USSR REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00992R000100210001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 27, 2016
• Document Release Date: March 11, 2013
• Sequence Number: 1
• Publication Date: October 1, 1988
• Content Type: REPORT

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USSR Review
October 1988
PROJECT NUM33ER
IWMJR
PAGE NUMBERS
'IC/TAL NUMBER OF COPIES
DISSEM DATE
EXTRA COPI
RECORD CENTER
JOB NUMBER
Secret
SOV UR 88-011X
October 1988
Copy
6 n 6
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JCLI CI
Intelligence
USSR Review
October 1988
The USSR Review is published by the Office of
Soviet Analysis.
Reverse Blank
Secret
SOV UR 88-011 X
October 1988
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Contents
Articles Baltic Drive for Autonomy Growing Stronger
Over the past several months the Soviet regime has shifted its policy
toward the nationalist ferment in the Baltic. General Secretary
Gorbachev is gambling that, while drawing the line at separatist
views, he can appease moderate nationalists by expanding republic
economic rights. The new policy risks whetting the population's
appetite for autonomy, allowing local party organizations to become
more responsive to popular demands than to Moscow, and allowing
an independence movement to gather strength.
Page
1
Soviet Perspectives on the Austria?European Community 7
Membership Issue
Austria's prospective application for entry into the European Com-
munity (EC) poses Moscow with a difficult policy dilemma. The
Soviets oppose the potential membership as a violation of Austrian
neutrality, yet they probably recognize that heavyhanded efforts to
thwart Austria's efforts could undermine Gorbachev's claims of
flexibility and "new thinking" in foreign policy. In our judgment,
the Soviets will almost certainly press Austria to find alternative
links to the EC short of full membership but are unlikely to place
their broader West European agenda at risk by taking threatening
political or military actions in the event that Austria decides to
apply for EC membership in 1989.
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Secret
SOV UR 88-01 IX
October 1988
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USSR-Libya: A Warming Trend
The June arms deal between Moscow and Tripoli?the first since
1985?and heightened Soviet public support for Muammar Qadhafi
mark an end to more than two years of cool relations. The shift in
Soviet support stems from steps Qadhafi has taken over the past
year that are more responsive to some of Moscow's concerns:
resuming payments on Libya's military debt to the USSR,
normalizing relations with Libya's neighbors, seeking a negotiated
settlement with Chad, and apparently ceasing arms shipments to
Iran.
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Conference Report: Gorbachev's "New Thinking" and the Arab- 19
Israeli Peace Process
In a daylong conference, sponsored by the CIA and the US State
Department, participants concluded that Moscow has managed to
stake out a claim to participation in the peace process?in part
because of "new thinking" but primarily because of events in the
Middle East. Conference members agreed that Moscow still has a
range of options available to continue new thinking in its policy
toward Israel. Participants also believe that, from the Arab
perspective, Soviet participation in the peace process is a result of
the Arabs' perception of the balance of forces in the region.
Economic Aspects of Ethnic Unrest in Nagorno-Karabakh
Economic neglect contributed to the ethnic unrest that has
repeatedly disrupted production in the small Nagorno-Karabakh
Autonomous Oblast during 1988, and real or perceived economic
discrimination may play a role in any future similar disruptions.
Moscow's response consisted of a 400-million-ruble economic
development program for the period 1988-95. If unrest occurs in
other nationality areas with larger populations and greater economic
importance, the price tag of a comparable bailout program would be
much greater and would place a much larger strain on the Soviet
budget.
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iv
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Soviet Navy Day Statements: Uneasy About Gorbachev
Statements published in connection with Soviet Navy Day in July
1988 suggest that some Soviet naval officers are uneasy about the
potential implications of key policies of the Communist Party of the
Soviet Union. Senior officers have expressed concern about the
impact of democratization and glasnost on morale and discipline,
and more junior officers are apparently willing to question whether
the party is committing enough resources to the military.
Moscow's Position on Military Aid to Nicaragua
35
The Soviet commitment to provide military aid to the Nicaraguan
Government appears strong and probably will remain so at least for
the near future. Soviet arms shipments have declined in 1988, but
we do not believe that the dip in military assistance represents any
lessening of Moscow's willingness to support Managua. The Soviets
continue to insist that any cutback in their military aid to Managua
must be matched by a US cutback in arms deliveries to Central
America.
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Notes
Foreign Policy Impact of Personnel Changes 43
Soviet Meat Production: Perceptions and Fact
46
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Articles
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Baltic Drive for Autonom
Growing Stronger
Official tolerance for massive demonstrations support-
ing autonomy for the three Baltic republics, the
acquiescence of the party leadership of the republics
in many of the demands being made by nationalist
groups, and Moscow's approval of economic self-
management for the region?all indicate that the
Gorbachev regime has adopted a new policy toward
nationalist ferment in the Baltic. Gorbachev is gam-
bling that he can appease moderate nationalists by
significantly expanding republic economic rights
while drawing the line at separatist views. The new
policy risks whetting the population's appetite for
autonomy, allowing local party organizations to be-
come more responsive to popular demands than to
Moscow, and allowing an independent movement to
gather strength.
The driving force behind the recent surge of national
self-consciousness and political activism in the Baltic
is a longstanding but growing resentment of what is
seen as a policy of Russian colonialism. Baltic nation-
alists claim that Moscow is plundering their re-
sources, poisoning the environment, forcing them to
bankroll economic inefficiency elsewhere in the
USSR, and flooding the republics with largely Rus-
sian immigrants who threaten the ethnic survival of
the indigenous nationalities.
The reaction has included numerous large demonstra-
tions and rallies, the formation of groups ranging
from popular fronts supporting perestroyka?now or-
ganized in all three republics?to formerly under-
ground secessionist groups. Speakers at mass
' Information available as of 10 October 1988 was used in this
article.
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meetings, including party members, have demanded
that Moscow allow "genuine" sovereignty including
the right to secede. The more radical groups are
calling for full political independence, while moder-
ates are focusing on the less devisive issue of economic
reform, arguing it would "eliminate national extre-
mism." The local media in all three republics have
begun to pressure local officials to support autonomy.
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Beleaguered Local Leaders
Local party organizations find themselves facing con-
flicting pressures from both above and below. Moscow
has sent mixed signals as reflected in the central press
debate over the legitimacy of the 1939 Molotov-
Ribbentrop Pact that led to the region's forced annex- 25X1
ation. Moreover, increasing local nationalism has
spawned a Russian backlash in all three republics,
allegedly with tacit support from party conservatives.
In August, virulent anti-Estonian leaflets attributed
to Russian extremists circulated in Tallinn and Vilj-
handi. 25X1
Party leaders' efforts to cope with rising popular ex-
pectations have strained unity and resulted in dramat-
ic policy shifts over the last few months. After report-
edly telling party officials that "power is slipping from 25X1
their hands" and threatening to confront "the bour-
geois nationalists" in mid-June, Latvia's then first
secretary Pugo flip-flopped and adopted several con-
troversial points from Latvia's People's Front pro-
gram. Both the party boss, Yanis Vagris, and the
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SOV UR 88-011 X
October 1988
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Groups Pressing Autonomy in the Baltic
Popular Fronts
The People's Fronts, which represent a fairly broad
cross section of society, are primarily concerned with
expanding the rights of local populations in
determining the political, economic, social, and
cultural development in the republic. They all want
to achieve "true" regional economic autonomy,
establish the republic mother tongue as the official
language, create a republic citizenship (based on
residency requirements and knowledge of the
indigenous language), limit Russian immigration,
and protect the environment. The fronts demand the
creation of republic army units and independent
relations with the United Nations. All three favor
maintaining some distance from the Communist
Party, although about half their members belong to
the party. They also express strong support for
Gorbachev's policies. All three organizations have
sponsored numerous demonstrations in the last few
months and have pressed for repeal of the new USSR
Supreme Soviet decree on demonstrations.
Estonian People's Front, founded last April, calls for
the right of self-determination not to be exercised in
the context of radical perestroyka but maintained as
a right. It now has a membership of over 50,000.
Lithuanian Movement for Perestroyka, established on
3 June, now has 100,000 members; its supporters are
primarily mainstream intellectuals and reform-
minded party officials. Its members defied an official
ban on demonstrations in gathering a reported 50,000
to 100,000 protestors at the Ignalina nuclear power
plant earlier in October.
Informal Latvian People's Front, the last to form,
claims over 130,000 members who represent a wide
spectrum of interest groups, including Russians and
party members. It closely resembles the Estonian
Front with which it probably has close contacts. It
calls itself "informal" to show that it is not affiliated
with the government or the party.
Dissident and Separatist Groups
Sensing a more hospitable atmosphere in the Baltic,
several separatist groups?new and revitalized?have
come into the open with their proclaimed goal of
reestablishing independence in the Baltic republics.
These dissident-led, embryonic independence parties,
however, are beginning to lose their separate
identities, as their demands are taken up by the
Popular Fronts and even local party organizations.
These groups, however, go beyond the fronts in
demanding the departure of all Russians and a
complete halt to external immigration of workers.
Like the People's Fronts, they ask that Baltic
citizens' military service be limited to their respective
republics. They also have staged demonstrations
demanding the withdrawal of Russian troops from
the three republics and the use of only the local
language at military bases.
newly elected president of Latvia, Anatolis Gorbun-
ovs, who is a member of the People's Front, have
endorsed the Front's activities, although Vagris is
more cautious about some points of its program.
Lithuanian party leaders have also felt their growing
isolation from the populace. They abandoned their
previous policy of resisting change and allowed the
largest and most radical demonstrations to protest the
Molotov-Ribbentrop Pact that led to the regime's
forced annexation to the USSR.
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The conservative first secretary in Estonia, Karl
Vayno, was sacked by the party in June 1988 because
he was perceived to be too inflexible on reform, and
the reformist wing now appears ascendant. Estonian
intellectuals claimed that, if Vayno had not been
forced out of office, "we would have had an explo-
sion." One of the architects of the economic autonomy
platform asserted that Estonia not only faced a
political vacuum because the old party leadership had
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Estonia
The Estonian National Independence Party of about
102 members, which was viciously attacked by the
Soviet media and whose leaders were forced out of
the country or jailed when it first emerged in
February 1988, held its first formal meeting on
20 August. The Society for the Preservation of
Antiquity, whose primary goal is the preservation of
Estonian culture, has Jewish, Armenian, and
Swedish sections that pursue their own cultural
goals. The society's interests run beyond cultural
concerns, however. In July it organized a 10,000-
strong demonstration around the perimeter of a
military base in Tartu demanding its withdrawal.
Latvia
The Latvian National Independent Movement,
formed in June 1988, is led by a former Latvian party
official who was expelled from the Communist Party
in 1959. The Helsinki-86 human rights group, whose
founders have largely emigrated under duress since
its formation in the summer of 1987, reemerged at
the rally of 23 August in Riga with about 60
members and many behind-the-scenes supporters.
Lithuania
The Lithuanian Freedom League, an underground
dissident secessionist group, announced in July 1988
that it would now work openly to reestablish
Lithuanian independence in a confederation of the
European states. It organized a hunger strike in
August for the release of political prisoners.
lost its grip but also was on the brink of a "political
confrontation." He went on to add that members had
left the party in droves in winter and spring 1988.
All three republics have endorsed a radical program
of local autonomy partly to maintain a degree of
credibility with their populace. The September Esto-
nian Central Committee plenum, for instance, sup-
ported economic and political autonomy, Estonian as
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the official language, and separate Estonian citizen-
ship. It also elected representatives of the informal
popular movement, including a member of the Peo-
ple's Front, to the party Central Committee Bureau.
The Estonian People's Front became the first newly
formed nationalist movement to be officially regis-
tered with party approval at the People's Front Con-
gress held on 1 and 2 October. An Estonian party
emissary has reportedly taken soundings in Sweden
and possibly Finland about setting up Estonian con-
sular representation. The Latvian Popular Front Con-
gress?which attracted over 130,000 supporters?was
held in early October, and the Lithuanian Front
planned to hold its founding congresses also in Octo-
ber. In the past several weeks, the Latvian and
Lithuanian Supreme Soviets?to preempt expected
demands by the People's Fronts?made Latvian and
Lithuanian, respectively, the official languages of the
two republics and legalized their prewar flags as
cultural symbols. In Lithuania the Council of Minis-
ters recently proposed the transfer of all industry,
agriculture, and research to republic ministers and
recommended the abolition of all industrial groupings,
such as railways, that cut across republic borders.
Moscow's Problem
Ambivalence over these issues probably goes all the
way to the top of the party. Some aspects of the Baltic
demands fit Gorbachev's reform strategy. The Gener-
al Secretary and other Politburo members, like Chair-
man of the Council of Ministers Ryzhkov and eco-
nomics secretary Slyun'kov, have endorsed republic
self-financing as an acceptable model. In a speech to
the Estonian People's Front Congress, the republic
party chief?having just returned from a meeting
with Gorbachev?relayed Gorbachev's support and
invited the Popular Front to put up its own candidates
for election. Gorbachev's Politburo ally Yakovlev
appeared to give a green light to the Baltic last month
by noting that Lenin believed a federal union required
only a common defense and foreign policy, leaving the
rest to the republics. Moscow's apparent go-ahead for
the recent demonstrations and USSR Council of
Ministers approval of economic autonomy for the
Baltic republics, Belorussia SSR, Sverdlovsk Oblast,
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and Tatar ASSR, announced in mid-September, sug-
gests that this less alarming view has come to prevail. Counterreaction Among Russian Minorities
The more orthodox members of the Politburo, such as
"Second Secretary" Ligachev and former KGB chair-
man Chebrikov?who have publicly suggested that
abuses of reform could lead to social instability and
ultimately undermine the Communist Party?may be
more concerned. Their past views also suggest they
might sympathize with the local Russian minorities
who have criticized the Popular Front. Last week's
leadership changes, however, make a crackdown by
Moscow less likely, unless the situation radicalizes
further. Ligachev's key role as ideology chief has been
altered, Chebrikov has been shifted from the KGB
post, and Secretary Vadim Medvedev?who reported-
ly supports autonomy for the Baltic republics?has
been promoted.
The regime has drawn up some limits to ensure that
things do not get out of control. All three republic
first secretaries met with the Baltic Military District
commander to discuss the nationality issue following
the 23 August demonstrations, and a special KGB
unit has reportedly been sent to Estonia to deal with
growing nationalism. Central media criticized the
"demagogues" and "extremists fomenting separatist
sentiments" inside the People's Fronts who go beyond
support for perestroyka. In October, the police, beat-
ing and arresting those who resisted, broke up an
unsanctioned demonstration sponsored by a secession-
ist group in Vilnius. Even Yakovlev warned Latvian
intellectuals that the mass media cannot set itself up
in opposition to the party.
The regime would no doubt like to prevent coordinat-
ed actions by nationalists in different republics that
have already begun to take shape. During the Esto-
nian People's Front Congress, messages of support
were read from similar organizations in Latvia, Lithu-
ania, Armenia, Moldavia, Belorussia, and the
Ukraine. The US Embassy has also learned that
representatives from Armenia, Georgia, Ukraine, and
the three Baltic republics attended a "coordinating
council" of independence movements that met in Riga
late last month.
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Russians and other nonindigenous nationalities in the
region?who range from about 20 percent in
Lithuania to 52 percent in Latvia?have recently
come to identify reform as against their interests. In a
reaction to the Estonian People's Front, longtime
Russian-speaking residents of Tallinn organized a
group called the International Movement. Similar
movements are reported in Latvia and Lithuania. One
report claims that former party boss Vayno organized
the Estonian movement when he realized that his
political position was at risk, allegedly to create
ethnic conflict to discredit the reform wing of the
party organization. the
Internationalist Movement is a KGB operation. Its
leader is a Jewish intellectual, reflecting the
movement's conscious outreach for a broader
coalition of non-Estonians who share Russian
concerns about Baltic nationalism.
there could be Sumgait-like riots in Estonia if the
linguistic demands of the Popular Front were carried
out.
Russians living in Estonia have publicly expressed
their fears that Estonia will talk itself out of the
Soviet Union. A televised debate in Estonia revealed
that inflammatory leaflets distributed in August
called for all non-Estonians to destroy Estonian
nationalists in a bloody pogrom. The leaflets were
signed by the "internationalists," but an Estonian
prosecutor has denied publicly that there was any
connection between them and the Internationalist
Movement.
If the radicalization of the regional political scene
continues, it seems almost certain that Moscow,
however reluctantly, will step in more firmly. How
tolerant Moscow is prepared to be in an effort to ride
the tide of Baltic autonomist sentiment may become
somewhat clearer in the next few weeks, when Estonia
will present a concrete proposal for the broad concept
of republic self-financing to the USSR Council of
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Ministers. The Lithuanian People's Front Congress to
be held later this month should further clarify the
relationship between the front and the Communist
Party. Finally, a critical indicator will be whether
People's Front candidates will be allowed to register
for local elections in March.
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Soviet Perspectives on the
Austria?European Communit
Membership Issue
The question of Austria's relationship with the Euro-
pean Community (EC) has long been a sensitive issue
for Moscow because the Soviets consider the EC a
backdoor to the NATO Alliance. Consequently, they
believe Austria's political and, to a lesser degree,
military independence could be jeopardized by full
membership in the EC. Moscow also is concerned that
Austrian accession could establish a precedent for
other European neutrals?Sweden and Switzerland,
for example?and ultimately upset the postwar bal-
ance in Europe. Apart from these issues, Moscow also
wants to ensure that Soviet sensitivities continue to be
a part of Vienna's calculus when it considers major
policy issues.
Recent Soviet Policy Toward Austria
Since his accession to power in 1985, Gorbachev has
emphasized Moscow's "new thinking" and flexibility
to demonstrate to the West Europeans the USSR's
trustworthiness and reliability as a partner in Europe-
an regional and security issues. In the case of Austria,
this flexibility has been manifested in a more re-
strained Soviet response to Austrian moves that previ-
ously had elicited strong vitriolics from the Kremlin.
In response to renewed Austrian discussions about
acquiring defensive missiles, for example, Moscow has
repeated its longstanding argument that missile ac-
quisitions are unnecessary and incompatible with
Austria's approach to security, but thus far it has
avoided outright opposition to such a purchase.
military defense organization; he added, however,
that if Austria's role applied only to economic and
political matters, it could, in his opinion, find a
"common denominator" with the principles of neu-
trality?as long as European security in the broader
sense was taken into consideration. These comments
were interpreted in Vienna as a sign of internal Soviet
disagreement on this issue and as a signal that
Gorbachev's "new thinking" might provide sufficient
flexibility for Austria to enter the EC with tolerable
frictions in Soviet-Austrian relations. The Soviet Am-
bassador to Austria, Gennadiy Shikin, quickly moved
to correct Vienna's "misperception"; that same
month, he told Austrian Foreign Minister Mock,
according to US Embassy reporting, that Shenayev's
comments did not represent the official Soviet posi-
tion.
Other Soviet spokesmen have sought to dispel the idea
of internal differences and have reiterated Moscow's
opposition to Austrian EC membership:
Although the Soviets have also hinted at some flexi-
bility regarding Austria and the EC, Moscow's policy
on this issue has more clearly reflected the tension
between "new thinking" and enduring objectives.
Indeed, throughout most of 1987 Moscow sought to
emphasize its "understanding" of Austrian economic
goals, culminating in the December 1987 remarks of
Vladimir Shenayev, Head of the Center for West
European Studies of the World Economics and Inter-
national Relations Institute (IMEMO), to Western
journalists. Shenayev stated that Austrian member-
ship would be unthinkable if the EC becomes a
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In May 1988, Yevgeniy Primakov, an academic
with close ties to the leadership, said in a press
interview that he saw no reason to give up Soviet
reservations against Austria's EC membership. He
represented this as the official Soviet opinion,
shared by his Institute without reservations: "Let us
be frank. I do not think that if Austria were to join
the EC?hypothetically?the EC would become 25X1
more neutral. I am much more convinced that
Austria's independence would disappear."
? Gennadiy Gerasimov, the chief spokesman for the
Soviet Foreign Ministry, said in a prepared press
statement in May 1988: "Austria's membership in
the European Community would be incompatible
with her permanent neutrality sealed in the special
Constitutional Act and the State Treaty of 1955
[sic] ... The majority of members of this Communi-
ty are also members of NATO or the Western
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European Union. [Austrian membership would
oblige it to follow] all decisions taken in the frame-
work of this Community."
? In a May 1988 press conference in Vienna, Ambas-
sador Shikin stated: "Permanent neutrality was laid
down in the Moscow Memorandum, which was
signed by the Governments of Austria and the
Soviet Union before the State Treaty. The Memo-
randum contained expressly what was later ap-
proved as a law by Austria, namely permanent
neutrality modeled on the Swiss example. We are
not opposed to Austria's move toward the EC and to
its effort to solve problems in connection with the
internal market. But membership is something dif-
ferent altogether."
? The Soviet Ambassador to Switzerland in June
1988 reportedly cautioned a high Swiss economic
official about believing that there are competing
viewpoints in Moscow regarding Austria's possible
adhesion to the EC, stating that the Soviet Govern-
ment is united in its opposition to this move.
affiliation while avoiding the political-military de-
liberations dominated by the EC's NATO mem-
bers. In light of the recent establishment of rela-
tions between the EC and CEMA, this outcome
would suit the Soviet inclination toward linkage
between blocs without the neutral nations becoming
more politically or militarily tied to the Western
"camp."
? "Special" membership. Soviet statements imply
that Moscow would not object?in theory?to an
Austrian membership in the EC that formally
removed it from political and military-oriented ac-
tions (such as boycotts). The stated Soviet concern
about the increasing orientation of the Community
toward political-military issues, coupled with state-
ments by EC officials that no "special" individual
memberships will be considered, brings into ques-
tion the viability of this option as a realistic Soviet
policy goal.
Although Soviet policy statements so far have not
articulated specific alternatives to a direct Austrian
application for EC membership, Soviet statements
suggest that Moscow has definite views on possible
alternatives short of full membership. In likely order
of preference, these include:
? Maintenance of the status quo. The Soviets almost
certainly recognize that the maintenance of Aus-
tria's current level of economic cooperation with the
EC is not a realistic Soviet policy goal. Austria is
already actively moving its economy on a parallel
course with the EC?a domestic Austrian decision
that Moscow has little motivation and even less
leverage to prevent.
? A European Free Trade Association (EFTA) agree-
ment with the EC. Soviet comments indicate that
Moscow might consider support for a unified EFTA
(as opposed to separate individual members') agree-
ment with the EC along the lines of current inter-
bloc discussion as the most attractive of its realistic
policy options. From Moscow's perspective, this
would allow European neutrals like Austria indi-
rectly to achieve some economic benefits from EC
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Full membership (with attached neutrality asser-
tions). High-level Soviet statements clearly indicate
that Moscow remains opposed to Austria's joining
the EC, despite the impression of many Austrians
that the Soviets have not "made up their minds" on
this question.
Should Austria eventually join the EC under any of
these scenarios, the Soviets, in spite of their often
articulated reservations, could benefit economically
from Austria's increased access to controlled technol-
ogy and equipment: Austria has long been a lucrative
target for technology diversions to the Eastern Bloc.
Although Vienna has recently agreed to tighten its
export licensing system to encompass all exports of
goods appearing on the Coordinating Committee for
Multilateral Export Controls (COCOM) list, it is too
early to judge the extent to which it will be able to
slow these diversions.
Assessing Soviet Leverage
Moscow is seeking to influence the Austrian Govern-
ment by using various policy levers. First, Soviet
comments are invariably expressed as the concern of a
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Austrian Policy
Austria's coalition government will decide in 1989
how to assure participation in the European
Community's internal market. Although both
coalition parties want to take the lead in supporting
the increasingly popular option of accession, Foreign
Minister Mock 's People's Party supports a more
accelerated timetable than Chancellor Vranitzky's
Socialists, who are advocating a somewhat slower
approach in order to explore potential drawbacks
thoroughly before applying. In our view, however,
even though concern remains high about protecting
Austria's neutrality and social welfare standards, a
consensus is emerging in support of Mock 's efforts to
apply in 1989.
Political, business, and labor leaders are looking
ahead increasingly to the establishment of the
Community's internal market in 1992, and they are
concluding that accession is vital for Austria's
economic prosperity, despite the painful adjustments
that the industrial and agricultural sectors will have
to make. Although Austrian officials deny that
Vienna's constitutionally mandated neutrality will be
a stumblingblock, they are nonetheless seeking to
clear potential impediments from their path. Some
officials talk of applying during the last half of 1989
when France?a signatory to the 1955 Austrian State
Treaty?holds the EC presidency. They calculate
that Paris's acceptance of the application would
signal a French conviction that membership is
compatible with the Treaty's provisions and would
possibly moderate Moscow's objections. According to
US Embassy officials, Great Britain, another Treaty
signatory, will probably support Vienna, despite
private doubts that EC membership is compatible
with Austrian neutrality. Negotiations for admission
would last several years, and, during that period,
Vienna would continue its policy of strengthening ties
to the Community bilaterally, through EFTA and by
adopting EC rules.
9
State Treaty signatory for preserving Austrian neu-
trality. Indeed, as signatory to the 1955 Treaty and as
an occupying power in the decade preceding the
Treaty, Moscow has long asserted its right to address
Austrian issues that affect perceived Soviet security
interests.
The Soviets have also raised Austria's international
credibility as a neutral as a lever to counter Vienna's
claims that membership in the EC is a domestic issue.
The Soviet Ambassador to Austria, for example, in a
February 1988 conversation with the US Ambassa-
dor, reportedly asserted that the way Austria defined
its neutrality was not a purely internal decision.
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Moscow has also begun to discuss its concern over the
"preservation" of Austrian neutrality with other Eu-
ropean neutrals. These discussions seek both to dis-
courage similar bids for EC membership by other
European neutrals and to signal Vienna that Moscow
is prepared to carry its arguments to other neutrals?
and, perhaps, to the other Western governments.' The
Soviets have also raised the prospect of more stringent
measures should Austria seek application to the EC.
Among the additional policy actions Moscow may be
considering are the following:
? Calling for a meeting of the State Treaty signatories
(France, United Kingdom, United States, USSR) to
"preserve" Austrian neutrality. The Soviet Ambas-
sador to Switzerland recently told a high Swiss
official that Moscow was prepared to convene such
a meeting, according to US Embassy reporting.
? Pressuring other EC members to resist an Austrian
application. The Soviet Ambassador in Switzerland
also warned that West German support for an
Austrian membership bid would sour Soviet-FRG
relations "for 20 years."
' Although neither Sweden nor Switzerland is considering a bilater-
al application for membership in the EC, Soviet pronouncements
about the incompatibility of the status of neutrality with any
political-economic action raise concern within these countries about
future Soviet "judgments" that might be directed at them.
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Legal Basis for Soviet Arguments Against Potential
Austrian Membership in the European Community
The Soviet Government has argued that three 1955
documents substantiate its claim of the legal "incom-
patibility" of Austria's international status with
membership in the European Community: the Soviet-
Austrian Agreement, the Anschluss prohibition in the
State Treaty, and the Austrian constitutional law
declaring perpetual neutrality. In spite of Soviet
assertions over the years that these articles demon-
strate the legal incompatibility of an Austrian mem-
bership in the EC, Moscow has been unable to gain
widespread acceptance of its interpretation.
Soviet-Austrian Agreement, 15 April 1955:
2.
I. [Austria agreed to] make a declaration in a form
which will obligate Austria internationally to
practice in perpetuity a neutrality of the type
maintained by Switzerland.
Austrian State Treaty, Article 4:
1 The Allied and Associated Powers declare that
political or economic union between Austria and
Germany is prohibited. Austria fully recognizes its
responsibilities in this matter and shall not enter
into political or economic union with Germany in
any form whatsoever [emphasis added].
In order to prevent such union Austria shall not
conclude any agreement with Germany, nor do any
act, nor take any measures likely, directly or
indirectly, to promote political or economic union
with Germany, or to impair its territorial integrity
or political or economic independence. Austria
further undertakes to prevent within its territory
any act likely, directly or indirectly, to promote
such union and shall prevent the existence, resur-
gence, and activities of any organizations having
as their aim political or economic union with
Germany, and Pan-German propaganda in favor of
union with Germany.
Constitutional Law Declaring Austrian Neutrality,
26 October 1955, Article 1:
1. For the purpose of the lasting maintenance of her
independence externally, and for the purpose of
the inviolability of her territory, Austria declares
of her own free will her perpetual neutrality.
Austria will maintain and defend this with all
means at her disposal.
2. For the securing of this purpose, in all future
times Austria will not join any military alliances
and will not permit the establishment of any
foreign military bases on her territory.
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? Imposing economic sanctions against Austria:
Austrian officials claimed in the past that Moscow
had used economic threats?specifically the threat
of increased energy prices and canceled construction
projects?to express its disapproval of potential
Austrian economic policies.
On balance, however, the Soviets probably recognize
that hardball tactics and a threatening posture toward
Austria will negatively affect their interests elsewhere
in Western Europe as well as US-Soviet relations. A
ham-fisted approach could quickly undermine the
credibility of Gorbachev's claims of new thinking and
flexibility, particularly in West Germany, and thus
potentially jeopardize important Soviet initiatives
aimed at creating a less threatening security
environment in Europe. In addition, Moscow
presumably would consider the possibility that
Austria might join the EC irrespective of Soviet
pressures, thus challenging the utility of employing
strong-arm tactics in the first place.
Moreover, Soviet arguments are somewhat
undermined by the recent establishment of EC-
CEMA relations. Although the Soviets regard the
EC-CEMA issue as completely divorced from the EC-
Austria question, they would be hard-pressed to
convince European publics that Austria's attempt to
join an organization with which the East Bloc itself
has formal relations is somehow threatening to the
Soviet Union. Finally, Soviet legal arguments may not
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offer much hope for overcoming a potential Austrian
membership bid: Moscow's conception of the
obligations of a neutral in the social-political s here
are not widely accepted in international law
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Outlook
During separate visits to Moscow by Foreign Minister
Mock and Chancellor Vranitsky in recent weeks,
senior Soviet officials restated their strong
reservations over the EC issue. In his talks with Mock,
for example, Foreign Minister Shevardnadze
reportedly stated that the USSR would be "disturbed
and alarmed" if Austria were to accede to the EC.
Having received assurances of Vienna's unwavering
commitment to neutrality, however, Moscow will
probably maintain its present policy course and
closely monitor both the Austrian and the EC position
on potential membership. Ultimately, as long as new
thinking holds sway, we believe Moscow would not
view Austrian accession to the EC as sufficiently
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could jeopardize its broader agenda in Western
Europe.
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USSR-Libya: A Warming
Trend
The probable arms deal in June 1988 between Mos-
cow and Tripoli?the first since 1985?and increased
Soviet public support for Mu'ammar Qadhafi mark
an end to more than two years of cool relations. The
shift in Soviet support appears to have stemmed from
steps Qadhafi has taken over the past year that are
more responsive to some of Moscow's concerns: re-
suming payments on Libya's military debt to the
USSR, normalizing relations with Libya's neighbors,
seeking a negotiated settlement with Chad, and ap-
parently ceasing arms shipments to Iran.
The Cool Spell
The Soviet-Libyan relationship has had its ups and
downs since its inception in the early 1970s but
reached its nadir after the US-Libyan clashes in
March and April 1986. The US-Libyan confrontation
brought the differences between Libya and Moscow
into sharper focus.
Soviet arms deliveries, which had been declining since
1979, dropped even more sharply after the US-Libyan
clash. Deliveries that had totaled $835 million worth
of equipment in 1985 dropped to $350 million by 1987
(see figure 1). Moscow consistently turned down Liby-
an arms requests, according to the US Embassy in
Moscow, and confined itself to delivering spare parts
and refurbishing equipment. The key factor behind
the slowdown seems to have been Libya's inability
13
Figure 1
Estimated Value of Soviet Military
Deliveries to Libya, 1979-87
Billion US $
2.5
2.0
1.5
1.0
0.5
0
1979 80 81 82 83 84 85 86 87
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and/or unwillingness to pay its military debt, which
totaled approximately $1-2 billion in 1986. According
to an Algerian official, in conversations with US
Embassy officials in Moscow, Tripoli's mishandling of
Soviet advanced weaponry during the US airstrikes
may also have already affected Soviet enthusiasm.
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In a move that soured the relationship further, Qa-
dhafi, apparently incensed over Moscow's determina-
tion that Libya clear up its military debt before
concluding a new arms deal, increased efforts to
diversify his sources of weapons?looking particularly
to China, Brazil, and Eastern Europe,
Probably in another attempt to coerce
Moscow into providing additional military hardware
despite disagreement over the debt, Tripoli cut back
sharply on the oil it was providing the Soviets as
payment for previously delivered arms.
? Libya's transfer of Soviet-made Scud surface-to-
surface missiles to Iran, which began in 1985,
complicated the Kremlin's relations with Iraq and
other Arab Gulf states.
Disagreement over regional and international ques-
tions added to Soviet-Libyan strains. The Kremlin
was angered by Qadhafi's penchant for taking actions
that strained relations between Moscow and the West
and undermined Soviet policy in the Middle East:
.
Although they had offered restrained support for
Tripoli's intervention in Chad, the 15-year-old con-
flict dissatisfied the Soviets,
because it aggravated relations
with the West. According to an Algerian Govern-
ment official, in conversations with US Embassy
officials in Moscow, in early 1987 the Soviets began
to advise Libya to avoid any action in Chad that
would increase the French presence and heighten
the possibility of a US threat to Libya from the
south. Soviet Foreign Ministry spokesman Gerasi-
mov publicly expressed satisfaction with the late
1987 cease-fire sponsored by the Organization of
African Unity and called on "all" parties in the
conflict to show restraint and prudence.
? Qadhafi's policy toward the Palestinians and Tripo-
li's isolation from the Arab world complicated Mos-
cow's efforts to promote Arab unity. In 1983,
Tripoli withdrew recognition of PLO chief Arafat
and his Fatah faction, giving military, financial, and
political aid to more radical Palestinian factions
bent on ousting the PLO chairman. Qadhafi also
refused to back Moscow's proposal for an interna-
tional conference to resolve the Arab-Israeli
conflict.
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? Some of Libya's terrorist actions, while possibly
benefiting the Soviet Union when targeted against
states friendly to the United States, placed Moscow
in the awkward position of having to rationalize
Qadhafi's actions to the world.
Warming Relations
Despite this nadir in Libyan-Soviet relations, the
friendship has steadily improved in 1988. Most signif-
icant, the Soviet-Libyan military relationship appears
to be back on track. In June, Moscow agreed to
provide Libya up to $1.4 billion worth of arms,
including SU-24 light bombers and MIG-29 fighters,
The deal also
includes advanced attack helicopters, air defense ra-
dars, and air-to-air and air-to-ground missiles.
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The warming in Soviet-Libyan relations was probably
also facilitated by Qadhafi's efforts to strike a more
moderate pose internationally:
? Tripoli claims to be seeking a negotiated settlement
to its conflict with Chad. During the Organization
of African Unity (OAU) summit held in Addis
Ababa in May 1988, Qadhafi announced from
Tripoli that Libya recognizes the government of
President Habre and desires to settle all existing
differences between the two states. That same
month,
Qadhafi urged then OAU Chairman Kuanda to
persuade Habre to meet with him and discuss a
peaceful settlement to the Aozou Strip dispute.
Soviet Foreign Minister Shevardnadze, in a May
statement released by TASS, hailed Qadhafi's "rev-
olutionary steps" toward Chad, pointing out that
they are totally compatible with the interests of the
Libyan people, the Chadian people, and the African
Continent. Moscow is even attempting to take some
credit for Qadhafi's moderation on the Chad issue
by claiming that it is representative of new thinking
in the world.
? Tripoli has also taken several steps that advance
Moscow's efforts to forge Arab unity. Qadhafi has
normalized relations with his neighbors in North
Africa and is actively promoting Maghreb unity. In
June 1988, Soviet Foreign Ministry spokesman Ger-
asimov praised Tripoli's conciliatory moves toward
Tunisia and Algeria. At the Arab league summit in
June, Qadhafi did not actively oppose the group's
call for an international conference to resolve the
Arab-Israeli dispute.
? Qadhafi has also developed ties to other Arabs who
are friendly to Moscow. He met several times with
PLO chief Yasir Arafat over the past year and has
normalized relations with Iraq. There has also been
no identifiable Libyan transfer of Soviet-made
weapons to Iran over the past year.
? Tripoli appears to be trying to reverse its interna-
tional image as a terrorist state. In mid-April 1988,
Qadhafi sponsored a seminar to clarify the concept
of terrorism. In June, Libya reacted sharply to US
State Department briefings linking Libya to in-
creased terrorist attacks on Americans in 1988 by
Secret
issuing a strong denial of any Libyan connection.
Moscow has supported the Libyan line on its
disengagement from terrorism. Shortly after the
US briefings in June, Soviet Foreign Ministry
spokesman Gerasimov took Washington to task for
accusing the Libyans of terrorist involvement.
Outlook
Despite this warming in Soviet-Libyan relations, the
friendship probably will continue to be limited. Mos-
cow is likely to remain cautious and to keep a certain
distance from Qadhafi. It realizes that he could
quickly revert to a more radical foreign policy, once
again complicating Soviet strategy in the region and
leading to unwanted friction with the United States.
To avoid being drawn into a military clash with the
United States and setting back Soviet efforts to woo
Algeria and Egypt, Moscow, in our view, will refrain
from committing itself to Libya's defense.
The USSR's unwillingness to commit itself to Libya's
defense will probably continue to prevent the signing
of the friendship and cooperation treaty the two
announced they had agreed to in principle in March
1983. The Soviets are probably ready to sign an
accord similar to their other friendship and coopera-
tion treaties with various Third World nations, which
do not include security commitments, but Qadhafi in
the past has balked at embracing the Soviets without
such commitments. If he felt threatened and isolated,
however, Qadhafi might be "forced" to sign such a
treaty.
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In an attempt to give the appearance of greater Soviet
willingness to defend Tripoli, Qadhafi may allow
increased Soviet access to Libyan military facilities,
such as the Port of Tobruk and the Umm Aitiqah
airfield. Although Moscow probably wants increased
military access?expanded use of Tobruk would en-
able the Soviet Navy to refuel and resupply its ships
in peacetime and reduce the requirement for rede-
ploying naval auxiliaries to the area?we believe it
will move cautiously to avoid giving the impression
Qadhafi desires. Even if Qadhafi were to grant the
Soviets greatly expanded use of the Port of Tobruk, he
probably would place limits on their presence and
Moscow would have to weigh the possible adverse
effects an expanded military presence would have on
Qadhafi's neighbors and the increased risk of being
drawn into a conflict with the United States. Also, the
Soviets could never be sure that the unpredictable
Qadhafi would not someday deny the Soviets use of
Tobruk or evict Soviet forces.
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Conference Report: Gorbachev's
"New Thinking" and the
Arab-Israeli Peace Process
Guest speakers:
? Aaron Miller
?Policy Planning Staff, Department of State.
On 7 September 1988 the Regional Policy Division,
CIA's Office of Soviet Analysis, and the Office of
Analysis for the Soviet Union and Eastern Europe,
US State Department's Bureau of Intelligence and
Research, sponsored an all-day conference to examine
the impact of Gorbachev's "new thinking" on Soviet
policy toward the Arab-Israeli peace process. The
speakers and about 50 participants, from the Intelli-
gence Community and the Soviet, Near East, and
Policy Planning desks at State, discussed Moscow's
recent efforts to become engaged in the peace process,
as well as current Arab and Israeli views both of
Moscow's participation and of the nature of the
process itself. The conference participants concluded
that Moscow has managed to stake out a claim to
participate in the peace process in part because of
elements of new thinking?such as its opening to
Israel and a willingness to reevaluate policy toward
old clients in the light of Soviet interests?but primar-
ily because of the course of events in the Middle East.
The Soviets' objective of an international conference,
however, is not likely to be achieved any time soon.
On New Thinking
In discussing the concept of new thinking overall,
there was general agreement that the policy could also
be called the "new orthodoxy." Although Soviet
scholars and officials debated each other more open-
ly?even in front of foreigners?they also demonstrat-
ed a lockstep in use of the new language: "A balance
of interests," "mutual security," and "national recon-
ciliation" are the order of the day, and castigating
Brezhnev-era ideas is the trend.
19
discussions were free of the usual quotient of
Marxist-Leninist rhetoric?a refreshing indicator
that in at least one way new thinking constitutes a
new realism in dealing with tough issues.
new thinking is being spread in old
Soviet ways; it is an idea officially proclaimed from
the highest government and party circles and can
easily be revoked by these leaders if the need arises.
Drawing on their extensive talks with various Soviets
this year, offered the names of
some who could be considered "new thinkers" on
policy toward the peace process. In the Central
Committee's International Department, Anatoliy Do-
brynin and Middle East expert Alexander Zotov are
key examples (one speaker stated that Zotov revealed
he writes some of Gorbachev's speeches on the Middle
East?including the one given during Syrian Presi-
dent Assad's visit in April 1987). In the Ministry of
Foreign Affairs, Gennadiy Tarasov, Chief of the Near
East and North Africa countries regional affairs
office, appears to be more of a new thinker than his
boss Vladimir Polyakov, Chief of the Near East and
North Africa Countries Administration. Finally, in
the institutes, Georgiy Mirsky, a Middle East expert
in the Institute for World Economics and Internation-
al Affairs (IMEMO), Vitaliy Naumkin of the Oriental
Institute, and Viktor Kremenyuk of the Institute for
USA and Canada Studies stand out as academics
breaking away from the old style. Yevgeniy Prima-
kov, head of the IMEMO, was mentioned as someone
who engages in occasional bouts of new thinking but
certainly is not at the forefront of the process.
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There was a consensus that there are a few broad
trends resulting from new thinking in Soviet policy
toward the Middle East. Moscow no longer seems to
approach US-Soviet competition or conflict in the
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Third World from a zero-sum game plan. Comment-
ing on his recent talks with Soviet officials,
Isome Soviets admit that they probably
have overreacted in the past to American influence in
the Third World and that the American presence can
even, in some cases, work to Moscow's benefit. (This
Soviet cited the US role in the transition to democra-
cy in the Philippines and South Korea.) All partici-
pants agreed that Moscow is disturbed by the prolifer-
ation of weapons in the Third World. The Soviets
were perceived as being both more discerning in their
use of arms sales as a foreign policy tool and con-
cerned to reduce their dependence on this instrument
as a means of gaining influence
Soviet interlocuters believe the Middle East is
not as important a part of Gorbachev's foreign policy
agenda as it was for both Krushchev and Brezhnev;
these Soviets stated that it is difficult to get Gorba-
chev to focus on the problems in the Middle East. On
Soviet policy on the peace process, the conference
generally agreed that the Soviets are essentially dress-
ing up their old ways with new rhetoric.
Moscow and Tel Aviv
There was some discussion as to whether Moscow's
opening to Israel fit this last assessment.
and most of those present believed it did, but some
participants contended that such events as the ex-
change of consular delegations and the Soviets' open
willingness to defend Israel's right to exist?even to
Syrian and Palestinian leaders?constituted the fruit
of new thinking. All were in agreement that the
Soviets have quickened the pace of contacts and
discussions, made skillful use of symbolic gestures
(being keenly aware of their dual resonance in both
Tel Aviv and Washington), largely dropped the old,
rigid ideological approach to talks, and allowed state-
to-state relations to flourish at the level of cultural
and consular exchanges. Yet, on issues crucial to
Israel?the framework for negotiations, Soviet back-
ing for PLO representation at a peace conference, and
full and free emigration for Soviet Jews?Moscow has
not significantly deviated from "old thinking."
Israel has been its ability to maneuver in Israeli
domestic politics to achieve its own goals. The Soviets
have played both sides of the National Unity Govern-
ment against each other and, in so doing, have reaped
the benefits. Foreign Minister Peres's belief that it is
better to have Moscow "on the inside" of negotiations
and Prime Minister Shamir's admission that "Gorba-
chev is a great man" have enhanced Moscow's stature
as a potential participant in the peace process and
have given it a new card to play in talks on regional is-
sues with the United States. In outlining his discus-
sions with Soviet officials,
Moscow is resigned to the need to deal with Likud in
the future and that the Soviets are no longer enthusi-
astic about Peres and his ability to deliver Tel Aviv.
real indications that the Soviets
are applying new thinking to their relations with
Israel might appear in several different forms. Mos-
cow could increase trade and allow exchanges of more
significance than the occasional token visit of an
orchestra or cultural group. The Kremlin could open
the gates to greater levels of emigration and thus
reduce its use as a political tool. The Soviets might
also agree to publicized visits of higher level political
figures (for example, a trip by the party's Internation-
al Department deputy chief Brutents to Tel Aviv to
engage in substantive discussions with the Israeli
Foreign Ministry). Finally, the Soviets could define
their view of the terms of normalization of relations
between Israel and the Arabs and offer a clear
model?including operational details?for negotia-
tions.
rather than talks with Israel
on the peace process (contacts between Israel and the
USSR have continued between the two countries
since 1967), the new aspect of Moscow's policy toward
Secret
There was some debate on the significance of the
reestablishment of diplomatic relations between the
two countries, those present
believed that a Soviet move to define very precisely
when and under what terms Moscow would reestab-
lish relations with Tel Aviv would be another key sign
of new thinking on Moscow's part. Aaron
Miller, and others argued that Moscow's current
stand is already a sign of new thinking and that
realistically one cannot expect the Soviets to move
beyond their present statements for fear of commit-
ting political suicide with the Arabs.
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The Soviets and the Arabs
In considering the Arabs and the peace process, as
well as Syria's, Jordan's and the PLO's differing
perceptions of Moscow's role, Miller noted that the
realities had changed dramatically since the
Egyptian-Israeli settlement in 1977, enhancing Mos-
cow's claim to be a necessary part of the peace
process. From the Arab perspective, discussions are
now being held in an environment in which no
contemporary Arab leader has both the power and the
will to make peace with Israel on his own. This fact,
together with the Arabs' common belief that peace
cannot be made without superpower involvement,
yields a situation in which the Arabs, despite misgiv-
ings, turn to the Soviets as a power to equalize the
odds with US-backed Israeli strength, both on the
battlefield and in negotiations. As one US official
noted, Moscow has not insinuated itself into the
process?it has, in effect, been invited in by 50
percent of those involved.
Each of the three major Arab players has a different
logic for bringing in the Soviets. Jordan sees Moscow
and its proposal for an international conference as
part of a necessary "cover" and, ultimately, guarantor
for actions which Amman cannot take unilaterally
because of demographic and geographic constraints.
The PLO seeks Soviet patronage in order to preserve
its identity (from its own Arab brothers) and because
Moscow's conference scheme provides the means to
protect the principle of self-determination for the
Palestinians. Syria requires Soviet participation more
because of what the Soviets can prevent from happen-
ing than because of what Moscow can deliver. All
present agreed with the judgment that, of the three
Arab players, Syria is the one least oriented toward
finding a solution to the conflict. Damascus has
entrenched itself in a commitment not to negotiate
from a position of weakness (from which follows its
21
stand that the time is not yet ripe for talks) and is
fortified in its stand by the knowledge that without
Syria, Moscow has very little strategic leverage in the
Middle East (that is, Moscow cannot move too far in
front of its key ally). It is important to remark, then,
that, from the Arab perspective, Soviet participation
in the peace process is not a result of Moscow's new
thinking and its desire to negotiate an end to regional
conflicts, but rather as a result of the Arabs' percep-
tion of the balance of forces in the region. Syria and
the PLO are almost certainly uncomfortable with new
thinking and with Moscow's efforts to reevaluate old
policies in light of its own interests.
25X1
perceived through their 25X1
talks with Soviet officials that, although Moscow
views the PLO as an important tool in its foreign
policy, Syria remains the linchpin in the region for the
Soviets. some 25X1
Soviet academics could be divided into "Syria-first" 25X1
and "PLO-first" camps in relation to the peace
process, but none disputed the strategic importance of
Syria to Moscow's overall policy toward the Middle
East. stated that he had to push the Soviets 25X1
hard to comment on the Palestinian riots in the
Israeli-occupied territories and that he came away
with the distinct impression that Moscow had not yet
digested the events fully or formulated an opinion.
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Figure 1
The Caucasus Region
re-
("1,^- 1) R.S,F.S.R.
Severe-
Ordzhonikidze
r
Makhachkala
/ ?
B/ack
Se
Baku
?
Caspian
Sea
714710 (300833) 10-88
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Economic Aspects of Ethnic
Unrest in Nagorno-Karabakh
Soviet officials have identified two principal causes of
the disturbances in the Nagorno-Karabakh Autono-
mous Oblast (NKAO), an Armenian enclave in the
Azerbaijan SSR (see figure 1). They have cited the
longstanding ethnic animosities between the Arme-
nian and Azeri nationalities.' They have also argued
that the oblast suffered from economic neglect by
both republic and oblast leaders during the Brezhnev
years. General Secretary Gorbachev blended the two
elements by suggesting that hiding behind the nation-
ality issue were the opponents of perestroyka, "con-
servative and corrupt elements that tightly stuffed
their purses in the stagnation period."
Economic Neglect of the NKAO
Although per capita capital investment in the NKAO
increased approximately 50 percent between 1970 and
1985, it was never more than two-thirds that of the
republic as a whole (see table 1). Moreover, after a
period of improvement, per capita investment in the
NKAO relative to Azerbaijan as a whole declined
sharply after 1975. In comparison, Azerbaijan's Na-
khichevan ASSR, a predominantly rural exclave of
Azeris (95 percent of the population), has enjoyed
rapid absolute and relative improvement in per capita
investment over the past decade.
The neglect is also reflected in examples of poor-
quality production and decay of the region's produc-
tive capacity and infrastructure. A reporter for Izves-
tiya, in an article titled "NKAO: The Bitter Fruit of
Stagnation," wrote that the footwear factory excels in
producing rejects, bakeries produce bread of indiffer-
ent quality, apartments receive running water just one
to two hours per day, and meat and milk are rationed.
According to an NKAO party committee secretary,
' Although ethnic tensions between Armenians and Azeris date
back many centuries, Soviet officials have blamed Stalin for the
ethnic strife because of his insistence in 1921 that Nagorno-
Karabakh be subordinated to Azerbaijan. An unidentified individ-
ual recently interviewed on Soviet television moved the date up,
stating that hostilities began in 1957 when the Presidium of the
Azerbaijan SSR Supreme Soviet issued a decree establishing And
as the main language of the republic for all production activities.
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Table 1 Million rubles
Per Capita Capital Investment: (except where noted)
Azerbaijan SSR, Nagorno-Karabakh
Autonomous Oblast (NKAO),
and Nakhichevan ASSR (NSSR)
Azerbaijan
NKAO
NSSR
1970
261
153 (59).
267 (102).
1975
307
203(66)
168 (55).
1980
361
220(61)'
251 (70).
1985
468
230(49)
389 (83) a
. ( ( indicates percent of Azerbaijan investment.
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Source: Narodnoye khozyaystvo Azerbaydzhanskoy SSR v 1985g.
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Vasiliy Atadzhanyan, the equipment in the Stepana-
kert silk combine?the oblast's largest enterprise?
was installed in the 1930s and has been falling apart
for a long time. The road network remains poorly
developed. Such neglect probably heightened percep-
tions of economic discrimination and exacerbated the
longstanding ethnic tensions that led to the eruption
of unrest in early 1988.
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Economic Disruption
Despite its small size, the NKAO makes a sizable
contribution to industrial production in Azerbaijan
for several items (see table 2).2 Moreover, to buttress
his claim that the oblast was not a parasite on
Azerbaijan and thus imply that NKAO was being
exploited, the new first secretary of the Nagorno-
Karabakh party organization (obkom) pointed out
With a predominantly Armenian population of about 180,000 split
nearly equally between urban and rural dwellers, Nagorno-Kara-
bakh contains about 2.6 percent of the population of the Azerbaijan
Republic and occupies 5 percent of the republic's land area.
23
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Table 2
Industrial Production in Nagorno-Karabakh
Autonomous Oblast, 1985
Product
NKAO
Azer-
baijan
NKAO as a
share of Azerbai-
jan (percent)
Raw silk
(metric tons)
117
456
25.7
Leather footwear
(million pairs)
4.5
22.9
19.7
Construction
lime (thousand
metric tons)
10.1
97.3
10.4
Furniture
(million rubles)
4.7
79.6
5.9
Electricity
(billion kWh)
0.074
20.7
0.4
Silk fabric (mu-
lion running
meters)
16.5
NA
NA
Sources: Narodnoye khozyaystvo SSSR v 1985 g.
Narodnoye khozyaystvo Azerba_vdzhanskoy SSR v 1985 g.
that the oblast's annual contribution to the Azerbai-
jan Republic's budget over the past decade was 91
million rubles while the oblast budget was only 42
million rubles.'
Since mid-February 1988, however, economic activity
in the NKAO has been disrupted by nearly continu-
ous civil unrest. This period encompassed at least four
general strikes, each lasting several weeks, as well as
more limited work stoppages that shut down the
factories, stalled passenger and freight transportation,
and closed retail shops:
? Industrial production bore the brunt of the impact.
According to an Izvestiya report, the Azerbaijan
State Committee for Statistics placed the shortfall
' It is difficult to know exactly what to make of this claim. The
various consumer products the oblast produces, including cognac,
carry a high turnover tax and may account for the excess. Also, the
budget figure is misleading because it includes only allocations for
those activities administered by the oblast and probably does not
include money received from various ministries. Nonetheless, the
importance of the concern should not be discounted. For example,
an official from the Turkmen SSR has recently voiced similar
complaints about apparent exploitation.
Secret
in production in the NKAO in excess of 41.5
million rubles as of early July. The losses appear to
be largely confined to the capital city of
Stepanakert.
? Evidence concerning the impact on agriculture is
contradictory. On 27 July, TASS reported that the
NKAO agroindustrial committee expected a record
grain harvest this year, but on 9 August, Radio
Yerevan's domestic service reported that the
NKAO party organization had criticized farm per-
formance, noting in particular that labor disruptions
had slowed deliveries of grain and vegetables to the
state. In addition, livestock farms were behind in
deliveries of meat and milk.
Although local authorities and plant directors institut-
ed apparently effective measures?triple shifts, use of
technical and professional personnel on the assembly
line, and asking workers to volunteer to work on their
days off?to recoup early production losses, workers
are unlikely to fully recover lost wages. In early April
after the first strikes, Izvestiya reported that workers
at the Stepanakert shoe factory were estimated to
have lost 180 to 250 rubles in wages, or about one
month's salary, as a result of the strikes.' The losses
must surely have increased in the subsequent months
as more strikes occurred.
The economic impact of the strikes has spread beyond
the boundaries of the oblast. According to Soviet
commentators, who may be exaggerating the impact
in order to prod strikers back to work, industrial
production at several plants throughout the Soviet
Union has been constrained by the failure of factories
in Stepanakert to meet their production targets. A
Moscow television report of 29 July 1988 indicated
that Stepanakert's lighting fixtures plant alone had
failed to meet its supply obligations for 400 important
customers. TASS reported on 15 July that shipment
of more than 300 containers of fruit waiting at the
railroad station in Stepanakert was being delayed.
Moscow itself has had to absorb other direct costs
such as those associated with the transportation and
housing of the various security forces that have been
? According to the republic statistical handbook, average monthly
wages for industrial workers in Azerbaijan in 1985 were 182 rubles.
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brought to the NKAO to help maintain order and
with the resettlement of Azeris who fled from Arme-
nia.' Finally, the Azerbaijani and Soviet governments
must confront what is likely to be the costliest impact
of the unrest?an economic development program
designed to address the longstanding problems result-
ing from economic neglect in Nagorno-Karabakh.
The Bailout
Economic measures figure prominently in Moscow's
response to the unrest in Nagorno-Karabakh?a typi-
cal reaction of throwing rubles at multidimensional
problems while largely ignoring underlying political
and cultural aspects. A joint Communist Party of the
Soviet Union Central Committee and USSR Council
of Ministers decree passed on 24 March 1988 follow-
ing the first round of strikes offers a broad range of
measures to be undertaken over the next seven years,
including:
? A 40-percent increase in housing construction.
? Construction of nine or 10 general education schools
and a 400-bed hospital.
? An increase in the availability of Armenian-lan-
guage materials.
? Construction of two water reservoirs and completion
of a water pipeline to meet the needs of urban and
rural areas.
Construction of a mixed-feed plant with a capacity
of 250 metric tons per day.
in highway
A 50- to 100-percent increase
construction.
Construction of several building-materials plants.
The program will not come cheap. Soviet commenta-
tors have placed the cost of the seven-year effort at
400 million rubles?approximately 57 million rubles
per year.' According to the decree, the funds for the
According to an AFP report of 15 September 1988, workers in
Stepanakert were angry because 2,000 Azeris who fled Armenia
were to be resettled in Shusha, a largely Azeri town in the NKAO,
with an estimated 3 million rubles earmarked for housing construc-
tion.
'Total capital investment in the NKAO during the 1981-85 Five-
Year Plan was 191 million rubles, an average of 38 million rubles
per year
25
program for 1988 are to come from the USSR
Council of Ministers' reserve fund. For subsequent
years, the decree directs the State Committee for
Planning (Gosplan) to provide additional funds in
1989-90 in excess of current five-year plan targets
and to ensure that capital investment for the 1991-95
period incorporates the additional requirements. The
entire program is to be carried out under close
supervision of both central and Azerbaijan govern-
ment and party leaders.
Not everyone is confident that the ambitious plans
laid out will be met despite a spate of articles
describing the planning already under way. NKAO
obkom secretary Atadzhanyan told a reporter for
Krasnaya zvezda in late July 1988 that "the people of
Karabakh reacted suspiciously to the well-known
resolution; they had no faith in it. Over the years they
have been given too many promises that have not been
fulfilled." In late July 1988, the chairman of the
Azerbaijan Gosplan indicated his dissatisfaction with
the pace of implementation of the decree, a sentiment
echoed a month later by the Azerbaijan party first
secretary. More practically, Nagorno-Karabakh first
secretary Genrikh Pogosyan in his speech at the 18
July session of the USSR Supreme Soviet Presidium
bluntly pointed out that current construction capacity
in the oblast was only 20 million rubles per year, far
less than required to assimilate the largess being
provided. In fact, according to an article in lzvestiya,
allocated capital investment funds have never been
fully assimilated during the 1980s, and only two-
thirds of investment available was utilized in 1987.
The new chairman of the oblast executive committee,
Semen Babayan, warned in late August 1988 that
implementation of the development program could be
accomplished only with outside assistance from both
Armenia and Azerbaijan, and so far the initial efforts
were not going smoothly. 25X1
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Implications
From Moscow's point of view, the most serious ques-
tion may concern not the events in Nagorno-Kara-
bakh themselves, but rather their implications for 25X1
possible future ethnic disturbances in other parts of
the country. The Soviet Union contains 38 ethnic
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enclaves below the republic level-20 autonomous
Soviet socialist republics (ASSRs), eight autonomous
oblasts, and 10 autonomous okrugs?with most locat-
ed in the Russian Republic (see figure 2). According
to data in the 1979 census, however, the titular
nationality accounts for the majority of the population
in only 10 of these regions. In these few areas, a
highly concentrated minority ethnic group is under
the jurisdiction of a republic government dominated
by a different, typically Russian, nationality?
possibly fostering, as in the NKAO, a climate condu-
cive to civil unrest.
The cost of the NKAO bailout is minuscule, although
it probably represents a sizable share of the Council of
Ministers' reserve from which the funds for 1988 were
taken. If ethnic unrest occurred in other areas with
larger populations and a more significant industrial
base, however, Moscow's attempt to resolve problems
through a similar package of crisis management and
economic aid might be strained. For example, the
price tag for a similar bailout program on a per capita
basis for the Dagestan ASSR?located in the RSFSR
on the border with Azerbaijan?probably would be
about 10 times greater, or approximately 570 million
rubles a year.' The cost of such a bailout probably
would be manageable, if it occurred in isolation, but,
if ethnic unrest were to occur in several places over a
relatively short time, the strain on the budget would
rapidly increase. Moreover, Dagestan, like the
NKAO, is a predominantly rural region. The per
capita cost of a bailout package in a more urbanized
area would undoubtedly be higher.
We are analyzing other ethnic regions where econom-
ic neglect might contribute to civil unrest. Our efforts
to explore this issue for those ethnic regions below the
republic level are constrained by lack of systematic
regional data, particularly for capital investment; the
Russian Republic, where most of the regions are
located, has not published regional investment data
since 1976. The example of the Yugo Osetin (South
Ossetian) Autonomous Oblast (SOAO), subordinate to
the Georgian SSR, at least demonstrates that Moscow
may not face the same problem in similar situations.
7The population of the Dagestan ASSR is 1.8 million, only about
12 percent ethnic Russian.
Secret
Figure 2
USSR: Comparison of Per Capita Capital
Investment in Two Autonomous Oblasts
Percent of republic level
M South Ossetian
? Nagorno-Karabakh
100
1970
1975
Source: Narodnoye khozyclystvo
Azerbauizhanskoy SSR, v 1985 g.
1980
1985
319124 10-88
The SOAO resembles the NKAO in two important
ways. The percentage of the oblast's population be-
longing to the titular nationality exceeds that of the
Georgians, the republic's majority population. There
is also potential for the issue of ethnic reunification to
complicate matters?the SOAO is adjacent to, but
separated from, the Severo Osetin (North Ossetian)
ASSR, subordinate to the Russian Republic. Unlike
the NKAO, however, the level of per capita invest-
ment in SOAO, relative to the Georgian Republic,
has improved over the past decade, partly because the
region's population has remained virtually stable.
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Figure 3
Soviet Ethnic Administrative Regions
The United States Government has not recognized
the incorporation of Estonia. Latvia, and Lithuania
into the Soviet union. Other boundary representation
is not necessarily authoritative.
LATVIA*
BELORUSSIAN
S.S.R
Yakutskaya
A.S.S.R.
UKRAINIAN
S-SR
RUSSIAN
Chuvashskaya
A.S.S.B. Mariyskaya
A.S.S
INImurtskaya
A S.S.R.
Tatarskaya
A.S.S.B
Komi
()VIE
Korai-
anyatskiy
A.Ok.
'
\'')1
Union ,nce 1945.
515,bed by 1.5555
ccupred by Soviet
Kurd
(acb-Inoste,ed by '
S55,5' 05'55'
Bashkirskaya
Allkhazska
A.S.S.R.
OR
lmytskaya
AS R.
Oat-Ordynskiy
Buryatskiy
A.Ok.
Buryetskays
A.S.S.R.
Tayreyskaya
A.O.
sskaya
ARMENIAN
S.S.R
stanskay
.S.S.R.
Aginskiy
Buryatskiy
A.Ok.
Tuvinskeys
A.S.S.R.
AIJAN
ASSRs and AOs in the Caucasus
1. Adygeyskaya AO
2 ra yovo-Cherke okays AO
3. Kabardino-Balkarskaya ASS
4 e 0 etinskaya ASSR
5. C gushskaya ASSR
8. 7 A kA;VRA?
8. Nagorno-Karabakhskaya AO
9 Nakhichevanskaya ASSR (Aeerhaij
TURKMEN
S.S.R.
UZ BE K
S.S.R.
KIRGHIZ
S.S.R.
Autonomous republic (ASSR)
Autonomous oblast (AO)
Autonomous okrug (AOk)
Reverse Blank
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In general, economic neglect, whether real or per-
ceived, can take several forms and can exacerbate
ethnic tensions. In the Baltic republics, where civil
unrest already has occurred, people are concerned
that the region's economic advantages over the rest of
the USSR are being unfairly eroded. Baltic officials
have also expressed the desire to more fully control
their republics' economies, an idea generally discussed
under the heading of "regional khozraschet." In
contrast, the major concern in the Central Asian
republics, where growth in investment has not kept
pace with population growth, is to simply stop falling
further behind. Officials from less developed areas
frequently lodge what amount to charges of economic
exploitation against Moscow. For example, at the
party conference in June 1988, Komi ASSR first
secretary V. I. Melnikov complained that his republic,
where the titular nationality comprises 25 percent of
the population, was being used as a source of raw
Reverse Blank
29
materials for industries throughout the USSR, while
development of social services was being neglected.
Leaders of other ethnic regions have voiced other
concerns that have strong economic components in-
cluding the need to ensure adequate water supplies in
Central Asia and the need to deal with water and air
pollution in the Ukraine.
Economic neglect in some form is likely to be at least
a contributing factor underlying future unrest in
ethnic regions, and Soviet statements and the experi-
ence of the NKAO suggest that economic remedies
are likely to be an important factor in Moscow's
approach to their resolution. The severity of these
problems would be worsened if neglect is perceived as
discrimination.
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Soviet Navy Day Statements:
Uneasy About Gorbachev
Statements published in connection with Soviet Navy
Day in July 1988 suggest that some Soviet naval
officers are uneasy about the potential implications of
key Communist Party of the Soviet Union (CPSU)
policies. In addition to the issue of whether the drive
for perestroyka is resulting in inadequate attention to
the resource needs of the military, officers expressed
concern about the role of glasnost and democratiza-
tion in potentially undermining morale and discipline.
Pacifism. One of the issues facing Admiral of the
Fleet Vladimir Chernavin, Commander in Chief of
the Soviet Navy, is the danger that glasnost is
fostering the growth of antimilitary and even pacifist
attitudes among the Soviet population, especially the
young. In his Navy Day television address this year,
Chernavin lamented the development of such
attitudes:
The military threat from imperialism still re-
mains today. We must by no means forget this
if we really wish to draw the correct conclusions
from our history. All the more concern is
caused by the pacifist moods that sometimes
occur, by failings in the military-patriotic edu-
cation of young people for service in the army
and the fleet. This is impermissible. Historical
experience teaches us that you must not trifle
with such matters; we must do everything neces-
sary to eliminate such shortcomings from our
work. This is our duty, to the fallen and to the
living, to the present and to the future.
Chernavin's warning indicates that he shares the
concern of some other senior Soviet military leaders
that General Secretary Gorbachev's glasnost policy
may have harmful consequences for the armed forces.
Probably the most threatening aspects of glasnost
from the military's perspective are writings that ques-
tion the importance of military service in an age when
war has ceased to be a rational means of conduct.
35
Soviet military spokesmen have denounced expres-
sions of "pacifism" because of the danger that such
thinking undermines the willingness of Soviet military
personnel to carry out their duty.
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An example of this type of thinking that is particular-
ly abhorrent to the Navy is an article (Ales Adamo-
vich, "For a Nuclear-Free World, for the Survival of
Mankind," Moscow News, March 1987) in which the 25X1
author discussed the morality of conducting a retalia-
tory strike in the event of a nuclear attack on the
Soviet Union. The author judged that such a retalia-
tory strike would be senseless. Referring to a conver-
sation he had with the commander of a Soviet nucle-
ar-powered ballistic missile submarine (SSBN), the
author stated that, if he were in the commander's
position, he would refuse to launch the submarine's
missiles even in retaliation. The SSBN commander,
according to Adamovich, would not say whether he
would obey an order to retaliate, contending that it
was better if no one knew how he would act. This
article, which implicitly challenges discipline in all the
armed services, was subsequently denounced by Gen-
eral Volkogonov, then deputy chief of the Main
Political Administration of the Soviet Ground Forces
and Navy, as an example of the appearance of
"pacifism," a "politically vegetarian tendency," in
Soviet literature. Volkogonov accused Adamovich of
dealing with nuclear weapons outside a political con-
text and of casting doubt "on the expediency of Soviet
servicemen fulfilling their military duty."
For the Soviet naval leadership the Adamovich article
is an extreme example of a broader problem?the
existence of a skeptical and even hostile attitude
toward the military, especially by Soviet youth. Mili-
tary spokesmen often discuss this in terms of a
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Antimilitary Attitudes: A Grave Problem
The Ministry of Defense newspaper, Krasnaya
zvezda, reported the experience of one of its corre-
spondents as an example of the growth of antimili-
tary attitudes among the Soviet population. The
journalist, after visiting a "beautifully designed and
tended" military cemetery devoted to those killed
fighting the German advance toward the Caucasus,
observed that not everyone shared his sense of respect
and devotion:
But one day, my serene mood was spoiled right
at the entrance to the memorial. Two middle-
aged women were walking toward me and ex-
changing impressions, and I could not help
overhearing their conversation, "What a fine
cemetery," one was saying as they drew level
with me. "Yes," the other replied, "the military
always grab the best of everything for
themselves."
The newspaper reported that the incident took place
at Pyatigorsk. Many Soviet readers, recognizing that
this is part of the Stavropol' region where Gorbachev
began his climb to power, probably viewed the placing
of the incident in this setting as a way of associating
the problem with the policies of the General Secre-
tary.
generation gap, especially the decreasing effectiveness
of "The Great Patriotic War" experience as a means
of legitimizing the current role of the military.
The Party and the Navy. The personnel issue is part
of a broader concern, evident in Soviet discussions of
the concept of "reasonable sufficiency," on the part of
military leaders as to whether the political leadership
is devoting enough attention and resources to defense.
Chernavin was careful in his Navy Day statement to
simply stress the continued Western threat and not to
directly challenge current CPSU policies on meeting
the threat. Some lower ranking naval officers, howev-
er, have been more openly critical. A Northern Fleet
Secret
officer, Captain Third Rank Petrov, was unusually
frank in a letter in Krasnaya zvezda (June 1988) in
questioning the party leadership's handling of defense
issues in connection with the CPSU conference. Pe-
trov went so far as to suggest that the party's
inadequate attention posed the danger that the Soviet
Union would lose military parity with the West:
As a military man, I expected the CPSU Cen-
tral Committee theses to reflect more extensive-
ly the question of maintaining the country's
defense capability at the necessary level and
continuing to preserve military parity. Despite
the relaxation of political and military tension
and the emerging reduction in the two leading
world powers' arsenals of weapons, the task of
defending the Socialist homeland remains one
of the most important tasks. The theses do
mention this, but not clearly enough in my view.
And should this be so?especially when you
consider the growth of pacifist sentiments
among certain strata of our society and the
exacerbation of the problem of training young
people for service in the armed forces? As a
Communist, I believe that defense building
must always be at the center of the party's
attention and that we have no right to allow the
loss of military parity with the West, which we
had difficulty in achieving. Many officers on
our shis share my opinion.
Vice Admiral Panin, Chief of the Navy Political
Directorate, apparently felt this attitude was danger-
ous enough to require a rebuttal by the party in a
Navy Day interview. The interviewer, noting that
Panin had been a delegate to the party conference,
stated that "some comrades feel that insufficient
attention was paid to the defense issue." Panin denied
this, noting that a spokesman for the armed forces
had spoken at the conference. More significantly, he
stated:
36
One must bear in mind that the country's
defense and the power of the armed forces is a
product of the economy, scientific potential, and
the people's moral and political condition, and
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these matters, as you know, were paid excep-
tional attention at the conference. It seems to
me and to military people that the task for the
armed forces is well understood and was ex-
pressed clearly by Mikhail Sergeyevich Gorba-
chev. Its essence boils down to this: that defense
effectiveness should henceforth be ensured pre-
dominantly by qualitative parameters both with
regard to equipment and military science and
with regard to the personnel of the armed
forces. if one bears all this in mind, I think you
will agree that sufficient attention was paid to
the defense issue at the conference.
In short, the health of the armed forces depends in the
long run on Gorbachev's ability to effect basic re-
forms in Soviet society across the board, especially in
the economy. The armed forces will ultimately benefit
from all these changes, but in the meantime they will
have to patiently support them by making sacrifices
and stressing "quality" over "quantity." The impor-
tance of "qualitative indicators" also was a major
point made by Chernavin in his speech and by
Minister of Defense Yazov in his Order of the Day for
Navy Day.
Panin felt it necessary to deal with another matter of
concern to the military?the potential conflict be-
tween the Party line on democratization and the
legitimate requirements for military discipline and
adherence to the chain of command. Panin, on behalf
of the party, attempted to reassure the military that
Gorbachev's emphasis on "combating bureaucracy"
was not inconsistent with the traditional military
concept of "one-man command":
[Interviewer]: The bureaucrat, as you well
know, recognizes only one method of leader-
ship?the high-handed administrative style.
The rejection of this method is now a fact of our
life. But, you know, this has always been the
way with the military: someone gives the orders
and someone else obeys.
[Panin]: And so it will continue. The principle of
one-man command operates in armies all over
the world and no one intends to reject it now.
There is simply no other principle of troop
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37
control. But I would not attempt to set one-man
command in opposition to the process of democ-
ratization which is now gathering momentum in
the armed forces.. . . Of course, in combat
conditions, situations are likely to arise where
everything will depend on the decision of one
person empowered to make that decision. . . .
But combat management is one thing, and
everyday army and navy life in all its diversity
is another?the social side in particular. Public
opinion and glasnost are the real forces which
can and must protect military collectives
against bureaucracy and the arbitrary will of
officials.
It is likely that Panin's comments were not completely
reassuring to Soviet military officers observing the
breakdown of public order in the Caucasus and other
parts of the Soviet Union under Gorbachev's leader-
ship. 25X1
Prospects. This year's Navy Day statements suggest
that senior members of the Navy, like their counter-
parts in the other military services, view some aspects
of Gorbachev's policies with concern. Chernavin's 25X1
statement indicates that he is willing at this time to
criticize aspects of glasnost rather than to question
the potential implications of perestroyka for resource
allocations to the Navy. 25X1
The appearance of the Petrov letter, however, sug-
gests that at least some elements of the Soviet naval
leadership are willing to permit stronger criticism on
the resource issue by lower ranking officers acting as
surrogates. Panin's response to this type of challenge
was reminiscent of the way Gorbachev's spokesmen
dealt with the challenge to his political program
contained in the Andreyeva letter earlier this year.
Overall, the Navy Day statements indicate that the
Navy, like the other services, has serious doubts about
where Gorbachev's policies may ultimately lead, in-
creasing the likelihood that Chernavin and other
military leaders would side with Gorbachev's oppo-
nents in the event of a serious political challenge.
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Moscow's Position on Military
Aid to Nicaragua
We believe the Soviet commitment to provide military
aid to the Nicaraguan Government is strong and will
remain so at least for the near future. Soviet arms
shipments have declined in 1988, probably because of
the Sandinistas' reduced need for replacement of
major weapons systems in the absence of large-scale
fighting and Moscow's desire to promote an image of
restraint in the region. We do not believe that the dip
in military assistance represents any lessening of
Moscow's willingness to support Managua. Although
a few private comments from Soviet officials suggest
that Moscow may have considered adopting a more
flexible position, the Soviets probably believe that
events in Nicaragua are proceeding in their favor,
leaving them with little incentive to make concessions.
The Soviets continue to insist that any cutback in
their military assistance to Managua must be
matched by a US cutback in arms deliveries to
Central America. Moscow will continue to voice
strong support for the Central American peace pro-
cess and for concluding a US-Soviet agreement to
reduce arms shipments to the region in order to try to
portray the United States as obstructing peace in
Central America and to establish Soviet credentials as
an influential diplomatic player in the area.
Soviet-Nicaraguan Ties: Still Strong
We believe that the Soviets remain committed to the
Nicaraguan regime's eventual consolidation and that
they will continue to provide military assistance in
order to help Managua achieve its goal.
claims that the
USSR and Nicaragua negotiated a three-year arms
agreement last spring that would provide more heli-
copters, small arms, and spare parts;
Moscow's ongoing provision of substantial amounts of
economic aid to Managua?the Soviets provided
about $500 million of economic aid in 1987?under-
scores the Soviet commitment to the regime.
39
Since late 1987 the Soviets have repeatedly offered?
both publicly and privately?to curtail arms ship-
ments to Nicaragua in return for reciprocal US
cutbacks to other Central American countries and a
cutoff of aid to the Nicaraguan rebels. Moscow,
however, has made no apparent preparations?such as
telling Managua that it must prepare to survive
without such assistance or cutting back on long-term
commitments?for such an eventuality. In addition,
we have no indication that Managua has begun
preparing for a cutback in Soviet arms shipments. The
Soviets evidently assume that Washington will not
accept restrictions on its military aid to Central
America and that the USSR will not have to make
good on any offer to reduce arms deliveries in the near
term. In the absence of large-scale fighting, they
probably also believe that the Nicaraguan military
has enough hardware to continue operations at cur-
rent levels for some time even if deliveries would be
limited to small arms and munitions.
Private Statements: A Few Hints of Flexibility
Soviet statements continue to insist that Washington
must curtail military assistance throughout Central
America before the USSR will undertake a commit-
ment to cut back its aid to Nicaragua. However, a few
Soviet officials?including General Secretary Gorba-
chev and then Central Committee Secretary Do-
brynin in meetings with a US congressional delega-
tion?privately have seemed to imply that a cutback
in Soviet arms deliveries might be linked only to a 25X1
cutoff of US aid to the Nicaraguan insurgents. None 25X1
of the seemingly softer statements, however, has been
confirmed or followed up by the Soviets, and all of
them may have been simply less than complete rendi- 25X1
tions of the policy or speculative probes for a US 25X1
reaction rather than any concrete signal of flexibility.
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Soviet officials have
suggested that the USSR may unilaterally limit or
reduce its aid to Nicaragua. Soviet officials dropped
hints in the winter and spring of 1988 that Moscow
may limit its commitment to Nicaragua "to avoid
disrupting progress" in US-Soviet relations
Public Statements and Foreign Ministry
Officials: Holding the Hard Line
Soviet public statements on arms reductions to Cen-
tral America are generally aimed at portraying Mos-
cow as an aspiring peacemaker in the region and at
claiming US obstructionism. In addition, Moscow
continues to pursue its longstanding goal of establish-
ing itself as a significant diplomatic player in the area.
The Soviets consistently voice strong support for the
Central American peace plan, the effect of which is to
prohibit external lethal aid to the insurgents but not to
Managua. In addition, the Soviets play down their
military assistance to Nicaragua, referring to its
limited nature and linking it to US aggression against
Managua. Moscow also has referred to Central
America as a regional conflict area where little
progress toward peace has been made?in contrast
with Afghanistan, Cambodia, and Angola.
Soviet officials have consistently refused to confirm
any notion of flexibility when US officials have
inquired about the possibility that Soviet terms for
cutting back aid to Nicaragua could soften. In mid-
September 1988, the chief of the Foreign Ministry's
First Latin America Department said that unless the
United States reduced aid to other nations in the
region, the Soviets could not break their aid commit-
ments to Managua. In addition, another Soviet For-
eign Ministry Latin America expert said in August
1988 that the US side "must have misunderstood"
statements by other officials implying that an aid
reduction or cutoff to Nicaragua might be contingent
only on the United States stopping assistance to the
Secret
Nicaraguan insurgents. Soviet officials have also
made direct and indirect reassurances to the Sandinis-
tas that aid would continue.
Outlook
The Soviets are unlikely to make a formal commit-
ment to curtail their military aid to Nicaragua unless
the United States agrees to a reciprocal cutback of aid
to Central America. The USSR shows no signs of
serious concern about the military situation in Nica-
ragua, and the Soviets probably believe events are
proceeding in their favor, leaving them with little
incentive to become significantly more flexible on
arms shipments. The Sandinistas will continue to rely
on the Soviets for military supplies over the long term,
and we believe that the Soviets will rely heavily on the
arms supply relationship to preserve long-term influ-
ence over Managua.
Moscow may continue to dangle a few hints of
flexibility on arms shipments, but these would proba-
bly be constructed to convey an image of reasonable-
ness to Latin American countries and to influence US
debates on supplying arms to the insurgents. Moscow
will almost certainly continue to advocate a US-Soviet
agreement to reduce tension in the region, citing
progress on other regional conflicts as a precedent for
the efficacy of such cooperation. Moscow also wants
to appear responsive to the desire of other Central
American countries for such an agreement.
At least for the rest of 1988, and until they assess the
new US administration's strategy in Central America,
the Soviets are likely to keep their arms shipments to
Managua relatively restrained?probably below their
1987 peak?in order to avoid alarming the United
States and to limit their long-term economic costs.
The Soviets continue to maintain publicly and private-
ly that they have no strategic interests in Nicaragua
and no intention of establishing military bases there.
Moscow is particularly likely to restrain its shipment
of big-ticket items because the Soviets probably see
these systems as most apt to provoke a US reaction
and also unnecessary. Nonetheless, the USSR will
probably continue to replace items needed by the
Sandinistas for counterinsurgency operations?such
as helicopters.
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Even as part of any regional agreement, Moscow
would reserve the right to continue to provide "police
items" such as ammunition and small arms that
Managua uses to maintain day-to-day military opera-
tions. Such an agreement would not affect Moscow's
capability to support Central American leftists be-
cause Havana does most of the direct supply and
because the amount and type of arms provided could
easily be supplied directly from small-scale military
shipments to Managua or transshipped through Cuba.
the Soviets may provide
arms to rebels in El Salvador via Cuba, but we have
no evidence that Moscow has provided arms to any
other Central American insurgent group. In fact,
Moscow now limits even financial assistance to Gua-
temalan and Honduran leftists because they are too
factionalized to be effective.) In any case, the Soviets
will continue to be careful not to let their activity in
support of insurgents reach levels that would prevent
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41
them from cultivating the governments that are the
targets of the opposition movements or that would
attract credible Western charges that Moscow was
promoting Communist revolution.
Under a regional agreement, the Soviets would still
retain the capability to provide arms to Nicaragua
through Cuban and East European surrogates?in
1987 the Soviets shipped about half their military
assistance through Cuba. Moscow, however, probably
would not use such surrogates for more than small
arms and ammunition shipments unless Managua
faced intense military pressure, because Moscow
would not want to jeopardize whatever gains it had
made as part of an agreement.
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Notes
Foreign Policy Impact of Personnel Changes
General Secretary Gorbachev has increased his control over foreign policy
decisionmaking with the recent leadership shakeup. Coming at a time of sharp
leadership debate over the direction of Soviet foreign policy, the changes were a
clear victory for those who advocate a break with the past and a more pragmatic,
nonideological approach, and who are likely to demonstrate greater flexibility over
the long run.
Impact of Personnel Changes. Gorbachev's closest allies on the Politburo now
control Soviet foreign policy. Aleksander Yakovlev, as head of the Central
Committee's new International Commission, has become the foreign policy czar
within the party and now presumably will oversee the work of the International
and Bloc Relations Departments, and perhaps the Cadres Abroad Department?
these departments are likely to be merged in the planned reorganization of the
Central Committee. In recent months, Foreign Minister Shevardnadze has
emerged as the leading advocate of change in the internal debates over both the
form and substance of Soviet foreign policy. Vadim Medvedev, who was promoted
to the Politburo to oversee ideology, also appears to be a "new thinker" although
his ties to Gorbachev are less clear.
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Perhaps the most important change was the removal of President Gromyko.
Although he was no longer playing a direct role in running foreign affairs,
Gromyko almost certainly continued to be an important factor in the Politburo and
Defense Council, and, by virtue of his unrivaled experience in dealing with the
West and his stature as the elder statesman, he probably was an influential
spokesman for party conservatives who have been skeptical of Gorbachev's
approach. Anatoliy Dobrynin's retirement appears to reflect his shortcomings as a
politician and a manager more than differences over policy. Although he appeared
to be slated to become Gorbachev's top foreign policy adviser when he moved to
the Secretariat in 1986, he has since been increasingly overshadowed by Shevard-
nadze and Yakovlev. 25X1
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Highlights From Shevardnadze 's Ministry of For-
eign Affairs Speech
On Economic Motivations for Foreign Policy
. . . the arms race can exhaust and bleed the
enemy dry, but truly at the price of undermining
one's own economic and social base. Serious
harm was caused to the nation by the primacy
of the military to the detriment of the political
means of opposing imperialism and the inability
to spot its [imperialism's] maneuver and its plan
of involving us in an arms race fraught with
economic exhaustion of our country.
On Foreign Policy Decision Making
Comrades have proposed that we introduce into
the work of the USSR Supreme Soviet open
hearings on various international problems. . .
and in a legally established procedure bring up
for discussion by all the people the fundamental
foreign policy decisions, using referendums and
public opinion polls.
[Within the MFA] democratization is seen pri-
marily in ensuring a pluralism of opinions on
all levels, the abandoning of the excessive abso-
lutizing of the views of superiors, the wider
involvement of the operations personnel in dis-
cussions which without fail should precede the
making of a decision.
The cult of personality, subjectivism and volun-
tarism, stagnation phenomena, a lack of glas-
nost, the warping of socialist ideals and princi-
ple of democratic culture, vestiges of an elitist
awareness have given rise to a certain "silent
zone" around our nation's diplomatic center.
On the Practice of Foreign Policy
It is essential to bear in mind that in foreign
policy virtually nothing can be achieved by
unilateral actions.
Secret
Foreign policy cannot be rational and effective
without complete and correct information.
On Peaceful Coexistence
The "image of the enemy"?which we are now
spending such an effort on destroying?came
into being contrary to the real image of the
Soviet people, [which] was undermined by the
repressions, statements such as "we will bury
you, by incorrect steps against friends and the
preaching during the period of detente of the
erroneous and, I would say, anti-Leninist thesis
of peaceful coexistence as a specific form of the
class struggle.
On National Security
The notion established in the minds and actions
of various strategists that the Soviet Union can
be as strong as any possible coalition of states
opposing it, is absolutely fallacious. To follow
this means to act in outright contrast to nation-
al interests.
"Reasonable sufficiency," a notion of nonoffen-
sive defense, is actually based on the demands
of reason and common sense.
On the Lessons of World War II
The world war showed that the arsenal supplies
of weapons on the side subjected to attack were
not of decisive significance.. . . Any advantage
of the aggressor could be nullified if the state
possessed developed industry and a scientific
and technical base.
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Changing Foreign Policy Ideology. The reshuffle signals the clear ascendance of
the advocates of a more flexible foreign policy line in recent Politburo debates.
Last month at the UN and in a July address to the Foreign Ministry,
Shevardnadze called for the "deideologization" of international relations and said
that peaceful coexistence can no longer be identified with class struggle, a major
break with traditional Soviet ideology that justified continued conflict with the
West despite detente. This view was endorsed by Yakovlev, who has been the
architect of the effort to improve the USSR's image abroad. Last week, Medvedev
signaled support when he called for a return to Lenin's perception of peaceful
coexistence, devoid of the "deformations and accretions of the subsequent period."
Ligachev took direct issue with Shevardnadze in August, warning that "class
interests" must predominate in international relations and that "raising the
question in another way" could only cause confusion. This traditional
interpretation was publicly supported by Chebrikov.
Changing Foreign Policy Decision Making. By taking over the presidency,
Gorbachev can now move ahead with his plans for shifting key national security
decisions?including the use of Soviet troops abroad and defense procurement?to
new state bodies to be created later this year. This would enhance his personal
control over national security and could balance the influence of the Defense
Council with the new state organizations. Rejecting class struggle in favor of a
long-term peaceful coexistence with the West places less emphasis on the role of
military competition and strengthens Gorbachev's hand in arguing to hold down
defense spending.
Moreover, the latest changes should create a more favorable environment for
Gorbachev in the Defense Council. Although its exact composition is not clear, two
of Gorbachev's key opponents in the leadership, in addition to Gromyko, may be
forced to give up their seats. Yegor Ligachev probably will lose the seat he
presumably held as "Second Secretary" and Viktor Chebrikov almost certainly
will be forced to relinquish his seat to the new KGB Chief, Vladimir Kryuchkov,
who appears to be on better terms with Gorbachev. If Yakovlev is not already a
member, he is now almost certain to become one by virtue of his new position.
Implications for the United States. The immediate impact on Soviet policy toward
the United States as a result of these changes is not likely to be dramatic because
the basic view of the reformers has been increasingly reflected in Soviet policy over
the last three years. In the long term, however, these changes should give
Gorbachev greater room to maneuver in appealing to foreign audiences,
particularly US allies. The changes would also enable him to offer more bold
proposals?perhaps even unilateral moves?and could make Soviet foreign policy
more effective. Gorbachev clearly hopes that the moderate new line will help
overcome the damage done to Moscow's image by the aggressive military security
policies of the Brezhnev era.
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Soviet Meat Production: Perceptions and Fact
V. Tikhonov, a distinguished academician, recently claimed that per capita meat
consumption in 1927?the final year of Lenin's New Economic Policy?reached
an unprecedented high, a level that has not been achieved since 1927. Tikhonov's
point is startling, but his statistics cannot be reconciled with other Soviet data for
the period. If all urban and rural residents consumed as much meat as he claimed,
production would have been over 8 million tons, nearly twice as much as the 4.5
million tons officially reported. Selected family budget survey data for the
period?based on samples of urban and collective-farm families?also indicate
meat consumption rates of about one-third those claimed by Tikhonov.
Tikhonov's article touched a sensitive issue. In his Krasnoyarsk speech of 16
September 1988, Gorbachev commented, "Some people believe that our country is
currently consuming less meat and dairy products than it has in the past .. . there
are some people who claim we are now consuming less than in 1927 . .. but how
are things really?" He cited 1927 meat availability of 30 kilograms per capita, a
figure consistent with previously reported total production, but somewhat more
than budget survey data indicate was consumed on average. Gorbachev then added
that officially reported meat consumption reached 41 kg in 1965 and 64 kg in
1987. Production in 1965 was 10 million tons; in 1987, 18.9 million tons.
Gorbachev argues?and we agree?that Soviet citizens may perceive they are
worse off because of the increasing gap between growth in supply of foodstuffs and
other goods and growth in monetary incomes. Enormous subsidies have kept meat
prices low and stable at state retail stores but have created enormous pent-up
demand. In contrast, prices for meat in collective farm markets?which are
relatively free to respond to demand?have been rising steadily.
We judge that Gorbachev's statistics are closer to the truth than Tikhonov's, at
least on a countrywide basis. Tikhonov may have some selected family budget
survey data that are unavailable to us that substantiate his claim. For example, he
could have chosen data that reflected only the better supplied cities and rural
areas. If, however, the meat consumption statistics presented in Tikhonov's article
do apply to the entire country:
? Collectivization of agriculture in the late 1920s and early 1930s had a far worse
impact than hitherto believed.
? Total Soviet meat production did not reach the 1927 level until 1959. Soviet
statistics indicate the 1927 level was regained by 1950.
? Soviet official statistics on meat consumption and production, at least for the
prewar years, are incorrect by a large margin. This is highly unlikely. Western
scholars?including Naum Jasny in his monumental work, The Socialized
Agriculture of the USSR?accept precollectivization Soviet livestock statistics
with only minor reservations.
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USSR: Meat Consumption
Kilograms per capita
Tikhonov a11E1 Official
? Gorbachev b
70
1927 1932 1950
1965 1987
'Weighted average of urban and rural consumption
(Literaturna)a gazeta, 3 August 1988).
b From his speech in Krasnoyarsk, 16 September 1988.
Official Soviet statistics, including offals and slaughter
fats. Quantities are not comparable to Western carcass-
weight measures.
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