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The states of the former Soviet Union: consideration of the present situation, future developments and appropriate policies

A Note by the Director  (DItchley 92/10)

11-13 September 1992

Ditchley does not normally revisit a topic after an interval as short as twelve months, but the complexity, speed and historic magnitude of events in what was the Soviet Union seemed to warrant this. The conference bore this out, as participants from September 1991 agreed. Outcomes in many directions remained hugely uncertain, but issues, trends, opportunities and risks were visible in new ways.

Discussions found initial focus on a simplifying question: now that the euphoric excitement of the defeat of the August 1991 coup was well behind us, were we mostly optimistic or pessimistic about the CIS future? Optimism could point to much since the coup that had gone better than might have been expected: a remarkable absence of lethal violence across so vast a canvas of dramatic change; no winter famine; no authoritarian or anti-democratic backlash; solid continuance of constructive and cooperative behaviour on the international stage, with a calm stepping-back from US-rivalling global aspiration; on the whole, reassuring if incomplete performance in the matter of nuclear-weapon control and deployment; nothing of a “Bosnian” kind or scale on the ethnic-minority front, save in relatively very small areas.

But pessimism too could have a long recital. On the economic front, hyper-inflation was an imminent threat (though the economists among us disagreed with cheerful vigour, as on much else, about whether it was any longer avoidable at all). President Yeltsin might well be past the peak of his popular power, with waning authority against reversionist or reform-obstructing pressures yet with key economic nettles still ungrasped, like the military- industrial complex. Pain in such areas had largely been deferred by unsustainable cross-subsidy to enterprises, or non-enterprises, which could not expect a viable future. The problems of minorities, for the most part, simply had not yet had time to play out to denouement. Scarcely any of the profound difficulties which analysis noted a year ago could be claimed to have been in any secure sense resolved. Was “so far, so good” merely falling past the fifth floor?

One of the toughest nuts, we noted, was the enormous military-industrial complex, including massive R & D capability. It no doubt embodied huge resources of potential individual talent, but nothing in Western experience encouraged high hopes of successful wholesale conversion to effective civilian production. That experience suggested “close down and start afresh" as not only the best but sooner or later the inescapable route; yet the social and therefore political cost of taking it seemed almost impossible for CIS leaders to contemplate (and one of the few apparent safety valves, large-scale arms sales abroad, was scarcely appealing to the West). Though the complex already had some experience of producing civilian goods, we could not see any good general way forward; the issue seemed to exemplify in particularly sharp degree the general problem of how political patience could be won for the time needed to carry out economic transformation. We were not sure whether the possible rise to economic authority of spokesmen for the military-industrial interest was something to be gravely deplored or to be accepted as at least engaging them in sharing responsibility for facing reality.

One or two voices expressed scepticism about whether so huge a construct as Russia could long survive unfragmented in its present boundaries. We glimpsed the spectre of Pandora’s Box sliding down a slippery slope if boundary change found open season; and we recognised a crucial interaction between boundary maintenance and the treatment of minorities, notably but of course not only of the twenty-five million Russians living outside Russia. This seemed a key area in which collective Western concern and expectation, geared to explicit CSCE standards, needed to be made clear and, if necessary, backed by available pressures - not leaving it to the ex-imperial power (even if Russians were the main sufferers in a particular instance) to sort out the problems alone.

We had the benefit - in addition to a welcome first participant from independent Ukraine - of special expertise in Central Asia, able to help us grasp more fully the diversity of the five artificial republics and the fact that though Islam there had been a widespread badge of opposition to the old structures it was mostly far from the fundamentalist-conviction model of Western apprehensions, and weaker in its political driving power than old clan identities. Conditions were less chaotic than might have been feared, but wide uncertainties remained, with growing outside influences (Turkey, Iran, Libya, Saudi Arabia) adding complication.

We talked about the interface with Japan, sometimes facilely classed as either a culpable under-contributor or else the natural economic saviour of the Russian Far East. The awkward late cancellation of the Yeltsin visit to Tokyo vividly illustrated how uncomfortably the relationship was impaled upon the high-profile political issue of the four northern islands; but we noted factors, both in long­standing historical attitude and in cold economic interest, which would make it imprudent to count upon any great surge of aid even if that stone were removed from the shoe.

When we sought to focus upon opportunities and options for Western policies generally, we agreed readily that the West ought in its own many-sided interest to do whatever it could to improve the odds for favourable outcomes, whether with the optimists from good to very good or with the pessimists merely from bad to poor. No-one however came near to expressing satisfaction with the scale and imagination of Western efforts in the round. There was scope, we suspected, for a more vigorous presentation to Western publics of the gains for the West from good outcomes in the CIS and the penalties (like massive migration) from bad ones; but we seemed widely albeit sadly to judge that in present circumstances, with most if not all major Western governments marked by severe internal socio-economic problems and beleaguered political leaderships, order-of-magnitude change in the scale of resources for aid to CIS members lay well beyond the bounds of reality. Given that, the leverage the West could exert for its preferred outcomes - even where exertion might be desired or tolerated within the CIS - was limited; and the range of inter-dependent reform needed was so huge that agreed over-arching Western priorities were almost impossible to establish. All this was however not reason to give up. Well-targetted help - especially in the provision, if welcome, of know-how advice in economic and indeed some aspects of political business - still had good scope; and the West need not be afraid, within reasonable sensitivity, of firm conditionality, especially in matters where direct Western interest could be clearly and credibly signalled. It was commented that serious effort in the “know-how” field mostly needed the engagement of permanent presence rather than visiting-fireman incursions. There was wide agreement that, alongside a clamant need for proper monetary order, rapid and large-scale privatisation was both a central component of economic reform and a key indicator of political seriousness in its pursuit; and also that well-directed aid could be very fruitful at the micro-level of specific industries and even enterprises, especially if (despite evident difficulties like political risk and defective structures of ownership) private-sector capital and its disciplining motivations could be brought to bear. We said little - too little? - about the need, even if uncomfortable to particular Western interests in the short run, for improvement in access to Western markets to partner and indeed to stimulate the reform and redirection of CIS industry.

There was much talk of institutions, from assorted angles. The IMF was plainly important, though discussion had to defend it variously against accusations of over-slow reaction (arguably ignoring its ultimate dependence on the wishes of its 170-odd owners and on the observance of prudent procedure) and against a tendency for Governments to use IMF activity - inevitably constrained - as an excuse for shortcomings in their own. More broadly, we acknowledged the need to enmesh CIS members constructively in as wide as possible a network of international relationships, institutional and other, as full and natural members of the global community and acceptors of global norms; and also to beware of risks that the development of groupings to which they - or particularly Russia - could not realistically belong, like the EC or NATO, might develop in ways which heightened a sense of exclusion or threat. Some participants expressed hopes of the CIS framework itself as potentially a powerful positive instrument of order; but we also heard vigorously-expressed caution and even scepticism about the realism of this.

It was noteworthy, and telling, that among the main subdivisions of the conference’s debates the calmest - even perhaps the dullest, I venture uncomplainingly - was the security field, at least in its classical politico-military aspects. How striking a reversal of the likely pattern of any Ditchley conference on the region in the past! Let us hope that the optimists are right enough for that still to be so when Ditchley next visits it.

This report reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

LIST OF PARTICIPANTS

Chairman: The Hon Jack Matloc

BRITAIN
Dr Shirin Akiner
Professor Ronald Amann
Sir Rodric Braithwaite KCMG
Mr Samuel Brittan
Sir Brian Fall KCMG
Mr Andrew Gowers
Professor Geoffrey Hosking
The Rt Hon David Howell MP
Mr Michael Kaser KSG
Mr Ralph Land OBE
Mr David Logan CMG
Dr Alastair McAuley
Ms Kate Mortimer
Professor Richard Portes
Professor Adam Roberts
Mr George Robertson MP

CANADA
Ms Jill Bodkin
Mr Jeremy K B Kinsman
Rear Admiral Larry Murray OMM CD

EC
Mr Michael Emerson

FRANCE
Mme Ewa Kulesza-Mietkowski

GERMANY
Ambassador Frank Elbe
Dr Klaus Segbers

IMF
Mr John Odling-Smee

JAPAN
Mr Toshihiko Ueno

NATO
Ambassador Gebhardt von Moltke

RUSSIAN FEDERATION
Mr Adnan Agaev
Dr Vladimir Bukovsky
Professor Dr Georgiy Mirsky

UKRAINE
Mr Anton Bouteiko

USA
Dr Marshall I Goldman
Professor Jerry F Hough
Professor Mark Kramer
Professor Robert Legvold
Mr George Melloan
Mr Henry Muller
Professor Joseph S Nye Jr
Professor Richard Rosecrance
Professor Jeffrey D Sachs

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