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

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(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.

Center for Security Policy

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