Help With Soviet Conversion Is Risky

BY: Frank J. Gaffney, Jr.,
Defense News , August 5, 1991

One of many bad ideas emerging as the Bush administration aligns itself ever more closely with the regime of Mikhail Gorbachev is the proposition that the United States should help the Soviet central authorities convert some of their military-industrial complex to civilian uses.

Odds are, the only conversion likely to result from such assistance will be to ensure that Moscow retains, perhaps at lower cost, this indispensable instrument for threatening the West.

If there is one area of the system by which the USSR has been governed that remains essentially unchanged by glasnost, perestroika, or the putative end of the Cold War, it is Moscow’s defense industrial establishment.

The respected Committee on the Present Danger has amply documented this fact in unclassified estimates of Soviet defense-related investment and procurement spending.

In a report released last April, titled "Russian Military Expenditures," the committee observed that Gorbachev has continued to invest about 8 percent of Soviet resources in the military throughout the original 12th Five-Year Plan (1986-1990).

The committee also found that ". . . Most, if not all, of the cuts in Soviet military outlays in 1989-90 and beyond would come from foregoing previously planned increases in Soviet military outlays."

The United States and its allies should exercise real care in considering initiatives aimed at helping Moscow improve its production capabilities. As with so many of the features of "Grand Bargain" style plans for assisting the USSR, aid for defense conversion has considerable potential to make matters worse, not better.

What distinguishes this area, however, from others (such as ruble convertibility schemes, balance of payments relief, debt rescheduling, etc.) is that it could result in improving the Soviet military’s capabilities to build more advanced weapons for its own arsenal and for export. This undesirable outcome is made much more likely by the undisciplined infusion of Western technology, know-how and investment into an unreformed Soviet system.

At the very least, before the West embarks on any program to help convert Soviet defense industrial facilities to civilian use, answers must be obtained to important questions like:

• What is the true size of the Soviet military industrial complex?
• Who is in control of this complex?
• Which ministries are involved (for example, what are the respective roles of the Military-Industrial Commission, Gosplan and the KGB)?
• Given the thorough integration of the civilian and military industrial bases — virtually all defense plants produce some consumer goods and vice versa — can elements of the military industrial complex be upgraded for civilian purposes without benefits flowing to the Soviet military as well?

Unfortunately, in the absence of full data disclosure and transparency, no realistic answers can be given to these questions. Even once they can be satisfactorily determined, however, it is far from clear whether U.S. assistance in the name of conversion of the Soviet military industrial complex is a good idea.

The following are but a few of the reservations that might be mentioned in this connection:

Where defense conversion has been undertaken in this country in response to the declining demand for military-related production, it has often not worked out very well. It is even more difficult to imagine how a government-dictated, planned market strategy for such conversions will prove more effective than has the free market.

There is a real danger that a piecemeal defense conversion scheme in the Soviet Union would wind up helping revitalize Moscow’s least productive enterprises.

If the Soviet military-industrial sector does wind up benefitting from U.S. aid, will that simply serve to help the Soviets produce more advanced weapon systems?

This could result in a double whammy for the United States — adding a new dimension to the threat we face and encouraging competition for overseas arms sales upon which the American defense industrial base is already unduly reliant to maintain vital production capabilities.

If the Soviet central authorities have not gone much beyond paying lip service to the idea of cutting back military production to increase the supply of manufactured goods for civilian purposes, they have shown a keen interest in reducing the costs of that military production.

Indeed, the bottom line for Moscow appears to be the goal of making its military-industrial complex more efficient, achieving higher productivity even as the costs associated with the manufacture of state-of-the-art military hardware are reduced.

It would be the height of irresponsibility for the United States and other Western nations to facilitate this ulterior conversion scheme by agreeing, in effect, to help upgrade the Soviet defense manufacturing base.

Fortunately, there is now an alternative to the sort of aid-for-promises approach embodied in Grand Bargain initiatives like this one. It would involve making Soviet structural reform — political, economic, military, foreign policy — a necessary precondition to future U.S. aid.

Legislation along these lines offered by Rep. Jon Kyl, R-Ariz., was endorsed in broad terms by Russian Republic President Boris Yeltsin when he was in Washington six weeks ago; it was subsequently overwhelmingly approved on June 19 by the House of Representatives, 374-41. The Senate has adopted virtually identical language, as well.

Unlike the Grand Bargain the Kyl Amendment offers real incentives to systemic democratic and free market reform. It also poses powerful disincentives to continued obstruction of such change by Gorbachev and his regime.

If the United States is successful in facilitating the wholesale transformation of the Soviet system, it can realistically expect to see the people of the USSR experience freedoms and opportunities for which this great country has long stood.

Such a development is justified in its own right both morally and economically. As a practical matter, it holds out the only real hope for improving the Soviet standard of living.

In addition the Soviet people’s ability to decide the form and policies of their government will inevitably translate into a magnificent diminution of the threat still being posed by the USSR to the U.S. and its allies.

By insisting on nothing less than this sort of systemic approach, the United States can not only avoid the dangers inherent in perpetuating the present, fundamentally unreformed Soviet regime. It can also help create opportunities for a genuine, fundamental and irreversible conversion of the Soviet Union.