THE SOVIET SYSTEM IN CRISIS: PROSPECTS FOR THE NEXT TWO YEARS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP94T00766R000200080002-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 35
• Document Creation Date: December 23, 2016
• Document Release Date: February 7, 2014
• Sequence Number: 2
• Publication Date: November 1, 1989
• Content Type: NIE

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Central 25X1
Intelligence
The Soviet System in Crisis:
Prospects for the Next
Two Years
National Intelligence Estimate
This National Intelligence Estimate represents
the views of the Director of Central Intelligence
with the advice and assistance of the
US Intelligence Community.
0079996
NIE*11-18*89
NI*0061*89
0596-0597
FILE COPY/SOURCED COPY (A-2)
CPAS/INC/CONTROL BRANCE (A-i:0SWR,SOyA)
?Secret-
NIE 11-18-89
November 1989
Copy 596
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or Methods Involved
(WNINTEL)
National Security Unauthorized Disclosure
Information Subject to Criminal Sanations
Dissemination Control
Abbreviations
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14 Intelligence oel:FeL
NIE 11-18-89
The Soviet System in Crisis:
Prospects for the Next
Two Years
Information available as of 21 November 1989 was used
in the preparation of this National Intelligence Estimate.
The following intelligence organizations participated
in the preparation of this Estimate:
The Central Intelligence Agency
The Defense Intelligence Agency
The National Security Agency
The Bureau of Intelligence and Research,
Department of State
also participating:
The Deputy Chief of Staff for Intelligence,
Department of the Army
The Director of Naval Intelligence,
Department of the Navy
The Assistant Chief of Staff, Intelligence,
Department of the Air Force
The Director of Intelligence,
Headquarters, Marine Corps
This Estimate was approved for publication by the
National Foreign Intelligence Board.
Secret
November 1989
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The Soviet System in Crisis:
Prospects for the Next
Two Years
? The Soviet domestic crisis will continue beyond the two years of
this Estimate regardless of the policies the regime pursues. The
regime will be preoccupied with domestic problems for years to
come, will want to keep tensions with the United States low, and
will probably still pursue agreements that reduce military compe-
tition and make resource trade-offs easier.
? Despite the enormous problems he faces, Gorbachev 's position in
the leadership appears relatively secure, and he has increased
power and political room to cope with the crisis.
? There will be greater effort to define the limits of political change,
a tougher approach on ethnic issues, and some retrenchment in
media policy; but the process of political liberalization will
expand with the legislature and independent political groups
increasing in power at party expense.
? The regime will concentrate on stabilizing the economy and, while
pulling back on some reforms, will push for others designed to
enlarge the role of the market and private enterprise.
? Despite these efforts, we expect little improvement?and possibly
a decline?in economic performance as well as further increase in
domestic turmoil. Of several conceivable scenarios:
Community analysts consider it most likely that the regime
will maintain the present course, intensifying reform while
making some retreats.
? In a less likely scenario that all analysts believe is a
possibility, the political turmoil and economic decline will
become unmanageable and lead to a repressive crackdown,
effectively ending any serious reform effort. (The CIA's Deputy
Director for Intelligence disagrees with both scenarios. See
pages vii and 18.)
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Figure 1. President Gorbachev:
trying to cope with the crisis.
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Key Judgments
The crisis, precipitated by long-simmering problems and Gorbachev's
policies to address them, will continue over the next two years and beyond
and could threaten the system's viability:
? Ethnic problems are endemic: conflict between the center and regions
will increase as will interethnic strife, and the regime can at best hope to
manage and cope with these problems, not resolve them.
? Economic ills are deeply rooted in the system, and efforts to reform it will
be slowed by the priority given to stabilizing the economy.
At the same time changes in the Soviet leadership during the last year have
made Gorbachev's position relatively secure over the next two years and
portend a more radical approach to addressing the nation's daunting
problems. We believe:
? Gorbachev's power has been significantly enhanced with the weakening
of the leadership's orthodox wing and the development of a second power
base in the legislature.
? The coming local and republic legislative elections and the party congress
next October will probably further undermine the role of the party
apparatus, increase the power of the legislature in decisionmaking, and
bring a de facto multiparty system to some republics.
? More stringent measures?possibly including some retail price increases
and a domestic currency devaluation?are likely to be imposed as part of
the current economic stabilization program. Although the need to
stabilize the economy has slowed the economic reform effort, we expect
to see the introduction of a number of controversial measures?including
a redefinition of property rights, a new taxation system, and antitrust
legislation?that are designed to enlarge the role of the free market and
private enterprise.
? To pursue this course and arrest the growing fear of anarchy in the
country, Gorbachev will try to rein in somewhat the now freewheeling
Soviet press and be tougher in defining the boundaries of the political and
economic autonomy for the country's minority nationalities; he already
has and will continue to use repressive measures if necessary to control
communal violence or prevent secession
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In view of the continuing turmoil, whether Gorbachev can maintain a
reformist course with some tactical retrenchment is uncertain and open to
considerable debate. The next two years will undoubtedly be one of the
most tumultuous periods in Soviet history.
Tangible benefits from perestroyka will be relatively few, although
intangibles (greater freedom and religious toleration) will be more appar-
ent. Overly ambitious targets for the production of consumer goods are
unlikely to be met. Labor strikes are certain. The enhanced role of the leg-
islature will make needed austerity measures more difficult to pursue and
likely compromises will reduce economic effectiveness
Under these conditions, several scenarios are in the realm of possibility, but
two are considered to be much more likely than the others. Most
Community analysts hold the view that a continuation and intensification
of the current course is most likely and believe that, despite the obvious
difficulties, the turmoil will be manageable without the need for repressive
measures so pervasive that the reform process is derailed:
? The politicization of the populace along with the expanding authority of
the legislature are changing the system, giving political reform a broader
and deeper base, and making it much more difficult and costly to turn
back the clock.
? Although ethnic assertiveness will continue and Baltic peoples will strive
for self-determination, the drive for secession will probably be blunted in
this period by the regime's more sophisticated use of concessions and
warnings and the desire of Baltic leaders to negotiate rather than
confront.
? As difficult as the economic situation will be, the regime probably can
prevent the supplies of food and consumer goods from declining to the
point of provoking large-scale unrest
In a less likely scenario that all accept as a possibility, the ongoing turmoil
will get only worse and lead the regime, with or without Gorbachev, to use
massive force to hold the country together and save the regime:
? Democratization will accelerate system fragmentation and make it
impossible to take necessary austerity and economic reform measures.
? An exacerbation of supply problems?by an upsurge in strike activity,
transportation bottlenecks, or severe weather?could increase shortages
and lead to social upheaval.
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? While trying to avoid confrontation, the interests of the Baltic peoples
and Moscow are bound to clash dramatically, leading to much harsher
measures by the center to regain control.
Events in Eastern Europe are certain to play a role in determining which
scenario the USSR follows in the next two years. As long as the
transformations in Eastern Europe do not spiral out of control, they will re-
inforce the trend toward radical reform in the Soviet Union. In the unlikely
event that Moscow deems it necessary to use Soviet troops to restore order
and prevent the disintegration of the Warsaw Pact, perestroyka in the
USSR would be dealt a serious, if not fatal, blow.
Either scenario points toward the continuation of current foreign and
security policies, at least for the two years of this Estimate. Gorbachev will
still push hard for various arms control agreements. Eastern Europe will
continue to have heretofore unthinkable leeway to democratize, effectively
changing the Warsaw Pact into more of a political alliance than a military
one. Even if a crackdown occurred under Gorbachev or another leader, the
preoccupation with internal problems would be paramount, the desire to
avoid increased tensions high, and the effort to shift resources toward
consumption strong. A different regime would not, however, be as inclined
to make major concessions to achieve various arms control agreements or
be as accommodating to centrifugal trends in Eastern Europe.
Alternative View
The CIA's Deputy Director for Intelligence believes that the Estimate does
not adequately capture the likely scope of change in the USSR over the
next two years
Assuming Gorbachev holds on to power and refrains from repression, the
next two years are likely to bring a significant progression toward a
pluralist?albeit chaotic?democratic system, accompanied by a higher
degree of political instability, social upheaval, and interethnic conflict than
this Estimate judges probable. In these circumstances, we believe there is a
significant chance that Gorbachev, during the period of this Estimate, will
progressively lose control of events. The personal political strength he has
accumulated is likely to erode, and his political position will be severely
tested
The essence of the Soviet crisis is that neither the political system that'
Gorbachev is attempting to change nor the emergent system he is fostering
is likely to cope effectively with newly mobilized popular demands and the
deepening economic crisis
VII
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Contents
Page
Key Judgments
Discussion
Leadership Showdown
Can the Turmoil Be Managed?
2
Staying the Course
5
Impact of Reform on Soviet Society
1 4
A Repressive Crackdown: A Less Likely Scenario
1 6
An Alternative View
1 8
Implications for the Future of the System
1 8
Implications for Gorbachev's International Agenda and US Policy
21
Gorbachev Stays the Course
21
Retrenchment
22
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Gorbachev's Politburo Today
Yakovlev. Gorbachev protege. . . strong proponent
of radical reform. Frequent target of criticism by
party conservatives.
Shevardnadze. One of Gorbachev's strongest sup-
porters on both domestic and foreign policy . . .
unorthodox statements challenging ideological un-
derpinnings of foreign policy have aroused objec-
tions from Ligachev.
Ryzhkov. Has played a leading role in economic
reform . . . more moderate on political and social
issues . . . criticized Gorbachev in July for neglect-
ing party duties but appears to be personally close
. . . clashes with Ligachev reported.
Medvedev. Ideology secretary in forefront of "new
thinking" on foreign policy and radical economic
reform . . . more cautious on cultural issues. . .
also target of orthodox critics.
Slyun'kov. Economics secretary who has been
hedging on radical restructuring. . . some reports
suggest not completely in Gorbachev's camp.
Maslyukov. First Deputy Premier and Gosplan
chairman?a moderate on reform . . . like his pa-
tron Ryzhkov, has better appreciation than Gorba-
chev of difficulties of translating economic theory
into practice.
Zaykov. Secretary and, since 21 November 1989,
First Deputy Chairman of the Defense Council . . .
takes a traditionalist stand on some key reform
issues. . . may have lost clout when failed to derail
Yel'tsin election.
Vorotnikov. Only other Politburo member appoint-
ed before Gorbachev took power . . . increasingly
critical of political pluralism and radical econom-
ic measures . . . only other full member in Su-
preme Soviet.
Kryuchkov. KGB chief who reportedly has close
personal ties to Gorbachev. . . echoed perestroyka
themes in 1989 Revolution Day speech but urged
restraint . . . has publicly called for legislative
oversight of KGB.
Ligachev. With "second secretary" powers now
removed, less able to hinder Gorbachev's pro-
grams . . . views political reform as dangerous,
disruptive, unnecessary. . . opponents of reform
may look to him as spokesman. . . questions about
corruption still alive.
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Discussion'
The Soviet system is in crisis. While noting the
potential for turmoil in our previous Estimate (NIE
11-18-87), we underestimated how quickly it would
develop. The roots of the crisis run deep into the
nature of the Soviet state and Russian history and
have been nourished by decades of official neglect,
corruption, and ineptitude. But the public manifesta-
tions?the strikes, demonstrations, and other chal-
lenges to authority?are a direct result of Gorba-
chev's effort to restructure the system. The turmoil
that these developments have brought to the fore will
continue and probably deepen.
This increased popular assertiveness is in one sense a
measure of Gorbachev's success in destroying ele-
ments of the Stalinist system. The pace and extent of
this change have exceeded even our relatively bullish
forecast of two years ago; indeed, the new legislature
is the beginning of systemic change. His political
reforms have brought a reduction in regime repres-
sion, an expansion of civil liberties, greater tolerance
of religious beliefs, a broader range of permissible
public discussion, and an opportunity for previously
unrepresented groups to become a part of the system.
Gorbachev's policies are breaking the management
and control mechanisms of the old regime, however,
before new ones are ready to assume these tasks. The
effort to create a new political culture and institu-
tions?capable of handling the flood of demands
unleashed by Gorbachev?is still in its infancy.
His policies, moreover, have yet to alleviate?and in
some respects have worsened?many of the social and
economic problems he inherited. His efforts to man-
age the USSR's restive ethnic minorities have not
halted their demands for greater independence from
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Moscow; indeed, the effort to accommodate them has
led to a strong push for independence in the Baltic?a
step that Moscow will not allow but may not be able
to stop without repression. And his economic policies
have exacerbated serious shortages of consumer goods
and services, guaranteeing a continuation of popular
discontent. Not surprisingly, there is widespread pes-
simism in the country about the ability of the regime
to overcome these problems.
Leadership Showdown
During the past year this turmoil led to an increasing-
ly open conflict within the Politburo:
? Party secretaries Ligachev and Chebrikov among
others seemed convinced that glasnost and political
reform in general had promoted disorder in the
country and were destroying the leadership role of
the Communist Party. These leaders made it in-
creasingly clear that significant retrenchment was
required to save the party and the country.
? Gorbachev and others rejected reliance on tradition-
al remedies and argued that even more radical
changes in the party and its policies were necessary
to cope with the crisis and restore the party's
authority.
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That conflict led Gorbachev to move decisively
against the Politburo's orthodox wing at the Central 25X1
Committee plenum in September 1989, removing five
full and candidate Politburo members and replacing
them with moderate and reformist supporters of
perestroyka. These changes have significantly altered
the balance of power in the Politburo and effectively
shattered its orthodox faction (see inset). The plen-
um's approval of Gorbachev's proposal to convene the
28th Party Congress in October 1990?four months
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earlier than mandated?also allowed him to acceler-
ate his plans to bring new blood into the Central
Committee, which has been another source of resis-
tance to his reforms
Gorbachev's success at the plenum was the latest in a
series of moves that have significantly strengthened
his political position in the leadership, including:
? The Central Committee plenum in September 1988,
when he launched a personnel and organizational
shakeup of a magnitude not seen since Khrushchev's
time.
? The April 1989 plenum, when he succeeded in
purging about 20 percent of the Central Commit-
tee's members?"dead souls" who no longer held
the jobs entitling them to membership?and pro-
moting 24 candidates, mostly of a reformist stripe.
? His acquisition of a newly strengthened presidency
in May 1989 followed by a streamlining of the
government bureaucracy that had been resisting his
economic reforms (see inset).
The cumulative effect of these moves has been to
sharply reduce the threat posed by Gorbachev's oppo-
nents. As a result, we believe his position in the
leadership is relatively secure for the next two years,
although an assassination attem ? t b an individual
against him cannot be ruled out
Can the Turmoil Be Managed?
Even with his power and authority enhanced, how-
ever, Gorbachev has not yet shown that he has a
strategy for dealing with a host of daunting problems
his policies have created that defy easy solution and
that by his own admission threaten perestroyka. On
the one hand, he faces powerful pressures for more
far-reaching changes:
? The March 1989 elections revealed previously unsus-
pected grassroots support for political reform and a
rejection of the party establishment that came as a
shock to entrenched party bureaucrats as well as
foreign analysts; an even greater repudiation is likely
in the coming legislative elections at the republic and
local levels, shifting authority further from party
control toward the new legislative system.
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An Upgraded Presidency
Gorbachev's clearest personal political gain
from the reform of the state system is a
strengthened presidency. Under the previous
arrangement, the post was largely ceremonial.
Gorbachev's scheme makes the president an
executive leader of the full Supreme Soviet with
constitutional authority in both domestic and
foreign affairs and gives him power to:
? Nominate appointees to top-level government
jobs, including the posts of premier, prosecu-
tor general, and Supreme Court chairman.
? Recommend appointments to the new Consti-
tutional Oversight Committee.
? Chair the Defense Council.
? Conduct negotiations and sign international
treaties.
The new president is accountable to both the
Congress of People's Deputies and the Supreme
Soviet, although only the Congress can recall
him. There is no legal requirement that the
general secretary serve as president, so Gorba-
chev's removal from the top party spot would
not automatically cost him the leading state
position. Although the Politburo undoubtedly
would try to deprive him of that power base as
well, the Supreme Soviet could prevent such a
move.
As the new legislature has gained authority and
become increasingly active in formulating poli-
cy, the presidency has taken on added impor-
tance and given Gorbachev a substantial advan-
tage over most of his Politburo colleagues who
have minimal formal legislative responsibility.
Both orthodox party members and reformers
fear that this upgrading of the presidency could
lead to one-man rule. Party traditionalists fear
this will violate the tradition of collective lead-
ership that gives them at least a limited ability
to keep Gorbachev's reforms in check, and the
reformers are more concerned about what might
happen if someone other than Gorbachev held
the job.
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Interlocking Directorate of the Soviet Leadership,
November 1989
Party
Other Post Government
Politburo Secretariat Council of Ministers Supreme Soviet
Full Member
Gorbachev General Secretary Chairman
(elected October 1980) (president)
Ligachev Chairman,
(elected April 1985) Agriculture Commission
Ryzhkov Chairman (prime minister)
(elected April 1985)
Maslyukov Gosplan chief
(elected September 1989)
Shevardnadze Minister of Foreign Affairs
(elected July 1985)
Medvedev Chairman,
(elected September 1988) Ideological Commission
Vorotnikov
(elected December 1983)
President, RSFSR Member
Zaykov
Member First Deputy Chair-
(elected March 1986) man, Defense Council
Kryuchkov KGB chief
(elected September 1989)
Slyunkov
(elected June 1989)
Chairman,
Socioeconomic
Commission
Yakovlev
(elected June 1989)
Chairman,
International
Commission
Candidate member
Lukyanov First Deputy Chair-
(elected September 1988) man (vice president)
Vlasov Premier, RSFSR
(elected September 1988)
Biryukova Deputy Premier
(elected September 1988)
Primakov Council of Union
(elected September 1989) Chairman
Razumovskiy Chief, Cadres
(elected February 1988) Commission
Yazov Minister of Defense
(elected June 1987)
Pugo
(elected September 1989)
Party Control
Commission
Secretaries only
Baklanov Defense Industry
(elected February 1988)
Stroyev Agriculture
(elected September 1989)
Manayenkov
RSFSR Cadres and Member
(elected September 1989) Ideology
Usmanov Unknown
(elected September 1989)
Girenko Unknown
(elected September 1989)
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Figure 2. Gorbachev iresides over Supreme Soviet?
September 1989.
? The level of ethnic mobilization in the Baltic and
Caucasus has significantly increased the pressures
for independence and promoted articulation of eth-
nic demands that are often irreconcilable with one
another. Managing these centrifugal threats to the
state is now much more difficult and the political
and social costs of returning to the old ways of
maintaining order much greater.
? The worsening economic situation has produced
mounting popular dissatisfaction and a wave of
strikes, intensifying the pressure on the regime to
give workers greater control over their enterprises,
to reduce the shortages of necessities and adopt
more decisive economic policies. The regime so far
has not been able to respond effectively to this
pressure.
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At the same time, he must deal with a number of
strong barriers to change:
? Although reduced in power, an entrenched party
and government bureaucracy continues to resist
reforms that would lead to increased political ac-
countability, greater "marketization" of the econo-
my, or other changes that would undermine its
status and autonomy.
? Many Soviet citizens regard economic reforms that
widen differentiations in wages, increase retail prices,
and threaten unemployment as violations of the
"social contract." This has been an important factor
in delaying economic reforms that for all their
promise would have such unpopular consequences.
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Gorbachev's Reform Agenda and the KGB
General Secretary Gorbachev needs the KGB in a
period of political change to ensure his political
survival, to monitor the compliance of local elites,
and to control burgeoning societal unrest. During
the past year, Gorbachev has strengthened his hold
on the security service first by transferring then
KGB boss Viktor Chebrikov to the Central Com-
mittee Secretariat and a year later retiring him.
Current KGB Chairman Vladimir Kryuchkov?
recently vaulted to full Politburo membership?is
a political ally of the General Secretary and has
been an outspoken advocate of reform?including
parliamentary oversight of the KGB. Chief of the
KGB Border Guard Directorate General Matrosov
recently discussed his component's budget at a
hearing of the Supreme Soviet Defense and Securi-
ty Committee, and later this fall Kryuchkov will
submit the security service's budget to the Su-
preme Soviet for the first time.
Some KGB officials are concerned about the effect
of perestroyka and glasnost on KGB prestige and
on the organization's ability to carry out its
mission at a time of growing unrest
The KGB on the whole, however, is apparently
satisfied that Gorbachev's reforms do not threaten
its prominent position. Despite some "KGB ba-
shing" in the Supreme Soviet and the press,
Kryuchkov has been successful in defending many
of the KGB's vested interests. Thus far, the KGB
has taken fewer cuts in its personnel and preroga-
tives than either the Ministry of Internal Affairs or
the Ministry of Defense. For example, although
the Fifth (Antidissident) Directorate has been
abolished and the Third Chief (Military Counter-
intelligence) Directorate has been trimmed, many
of their personnel have been assigned to a new
department formed to fight organized crime.
Moreover, KGB departments in the Caucasus and
Central Asia remain active in investigating nation-
alist extremists?reflecting the leadership's con-
tinuing need for the KGB's domestic role to main-
tain control.
? The disorder that accompanies reform?corruption,
strikes, civil unrest, inflation, and increased crime?
is anathema not only to institutions like the KGB
and the military but also to large segments of the
general population (see foldout map, figure 10, at
the back). An authoritarian and paternalistic cul-
ture has instilled in many the belief that the only
alternative to a strong hand at the center is anarchy
(see inset).
As a result of these pressures and the greater latitude
for action he has achieved within the Soviet elite,
Community analysts now expect Gorbachev to press
ahead with a domestic agenda that combines an
intensification of political reform and economic stabi-
lization with a tougher approach to party discipline,
ethnic extremism, and media policy. Whether he can
maintain such a course given the turmoil and
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pressures is uncertain and the subject of strong debate
in and out of the Intelligence Community. This
situation could move in several different directions,
but most analysts believe two are much more likely
than others: "staying the course" and "a repressive
crackdown" (see inset, page 7). (s NF)
Staying the Course
The most likely scenario in the view of Community
analysts is that Gorbachev will be able to keep the
reform process going and avoid resorting to draconian
measures that would roll back the trend toward
greater pluralism and democratization. (s NF)
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Figure 3
USSR: Reported Incidents of Unrest by Type,
January 1987-September 1989
Demonstrations
Other poliltical acts a
Petitioning
Distributing leaflets
Strikes
Fighting
Riots
Other violent acts')
0 200
400
600
800
1,000
1,200
1,400
?_,
--
-,
1.
a Includes mass meetings of informal groups not considered
demonstrations, hunger strikes, collection of funds for
nonofficial functions, unsanctioned religious activity.
such as Hare Krishna meetings and mass meetings of
Ukrainian Catholics, and so forth.
bIncludes bombings, assassinations, production of homemade
weapons, airline hijackings, and attacks against security forces.
This judgment rests in part on our assessment of
Gorbachev, his agenda and his ability. Although
lacking a detailed blueprint, he has been enormously
successful in using and defining the sense of crisis in
the system?in 1985 and now?to drive increasingly
radical solutions to Soviet ills. His policies call into
question, whether intentionally or not, the role of the
Communist Party, its ideology, the Stalinist economic
system, and the center's dominance of the regions. As
the sense of crisis has mounted, only he in the
leadership appears to have the ability to manage the
turmoil his own policies have stimulated. At the same
time, he is flexible and clever at not getting too far
Secret
324257 11-89
ahead of what his colleagues can tolerate at a given
moment; he has made tactical adjustments and occa-
sional retreats to cope with both political and policy
consequences of reform.
Our assessment of the likelihood of this scenario also
reflects judgments about the manageability of the
reform process and the turmoil it has created. Forces
have now been unleashed in the USSR that have a life
of their own, weakening the regime's control over
events. The turmoil will continue under this or any
other scenario. Most Community analysts believe the
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Other Possible Outcomes
Although the Intelligence Community considers
the two scenarios presented in this Estimate to be
the most likely, three other general scenarios?
while far less likely?are at least conceivable:
? Success story. The regime could move much
more quickly and skillfully on economic stabili-
zation than we anticipate, be far more accommo-
dating on demands for ethnic autonomy, and
more receptive to sharing political power with
forces outside the Communist Party. Such a
scenario would see the economy revive, the
"union" enhanced by genuine devolution of sub-
stantial political and economic power to national
minorities, and a stable transition toward politi-
cal democracy that did not threaten?as in
Poland, Hungary, and East Germany?the con-
tinued viability of the Communist Party.
? Social revolution. At the opposite end of the
spectrum, Gorbachev's concessions to the popu-
lation, severe weakening of all major regime
institutions, and incompetence in managing the
economy could lead to his losing control of the
situation. Ethnic violence and separatist de-
mands, increasingly potent challenges to Com-
munist Party rule, and catastrophic economic
deterioration could lead to large-scale instabil-
ity and perhaps social revolution. This could
include the breakaway of many non-Russian
republics and a prolonged period of civil war.
? Return to neo-Stalinism. The threat of imminent
social revolution could prompt a coup against
Gorbachev that would not only lead to retrench-
ment but also to the imposition of political
repression more severe than during the Brezhnev
years. This scenario would involve the massive
use of military force to reimpose order. The
effort would certainly be bloody and would only
postpone?and over time deepen?the systemic
crisis, not resolve it.
regime can cope with it and press ahead, haltingly and
unevenly at times, with the reform process:
? A more open legislative process with real elections,
debate, and votes is becoming institutionalized. The
population is becoming more involved and interest-
ed, enlarging the constituency favoring change and
making it much more difficult to alter course.
? Although strikes and shortages will continue, the
regime will be able to maintain supplies, particular-
ly food, at a level sufficient to avoid widespread
social disruptions; the population, as it has in the
past will grudgingly endure the privations, giving
the regime more time to get its economic strategy
implemented.
7
? The combination of regime concessions and warn-
ings have blunted somewhat nationalist demands for
outright independence, while the Baltic peoples
appear disinclined to force a confrontation over the
issue any time soon.
Political Reform. Analysts expect Gorbachev will
intensify his reform of political institutions even fur-
ther over the next two years, as he attempts to
improve their capacity to deal with the demands
perestroyka has created. The political reforms
mapped out in the summer of 1988 will soon be
nearing completion in structural terms. A new Con-
gress of People's Deputies and Supreme Soviet al-
ready have been elected. Elections to the republic
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Figure 4. Debate in the Supreme Soviet. Left to right: Chairman of
the Council of Nationalities, Nishanov; First Deputy Chairman of
the Supreme Soviet, Luk'yanov; Chairman of the Supreme Soviet
Gorbachev; Chairman of the Council of the Union, Primakov; and
Deputy Chairman of the Council of the Union, Iskakova.
congresses of deputies and local soviets are being held
late this year and early next, further drawing the
populace into the political process and increasing the
pressure on the system to respond. The party congress
already set for October 1990 will complete the re-
vamping of the party and its Central Committee,
shifting the political balance strongly toward a re-
formist course.
Despite this progress, the reformers recognize that
they have far to go to build a political culture and
institutions capable of dealing with the demands
reforms have unleashed. They are trying to ensure
that the new legislative institutions have a genuine
measure of power and that the Soviet people have
some real influence in selecting their representatives.
Secret
At the same time they want to achieve these objec-
tives while preserving a national single-party system
in which much power remains concentrated at the top.
Gorbachev seems prepared to give these new institu-
tions a substantial degree of independence and to
permit considerable pluralism within them, however,
in order to obtain his larger reform objectives. As is
already evident, achieving such a balance will be
difficult, requiring consistent effort to make the party
more inclusive of diverse opinions while reining in
those who exceed the limits.
In addition to strengthening the role of the legislature,
we believe Gorbachev will attempt to restore the
party's deteriorating position. His speeches and
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actions indicate that he wants the party to shape the
reform process rather than be pulled along by it. To
do this he intends to use the coming local and republic
elections and the party congress to discredit further
the opponents of reform and brin more new blood
into the apparatus.
This reform process will weaken an already belea-
guered nomenklatura and could destroy it if allowed
to continue for much longer. The new blood will align
the party more clearly with reform efforts, as it
already has in the Baltic, and perhaps give it greater
credibility. Such a party would be vastly different
from its Leninist predecessor, however, less responsive
to Moscow's edicts and more closely tied to its local
constituency. Its distinctive claim to rule would be
eroded even further as it faced strong competition at
the local level from groups (de facto political parties)
urging support for their own agendas. Whether in-
tended or not, the reform will, in our view, hasten the
ongoing shift of power, legitimacy, and action away
from the party to other institutions, particularly the
legislatures.
We also expect Gorbachev to give new emphasis to his
call for a society based on law as part of his effort to
strengthen the regime's legitimacy. Actually estab-
lishing the rule of law would require steps the regime
so far has been reluctant to take: codification and
implementation of such ideas as the independence of
the judiciary, the subordination of the government to
the law, and an emphasis on the freedom of the
individual, rather than the individual's obligations to
the state. In the "halfway house" Gorbachev is trying
to create, we expect coming legal reforms?including
new criminal legislation and laws on economic activity
and the press?to make steps in those directions but
continue to stress the regime's rights over those of its
citizens.
Nationality Policy. Initially, Gorbachev paid little
attention to nationality problems; indeed, he appears
to have assumed that reform would not encounter
obstacles on this front. As a result, the regime has
been struggling ever since to get ahead of the prob-
lem. Nationalism has flourished in the more open
atmosphere of glasnost and public debate. The regime
has allowed changes that would have been unthink-
9
Gorbachev 's Nationalities Policy
To help ease the Soviet Union's nationalities
problem, Gorbachev envisions a program that
would include:
? The transition of the USSR from a de facto
unitary empire to a union with real federative
content.
? Constitutional delimitation of the functions of
the center and the republics, with a significant
increase in the authority allocated to the
republics.
? Removal of discriminatory and provocative
obstacles to the development of non-Russian
languages and cultures.
? Equalization of the rights of all nationalities.
? Integration of the republics within a single
unionwide economy, in which the "socialist
market" harmonizes the interests of the mul-
tiethnic whole with those of its ethnic parts.
able a few years ago, but this accommodation has
encouraged more demands rather than limited them
(see foldout map, figure 11 at the back).
The nationality policy adopted at the September 1989
plenum indicates that Gorbachev's willingness to give
the republics greater political and economic autonomy
has certain clearly defined limits (see inset). In his
speech he affirmed that each nationality had the right
of self-determination but noted that this concept was
not a "one-time act connected with secession" but the
right to develop culturally and economically within
the existing state structure. Gorbachev also has ruled
out any shifting of borders and rejected the splitting
of the Communist Party along ethnic or republic lines.
Moreover, his stress on an integrated market and the
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Figure 5
USSR: Distribution of Reported Unrest and of Population
by Republics, January 1987- September 1989
Percent
Incidents of Unrest
Ukraine,
Moldavia,
Belorussia, 13
Baltic
republics, 19
Central Asian
republics, 6
ollitSFSR, 37
N
Caucasus
republics, 25
a Figures from 1989 Census.
Secret
Percent
Population a
Ukraine
Moldavia,
Belorussia, 23
Central Asian
republics, 17 \
RSFSR, 51
Baltic
republics, 3
Caucasus
republics, 6
reality of the economic interdependence of the repub-
lics appears to be aimed at reining in the growing zeal
among nationalists, especially in the Baltic republics,
for virtual economic and political independence from
Moscow.
Community analysts believe Gorbachev is fully pre-
pared to use force, if necessary, to control the kind of
interethnic violence that broke out over the disputed
territory of Nagorno-Karabakh in the Caucasus; the
reestablishment of law and order in such cases would
not be incompatible with his reform objectives. On the
other hand, most expect him to make every effort to
avoid the use of force to quell nationalist demands for
political independence in the Baltics?a move that
would clearly enforce limits on glasnost, democratiza-
tion and other reforms, and cost him some of the
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324256 11.89
international goodwill derived from his liberalization
and his diplomatic initiatives.
The political challenge to Soviet rule is the greatest in
the Baltics, where actions in support of eventual
secession will continue to test Moscow's patience and
tolerance. Most analysts believe there is a decent
prospect that the regime's willingness to concede a
degree of autonomy unthinkable in the past along
with warnings of what is not now possible will blunt
immediate demands for secession. Some Baltic na-
tionalists are aware of the dangers of going too far,
are looking for compromise, and seem inclined to
avoid confrontation. This approach could well post-
pone a pitched battle over independence for some
time.
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Even if this fails, we believe the leadership would first
exhaust all its political and economic leverage to
encourage a nationalist retreat from unacceptable
demands before turning to military intervention. For
example:
? Central ministries could be directed to exert eco-
nomic pressure by bargaining over delivery prices or
even delaying the delivery of fuel, and blocking
foreign financial ventures.
? Moscow might emphasize its disapproval by height-
ening the visibility of security (MVD and KGB)
personnel or military units already present in the
Baltics and seal the borders, hoping to cow dissent-
ers and forestall a major bloodletting.
? Advocacy of secession could be criminalized and its
advocates prevented from seeking elective office or
even arrested.
? The Russian minority in the Baltic could be spurred
to use strikes or work stoppages to tie up the local
economies.
Gorbachev undoubtedly recognizes that these options
carry the risk of provoking demonstrations and esca-
lating into a situation that could ultimately trap the
leadership into sending in troops. The risk would be
less, however, than that associated with a general
crackdown in the Baltic republics, which most believe
would be used only as a last resort. Even this latter
course would be less risky for him and the system than
letting the Baltic republics go. This move would
encourage other much larger nationalities, such as
Ukrainians, to seek similar goals and make regime
survival problematic at best
The Economy. The USSR's swelling budget deficit,
spiraling inflation rate, and continuing shortages of
consumer goods threaten not only the country's eco-
nomic well-being but perestroyka itself. Because of
this, we expect Gorbachev to give special emphasis to
a new economic stabilization program designed to
11
slash the budget deficit, reduce the ruble "overhang,"
and provide some immediate relief to the consumer.
Specifically:
? The plan for 1990 is to cut the budget deficit in half
by reducing spending for investment and defense
and by increasing revenues through various means.
? Bonds and state housing will be offered to enter-
prises and individual citizens to soak up excess
liquidity.
? Stiff taxes have been imposed on wage hikes of more
than 3 percent unless related to increased output of
consumer goods.
? Production of consumer goods is programmed to
grow by 12 percent in 1990 over the planned level
for 1989, and imports of industrial consumer goods
are scheduled to rise by 15 percent per year this
year and next.
This stabilization program, however, will not achieve
the desired objectives. The regime apparently recog-
nizes this and is reportedly considering more stringent
measures to help stabilize the economy. This could
include a currency reform?the conversion of old
rubles into new ones at different rates depending on
the size or form of holdings. Price increases on heavily
subsidized basic goods and services, which we believe
are necessary to get a hold on the monetary imbal-
ance, are apparently not imminent. A draft blueprint
for economic reform that is currently under discussion
calls for a deregulation of retail prices only on luxury
items, most imported goods, and high-quality foods
and delicacies beginning in 1991. The rising tide of
consumer dissatisfaction, combined with the legisla-
ture's increased authority and responsiveness to public
opinion, will make it difficult for the leadership to
adopt the tougher austerity measures needed to im-
prove the economy's health.
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Figure 6
USSR: Summary of Selected Indicators of Consumer Welfare
? Improvement
0 No significant change
? Deterioration
Indicators
Performance measures a
1986 87 88
89c
Popular perceptions b
88 89
Overall consumption per capita
?
0
?
?
?
Meat
?
?
Vegetables and fruit
??
?
?
?
?
?
Durable goods
?
0
0
0
?
Automobiles
?
0
?
Home electronics
?
?
Clothing
0
?
0
0
?
Personal care and repair services
?
?
?
Housing
?
?
?
0
?
Health care
?
?
?
?
Leisure and recreation
?
?
?
?
?
Inflation
?
?
?
?
Rationing d
?
Working conditions
?
?
?
?
?
Protection of the environment
?
?
?
a Performance is measured by comparing an indicator's rate of growth with the growth rate
achieved during 1981-85, the five-year period that preceded the Gorbachev era.
bBased on CIA analysts' judgments of the perception of citizens in the USSR as to how living
standards have changed under Gorbachev?through August 1989?in comparison with the first half
of the 1980s.
c Projections based on data for January-June 1989 compared to the same period in 1988.
dNo performance measures are included for this indicator because we lack sufficient data on
performance during the baseline period, 1981-85.
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Figure 7
USSR: State Budget Deficit, 1985-90
Note scale change
Billion rubles
125
100
75
50
25
Percent of GNP
15
12
0 1985 86 87 88 89a 90a 0 1985 86 87 88 89a 90a
aThe CIA estimates for 1989 and 1990 are based on plan data. The range in the
estimates for those years reflects uncertainty about the success of announced
Soviet measures to reduce the deficit.
The severity of the economic situation has forced the
regime to backtrack on those economic reforms that
would exacerbate the fiscal dilemma, hurt the con-
sumer, and undermine popular support for peres-
troyka (see inset, page 14). Gorbachev regards this as
a temporary retreat, however, and we expect him to
continue his efforts to develop a more coherent plan
for enlarging the role of the free market and private
enterprise that will lay the groundwork for the intro-
duction of more far-reaching measures when the
economy is more stable. These measures include:
? A new corporate and individual income tax system.
? Antitrust legislation designed to break up the coun-
try's massive production conglomerates and encour-
age competition.
13
324200 11.89
? A redefinition of property rights that puts the
socialist and cooperative/private sectors on a more
equal footing.
? An overhaul of the monetary/financial system to
increase the ability of central authorities to employ
economic rather than administrative levers.
In a move driven more by politics than economics,
Gorbachev will continue to provide strong support for
efforts to give the republics greater economic autono-
my under a system known as regional self-financing.
This decentralization of economic authority is de-
signed to assuage some of the republics' demands for
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Pulling Back on Reform
? Both wholesale and retail price reform, sched-
uled for implementation in 1990 and 1991,
were delayed. At first postponed indefinitely,
plans now under discussion would return to
the original schedule but make the revision of
wholesale prices more gradual and the dereg-
ulation of retail prices more limited.
? To control inflationary pressures, enterprises
no longer have the right to raise the prices of
certain categories of products.
? Mandatory output targets, which were to be
sharply reduced, have been reinstated in sev-
eral sectors.
? Decisions on wage increases, which were to be
the preserve of the enterprise, are now to be
controlled by centrally imposed taxes on the
growth of the enterprise wage fund.
Figure 8. City of the future, Krokodil, July 1989
greater independence while at the same time making
them more accountable for their economic perfor-
mance (see inset).
Secret
Regional Self-Financing
The Law on Regional Self-Financing, scheduled
for nationwide implementation in 1991, will
give the republics more authority over and
responsibility for the production of food, con-
sumer goods, services, and local construction.
According to preliminary Soviet calculations,
the overall output of industrial production un-
der the jurisdiction of the republics is expected
to increase, on the average, from the current
level at' 5 percent to 36 percent of the USSR's
total production. To involve the republics more
directly in the effort to increase productivity,
each republic's budget will be made more de-
pendent on the profits of its enterprises. The
republics' economic plans, however, will contin-
ue to be dominated by state orders and "control
figures" established by Moscow, and key sec-
tors of the economy, strategic planning, and
control over resources and financial policies
will be left in Moscow's hands.
Impact of Reform on Soviet Society
The Soviet system clearly is changing dramatically.
Unlike the leaders in China, Gorbachev appears to
believe that the new order must be built on founda-
tions of political and social legitimacy if it is to
succeed. But reform is often more difficult than
revolution, and the genies he has released will defy the
boundaries the system tries to place around them.
Although Gorbachev's economic policies point in the
right direction, we believe they are unlikely to bring
any substantial improvement in economic perfor-
mance during the next two years and the situation
could get worse, particularly this winter when food
supplies will decline and spot fuel shortages may
increase:
? The deficit will remain high, there will be little
economic growth, and the demand for goods and
services will greatly exceed their supply.
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? Overly ambitious targets for the production of con-
sumer goods are unlikely to be met. Some modest
improvements are possible, but?even with the cuts
in defense spending?any gains will come slowly
because of the long leadtimes involved in shifting
production capacity toward consumer goods and be
restricted to relief in a few areas. Rationing and
periodic runs on scarce goods will continue.
? Gorbachev's reforms will put increased financial
pressure on the enterprises and should help reduce
redundant labor and some waste of materials. But
these benefits too will be slow in coming and
probably outweighed by dislocations, such as unem-
ployment, and other disruptions resulting from the
conflicting signals that piecemeal implementation of
reforms will continue to create.
? Increased regional autonomy could eventually make
the distribution of food more efficient by reducing
Moscow's role as the chief bottleneck in an overly
centralized system. Thus far, however, local officials
are introducing protectionist measures that are
causing even more disruption and disequilibrium in
national balances.
? Antimonopoly legislation and other reforms now
under consideration hold some promise for the
future but will only begin to take root during the
period under consideration.
? If Gorbachev adopts a more radical approach on
monetary stabilization, the economic and political
environment for reforms could improve, allowing
him to at least push ahead rather than delay
further.
Gorbachev's political reforms have more potential to
produce results that would make any effort to turn
back the clock more difficult and costly:
? His electoral reforms appear to be mobilizing the
population, creating channels through which its
interests can be expressed, and making officials
more accountable to their constituencies.
? The boundaries of intraparty dialogue will probably
expand even further, making any return to "demo-
cratic centralism" less likely.
15
? Although the new Supreme Soviet will not achieve
the role of a Western legislature in the next two
years, it is no longer the rubberstamp organization it
once was, and the leadership will have to take it
increasingly into account. This will provide a chan-
nel for citizen involvement in decisionmaking, give
the leadership a more accurate barometer of grass-
roots opinion, and have an impact on important
legislation.
? The challenge of contested elections?whether to
party or state posts?also will force the party to
engage in a genuine dialogue with other organiza-
tions, including informal political groups. Although
official opposition to a multiparty system will re-
main, these new groups are already operating like
parties and in many regions could become the
governing authority, replacing the Communist Par-
ty.
The radical transformations under way in Eastern
Europe are likely to have a major impact on the fate
of perestroyka in the USSR. As long as widespread
domestic violence is avoided, anti-Sovietism held in
check, and Warsaw Pact membership maintained,
Gorbachev appears willing to tolerate almost any
political change in East European countries?includ-
ing the demise of the Communist parties. A continua-
tion of such fundamental reform in Eastern Europe
will reinforce the trend toward the thus far much less
radical reform in the Soviet Union. Although the
stakes are far greater at home, Gorbachev's willing-
ness to accept multiparty systems in Eastern Europe
will over time make it more difficult for him to reject
such a course for the USSR.
Perestroyka in the Soviet Union and Gorbachev's own
political survival would be threatened, however, if
events in Eastern Europe were to spiral completely out
of control or take on an aggressively anti-Soviet
character. Such a scenario?particularly if it occurred
in East Germany or Poland and threatened the securi-
ty of Soviet troops stationed there?would put tre-
mendous pressure on Gorbachev to use Soviet forces
to restore order and prevent the breakup of the
alliance. An attempt to do so would lead to bloody
repression, freeze relations with the West, and halt
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Figure 9
Growth of Rationing in the USSR
Note scale change
Cities Reporting Rationing
60
,---,
45
30
15
0
1986
a Projected.
87
88
89a
Commodities Reported Rationed
20
15
10
1986 87
88 89a
liberalization in the USSR. If Gorbachev resisted
using Soviet forces in this scenario, orthodox elements
in the party, the military, and the security services
would almost certainly attempt to oust him. Their
success, which would be followed by a violent crack-
down on Eastern Europe, would set back perestroyka
for years, if not kill it entirely.
A Repressive Crackdown: A Less Likely Scenario
There is a less likely scenario for the course of events
in the USSR over the next two years that all analysts
acknowledge is a possibility. In this scenario the
turmoil becomes unmanageable and so threatening to
the system that the requirements of survival lead to a
massive crackdown, ending reform efforts for some
Secret
324198 11-89
time to come. Several developments could lead to such
an outcome:
? The virtual certainty of continuing instability on all
fronts could drive the leadership in an ever more
orthodox direction that Gorbachev will be unable to
resist if he wants to stay in office. Current attempts
to rein in the media and draw clearer lines on
nationality policy may portend such a course.
? The economy could decline much further over the
next two years. Severe shortages of food and fuel
this winter would be especially dangerous for the
regime. This situation would substantially increase
the prospect of regime-threatening labor strife and
make the likelihood of a repressive crackdown much
greater.
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? Baltic nationalists could push so hard for indepen-
dence that a confrontation over this issue cannot be
avoided and would force the regime to use substan-
tial force to maintain Soviet rule. Less re e ressive
measures may not prevent secession.
Such a crackdown would not be so easy now. The
politicization of society has gone quite far. Ethnic
minorities will not readily give up their gains and
hopes for the future. The longer the current reform
process is allowed to continue the more difficult and
probably bloody would be any attempt to repress it.
The institutional support for repression, nonetheless,
remains and would in the view of most analysts still be
able to regain some control over society if ordered into
action.
Such a repressive regime would retreat to policies that
would be less disruptive than the present brand of
perestroyka. While perhaps pursuing nominally re-
formist policies, the assault on the fundamentals of
the Stalinist system would stop, and the reforms that
threaten the party and Moscow's control of the empire
would be reversed. This path would increase order at
the expense of decentralization, democratization, and
human rights. It might in the short run improve
government performance by returning to well-known
principles of management. It would not address the
fundamental economic and social problems now
plaguing the Soviet Union. It may be only able to
reimpose calm for a relatively short period, making
the eventual storm far greater than the one facing the
regime now.
In the economic sphere, retrenchment would mean
adoption of a more orthodox approach, deviating less
markedly from the traditional Soviet model. Such an
approach would place less emphasis on market forces,
strengthen ministerial controls, and give the enter-
prises less decisionmaking discretion. It would also
impose stricter limitations on private businesses (coop-
eratives), individual labor, and leasing arrangements
by reducing the scope of such activities, introducing
stricter eligibility requirements for those engaging in
them, and revising the tax structure in ways to make
17
the private sector less attractive. Soviet advocates of
this approach still believe economic gains are possible
through stricter work discipline, the introduction of
high technology, and a crackdown on flagrant official
corruption.
There would be an even greater retrenchment on
glasnost and the liberalization process. Efforts would
be made to increase central control over the electoral
process and to restrict the Supreme Soviet's newfound
authority. This would quite likely require measures
now judged to be unconstitutional in the USSR
(arrests of Supreme Soviet and Congress deputies,
rule by decree, perhaps shutting down the Supreme
Soviet) and use of force:
? Within the party, emphasis would be placed on
unity rather than a pluralism of views; the forma-
tion of unofficial groups would also be prohibited.
? The range of permissible public and media discus-
sion would be significantly narrowed, overt censor-
ship would return, access to information from the
West would be reduced, and opportunities for Soviet
citizens to travel abroad would become more
limited.
? Human rights generally would be much more vul-
nerable than now; the security services would once
again have relatively free rein to deal with dissi-
dents, nationalists, and strikers.
Under such a retrenchment, the regime also over time
would become much less willing to make significant
concessions to ethnic demands, fearing this would
strengthen the hand of those who want nothing less
than complete political independence. There would be
less reluctance to use draconian measures to put down
ethnic strikes and demonstrations that threatened
central authority or damaged the national economy.
And the planned experiments in regional economic
autonomy?designed to assuage the demands for in-
creased political independence?would likely be can-
celed or sharply curtailed
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An Alternative View
The CIA's Deputy Director for Intelligence believes
that the first of the two main scenarios presented in
the Estimate does not adequately capture the likely
scope of change in the USSR over the next two years
and that the second is not at all the inevitable
alternative.
Assuming Gorbachev holds on to power and refrains
from repression, the next two years are likely to bring
a significant progression toward a pluralist?albeit
chaotic?democratic system, accompanied by a high-
er degree of political instability, social upheaval, and
interethnic conflict than this Estimate judges proba-
ble. In these circumstances, we believe there is a
significant chance that Gorbachev will progressively
lose control of the situation. During the period of this
Estimate, the personal political strength he has accu-
mulated is likely to erode and his political position will
be severely tested.
The essence of the Soviet crisis is that neither the
political system that Gorbachev is attempting to
change nor the emergent system he is fostering is
likely to cope effectively with newly mobilized popular
demands and the deepening economic crisis.
Gorbachev and the Soviet regime will increasingly be
confronted by the choice of acceding to a substantial
loss of political and economic control or attempting to
enforce harsh limits?both economic and political.
Such limits are not acceptable to nationality groups
that want meaningful autonomy, to new political
organizations and individuals who want full political
freedom, or to the general citizenry who, as workers
and consumers, want immediate improvement in what
they know to be a deteriorating standard of living.
Indeed, a program that could stabilize the economy
and prepare the way for serious economic reforms
would require reductions in consumer subsidies and
other measures painful to the populace. The regime's
hopes of producing more consumer goods, including
the conversion of defense industries, are unlikely to
yield substantial results during the period of this
Estimate.
Secret
Facing this dilemma, Gorbachev will press for politi-
cal reforms that propel the process forward, and try to
keep change within bounds. To do the latter, he will
use political and economic pressures and resort to
coercion periodically. This approach is unlikely to
work. The upshot for Gorbachev personally will be to
drive him to either give up his still authoritarian vision
in favor of a truly democratic one, or recognize his
vision as unreachable and try to backtrack from
democratization. Gorbachev is unlikely to choose
clearly either of these positions, thereby intensifying
the crisis and increasing the prospect of a resort to
force and repression.
Massive repression, as the second scenario of the
Estimate suggests, is possible. However, this is less
likely to be led by Gorbachev than by a political and
military coalition that managed to outmaneuver him.
Gorbachev is more likely, in CIA's view, to use
coercive measures in unsystematic and ad hoc ways
that do not stop the ongoing systemic chane and
destruction of the one-party state.
Implications for the Future of the System
The Intelligence Community believes that Gorba-
chev's political reforms are designed to strengthen the
regime's legitimacy by giving Soviet citizens the
ability to improve their lives by working through the
system. To achieve that legitimacy, however, the
system must be able to produce the desired result?
namely, real improvement in the quality of Soviet life.
The modest improvements we expect in consumer
goods and services over the next few years are likely to
fall far short of that goal but may be sufficient to buy
the regime additional time for its policies to take hold.
The same reforms required to strengthen the system's
legitimacy, however, are also certain to make the next
few years some of the most turbulent and destabiliz-
ing in Soviet history. Even though Gorbachev's con-
cern about potential consumer backlash has caused
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him to pull back on some of his economic reforms, his
attempt to revitalize the Soviet economy will prove
highly disruptive:
? The Stalinist economic mechanism is broken, but
the failure to create a new one to do its job has
resulted in confusion and contributed to the eco-
nomic stagnation.
? His effort to improve economic efficiency by reduc-
ing the number of excess workers may require many
of them to take less attractive positions?at lower
pay or in less desirable locations.
? Social tensions also will be exacerbated by his
attempt to make wages more dependent on produc-
tivity?a move that workers accustomed to the
traditional "free lunch" find threatening.
? Resentment of those enriching themselves in the
private sector already has led to outbursts of vio-
lence and retribution and is likely to increase as the
gap in the incomes of productive and unproductive
workers widens.
We believe Gorbachev's policy of glasnost will help to
reengage a disaffected populace and provide a vent for
the frustrations that built up under Brezhnev. But it
will also encourage activities the regime finds undesir-
able?notably, the mobilization of groups advancing
ideas inimical to state interests, such as the separatist
movements of minority nationalities. The modest re-
trenchment on this front will reduce the damage but
not eliminate the problem. Gorbachev's electoral re-
forms are intended to channel this new political
activism into official institutions, but under the ban-
ner of glasnost, groups are issuing demands that
challenge central authority and could eventually form
the basis of a political opposition. Such a course can
ultimately work only if there is at least broad accep-
tance of the Soviet state
In our view, the growing assertiveness of the Soviet
Union's minority nationalities will pose a significant
challenge to the stability of the Soviet system during
this period. It also is increasing the tensions between
the republics' native and Russian populations. As a
19
result, Russian nationalist organizations, including
the more hardline groups such as Pamyat, are likely
to grow bolder and gain increased support.
The regime's more repressive approach since last year
in the Caucasus?the continued martial law in Arme-
nia and Azerbaijan and harsh suppression of demon-
strations in Georgia?will be accompanied by some
concessions, including legislation designed to give
republics in this region and elsewhere greater econom-
ic independence and protect the rights of scattered
nationalities. Gorbachev also is attempting to estab-
lish new mechanisms to deal with constitutional dis-
putes between Moscow and the republics as a way of
keeping such grievances within official channels.
The USSR will be plagued by serious labor unrest
over the next two years. Strikes will continue as
economic conditions fail to meet popular demands.
Gorbachev's conciliatory handling of the nationwide
coal miners' walkout last summer has legitimized
strikes in the minds of Soviet workers, who no longer
fear that the regime will use force to break strikes.
Moscow is likely to face several strikes at any given
time; most will probably be small, but some might
involve tens or hundreds of thousands of workers at
large enterprises or throughout a city. Although no
general strikes over economic problems appear immi-
nent, the possibility cannot be ruled out, especially if
distress over rationing spreads and intensifies
We believe Gorbachev will continue to rely on negoti-
ation, rather than violent suppression, to end any
strikes that break out. In some cases, he probably will
insist on strict enforcement of the new law on labor
disputes, which went into effect in late October and
requires several weeks of collective bargaining before
workers may legally declare a strike. The law bans
strikes outright in strategic sectors of the economy,
such as energy, transportation, public works and
utilities, as well as law and order agencies, and
violators may be fined or even fired. Strikers may
attempt to thwart application of these sanctions,
however, by walking out in large numbers.
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Whose Perestroyka: The Political Spectrum
in the USSR
Issues like the creation of a multiparty system,
economic reform, preservation of the Soviet feder-
ation, and the limits of glasnost have brought the
political spectrum in society and the regime into
sharp focus. Both have fractured into general
groups, from party traditionalists on the right to
radical reformers on the left. There are also small
factions on the extreme left and right of this
spectrum.
Party traditionalists support perestroyka in gener-
al terms, but have little tolerance for what they
perceive as the step-by-step dismantling of Marx-
ist-Leninist ideology. They believe that political
and economic centralization, under the leadership
of the Communist Party, is one of the chief reasons
that the Soviet Union has achieved superpower
status. As a result, they are loath to accept
criticism of the Soviet past?the trials and repres-
sions of the Stalin era or the "stagnation" of the
Brezhnev years?and prefer to emphasize the posi-
tive accomplishments of Soviet power. They stren-
uously oppose political pluralism and private eco-
nomic activity. Many in this group have a
xenophobic mistrust of foreign influences and in-
stitutions, assuming that closer ties to the West
will subvert socialist values. Within society at
large, groups like the United Workers' Front sup-
port these positions; among Politburo members,
only Ligachev represents this view
"Establishment" radicals seek to reform society
by transforming society's institutions, beginning
with the party. They seek to preserve single-party
rule, but through a revamped Communist Party.
They support greater republic economic autonomy
and some concessions to a free market system, but
they insist on the preservation of a strong, united
Soviet Union. Glasnost to this group is a means of
opening up society to the changes that are neces-
sary to revive political life and awaken economic
reform; theirs is a glasnost with distinct, albeit
liberal, boundaries. Gorbachev, Yakovlev, Medve-
dev, and Shevardnadze are the Politburo members
most identified with this mindset
"Antiestablishment" radicals in general draw
their inspiration from Western nonsocialist
models and support fundamental changes in the
political system and the injection of market forces
in the economy. They believe strongly in political
pluralism, some stressing genuine competition
among rival parties. Some, including Yel'tsin,
emphasize social justice and the abolition of
nomenklatura privileges. Many, like Sakharov,
believe that the CPSU should be legally responsi-
ble to the Supreme Soviet.
Another potential threat to the stability of the system
is the growing openness in questioning the necessity
for one-party rule?a development that is likely to
escalate with the formation of a non-Communist
government in Poland and eventually in Hungary. We
believe most of the newly formed groups, with their
highly parochial agendas, will find it difficult to
coalesce into a countrywide alternative to the Com-
munist Party. If the pressure for political pluralism
grows, Gorbachev might eventually have to contem-
plate a system that allowed nominal organized opposi-
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tion to the party to build regime credibility. For the
near term, however, we believe his strategy of enlarg-
ing the scope of intraparty debate and allowing some
nonparty criticism of government decisions may obvi-
ate the need for such a move (see inset).
These threats will not go away and could lead to
Gorbachev's downfall and the demise of reform. His
program of allowing greater pluralism of expression
and expanded popular participation in the political
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Gorbachev and the Military: Living With
Perestroyka
Since becoming General Secretary, Gorbachev has
challenged the military's priority status and tight-
ened party control over it. Gorbachev purged the
Defense Ministry's senior leadership and tapped a
comparative outsider, Gen. Dmitriy Yazov, as
Defense Minister, who was mandated to accelerate
perestroyka in the armed forces. Since then Gorba-
chev has kept up the heat on the military. He
pushed the General Staff to help him work out the
unilateral conventional force cuts announced in
December 1988 and to formulate conventional and
strategic arms reduction proposals that, if imple-
mented, would mean large reductions in military
manpower and capabilities. Simultaneously,
Gorbachev has initiated a program converting de-
fense industrial capabilities to support the civil
economy. Working through the newly empowered
Supreme Soviet, Gorbachev has forced the mili-
tary to open its books and to submit its budget and
some# ersonnel s olicies to parliamentary over-
sight.
It has been difficult for the military to assimilate
all this. The manpower reductions, for example,
are testing the armed forces' ability to efficiently
select officers for discharge and resettle their
families. Nationalism has become another serious
problem as non-Russians refuse to serve outside
their home regions and hazing and bullying in-
creasingly take on an ethnic cast. Because the
government has frequently used army troops to
backstop overextended Interior Ministry assets,
the military has become the focus of blame for
excesses incurred during police actions against
battling ethnic groups. This has added to the
surprisingly virulent antimilitarism that has
emerged in response to media criticism of military
problems. Several Soviet officers have complained
to Americans that all these changes have com-
bined to lower the prestige of the military.
Gorbachev has firm control over the military. He
has reduced military influence in national security
decisionmaking and made cuts to the defense
budget. He has created a more malleable high
command, led by officers, such as Yazov and
General Staff chief Moiseyev, who are more per-
sonally beholden to the General Secretary. Vari-
ous sources indicate that Yazov, who is only a
candidate Politburo member, does not play a
dominant role in national decisionmaking. The
military is continuing to voice its opinion and
speak out against reforms that it considers unrea-
sonable?such as the creation of an all-volunteer
armed forces?but there is little it can do if the
government and parliament insist on the changes.
process is predicated on the belief that the Soviet
population is fundamentally loyal to the state, that the
interests of important social groups can largely be
accommodated within the system, and that even non-
Russian groups like the Baltic peoples seeking inde-
pendence can eventually be co-opted into settling for
greater autonomy. He is trying to demonstrate that
reform can be managed in a way that avoids loss of
regime control of the process and heads off pressure
for more radical reforms that would truly revolution-
ize the system. He is, thus, engaged in a gamble of
enormous proportions and uncertain consequences.
21
Implications for Gorbachev's International Agenda
and US Policy
Gorbachev Stays the Course
If Gorbachev remains in power and avoids having to
retrench significantly, we expect little change in the
direction of his foreign policy. He will still have a
pressing need for a stable international atmosphere
that will allow him to concentrate on perestroyka and
to shift funds from defense to the domestic economy.
Up to a point, the prospect of continuing turmoil at
home will reinforce sentiment in favor of a respite
from East-West tensions (see inset).
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We expect Gorbachev to:
? Push hard for conclusion of arms control agree-
ments with the West.
? Broaden the base of the improvement in relations
with the United States and Western Europe and
seek to shape the evolution of the European security
order.
? Go further to defuse human rights as a contentious
issue in US-Soviet relations.
? Remain tolerant of changes in Eastern Europe that
reduce Soviet influence.
? Consolidate the rapprochement with China.
? Seek to reduce military commitments in the Third
World and avoid confrontation with the United
States.
? Step up efforts to make the USSR into a more
credible 1 er in the international economic sys-
tem.
Retrenchment
The retrenchment scenario sketched out above would
make Moscow:
? Less likely to make meaningful unilateral arms
control concessions or military reductions.
? Less tolerant of liberalization in Eastern Europe,
but unwilling to attempt to regain what has been
lost.
Secret
? More supportive of leftist allies abroad.
? More reluctant to undertake any radical reorganiza-
tion of the Soviet military and security services.
A more orthodox Communist regime's harder line on
a range of foreign and domestic issues would certainly
increase East-West tensions, but the new regime
would try to limit the damage. We see little chance
that such a regime would find it in the Soviet interest
to revert to an openly confrontational strategy toward
the West that would entail a major new military
buildup or significant risktalcing in the Third World.
In fact, its preoccupation with the problems of domes-
tic order and consumer discontent would place some
limits on its ability to shift resources back to the
defense sector. It would probably implement arms
control agreements already reached but be less in-
clined to make concessions to complete those still
being negotiated.
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Figure 10
Reported Incidents of Economic Unrest, January 1987-September 1989
LATVIAN S.S.R.
Total Cities
Incidents Involved
1 Strikes
LITHUANIAN S.S.R.
Total Cities
Incidents Involved
2 Strikes 2
ESTONIAN S.S.R.
Total Cities
Incidents Involved
5 Strikes 2
BELORUSSIAN S.S.R.
Total Cities
Incidents Involved
1 Strikes 1
UKRAINIAN S.S.R.
Total Cities
Incidents Involved
23 Strikes 18
*MOSCOW
R.S.F.S.R.
Total Cities
Incidents Involved
6 Violent unrest a 3
12 Demonstrations 11
111 Strikes 43
MOLDAVIAN S.S.R.
Total Cities
Incidents Involved
2 Strikes 2
Soviet Union
GEORGIAN
S.S.R.
ARMENIAN
S.S.R.
ItEsw0
AZERBAIJAN
S.S.R.
TURKMEN S.S.R.
Total Cities
Incidents Involved
1 Strikes 1
011
TASK
S.S.R.
ICAZAKH S.S.R.
Total Cities
Incidents Involved
2 Demonstrations 2
11 Strikes 8
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.
UZBEK S.S.R.
Total Cities
Incidents Involved
1 Demonstrations 1
2 Strikes 2
0 1000 Kilometers
0 1000 Miles
KIRGHIZ S.S.R.
Total Cities
Incidents Involved
1 Strikes
Includes dots and sabotage.
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Figure 11
Reported Incidents of Nationalist Unrest, January 1987-September 1989
LITHUANIAN S.S.R.
Total
Incidents
LATVIAN S.S.R.
Total
Incidents
Cities
Involved
Cities
Involved
5
Violent unrest
60
Demonstrations
7
105
Demonstrations
17
1
Strikes
1
1
Strikes
1
BELORUSSIAN S.S.R.
Total
Incidents
Cities
Involved
8 Demonstrations 1
UKRAINIAN S.S.R.
Total
Incidents
4 Violent unrest
60 Demonstrations
2 Strikes
MOLDAVIAN S.S.R.
Total
Incidents
3
38
6
Violent unrest
Demonstrations
Strikes
GEORGIAN S.S.R.
Total
Incidents
42
70
10
Violent unrest
Demonstrations
Strikes
ESTONIAN S.S.R.
Total
Incidents
3
62
3
Violent unrest
Demonstrations
Strikes
Cities
Involved
2
10
3
Cities
Involved
4
27
2
Cities
Involved
3
5
5
Cities
Involved
19
13
5
ARMENIAN S.S.R.
Total
Incidents
24 Violent unrest
132 Demonstrations
12 Strikesb
*MOSCOW
Total
Incidents
Cities
Involved
16 Violent unrest 8
96 Demonstrations 13
1 Strikes 1
Soviet Union
Cities
Involved
8
8
5
AZERBAIJAN S.S.R.
Total
Incidents
105
62
11
Cities
Involved
Violent unrest 27
Demonstrations 11
Strikes? 5
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.
TURKMEN S.S.R.
Total Cities
Incidents Involved
3 Violent unrest 2
UZBEK S.S.R.
Total Cities
Incidents Involved
16 Violent unrest 10
40 Demonstrations 9
1000 Kilometers
1000 Miles
Total
Incidents
7 Violent unrest
10 Demonstrations
KIRGHIZ S.S.R.
Total
Incidents
2
2
Cities
Involved
Cities
Involved
Violent unrest 2
Demonstrations 2
TAJIK S.S.R.
Total
Incidents
6 Violent unrest
5 Demonstrations
Cities
Involved
4
2
a Almost 70 percent of reported nationalist
demonstrations in the R.S.F.S.R. took place
in Moscow where small groups of Armenians.
Crimean Tatars, Estonians, Latvians, Lithuanians,
or Meskhetian Turks have habitually put forth
their respective long-held nationalist demands
or grievances.
Strike total does not convey magnitude of general
strikes that paralyzed Armenia, Azerbaijan, and the
Nagorno-Karabakh Autonomous Oblast during various
times in 1988 and 1989. Each of these general strikes
have been included as one strike incident in one city.
Note: Incidents of violent unrest include riots,
fighting, bombings, assassinations, and
attacks against security forces.
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