HARRY J. SIEVERS MEMORIAL LECTURE SERIES FORDHAM UNIVERSITY AND CENTER FOR THE STUDY OF THE PRESIDENCY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00366R000200030011-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Document Release Date: October 24, 2007
• Sequence Number: 11
• Publication Date: November 17, 1982
• Content Type: REPORT

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17 November 1982
Harry J. Sievers Memorial Lecture Series
Fordham University and Center for the Study of the Presidency
It is an honor for me to be here before you tonight as a substitute
for Bill Casey who sends his regrets and who cannot be here because of
the press of business which keeps him in Washington tonight.
An important cause of Bill's absence is the change that is taking
place in the leadership of several key nations. In an age in which
bureaucracies seem to have taken over, the personalities of leaders are
still important. We recognize this in our selection of presidents and
it is true elsewhere. And foreign leaders have been changing rapidly:
Andropov has replaced Brezhnev, Kohl has succeeded Schmidt; someone will
replace Suzuki.
The most important of these leadership changes is that in the
Soviet Union. This change has long been anticipated, yet because of the
absence of an organized procedure for the devolution of power in that
society, the transfer of political power there is an uncertain
business. It seems to have been accomplished this time, however, with
remarkable speed and assuredness. It is likely to produce a strong
leadership.
This outcome, if it in fact sticks, will offer both challenges and
opportunities. These will derive from the underlying realities that
face the new Soviet leader and that face us as well.
The most salient of these facts is first the success of the Soviet
Union in carrying out the greatest military buildup in history and the
projection of this power abroad directly or through proxies throughout
Africa, to the edges of Asia, and to the Western Hemisphere. Second,
and equally important, is the fact that this power rests on an economic
system which is in deep -- and deepening -- trouble and getting worse.
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First on the new leadership.
It is a remarkable thing that in the 65-year history of the Soviet
Union this is only the fourth time that supreme power has passed and
only the second time that there has been anything approaching the
deliberate selection of a new leader. When Lenin died it was clearly
foreordained, despite his warnings against Stalin, that as the Secretary
General of the Communist Party he had gathered the essential elements of
power in his own hands. When Stalin died, there was a competitive
process lasting some weeks, which produced a triumvirate. It took some
two years for Khrushchev to gather supreme power in his own hands.
Then, when he misplayed his hand, Brezhnev displaced him. And now, Yuri
Andropov has arrived to replace Brezhnev in a transition which is
presented as an orderly one, although we have only limited comprehension
of the struggle for succession which took place during Brezhnev's long
twilight.
.There are three sets of circumstances which we need to fully
understand in order to have a realistic perception of what we can expect
of General Secretary Andropov.
The first of these is his history. He is no stranger. He first
surfaced as Ambassador in Hungary in 1956 and played a key role in
supressing the brave Hungarian people's effort to regain their
freedom. Performance there earned him a title -- "The Butcher of
Hungary." Later he spent fifteen years running the dreaded and all
powerful KGB, vastly expanding both its capacities throughout the world
and the subtlety and force with which it controlled, indeed, crushed
internal dissent. It was, significantly, under his leadership that
psychiatry was perverted to the disposition of troublesome dissidents.
Moreover, he came to power supported by two of the most threatening
elements of the Soviet state, the military and the Secret Police.
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Those forces have been dominant in Soviet society for a long
time. Since at least the Cuban missile crisis, while engaging us in a
so-called detente and a series of arms limitation talks, the Soviets
steadily increased Soviet strategic and conventional power while we
either stood still or lost ground until today the Soviets make claim to
military superiority and are widely and generally accorded no less than
parity. A combination of growing military power and active intervention
abroad has brought Soviet arms and Cuban troops to far away Angola and
Ethiopia, and has brought Soviet troops into Afghanistan.
Any realistic hopes that detente with the Soviet Union might
survive practically disappear with these developments and vanishes when
a genuine workers' revolt. occurred in the Soviet empire and was met with
repression. The cry, "Workers of the world unite," makes the leaders in
the Kremlin tremble. They fear that it might even happen in Russia.
The military power which the Soviet leadership has at its disposal
is formidable. I will spare you the details. It is sufficient to say
that the Soviets have built a strong nuclear weapons establishment
rivaling our own and, indeed, one that has been on a faster track. It
has created a modern nuclear threat to Europe and other peripheral areas
with its SS-20 missiles among other weapons. It has fielded an armed
force opposite Western Europe which is large, modern and growing. Its
navy has moved from coastal defense to a capacity to roam the seas. And
it has, in addition, built up a powerful force opposite China.
Whatever else can be said of Brezhnev, he cannot be faulted for
having left the Soviet Union militarily weaker than he found it.
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This is not to say that Andropov inherits a comfortable
situation. Despite the lagging defense efforts of the United States and
its allies, we remain formidable. I believe that Andropov or anybody
else would have to think many times and weigh the potential consequences
and dangers very carefully before risking the response which the NATO
powers can make. The main question before us is not who would survive
or would win in a conflict in which there would probably be only losers,
but how we can seize the opportunity which now presents itself to defuse
risks and mitigate threats.
The main bases for optimism are the problems which Andropov
inherits. Soviet agriculture has suffered crop failures in four
successive years and is unable to feed itself; Soviet society suffers
from declining health with alcohol addiction running rampant; corruption
is massive and reaches to the top of the system; there is a suppressed
but growing dissidence; ethnic conflicts are likely to be intensified in
the years ahead.
The key to the drive for military power has been the ability of the
Soviet economy to provide small but steady improvements to the standard
of living.- Until recently, the Russian economy provided enough
additional butter to support the acquisition of more and more guns.
We now recognize that an important element in Moscow's ability to
keep this strategy alive through the 1970s was help from the West, in
the form of credits to buy equipment, technology, and food. In
addition, the Russians helped themselves by acquiring Western technology
through espionage, and by earning hard currency through exports of oil,
arms and gold.
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The Soviet economy is now in a period during which annual growth
rates will be in the 1 percent to 1.5 percent range at best. Shortages
of oil and declining rates of labor productivity are major causes of
this declining performance. Due to low birth rates during the 1960s
among ethnic Russians and other Slavs, the Soviet'Union now has a
shortage of workers in key regions. During this decade, the work force
in the Russian Republic -- which accounts for 60 percent of the
country's total industrial output and 75 percent of total military
output -- will shrink by 1,300,000.
It is in large part to compensate for this shrinkage in the work
force that the Russians have turned to Western equipment'and
technology. Their need for our equipment and technology is greater now
than it was during the heyday of detente. But the their ability to
import equipment and technology is declining rapidly due to a shortage
of hard currency:
a. Oil prices are dropping.
b. Gold prices are low (due, in part, to heavy Soviet selling).
c. The market for Soviet arms is softening.
d. Western banks are increasingly reluctant to extend credit to
the Soviet Union -- or its satellites.
e. Four consecutive poor harvests have forced the Russians to
divert billions of dollars from equipment and technology
purchases to gain.
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But despite this, military expenditures continue to grow. Since
1965, the growth in Soviet defense spending in ruble terms has averaged
about 4 percent a year -- about the same as that for the overall
economy. By now, the share of GNP for defense is 13-14 percent. Given
current and future economic conditions, maintaining historical rates of
growth in defense spending will be economically and politically more
difficult. Nevertheless, we expect that Soviet defense spending will
continue to grow. If so, the defense share of GNP would increase to at
least 15 percent in 1985 and could approach 20 percent by the end of the
decade. In short, it's difficult to see how Moscow can continue its
arms buildup without strangling its economy unless it can get help from
the West.
For Kremlin leaders, the trick will be to keep the ald strategy
going for a while longer by finding enough money to support growing --
or even current -- levels of defense spending while fending off disaster
in the civilian sectors. One option would be to order .a tightening of
belts, using more police power if necessary to keep the lid from
blowing. A second option would be to "starve" the satellites to help
the Motherland, for instance by reducing subsidies the Soviet Union now
provides to Eastsern Europe by selling oil at roughly half the world
market price. Another would be to find alternate sources of hard
currency. These might include:
a. Credits from new lenders, such as Mid-East governments.
b. Increased exports of raw materials including natural gas,
minerals, and increased exports of chemicals.
c. Gain access to wealth without spending hard currency-through a
Soviet drive politically, economically or militarily toward the
Persian Gulf.
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Kremlin leaders have not confronted this issue squarely and
adopting a coherent, comprehensive response. Andropov is the first
Soviet leader to take power at a time when his country is, arguably, the
world's number one military power. If US will is perceived as weak, the
ability of Moscow to intimidate is enhanced. Mid-Easts governments
might respond to Soviet threats by extending credits at low rates of
interest -- or by selling oil. to the Soviet Union and its satellites at
sweetheart prices.
Only Russian nationalism and military power provides the cohesion
necessary to hold this society together. These forces have been
challenged in Eastern Europe and may be inadequate in the future in the
moslem and other disparate parts of the Soviet empire. Around the
world, in Poland, in Cuba, in Vietnam, the Communists' system is a
failure and is maintained only through the use of force. The western
system of freedom of political choice and freedom of market has proven
its superiority.
What the Soviet system needs is clear: Above all, it needs to be
freed from the dead weight of the central controllers. It needs to be
decentralized, to allow managers real authority in making decision, to
allow prices to influence consuming and manufacturing decisions, to
allow individual farmers (or at least small groups) to make crucial
choices in the countryside. And so on. Will Andropov move in this
direction? How much freedom of action will he have? We don't know.
Nor, in all probability, does he.
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If he does not move, or move much, in these directions, we think we
know what will happen; nothing economically. The system is stagnant.
Only market-type reforms will enable it to get on a higher growth
path. Yet such reforms are resisted because they can occur only with
the loss of power of local political and bureaucratic cadres. These
cadres were central in the Brezhnev era and they are also important to
Andropov. If he wants to move the system,out of the doldrums, he has to
weaken their power and yet they, together with the military, are crucial
to the maintenance of the system.
The only other important option for economic improvement open to
Andropov, one that is less promising in its effects but one that may
appear less risky, is to undertake to get help from the West. the
Soviets have been here before -- as have we. The basis for East-West
detente in the early 1970s. was economic interaction, indeed support,
for the Soviet Union in exchange for Soviet restraint on arms and
foreign adventures. It foundered on the Soviet's unwillingness to
adhere to their side of the bargain. Now a decade later, Andropov
inherits an internal situation which is even worse than Brezhnev faced.
Therefore we can expect to hear voices calling for a softer line,
more trade and credit to encourage and strengthen those in the Kremlin
inclined to pursue economic and social goals rather than military and
imperialist ones, and far less effort to redress our own defense
deficiencies. Yet we do not know that there is a peace party in the
Kremlin or, if there is one, that it has any clout. We do know that
Andropov came to power with the support of the military and the secret
police. It is not unreasonable to expect that he and his colleagues
might hope to get that which they tried to get and didn't quite bring
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off in the 1970s: both sustained Western economic benefits and
sustained deterrance of Soviet imperial power. In this situation, it's
just as likely that any reassurances we offer about possibilities for
peaceful cooperation would be perceived as signs of weakness and lack of
resolve or taken as an opportunity to lull us into comlacency and create
renewed opportunity for extending military superiority. The best way to
strengthen any possible doves in the Kremlin is to reaffirm western will
and capability to react promptly to make any Soviet adventurism
dangerous.
We have a policy and the President reaffirmed it after Brezhnev's
demise. It is to seek conciliation from a position of firmness and
strength. It is to seek reduction in the armaments that threaten all of
us. It is not to subsidize or to make our technology available to those
who threaten us but to be open to trade on market terms. We have begun
during the last year initiatives in arms control. President Reagan has
outlined our approach to four important items -- negotiations between
the United States and the Soviet Union on intermediate-range nuclear
weapons, known as INF, and those on strategic nuclear arms reductions,
known as START; the negotiations on mutual and balanced reductions of
conventional forces in Europe, and the continuing process of discussion
and negotiation stemming from the Final Act of the Helsinki Conference
on Security and Cooperation in Europe. In addition, the United States
is trying to prevent the spread of nuclear weapons; to eliminate the
menace of chemical weapons (a case in which the Soviet Union is a clear
violator of international agreements); to study the possibility of
imposing further limits on the military use of outer space; and to
develop new measures to minimize the risks of war by miscalculation.
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How did the present situation arise? Over a period of more than 25
years the Soviet Union claimed immunity from the Charter rules against
aggression, and the rest of the world tacitly accepted its claim. That
course is no longer tolerable. Soviet expansion and the Soviet Union's
growing military power threatens the international system. That system
cannot continue to accept the Soviet practice of aggression through the
use of its own forces and those of its proxies and satellites, whether
organized as armies, guerrillas, armed bands, or terrorists, backed by
the implicit threat of its growing nuclear forces. During the 1970s, a
period when the United States nuclear arsenal was held relatively
stable, the Soviet Union expanded its nuclear forces far beyond any
conceivable requirements for deterrence and defense. We must give
priority to our security and to that of other democratic nations in the
world.
Having said all of this, I do not want to end on too pessimistic a
note. With our European allies, our basic congruence in values
dominates our occasional differences. We have been through a period of
difficulty and largely as a result of Secretary Schultz' efforts we have
reached an agreement on a better approach to our economic relations with
the Soviet Union. Perhaps the new Soviet leadership will recognize that
its interests lie in reducing the level of arms and in improving the
material welfare of its people. We will be more than willing to join in
reciprocal arms reductions efforts. And, if the new leadership elects
to tend to its own affairs at home and to interfere less in the affairs
of others, it would no doubt also find the path open to wider and
mutually beneficial economic relations with the West.
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All of these good things can happen; we need to keep our minds
alive to these possibilities. Meanwhile, let us keep our powder dry.
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