Editor's Note

Editor’s Note

This issue begins with an article by Archie Brown, who discusses the two-day seminar convened by British Prime Minister Margaret Thatcher in Septem- ber 1983 to help her decide what approach she should take to the Soviet Union and Eastern Europe. This seminar, Brown argues, was crucial in persuading Thatcher to shift to a policy of engagement with up-and-coming leaders in Moscow, especially Downloaded from http://direct.mit.edu/jcws/article-pdf/10/3/1/697081/jcws.2008.10.3.1.pdf by guest on 02 October 2021 Mikhail Gorbachev, who accepted her invitation to visit Great Britain in December 1984, three months before he became General Secretary of the Communist Party of the Soviet Union (CPSU). Although the historical record shows that academic experts almost never have any meaningful impact on the highest policymakers, Brown con- tends that this was a special case in which Thatcher was actively seeking advice from specialists outside the British Foreign Ofªce, an agency she had long distrusted. The two days of meetings at Chequers, the prime minister’s ofªcial country residence, on 8–9 September 1983 allowed the outside experts (including Brown) to have direct ac- cess to Thatcher, who spent hours reading their brieªng papers and listening to their comments. Brown cites several former close advisers to Thatcher who claim that the meetings were of great importance in helping the prime minister to decide whether to reorient British policy. Even readers who are skeptical that the Chequers meetings were what truly changed Thatcher’s views on the matter will likely ªnd Brown’s ac- count a useful source about this key period in British policymaking toward the USSR and Eastern Europe. The next three articles deal with international economic aspects of the Cold War. The ªrst of the three, by David R. Stone, examines the activities and ultimate failure of the Soviet-sponsored International Investment Bank (IIB), an institution formed in 1971 under the auspices of the Council for Mutual Economic Assistance (CMEA), the organization responsible for coordinating multilateral economic transactions within the Soviet bloc. When the IIB was set up, it was intended to provide rigorous scrutiny of innovative proposals emphasizing multilateral industrial ventures that would incorporate advanced technology and facilitate intra-CMA economic integration. The bank during its ªrst few years did provide ªnancing for industrial ventures, but the success of these projects was limited by problems inherent in the nature of So- viet-style economic systems. Moreover, starting in the mid-1970s the bank shifted the vast majority of its ªnancing to resource extraction in the Soviet Union, speciªcally the Soyuz natural gas pipeline that would bring much-needed energy supplies from the USSR to the East European countries. With the bank’s support, the pipeline was completed in 1978, but as this project and other resource-extraction ventures came to dominate nearly all of the IIB’s lending pool, it further diminished the bank’s ability to perform its original mission. Stone argues that the only way the IIB could genu- Journal of Cold War Studies Vol. 10, No. 3, Summer 2008, pp. 1–2 © 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

1 Editor’s Note inely have become an effective institution was if the CMEA countries had shifted to a convertible currency and meaningful prices. But such steps would have required the abandonment of cardinal features of their Soviet-style economies, something that no CMEA government (not even the Hungarian) was willing to contemplate. This con- straint, Stone shows, doomed the IIB’s efforts to promote market-oriented reforms that would lead to industrial modernization and economic integration within CMEA. The next article, by Francine McKenzie, shows that the Cold War had a far- reaching impact on the General Agreement on Tariffs and Trade (GATT), the organization set up at the beginning of 1948 to promote free trade and a liberal international Downloaded from http://direct.mit.edu/jcws/article-pdf/10/3/1/697081/jcws.2008.10.3.1.pdf by guest on 02 October 2021 economic order. Although GATT initially was intended as only a temporary body, it emerged as the main vehicle for encouraging global free trade after proposals that were broached in the mid-1940s to form an International Trade Organization ªnally col- lapsed in 1950. Most analyses of GATT focus on its economic (tariff-lowering) di- mensions and portray it as having been largely unaffected by the Cold War, but McKenzie argues that debates about membership, as the contracting parties decided which countries to let into the organization and which ones to exclude, were heavily inºuenced by the Cold War. The United States usually got its way in these debates, but in a few important cases the U.S. view did not prevail. McKenzie also shows, more generally, that GATT increasingly became linked, at least symbolically, with the North Atlantic Treaty Organization (NATO) in safeguarding the democratic capitalist world. What NATO did in the military sphere, GATT supplemented in the economic realm by promoting liberal trade and increased prosperity, which were seen as crucial to defuse the threat of Communist subversion. The effect of the Cold War on GATT—and the reciprocal effect of GATT on the Cold War—underscore the important political as well as economic role of trade in the international system. The ªnal article, by Ragna Boden, examines the Soviet Union’s military and economic assistance to Indonesia during the era of Nikita Khrushchev. Drawing on declassiªed materials from several former Soviet archives, Boden traces how the So- viet-Indonesian aid relationship developed after the two countries ªrst established diplomatic ties in 1954. From 1959 to 1965, Indonesia received 21 percent of all So- viet foreign assistance. The vast majority of Soviet funding to Indonesia went to military activities, and the very small percentage devoted to economic programs was squandered on extravagant ventures that brought no salutary effect for ordinary Indo- nesians, whose living standards under President Sukarno remained miserable. Sukarno himself beneªted a great deal (at least politically) from the Soviet largesse, but the So- viet Union ended up with almost nothing to show for the many hundreds of millions of dollars it pumped in. After Sukarno was overthrown in 1965, the Soviet Union had to terminate all its aid to Indonesia. Boden argues that the case of Soviet assistance to Indonesia illustrates some of the broader problems facing the superpowers when they tried to use foreign aid to gain political inºuence in the Third World. The issue ends with thirty-seven shorter book reviews.