TRANSFORMATION WATCH #3: BAKER ON THE NEED FOR STRUCTURAL SOVIET REFORM — ‘NEVER MIND’

(Washington, D.C.): En route to Moscow
on 10 September, Secretary of State James
Baker disclosed that — as far as the
Bush Administration is concerned — all
that a reconfigured Soviet center need do
now to gain access to Western economic
assistance would be to express “a
commitment to true free market economic
policies” and to have “some
sort of plan.” As he put it,
“If they can take those steps, we
will be there. They don’t have to
take the steps first, but commit to
taking the steps.”

Secretary Baker’s erosion of the
milestones Moscow center was expected to
achieve in order to qualify for U.S. and
allied taxpayer-underwritten aid is
occurring at the same moment that the
serious shortfall in the Soviet
transformation is becoming more apparent.
Consider the following:

• There are still no scheduled
  general elections for offices in
  newly commisioned democratic
  institutions and the presidency
  of the central government. In
  fact, the interim government now
  in place bears little resemblance
  to a democratic system; indeed,
  it possesses heavy authoritarian
  overtones.
• To the enthusiastic applause of
  Western governments and
  commercial banks, Grigory
  Yavlinsky, the chairman-designate
  of the new Inter-Republican
  Economic Committee, is prevailing
  in his effort to reconstruct and
  strengthen centralized controls
  over fiscal, monetary, banking
  and other policies. The losing
  side in this politically
  portentous contest appears to be
  Stanislav Shatalin and other
  reformers who are intent on
  pursuing a far more systematic —
  and promising — approach to
  genuine decentralization and
  transformation.
• The retooled Soviet central
  authorities are being coached by
  senior Western policymakers to
  configure all manner of
  activities — from a crash
  assistance program for the
  strategic Soviet energy sector to
  a potentially reckless
  “defense conversion”
  initiative even to a vastly
  premature “stabilization
  fund” to backstop ruble
  convertibility — as
  “humanitarian aid.”
  Such a cynical distortion of
  these activities blurs the real
  distinction between meeting
  desperate human needs and
  longer-term economic development.
• The reconfigured Soviet center is
  also collaborating with Western
  governments to stave off an
  imminent Soviet debt rescheduling
  by quick infusions of
  taxpayer-guaranteed funds. Their
  common interest lies in a shared
  desire to bail out those among
  the G-7 governments and banks
  that engaged imprudently in
  large-scale financial flows to
  Moscow in the pre-coup period.
  Even this exercise may ultimately
  be camouflaged as
  “humanitarian
  assistance.”
• Meanwhile, the center is
  imaginatively forging — with
  Secretary Baker’s apparent
  approval — new arrangements
  for maintaining its life-support
  for communist regimes like those
  in Cuba and Afghanistan. For
  example, in exchange for
  Gorbachev merely announcing that
  he would “begin
  discussions” with the
  Cuban leadership about withdrawal
  of a Soviet training brigade —
  which Baker called a “very
  substantial gesture….that would
  be very important with respect to
  public opinion in the United
  States” — the Bush
  Administration is putting out the
  word that the Cuban obstacle to
  U.S. assistance to Moscow has
  been overcome.
• The Soviet defense establishment
  is signalling an interest in
  developing more formidable,
  high-tech weaponry — for which
  infusions of Western dual-use
  technology would be especially
  valuable. Interestingly, last
  September the then-Air Force
  Commander-in-Chief Col. Gen.
  Yevgeny Shaposhnikov, told Jane’s
  Defense Week that: “The
  Soviet Air Force must be modern
  and more reliable and powerful
  than ever.” There is no
  evidence that Shaposhnikov, now
  Defense Minister, has abandoned
  this goal. To the contrary, as
  evidenced in his recent interview
  on CNN, he continues to believe
  that the Soviet Union must
  maintain forces equivalent to
  those of the United States —
  with ominous implications for the
  destitute economy of the former
  USSR.

In short, as Moscow Mayor Gavril
Popov put it on 12 September 1991:

“Reactionary forces will
always be a threat to us as long
as they still maintain their
position in the old structure
that is still somewhat with us.
As long as property is still in
the hands of the state, it will
always be a threat and continue
to be so.”

Under these circumstances, it is hard to
imagine a policy approach more
antithetical to the disciplined
transformation of the Soviet Union than
that enunciated by Secretary Baker. The
basic message to Moscow center embodied
in the new “Baker Plan”
for the Soviet Union can be summed up as:
“Get more for doing
less” in the way of
structural reform.

The Center for
Security Policy believes that this is,
instead, the time for proven Soviet and
republic track- records of reform
implementation, meticulous credit and
trade-oriented discipline, full data
disclosure, transparency and, above all,
the active encouragement and fostering of
truly independent, democratic republics
throughout the former USSR.