his chairmanship of the Council?rather
than his role as General Secretary?when he proposed "delinking" INF from the
START and defense and space talks in early 1987. More recently, in his proposals
for the new governmental structure of the USSR, Gorbachev specified that the
leader who assumed the role of president (a post he apparently intends to claim)
would also chair the Defense Council.
The General Staff Chief's comments confirm some longstanding views on how the
Council functions?views that had been controversial because of the dearth of
direct evidence. Akhromeyev's disclosures imply that the Council meets regularly
and deals with developing trends in the security area?such as the redefinition of
Soviet military doctrine?on a systematic basis. We can add this to previously
confirmed reporting that the Council also meets for emergency situations.
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The Marshal's comments on the military's role reinforce our belief that the Soviet
General Staff functions as the Council's secretariat.
dating back to 1983 that the political leadership intended to reduce this special
role by creating a new civilian-military group to provide staff support to the
Council, but apparently this was not done. All the same, Akhromeyev is careful to
confirm that the political leadership dominates Council deliberations. Indeed,
under Gorbachev, probably all seven civilian members of the Council are full
Politburo members. The military members of the Council are probably Defense
Minister Yazov?only a Politburo candidate member?and Akhromeyev himself.
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Tatar Movement Muted
Moscow's ability to isolate and temporarily halt protests by Crimean Tatars
signals a major success in its efforts to control nationalist activism. Strikes by
Tatars in Krasnodar Kray, which began on 20 June 1988 following a Supreme So-
viet rejection of their key demands, came to an end on 4 August. Other strikes by
Tatars, called in various cities and towns of the Uzbek SSR, Kherson Oblast, and
the Crimea, did not enjoy the support of large sections of the Tatar population.
Most were either called off or of short duration. No large-scale Tatar demonstra-
tions have occurred since the latter part of June.
The Kremlin's response to the Tatars has been mostly to rely on the stick and very
little on the carrot. Although the Gromyko Commission approved limited Tatar
resettlement in the Crimea, wholesale relocation of Tatars to the Crimea and,
more important, the creation of a Tatar ASSR located there were ruled out.
Demonstrations by Tatars have been violently dispersed. Of these actions, the most
brutal was the demonstration of 26 June in Tashkent where thousands of Tatars
were reportedly beaten and hundreds arrested by the militia. Many Tatars actively
supporting the strikes in Krasnodar Kray and in other areas of the USSR have
been fired from their jobs, thus driving home to the Tatar population the economic
price they must pay for their actions. The authorities have kept Tatar dissidents
away from Moscow where they had previously staged demonstrations. Activists
have been confined to out-of-the-way areas in Uzbekistan where they can be more
effectively controlled.
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The Tatar movement is fragmenting under the pressure of the regime's hard line.
Tatars already living in the Crimea and Kherson Oblast have generally refrained
from backing their brethren's demands with actions, while those living in Central
Asia appear to have been cowed by Moscow's forceful response to any form of irre-
dentist protest. the movement 25X1
was splintering into moderate and extremist wings. At least one major leader of
the Tatar movement views the decision of 18 July by the USSR Supreme Soviet
not to make territorial boundary changes with regard to Nagorno Karabakh as a
further demoralizing factor among the Tatar population. 25X1
Kremlin leaders can take some comfort in knowing that their tactics have muted,
for the time being, one of the most vocal groups of nationalistic activists. The
failure of the Tatar movement to achieve its goals will also serve as Moscow's
warning to other nationalities that the regime is not powerless to deal with unrest.
On the negative side, Kremlin leaders, by not satisfactorily addressing Tatar
demands, have closed off any compromise solution, and this may lead to a more
radical Tatar movement sometime in the future. The Crimean Tatar movement's
ability to act as a major irritant to Moscow in the near term is questionable, but,
over the last 20 years, the movement has shown an ability to bounce back with un-
expected vigor.
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