RUSSIA:

Its Place in the 21st Century and the Implications for the United States

The findings of a trilogy of panel studies by recognized experts

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

CONTENTS

Introduction by Herbert London

Study Group Briefing Agenda and Panel Participants

Part One - Plenary Session Rapporteur’s Report by Peter Schweizer

Part Two - Panel Reports

I. Internal Issues Panel Findings, Conclusions or Recommendations Remarks by Panel Chairman, Congressman Curt Weldon Cornerstone Paper by David Satter

II. Foreign Policy Panel Findings, Conclusions or Recommendations Remarks by Panel Chairman, Senator Fred Thompson Cornerstone Paper by Dr. Richard Pipes

III. Security and Military Issues Panel Findings, Conclusions or Recommendations Remarks by Panel Chairman, Major General William Odom, USA, Ret. Cornerstone Paper by Dr. Keith Payne

Part Three - Luncheon Address by The Honorable James Woolsey

Further Suggested Reading on Russia and the United States

For Additional Information on this Hudson Institute Project and Future Hudson Institute Events, See Contact Information on the Inside Back Cover.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

RUSSIA: ITS PLACE IN THE TWENTY-FIRST CENTURY AND THE IMPLICATIONS FOR THE UNITED STATES

A Report of the Hudson Institute Study Group on U.S.-Russia Relations

Introduction By Herbert London

Ten years ago we watched with near disbelief as the last great predatory empire, the Soviet Union, began to unravel before our eyes - and with scarcely a shot fired. It was a heady time, an event of unprecedented magnitude. For half a century the confrontation between the Soviets and the West had loomed over the entire globe, preoccupied our leaders and dominated our politics, forcing us to spend immense sums on defense, yet still leaving us haunted by the constant possibility of nuclear war. America and the West could take some pride in bringing a victorious end to this long twilight struggle, for it was our free system and our determination to remain free - the “wall of resolve” in the words of Russian patriot Alexander Solzhenitsyn - that finally caused the Soviet Union to collapse of its own internal corruption.

When the Russian people threw off the burden of Communism, hopes were high in both Russia and the West that Russia would make the transition to a free, democratic, and stable country. We provided considerable material aid and much moral support to help bring it about. Now, as we all recognize with regret, things did not work out that way. Instead Russia went through a further agonizing economic collapse, accompanied by social and political turmoil. The old Communist nomenklatura, often in the new guise of criminal cartels, fought with reformers not just for the reins of power, but also over what kind of Russia would rise from the wreckage. Corrupt oligarches emerged in leadership positions, no longer claiming the sanction of “scientific” Marxist- Leninism but simply the right of the most unscrupulous to rule. The Russian people sank deeper into poverty and misery. Sadly, many of them came to equate the cynical exploitation of the new class of oligarches with free market reforms. Relations between America and Russia, which held so much promise at the end of the Cold War, soured once again.

It would be tempting to dismiss all this as irrelevant. Americans have had a tendency to be complacent since the USSR collapsed. Soviet Communism is defeated and discredited, and Russia seriously weakened. It no longer threatens us, many Americans believe. And yet, while no one wants to revive or perpetuate the Cold War, we cannot afford to ignore the fact that Russia retains 6,000 nuclear warheads, is modernizing its strategic arsenal, and still has considerable conventional military power. We must face the fact that Russia still has the means to undermine the interests of the United States and our allies. Moreover, what happens in Russia may determine its eternal behavior. If Russia is able to surmount its internal problems and transform itself into a free and democratic society, then it most likely will adopt a military posture and foreign policy that does not seek to make trouble for America and the West. On the other hand, if a virulent new form of lawless authoritarianism takes permanent root, Russia is more likely to embark upon irredentist or aggressive policies abroad.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Because we still have a vital stake in what happens in Russia, the Hudson Institute decided to convene a group of experts to study U.S.-Russia relations and how America might encourage the emergence of a stable, democratic country. Without casting unduly harsh or premature judgments, the Institute believed nevertheless that American policy had failed to help Russia make the desired transformation. The Institute also anticipated that a new U.S. Administration might assume office in 2001 and a new approach to Russia might ensue. When Russia elected a new President, Vladimir Putin, the time seemed propitious to move forward with this study, “Russia: Its Place in the Twenty-First Century and the Implications for the United States.”

The Hudson Institute brought together the most experienced foreign policy analysts and defense specialists available to assess the current state of the relationship and to make policy recommendations for improving it. U.S. policy toward Russia remains the subject of intense debate in Washington, so we expected the discussions to be lively. But when the sessions occurred in the shadow of President Bill Clinton’s historic meeting with President Putin in Moscow, and also the release of the Cox Committee’s Report on the failures of U.S. policy toward Russia, our deliberations took on added meaning.

Three panels were created, with special attention to selecting bipartisan participants from a variety of professional backgrounds. Panel members included Members of the House and Senate, former intelligence officials, military officers, journalists, scholars, and businessmen. The first panel addressed Russia’s internal situation, covering corruption, health care, and legal and economic reform. The second panel analyzed Russian foreign policy and how the United States might adopt valid and more effective principles for dealing with Moscow. The third panel examined military questions, including the present and future state of Russia’s armed forces.

Once each panel met to discuss its topics in depth, all three were convened in a private plenary session for an overall discussion. Through the plenary session we hoped to find some congruence in all three panels that could form the basis of a consistent policy. The day after this plenary session, a public meeting was held on Capitol Hill to discuss findings and make policy recommendations. More than a hundred people attended the event, including Members of Congress and Staff, journalists, and representatives from “think tanks” and the policy community.

The Bush Administration has the opportunity to renew improved ties with Russia. And while America’s ability to affect the internal course of events in Russia is limited, there is still much that we can do to help make our former enemy a friend, as we have with adversaries in the past. We hope the Report you are about to read will help policymakers introduce a greater consistency and soundness of purpose into America’s relations with Russia. The United States needs to pursue a policy that is consistent with American national security interests and that offers the best long-term hope for prosperity and freedom in Russia. Through this exercise and with this Report, we believe we have made an important contribution toward that goal.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Public Briefing of the U.S.-Russia Relations Study Group “Russia: Its Place in the Twenty-First Century and the Implications for the United States”

Agenda

June 6, 2000

8:00 a.m. to 1:00 p.m.

Senate Governmental Affairs Committee Hearing Room 342 Dirksen Senate Office Building, Washington, D.C.

Sponsored by The Hudson Institute

Welcome and Introduction by Herbert I. London, President, Hudson Institute

Panel I. How Will Russia’s Internal Problems Shape Its Sense of Itself and the Role It Wants to Play?

Chair, Curt Weldon, U.S. Representative, Pennsylvania Fritz Enmarth, former Chairman, National Intelligence Council Daniel Fine, Research Associate, Massachusetts Institute of Technology David Satter, Senior Fellow, Hudson Institute Owen T. Smith, Professor, Long Island University

Panel II. What Are Russia’s Foreign Policy Aspirations and How Realistic Are They?

Chair, Fred Thompson, U.S. Senator, Tennessee, Chairman of the Governmental Affairs Committee Constantine Menges, Director of the Program on Transitions to Democracy, The George Washington University Richard Perle, Senior Fellow, American Enterprise Institute Richard Pipes, Professor of History, Harvard University Roger W. Robinson, Jr., William J. Casey Institute Chair, former Senior Director of International Economic Affairs at the National Security Council Paul Wolfowitz, Dean, Nitze School of Advanced International Studies, Johns Hopkins University

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Panel III. Where Does Russia Want to Go as a Military Power and Can They Afford it?

Chair, William Odom, Director, National Security Studies, Hudson Institute Frank J. Gaffney, Jr., President, Center for Security Policy Robert Joseph, Director, Center for Counterproliferation Research, National Defense University Keith B. Payne, President, National Institute for Public Policy Robert Pfaltzgraff, President, Institute for Foreign Policy Analysis William R. Van Cleave, Department Head, Defense and Strategic Studies, Southwest Missouri State University

Plenary Report: Peter Schweizer, author of Victory

Luncheon: Keynote Address by R. James Woolsey, former Director, Central Intelligence Agency

Project Co-chairmen: R. James Woolsey and Herbert I. London

Project Rapporteurs: Peter Schweizer, author of VICTORY; Thomas Moore, former Director of International Studies, Heritage Foundation; Tryfan Evans, Johns Hopkins University (SAIS); Willis Stanley, Research Analyst, National Institute for Public Policy.

Project Director: Rinelda Bliss

Observer to the Plenary Session, Dr. Andrei Piontkovsky, Executive Director, Strategic Studies Center, World Laboratory, Moscow

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HUDSON INSTITUTE U.S. Russia-Relations Study Group Participants

Contributors and Panelists

Fritz W. Ermarth served as Chairman of the National Intelligence Council, the body that prepared National Intelligence Estimates, from 1988 to 1993. Prior to this, he was a National Intelligence Officer at the C.I.A. for the U.S.S.R. and Eastern Europe as well as Special Assistant to the President and Senior Director of Soviet and European Affairs of the National Security Council.

Daniel I. Fine is a Research Associate at the Massachusetts Institute of Technology. He is a specialist in strategic minerals and has consulted with the Department of Defense, Harvard University, Congress and industry.

Frank J. Gaffney is the President of the Center for Security Policy, which he founded in 1988. While serving as Deputy Assistant Secretary of Defense for Nuclear Forces and Arms Control Policy, he was nominated to become Assistant Secretary of Defense for International Security Policy; and became acting Chairman of NATO’s High Level Group.

Robert G. Joseph is Director of the Center for Counterproliferation Research at the National Defense University and is also a Professor of Security Studies at the National War College. Prior to this, he was U.S. Commissioner to the Standing Consultative Commission and Ambassador to the U.S.-Russian Consultative Commission on Nuclear Testing. He has also held senior positions at the Department of Defense.

Herbert I. London is a long-time member of Hudson Institute’s Board of Trustees as well as Senior Fellow. Mr. London became President of the Institute in 1997, and founded its Center for Education and Employment Policy. He is the John M. Olin University Professor of Humanities at New York University and was responsible for creating the Gallatin Division in 1972 as well as served as Dean until 1992.

Constantine C. Menges, professor at George Washington University, is the director of the University’s Program on Transitions to Democracy. He is the author of numerous books, among which are The Twilight Struggle, Transitions from Communism in Russia and Eastern Europe, and Partnerships for Peace, Democracy, ad Prosperity. Dr. Menges was also Special Assistant to the President for National Security Affairs in the Reagan Administration.

Lt. Gen. William E. Odom, U.S.A. (Ret.), is a senior fellow and director of National Security Studies at Hudson Institute’s Washington, D.C. office and also an adjunct professor at Yale University. He was former Director of the National Security Agency and also served as Assistant Chief of Staff for Intelligence the U.S. Army. The most recent of General Odom’s books is The Collapse of the Soviet Military.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Keith B. Payne is President and founding research director at the National Institute for Public Policy and an adjunct professor at Georgetown University and Southwest Missouri State University. He is Editor-in- Chief of Comparative Strategy: An International Journal, and author of Deterrence in the Second Nuclear Age. Mr. Payne also currently serves the U.S. State Department as a member of the Defense Trade Advisory Group.

Richard N. Perle is Resident Fellow at the American Enterprise Institute where he is also Director of its Commission on Future Defenses. He is a member of the Defense Policy Board and a consultant to the Secretary of Defense. Previously, Mr. Perle was a professional staff member on the Senate Armed Services Committee and served as Assistant Secretary of Defense for International Security Policy where he was the Chairman of NATO’s High Level Group.

Robert L. Pfaltzgraff is President of the Institute for Foreign Policy Analysis and Shelby Cullom Davis Professor of International Security Studies at the Fletcher School of Law and Diplomacy at Tufts University. He has taught extensively both nationally and internationally and consulted with the Departments of Defense and State, the National Security Council, and the U.S. Information Agency. Among his many publications are Contending Theories of International Relations.

Richard Pipes has been a Professor at Harvard University since 1950. He served as the director of East European and Soviet Affairs at the National Security Council from 1981-82 and as a member of the Reagan Transition Team at the Department of State in 1980. He is a member of a number of editorial boards, including Strategic Review, Orbis, and International Journal of Intelligence and CounterIntelligence. Prof. Pipes has also written numerous books, including the Formation of the Soviet Union (1954, 1997), A Concise History of the Russian Revolution (1995), and Russia Under the Bolshevik Regime (1994).

Roger W. Robinson, Jr. is president of RWR Inc., a Washington D.C.-based consulting firm. Mr. Robinson was formerly Senior Director of International Economic Affairs at the National Security Council. He is currently on the Board of Advisors of the Fund for Democracy and Development and the Center for Security Policy as well as the Board of Trustees of the Carthage Foundation of Pittsburgh and the Board of Directors of the Civic Institute in Prague.

David Satter served as Moscow correspondent of the Financial Times of London from 1976-1982. He then served as special correspondent on Soviet affairs for the Wall Street Journal. Mr. Satter is presently a senior fellow at the Hudson Institute and a visiting scholar at the Johns Hopkins University Nitze School of Advanced International Studies (SAIA). He is the author of Age of Delirium: The Decline and Fall of the Soviet Union.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Owen T. Smith is a professor at Long Island University. Prior to his professorship at Long Island University, Mr. Smith ran a private legal practice in Oyster Bay, New York, and served as the chairman of the New York State Board of Elections. He serves on the Advisory Committee for Paralegal Studies and the Executive Committee for the Real Estate Institute at Long Island University,

Senator Fred Thompson (R-TN) was first elected to office in 1994. In 1997, he was elected Chairman of the Governmental Affairs Committee. He also serves on the Senate Finance Committee. Senator Thompson was named Assistant United States Attorney two years after he completed law school and at the age of 30 was appointed Minority Counsel to the Senate Watergate Committee, where he served in 1973 and 1974. In addition to his public service, Sen. Thompson has acted in 18 motion pictures.

William R. Van Cleave is professor and department head of Defense and Strategic Studies at Southwestern Missouri State University. He served as Senior Defense Advisor and Defense Policy Coordinator under Ronald Reagan. From 1981-82, Prof. Van Cleave was the chairman of the President’s General Advisory Committee on Arms Control. He has also served as a member of the U.S. Delegation to the Strategic Arms Limitation Talks with the USSR.

Representative Curt Weldon (R-PA) has been a member of the House of Representatives since 1987, representing Pennsylvania’s 7th District. He is a senior member of the House National Security Committee and serves as chairman of the Military Research and Development Subcommittee, which oversees the development and testing of key military systems, weapons programs, and military technologies.

Ambassador Paul Dundes Wolfowitz is dean of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University. From 1989 to 1993, Dr. Wolfowitz was the Under Secretary of Defense for Policy, the principal civilian official responsible for strategy, plans and policy under Secretary of Defense Dick Cheney. He served as Ambassador to Indonesia from 1986-89 and as Assistant Secretary of State for East Asian and Pacific Affairs from 1982-86.

R. James Woolsey is former Director of Central Intelligence (1993-95) and is currently a partner at the law firm Shea & Gardner in Washington, D.C. Mr. Woolsey has served in the U.S. government as Ambassador to the Negotiations on Conventional Armed Forces in Europe (1989-91), Under Secretary of the Navy (1977- 79), and General Counsel to the U.S. Senate Committee on Armed Services (1970-73). He was also appointed by President Ronald Reagan as Delegate at Large to the U.S.-Soviet Strategic Arms Reduction Talks (START), and Nuclear and Space Arms Talks (NST).

Plenary Session Rapporteur

Peter Schweizer is a visiting scholar at the Hoover Institute on War, Revolution and Peace at Stanford University. His publications include Friendly Spies and Victory, which has been translated into ten languages. His is also the author of The Next War, written with former Defense Secretary Caspar Weinberger.

Panel Rapporteurs

Tryfan Evans is a Master of Arts candidate in International Relations at the Johns Hopkins School of Advanced International Studies. Prior to enrolling at SAIS, Mr. Evans was an Associate at the Washington- based Center for Security Policy. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Thomas Moore is a Washington-based defense analyst, military historian, consultant, and writer. He served in the Defense Department during the Reagan Administration and on the Professional Staff of the Senate Armed Services Committee in the mid-1990s. Mr. Moore is a former Director of International Studies at the Heritage Foundation.

Willis Stanley is a Senior Research Analyst at the National Institute for Public Policy. Mr. Stanley is a key participant in the Institute’s support for the Ballistic Missile Defense Organization and is a member of a U.S.-Russian bilateral study to identify common interests in counterproliferation. He has also served as a member of the World Federation of Scientists (Geneva) Monitoring Panel on Missile Proliferation.

Project Director

Rinelda Bliss is an independent Washington-based consultant. For over eleven years, she was Chief of Staff of the Center for Security Policy, which she helped found with the Center’s President in 1988. Before that she served in the Reagan Administration in the Department of Energy’s Defense Programs, the State Department Delegation to Nuclear and Space Talks, the Defense Department Office of International Security Policy; and was Special Assistant to Secretary of Defense Caspar Weinberger.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

RUSSIA:

Its Place in the 21st Century and the Implications for the United States

Part One

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

PLENARY SESSION RAPPORTEUR’S REPORT by Peter Schweizer

The Hudson Institute Russia study group was an ecumenical collection of military specialists, foreign policy practitioners and scholars who have studied the Soviet Union and Russia for many years. Equally impressive, it included individuals who had served the past six presidents of the United States.

The group’s composition reflected the complicated nature of the subject. Members found it difficult to separate fully Russia’s internal affairs from foreign policy concerns. Study group participants also noted that the topics of discussion were fraught with enormous ambiguities and uncertainties. Events and trends that appear negative at present might actually end up leading to positive results. For example, economic chaos has caused social dislocation in Russia. But it has also reduced dependence on the state, a necessity in the long-term transformation of the country toward greater liberalism.

Given the uncertainties of the present situation in Russia and our inability to predict what will actually happen in that country, the panelists believed that U.S. policy toward Russia must be guided above all by valid principles.

General Findings and Conclusions

Study group members began by analyzing the present situation and came to several important conclusions.

At present, Russia menaces the world not so much because of its strength, but because of its weakness. This is not to say that the study group was unconcerned about some military trends in the country. But the overwhelming sense from participants was that Russia’s greatest threat at this point in time is posed by the possibility of social disintegration, lack of control over its nuclear arsenal, or other problems associated with profound internal weakness.

While concerns about a Russian collapse were real, study group members were quick to form a consensus that not all the news out of Russia is bad. There are both positive and negative developments in Russia. While policymakers have tended to focus on negative trends in the country, perhaps a reflection of the fact that policymaking is a problem-solving exercise, there were some encouraging trends that deserved attention.

Before addressing specifics concerning what U.S. policy toward Russia should be, study group members searched for a historical analogy that might help guide policy. Post-war Germany and Japan were quickly identified as the most recent examples of countries that had faced collapse and then went through difficult reforms. However America’s post-war experience with those two countries was not considered a helpful analogy. Both were occupied by U.S. forces, with broad powers to ensure that reforms took place. No such level of control or influence exists with regard to present-day Russia. The study group ended up with the sobering conclusion that no historic analogy exists.

When the study group turned its attentions to post-communist efforts by the United States to assist Russia in its transformation, they were struck by an overwhelming lack of transparency in the process. The level of secrecy that has existed in U.S. policy was deemed neither necessary nor desirable. Group members believed A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

that this was a reflection of a broader problem in the present U.S. approach to Russia. Stuck in what several members called a “cold war model,” the U.S. bilateral relationship has been largely secretive, focused on the personality of the Russian leadership, and dominated by issues such as arms control. Study group members agreed that U.S. policy should be more open and transparent, indicative the changed nature of Russia and the shifting relationship between the two nations. In addition, the United States should not base the relationship as much on individual Russian leaders and personalities, but rather on institutions and the Russian people. And finally, traditional cold war issues such as arms control should no longer be emphasized. By concentrating so heavily on these issues, the United States is encouraging the view that great power status is best achieved or maintained via strong military power, and thereby encouraging dysfunctional Russian behavior.

The Internal Situation in Russia

There was a lively discussion on the present situation in the country. Serious concern was expressed about the criminalization of society, economic dislocation, a growing health crisis, and a growing emphasis on centralization of power. But woven through the discussion was the widely accepted view that the United States should not overstate its ability to influence internal events in the country. Success or failure in creating a more liberal Russia will largely rest with the Russian people. The study group also believed that the present level of frustration in Washington over events in Russia was an outgrowth of this phenomenon: the stakes in the country were so high, and our ability to influence them so low.

Study group members reached two other conclusions on the internal situation in the country. First, they strongly expressed the view that Russia cannot go it alone. Recent statements by President Vladimir Putin and others that Russia could go its own unique way and achieve both prosperity and a more liberal society without embracing Western ideals is a dangerous myth. Only Western principles and institutions have proven the ability to produce both, and they have done so in diverse countries like the United States, Japan, and Europe. The present Russian government has done a poor job of informing the Russian public of this fact, and study group members believed that there was a great need to move in this direction.

Members also expressed their strong belief that there is a profound need for greater transparency in economic transactions within the country. In many sectors of the economy, particularly energy, the Russian state continues to exercise monopoly power and has failed to open up the process to allow competition to flourish. With secrecy, corruption has blossomed. Until these practices are abandoned, corruption will continue to be a major problem in Russia.

Given the internal weaknesses in the country, Russia is considerably weaker now than it was during the height of the cold war. When the discussion turned to issues of national security and foreign policy, study group members disagreed as to whether Russia could muster the resources to seriously challenge American military interests in the short term. However, the panel was united in the view that Russian intentions should be of concern to U.S. policymakers. The consensus view was that Russia remains a non-status quo power, unhappy with the present power arrangement in the world. As a result, Russia appears to have made its chief goal reducing American influence and power overseas.

Moscow has used a number of means to achieve this goal. Closer relations with China, supporting the proliferation of weapons of mass destruction in the developing world, and a diplomatic posture designed to weaken western alliance systems, are all consistent with this goal.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Parallel with the goal of promoting liberal institutions inside Russia, members felt it was important to strongly protect U.S. national interest and that of our allies. Ruling out the possibility of a direct U.S.-Russian military confrontation in the short to medium term, members felt the greatest challenge is in protecting U.S. power and influence overseas.

Serious concerns were expressed about the Russian government’s continued commitment to military spending, particularly on cold war military programs that seem inappropriate in the post-cold war era. Mention was made of the Yamantu Mountain project, for example, a massive military project in the Urals assumed to be a civil defense program. Study group members wondered why, in an era of dramatically reduced military tensions and scarce resources in Moscow, the program continues to proceed. Study group members also expressed their strong view that Moscow’s continued assistance to weapons proliferators in the developing world was not simply an effort to “sell-off” technology for desperately needed funds, but part of a decided Russian military effort to cause strategic problems for the United States.

What the United States Can Do

Having evaluated the present situation in the country, the study group then turned its attention to questions of U.S. policy. Keeping in mind the strongly held belief that American influence in Russia is limited, members nonetheless unanimously endorsed the view that the United States needs to encourage liberal institution building inside the country by supporting institutions such as labor unions, civic organizations, and political parties. Such support should be public and overt, similar to the efforts undertaken in the 1980s by the National Endowment for Democracy. The study group drew a sharp contrast between this approach and current U.S. policy, which has tended to focus on the personalities of the Russian leadership and financial support to the Russian state.

The group also felt that the United States had failed to adequately promote economic freedom in Russia, placing too much emphasis on government-to-government relations. The study group believed that other institutions, such as U.S. banks, should be encouraged to tap into the Russian consumer market. For example, the Alaska National Bank has pursued the possibility of opening branch offices in Russia to make savings accounts, mutual fund accounts, and mortgages available to ordinary Russians. The participants strongly endorsed such an approach.

With regard to protecting U.S. national security interests, two important tools were identified as particularly effective--verbal criticism and financial pressure. Moscow remains very sensitive about its image in the West. Therefore, criticism could be effective in constraining Russian behavior when it comes to issues such as Chechnya. But the study group was unanimous in its view that this tool had not been effectively employed by the United States. To the extent that the administration has criticized Russia, it has been inconsistent, ill-timed, and not strong enough.

On more serious matters of concern, the participants embraced the view that financial pressure could be decisive in limiting Russian behavior. Turning away from the traditional notion of trade sanctions, the group unanimously endorsed the notion that restricting Russian access to U.S. capital markets was the best means of applying financial pressure. Trade sanctions cause collateral damage in terms of U.S. jobs and require the cooperation of numerous allies, making them ineffective and clumsy tools. Restricting access to American capital markets, on the other hand, would not cause collateral damage. And given the strength and influence of U.S. financial markets, the study group believed unilateral action by the U.S. government would be highly A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

effective if allied cooperation was not forthcoming.

Members debated what sort of Russian conduct might merit restricting access to American capital markets. A general consensus was reached on the following Russian actions:

(1) support for the proliferation of weapons of mass destruction; (2) inordinate support for terrorist regimes (e.g. Sudan); (3) efforts to destabilize nearby states (e.g. Georgia, Azerbaijan); (4) sale of advanced weapons to China and North Korea; (5) diversion of U.S. assistance flows from their intended use; (6) military spending on offensive weapons systems (e.g. new strategic nuclear forces); (7) systematic and blatant human rights abuses.

The final area of concern for U.S. policymakers on which the study group focused was the matter of ballistic missile defense (BMD). Members debated the merits of deploying a system in the short term. But the division over BMD was largely over the question of timing. Some argued that the possible disruption that it might cause in the alliance system was such a cause for concern that moving slow was justified. Other contended that it was necessary to move now, in light of the growing list of proliferating states. However, there was a strong consensus that the anti-ballistic missile (ABM) treaty was obsolete and no longer legally binding. And the study group was unanimous in its view that Moscow should not retain a “veto” over the American deployment of such a system. If the United States proceeded with the deployment of a BMD system, the study group concluded that Russia would live with it and not resort to drastic measures.

Looking Back

Having covered a gamut of issues from domestic concern to national security, the study group concluded, noting the need to know more about American policy toward Russia over the past eight years. Russia has not evolved the way most American policymakers would like. And yet, while we are well aware of Russian failures, we are not so aware of ours. Calling for a federal panel to study and investigate the conduct of American policy toward Russia in the post-Soviet era, the study group hoped that lessons might be learned by knowing the truth behind past failures.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

RUSSIA:

Its Place in the 21st Century and the Implications for the United States

Part Two

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Internal Issues Panel

The Internal Issues Panel met on May 8 and May 16, 2000 in the Rayburn House Office Building and the Hay-Adams Hotel, Washington, DC. Participants were Rep. Curt Weldon (Chair), David Satter, Owen Smith, Fritz Ermarth, Dan Fine, Peter Schweizer, Rinelda Bliss, and Thomas Moore (rapporteur).

The Internal Issues Panel began its discussions in the Congressional office of Rep. Curt Weldon (R-PA), a Russian speaker and the Member generally recognized as Congress’ leading expert on Russia. In three sessions on May 8 and May 16 the Panel explored in depth how the increasing economic and political disintegration inside Russia might affect Russia’s conduct toward other nations and regions, and especially the United States. Coming immediately after Vladimir Putin’s taking office as Russia’s new president, the discussions of necessity focused on the impact this enigmatic figure may have in solving (or worsening) his country’s internal problems, and assessing in what direction he will take the Russian Federation during his tenure.

The following are highlights of the observations, propositions, and recommendations emerging from the panel discussions.

Transforming Engagement

There was a strong consensus among the panelists that the U.S. must remain engaged in a consistent, principled effort to achieve good relations with Russia. Americans, especially opinion leaders and others in positions of influence, must riot let their concern over Russia’s behavior and worsening U.S.-Russian relations revive the Cold War. However, this engagement must riot be based upon the self-serving delusions of U.S. foreign policy elites. It must rest upon a realistic assessment of Russia’s true internal conditions, and upon strength, consistency, and candor. Above all, the U.S. must expand engagement from a narrow preoccupation with the occupants of the Kremlin to a broader focus on helping Russia’s people and institutions. The goal of true or proper engagement must be the transformation of Russia to a civil society, and not merely keeping good relations with Russia’s current power-holders.

Material aid to Russia is important, but the U.S. must acknowledge that much of our aid has not benefited the Russian people as a whole nor achieved its intended purposes, since the necessary legal and accountability structures do not exist in the Russian Federation for it to be absorbed properly. Consequently, much of the transfer of wealth from the U.S. and the West to Russia has been misappropriated. It has merely served to heighten corruption and strengthen the power of criminal cartels and greedy oligarches. Our engagement must recognize this fact and seek to undo the harm that power-to-power engagement has done to the Russian people; for it is the Russian people who are our natural allies, not the individual or regime that happens to be in power at the moment.

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Moral Foundations of Russia’s Crisis

Those who make or influence U.S. policy toward Russia must recognize that the country’s internal crisis is primarily moral. It does no good to induce Russia to adopt the outward forms or processes of democracy if the necessary prerequisites to ordered liberty -- -the rule of law and moral leadership -- do not exist. Nor can genuine free market capitalism flourish without a base of ethical conduct in the culture.

This means, among other things, that the traditional instruments of foreign policy will be of limited effectiveness in influencing Russian conduct. American policymakers must begin to think outside of the normal policy categories and address the broader issues of the moral collapse of the country; and in particular, helping the rule of law take root. Pouring more financial aid into the country without addressing the underlying lack of a legal and moral infrastructure merely feeds the corruption and the power of the oligarches, the “kleptocracy.” In effect, America becomes complicit with this “rule of thieves.”

The Material Dimensions of Russia’s Internal Crisis

While emphasizing that Russia’s internal crisis is primarily moral, the panel also noted there are significant, material dimensions to Russia’s problems as well; in particular, in the areas of environment and natural resources.

Russia is rich in minerals, natural gas, petroleum, and other vital resources which, if properly managed and developed, could help restore the country’s material well being. However, among the many doleful legacies of the Soviet Union is a shocking pollution and environmental degradation, which have imposed an untold cost in human misery. And while the environmental and natural resources policies of President Putin’s new regime are not yet clear, the panel expressed concern that Putin is not taking the necessary steps to ensure that Russia’s environment is protected and that her natural resources will be open to foreign investment and expertise in a way that will benefit all Russians and not just a privileged few.

For example, the panel lamented Putin’s abolishing the Russian state committee on the environment. Its function will be transferred to the Ministry of Natural resources, where there is opposition to genuine environmental standards in the development of mineral resources, fuel and non-fuel. This action will make it difficult, if not impossible, for Western investors to participate in several major development projects.

The panel believes it is necessary to expose the deeper implications of this action. First, it perpetuates the old Soviet disregard for the environment and the resulting risks to human beings from industrial pollution. Second, it may be a tactic to buy time for Russian national companies to assert control over projects currently in joint-venture or with Western equity participation, and eventually exclude the accountability and expertise that accompany Western participation. Third, it suggests in the long term the isolation of a new and stronger Russian state from global accountability measures. Finally, it is an obstacle to establishing a moral foundation to the Russian polity to the extent that it fails to end the human degradation resulting from destruction of the environment. If Putin preserves the centralized industrialization of the old Soviet Union without mitigating its economic and environmental consequences, then it will be clear to the Russian people and the West alike that basic human welfare is still a low priority in the new Russia.

“Weak but Nasty”

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The panel felt strongly that the internal problems of Russia and its collapsing society will be reflected in the Russian Federation’s international conduct, and thus will pose greater challenges to the West than military or foreign policy considerations per se. Although Russia is weak and no longer represents the threat it did in the Cold War, it is still a heavily armed nuclear power. Many of its people have a deep sense of grievance toward the U.S., and its oligarches have irredentist ambitions. Such a heavily armed former great power, if it transmogrifies into a “gangster state,” will be even more dangerous as its internal decay releases toxins into the international environment.

America must understand the danger of allowing Russia to become, in the vivid formulation of one panelist, “weak but nasty.” The U.S. must seek, via economic aid and other forms of engagement, to eliminate the deep sense of grievance and exploitation among Russians that can fuel tensions and perhaps even ignite future conflicts. Aid that is seen by the Russian people to directly benefit them and alleviate their misery -- for example, improving health care and housing, cleaning up their polluted environment -- could do more to diminish the “nastiness” that is poisoning the future of U.S.-Russian relations than traditional government-to- government aid.

Critique of Past and Present Administration Policies.

There was a strong consensus among the panelists that the policies and actions of the U.S. Government, in particular the Clinton Administration, have been ineffectual at best and harmful at worst. And while the final report of the Study Group should not put excessive emphasis on recrimination, still one cannot make sound recommendations about the future of the U.S. and Russia without an understanding of the mistakes of the past.

For example, one of the most misguided approaches of the past has been to base U.S. policy exclusively on personal relations with Russian leaders. However, this approach could only work if the U.S. turned a blind eye to the corruption and misappropriation of Western aid by Russian leaders, in particular, Boris Yeltsin and the oligarches surrounding him. In essence, America has given de facto support of the criminalization of Russia by making our actions dependent on untrustworthy individuals, rather than basing our actions upon sound principles.

The panel also noted in this connection that the moral collapse in Russia is to a degree connected to the moral-intellectual corruption of our own political class. American elites must stop lying about the internal state of the Russian Federation, first to themselves and then to the American people. For a genuine U.S.-Russian friendship to succeed, America must come to grips with the personal, political, and financial aggrandizement by U.S. elites that has contributed to the massive pillaging of the country by Russia’s newly rich, and which tragically has become associated in the minds of average Russians with U.S. policy as they see the U.S. aligned with the kleptocracy.

The past approach of the U.S. has persuaded many Russians that the pillaging of their country is “capitalism.” In their minds this predatory capitalism characterizes America rather than an ethical culture and law-governed democratic, civil society. Moreover, the conspiratorial mindset to which Russians are prone sees this not as a tragic mistake, but as a subtle and intentional ploy to keep Russia weak and prostrate.

Specific Steps

The panel proposed a number of specific or concrete steps to improve Russia’s internal state and thereby A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org improve U.S.-Russian relations. However, the panel emphasized that such concrete steps must be embedded in a comprehensive re-direction of U.S. policy toward addressing the underlying moral and institutional crisis in Russia. Moreover, the panel urged that the role of rhetoric not be neglected. The Russian people and their traditional culture (or what remains of it after 70 years of Communist rule) have a strong rhetorical orientation, and respond to truth, properly told, and conveyed with the appropriate cultural context.

With this critique of Russia and past U.S. approaches in mind, the Internal Issues Panel urged that the U.S. should focus non-government dialogue and engagement on:

• Strengthening Russian institutions, especially the Duma, helping it become a truly democratic body.

• Helping build a viable Russian middle class.

• Helping Russia create a legal ethos, sound civil courts and workable code of laws that will, for example, allow for the possibility of contract enforcement and protecting private investment and ownership of property -- especially land (recognizing that this will require a major change in political culture).

• Helping implement new laws to support foreign investment; for example, production- sharing regulations that open Russia’s energy resources to needed foreign investment.

• The U.S. must stop funneling vast sums to Russia through the IMF and similar agencies.

• Nunn-Lugar Cooperative Threat Reduction funds and other government-to-government aid must be carefully audited to ensure accountability, and that it is spent for the intended purpose.

• Encourage NGO aid for housing, medical care, environmental remediation, and food production. A special NGO effort should be to imbue primary and secondary education with ethical values, and to aid Russian educational entities that promote ethical culture and a law-governed society (but in a way that is culturally acceptable to Russians).

• Persuade Russians and the relevant government policymakers that environmental Best International Standards and Practices prevent human degradation which in turn can lead to anti-democratic and despotic political outcomes such as those associated with the environmental destruction of the Former Soviet Union.

• Develop a way to screen and identify Russian firms and entities which are corrupt and which are honest, as a means to denying access to aid or capital by those which are corrupt, and to support those which are honest.

• Congress should amend the Foreign Corrupt Practices Act to make it more difficult for U.S. businesses to be drawn into Russian criminal cartels.

• U.S. law and policy should encourage the break-up of Russian state-owned monopolies, which control vital resources-- for example, strategic minerals like palladium-- or which allow the Russian A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Federation to manipulate the price and supply of resources on which the U.S. is critically dependent.

• Support local and regional democratic participation in the Russian Federation as an alternative to over-centralization and single-party or bureaucratic rule.

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Hudson Institute U.S.-Russia Relations Study Group Internal Issues Panel June 6, 2000

Remarks by Representative Curt Weldon (R-PA-7) Chairman of the Panel

Think back to 1992. Thousands of Russians were waving the American flag in Moscow and wanting to be closely aligned with the West. In fact, in one of his first speeches, Boris Yeltsin declared a new strategic relationship with the United States.

Now think back to the fall of 1999. Five thousand young Russians were standing outside the American embassy, burning our flag, throwing rocks, hurling paint bombs and firing weapons. Vladimir Putin, in his first comments as President, declared a new strategic relationship. This time it was with Beijing. And it was a partnership directed against the United States.

Over this seven-year period, antagonism in Russia toward the West has become very pronounced. What did we do to help contribute to it?

First, we have to consider the subject of our response to the economic situation in Russia. After throwing off sixty-five years of communism, Russia made a move toward a market economy. Since 1992, the West has invested about $15 billion in the Russian economy. During this same period we have invested over $350 billion in the Chinese economy, which remains a steadfast communist system. Simply put, when it came to western investment, there was no real reward for Russia in throwing off communism.

Second, there is the fact that we were simply blinded by our allegiance to a series of individuals in Russia, not to systemic reform. We were committed to keeping Yeltsin in power while ignoring troubling signs. We ignored evidence that Russian government officials were stealing billions in International Monetary Fund and World Bank funds. We also turned a blind eye toward the proliferation of weapons of mass destruction. Between 1992 and 1998 there were seventeen documented cases of proliferation by Russian entities. But our response was to do nothing.

For the past eight years, instead of supporting a personality in the form of Boris Yeltsin, we should have been helping to build the institutions that will determine the eventual success of democracy in Russia: the Presidency, the parliament, and the Federation Council. We should have focused not on strengthening certain Russian individuals, but on strengthening Russian institutions.

For example, when Boris Yeltsin called the Durna a bunch of rogues and thieves (which perhaps some of them were), we should have supported the parliament because they have a legitimate role to play in Russia’s democracy. Instead, we sat by and basically gave Russians the impression that we did not take the parliament seriously and that it was not legitimate in the move toward a democracy.

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But beyond the politics of the matter, we failed to help Russia build a viable middle class. Most of our programs ended up centralizing power in Moscow, rather than helping individual Russians. Five years ago, many of us in Congress proposed a mortgage banking system modeled after our system that could have helped the average Russian. The Duma was very excited about it, but we missed the chance to make it happen. Similar opportunities have been missed to help Russia create a healthy legal ethos, including sound civil courts and a workable code of laws. These are essential for both a free economic system and a workable legal system.

In order to strengthen Russian democratic institutions, I’ve proposed with several Russian legislators that we create a joint legislative oversight body that connects the U.S. Congress with the Russian Duma and the Federal Council. The purpose of this body would not be to direct resources; that is the legitimate right of the executive branches in both countries. Instead, the purpose of this oversight body would be to make sure that dollars going into Russia are in fact going to the intended purpose of helping the Russian people.

We need to seriously rethink our approach to Russia and learn from the mistakes of the past. The situation in Russia is troubling, but it’s not too late to change course.

The U.S. government cannot do it alone. We need a massive effort made by nongovernmental organizations (NGOs) and by nonprofit foundations. There are some very good programs that are in place. Two years ago, for example, the Pew Foundation was able to secure funding to begin a staff dialogue and exchange program between the Russian Duma and our congress. Through this program we bring staffers from the Duma to work in the U. S. Congress. The idea is to build up and strengthen the Russian parliament.

James Billington, the Librarian of Congress, has received $40 million to bring over 4,000 young Russian leaders to the United States. For a period of seven to twelve days, they are exposed to local institutions that make American strong. They spend time with nonprofit organizations and faith-based groups that deal with issues such as poverty, crime, economic development, and social issues on a local level. It demonstrates to these Russian leaders that many of the solutions to their problems have to come from the local level.

There are some encouraging signs in Russia. But if these challenges I’ve cited are going to be overcome, we need to work harder, and above all, seek to reorient our thinking before it is too late.

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INTERNAL POLICY PANEL

by David Satter

Overview

As Vladimir Putin takes office as Russia’s president, Russia’s well being and the security of the world will depend on whether he can give Russia what it needs most, moral leadership and the rule of law.

Contrary to a widespread impression in the West, Russia is in danger of political and economic disintegration not because many aspects of the economic reform program were unwise but rather because reform in Russia was carried out in a moral vacuum, leading to an economy in which the animating factor was not productivity but theft.

The first great act of theft was the destruction of the Russian people’s savings as a result of the hyperinflation after the uncontrolled freeing of prices in January 1992. Money that had been saved for decades by millions of people disappeared overnight. The effective confiscation of personal savings was followed by privatization in which enterprises created by the common efforts of the entire population were “sold” to criminal business syndicates at giveaway prices. And, in a final act of theft, the government “empowered” banks to handle its accounts. By appropriating interest, these banks made huge fortunes on the state’s money.

The result of a reform process run for the benefit of well-connected insiders was that the Russian economy suffered a collapse that was unprecedented in the country’s postwar history. In the last eight years, the gross domestic product declined by half. This did not occur even under Nazi occupation.

At the same time, money is being sent out of Russia in enormous quantities. Russia’s newly rich, having acquired their wealth illegally, live in fear that it will be confiscated and, as result, do not invest it in Russia but, at the first opportunity, move it out of the country to safer climes.

Estimates as to how much money left Russia illegally during the Yeltsin era range from $220 to $450 billion. According to the Russian Prosecutor General, Russian citizens have set up 60,000 offshore companies to hide illegally transferred wealth and, in an indication of the seriousness of the situation, it was reported recently that in 1998, $70 billion was transferred from Russia to offshore banks in the Republic of Naura, a coral island in the Pacific Ocean.

Under these conditions, it is pointless to speak of market institutions and the creation of wealth. Only policies aimed at enforcing the rule of law and creating equal conditions for all economic actors can put a stop to the pillaging and give to Russia the preconditions for political and economic stability. Putin has expressed his support for democratic reforms and has promised to distance himself from Russia’s corrupt financial oligarches. But so far, the record is mixed at best and, although Putin faces a deteriorating social and economic situation, there are well-founded doubts as to whether he will work seriously for the establishment of the rule of law.

No definitive judgements about Putin and his intentions are possible at the present time but in the months since he was plucked from obscurity, there have been a number of indications that his accession to power may presage a reduction in the scope of Russian democracy.

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Unlimited War - The Second Chechen War, although ostensibly an “anti-terrorist operation,” is being fought with a complete disregard for civilian casualties. Aerial bombardments have destroyed entire cities and, because of the scale of the bombing and its indiscriminate nature, an estimated 220,000 persons have fled Chechnya, effectively depopulating the region. Putin has also authorized the use in Chechnya of TOS-1 rockets, which cause aerosol explosions on impact and are forbidden by the 1980 Geneva Protocol, and Tochka-U ballistic missiles, which can cover up to seven hectares with cluster shrapnel on impact. Neither of these weapons were used in the first Chechen War.

Attacks on Press Freedom - Since becoming president, Putin has imposed post-Soviet Russia’s first official restrictions on the press. Journalists have been prevented from entering Chechnya except in the company of Russian military press representatives who limit what they can report or film. When Andrei Babitsky, a correspondent for Radio Liberty, entered the war zone on his own, he was detained by Russian troops and then “exchanged” to unknown Chechen rebels for two Russian soldiers.

On May 11, police in black masks and armed with submachine guns searched the offices of the Media- MOST company, occupying the offices for most of the day and rummaging through documents and recording workers’ personal data. The group’s NTV television station has been independent in its coverage of the Chechen War and has been critical in its coverage of Putin.

Control over Information - Since becoming a candidate for president, Putin has declined to discuss his future plans and intentions in any but the most general terms. At the same time, a curtain of silence has fallen over the bombings of Russian apartment buildings last September. The bombings were attributed to Chechen terrorists and used to justify the Second Chechen War. Relevant questions about an incident in Ryazan where the FSB appeared to have been caught planting a bomb have been left without answers and when a motion was made in the State Duma calling on the general procurator to investigate the incident, it was voted down by the pro-Putin Unity party.

Neutralization of Political Opposition - To the surprise of many political observers, Putin appears to be coopting the parliamentary opposition. The Unity Party marked its success in the December 19 parliamentary elections by dividing all the key posts in the Duma with the communists. This was followed, February 11, by a rebuke to the Yabloko Party and the Union of Right Wing Forces (SPS) when the Putin-Communist bloc rejected the candidates from those parties to two deputy speaker positions, a move which underscored the Liberals’ powerlessness in the new Duma.

One sign of Putin’s apparent success in coopting the parliamentary opposition was the parliament’s final ratification of the START-2 treaty. An even more telling indication, however, may have been the vote of the Federation Council, the parliament’s upper house, to suspend Yuri Skuratov, the chief prosecutor, who had been conducting investigations into high level corruption that were reported to touch not only the leading oligarch, Boris Berezovsky, but also members of Yeltsin’s family. The Federation Council had refused on three previous occasions to accede to Yeltsin’s request that Skuratov be removed.

In the coming months, a great deal more will be learned about Putin and his intentions but, if he is to play a positive role in Russian history, it will be first and foremost as a leader who created a basis for prosperity in Russia by strengthening the rule of law. To this end, there are several steps which would indicate that Putin is seriously interested in creating the conditions for Russia’s resurrection:

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* Progress in solving any or all of Russia’s most notorious political murders with the arrest and trial of all of those involved in the crime, the organizers as well as the executors.

* Openness regarding the investigation into the bombings of Russian apartment buildings in September and a complete and credible explanation of why the Federal Security Bureau (FSB) decided to plant a dummy bomb - if it was a dummy bomb - in the basement of an apartment building in Ryazan.

* The arrest and trial of the financial oligarches with the publication of full information about their ties to government officials, including members of the presidential administration.

* Steps to memorialize the victims of political terror and to establish museums or exhibits that describe fully and truthfully the crimes of communism.

* The arrest and trial of the leaders of any one of Russia’s criminal syndicates with full information about their business holdings and relation to government officials.

In the absence of these or related measures, it will be hard to avoid the impression that Putin’s anti-democratic early first steps were not an accident and that Putin seeks not to establish the role of law but to achieve economic progress with police methods, an effort that will not solve Russia’s problems but only compound them.

Russia has recently experienced an increase in industrial production which has prompted talk in the West about the beginning of a Russian economic recovery. This recovery, however, is largely the product of a rise in world energy prices and the effect of the devaluation of the ruble. The three critical indicators of stable economic growth -investments, per capita income and the level of individual and company savings - all fell significantly over the last 18 months and have not returned to the level they had reached before the financial crisis of August 17, 1998. At the same time, such growth as has taken place is linked to import substitution which occurred without any change in the retail trade turnover, so prospects for future growth with the existing set of conditions are severely limited.

In fact, barring a rise in effective demand within the country, growth now depends on an increase in exports and further import substitution, neither of which will be possible without new investment which, in turn, will not take place without a change in Russia’s climate of lawlessness that alone is capable of making investment both rational and possible.

An attempt to sustain a corrupt status quo which is, in the long run, unsustainable without the help of police methods may occur. But it can only come at the expense of Russian society and the future security of the world.

Implications for the United States

Unless something is done about Russia’s lawlessness, the prospect in Russia is for continued disintegration, and the more weak and unstable Russian society becomes, the greater is the chance that the processes taking a toll within the country will begin to pose a threat to the United States.

There are two types of dangers that face the United States as a result of the internal situation in Russia: A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org those arising from the actions of the state and those arising from the actions of specific groups over which Russian state structures have lost all control. In both cases, they are a product of the chaos stemming from Russian society’s underlying lack of moral orientation.

The principal dangers arising from the actions of the Russian state are:

Social Unrest - The failure to address Russia’s economic problems could lead to civil unrest sufficiently serious to draw in nations along Russia’s long border. More than 40 per cent of the Russian population lives in conditions of severe poverty, and economic decline has led to a public health crisis, alcoholism and rising rates of murder and suicide. The Russian people remain deeply dissatisfied with the results of “reform” and this discontent could be exploited by a demagogic leader, particularly if living standards continue to fall.

Aggression - The deterioration of the situation in Russia could prompt Putin or another Russian leader to launch a war of aggression against any of the former Soviet republics to shore up popular support in the same way as the war in Chechnya was used to help Putin win the Russian presidency. Likely targets of a Russian war of aggression are Georgia and Azerbaijan, and even the Baltic Republics.

The principal dangers involving groups, individuals, or institutions over which there is no effective control are:

Terrorism - Because it is impoverished and heir to the military expertise of the Soviet Union, Russia could become a base area for terrorism. Leaders of Aum Shinri Kyo, the Japanese doomsday sect which launched an attack with sarin nerve gas on the Tokyo metro, have testified that the production designs for the manufacture of sarin were given to the sect in 1993 in return for $100,000 in cash by Oleg Lobov, Russia’s former first deputy prime minister. Members of the sect, with Lobov’s help, also trained on Russian military bases and were frequent visitors to Russian academic institutes where they studied the circulation of gases.

Organized Crime - Russian expertise has been a boon for organized crime. There are presently about 30 Russian criminal syndicates operating in the United States and they conduct some of the most sophisticated criminal operations ever seen in the United States thanks to their mastery of computer technology, encryption techniques, and money laundering facilities that process hundreds of millions of dollars.

The Russian criminal syndicates have also established working relationships with the Colombian drug cartels and have tried to arrange the sale to them of sophisticated weapons including a Tango-class, diesel powered patrol submarine to be used to move cocaine from Colombia to California. U.S. law enforcement agencies take seriously the possibility that Russian criminal gangs could obtain nuclear weapons.

Nuclear accidents - Russia could be the source of ecological disasters. Outdated nuclear power stations, many of the same type as the power station at Chernobyl, are operating with equipment that is in need of replacement. At the same time, human error is increasingly possible because the employees of nuclear power stations in Russia have gone as much as six months without pay, causing workers to faint on the job and go on hunger strikes.

The nuclear material inside submarines could also cause a disaster. At present, there are 45,000 nuclear fuel elements stored in the Murmansk/Archangel Panhandle, 1,200 miles north of Moscow. Many are still inside 104 submarines which are rapidly corroding. The shipyards have 1.8 million gallons of liquid radioactive waste A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

awaiting disposal as well. Disposal of the current supply of spent nuclear materials would take an estimated 30 years, too long to avoid a nuclear disaster.

The Theft of Nuclear Materials - Russia has 150 metric tons of plutonium and 650 tons of highly enriched uranium stored in 400 buildings at 50 scientific centers. Much of this supply, which is enough to make 33,000 nuclear weapons, is not secure. Russia’s nuclear sites are guarded by nearly 30,000 servicemen but many of these soldiers have gone for long periods without pay and there have been reports of guards leaving their posts to forage for food. In one case, a 19 year old sailor killed eight people, locked himself in the torpedo room of a nuclear submarine and threatened to blow up the ship. In 1998, a soldier who was guarding a nuclear reprocessing plant in the Ural Mountains killed two fellow guards and then fled.

At the same time, many of Russia’s 20,000 nuclear scientists live in conditions of extreme hardship and are vulnerable to recruitment efforts by foreign powers, including North Korea which, according to an unconfirmed report, has recruited them successfully.

Epidemics - The breakdown of the system of public hygiene in Russia has made Russia the source of new epidemics. Among the new threats to health that have emerged are polio, cholera and even plague. The number of new cases of syphilis in Russia has increased 57 times in seven years from 8,000 to 450,000 in 1997. Most ominous of all, however, is the rise of drug resistant tuberculosis, which developed in the fetid, overcrowded Russian prisons. Persons ill with tuberculosis received only partial treatment with antibiotics and this produced the drug resistant strain. The disease is spreading throughout Russia as prisoners return to their communities and its spread beyond Russia’s borders is only a matter of time.

U.S. Policy

Russia menaces the West today because of its weakness rather than its strength so in it is in the West’s interest to do whatever we can to help arrest the deterioration in the Russian internal situation. In this respect, the way in which American representatives speak to Russia becomes very important.

In recent years, American policymakers have concentrated on aid for the reformers as the “embodiment of democracy” and our efforts were focused on supporting them in their fight with political rivals. This approach was flawed for two reasons. In the first place, the reformers were far more corrupt and unprincipled than many in the West were, at first, led to believe. More important, however, the practice of basing policy on support for one Russian political faction presumed an overall moral and legal context for political life in Russia which does not exist. Without realizing it, we were giving unconditional support to one side in a game without rules, in that way spurring the spread of corruption in Russia and the destruction of those overarching values which are necessary to everyone.

As the Russian internal crisis deepens, it is important for the United States to defend principles in Russia, not factions or individuals, and the most important principle is not the transition to a market economy but rather the rule of law which is necessary in order to make such a transition possible.

There are two ways in which American policy can support a fundamental moral change in Russia: by directing policy toward fighting corruption and a genuinely law based state, and by distinguishing in our public statements between change at the economic level and change at the more fundamental level of ethics and morality. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

In terms of policy, there are a number of steps that the United States can take to support a law based state in Russia.

* Make international loans contingent on realistic efforts to fight corruption. Russia still lacks laws on organized crime, money laundering and corruption. Western lenders have a right to insist that these laws, which have been under discussion since 1993, finally be adopted, that there is greater transparency in the operations of the Russian Central Bank and Ministry of Finance, the two recipients of international loans, and that cases of corruption documented by the Russian Accounting Chamber be prosecuted. The U.S. also needs to monitor closely the ties between organized crime and Russian officials and the progress of investigations into high profile contract murders.

* Direct foreign aid toward humanitarian assistance. Russia faces a catastrophic health care situation as reflected in falling life expectancy and a very high death rate. Part of the reason is a shortage of medical equipment and the unavailability of medicines due to their high cost. American medical aid directed toward persons who would not otherwise receive assistance, besides achieving a concrete purpose, can inspire goodwill toward the United States and convey the message that the U.S. seeks a relationship with the Russian people as a whole and not with any one political faction.

* Use tax incentives to encourage direct assistance to Russian regions by private American organizations. Russians benefit from contact with non-government organizations. Churches, schools, corporations and private individuals who take an interest in Russia can often provide invaluable help to individuals in need while, at the same time, helping to break the impression, too often fostered in recent years, that America stands for capitalism and capitalism is indistinguishable from crime.

* Fight illegal capital flight from Russia by encouraging international efforts to crack down on offshore zones. The United States, in cooperation with other members of the G7, should make joint efforts to force offshore zones to adopt civilized banking laws that provide for regulation, external audits, transparency and the refusal to handle dubious operations.

* Expand the Financial Intelligence Fraud Network. Russian businessmen and criminal structures export money under the guise of paying penalties or fees to companies which they secretly own. These front companies are registered in offshore zones or, frequently, in Delaware, where they are often organized into a veritable maze. The U.S. should provide the relevant government agencies with enough resources to deny Russian criminals this means of looting their own country.

* Keep corrupt officials and known criminals out of the United States. Russia’s corrupt businessmen and gangsters like to travel abroad. By denying them visas, the United States can exert pressure on them and, at the same time, disassociate itself in the eyes of Russians from their behavior.

* Provide aid to Russian law enforcement. The outstanding problem of law enforcement in Russia is the low pay and lack of equipment of the police. American aid to Russian law enforcement agencies can help them in what now is a losing battle with organized crime. Among the programs which Russian law enforcement officers most need is a witness protection program so that ordinary Russian citizens will not be afraid to testify in court.

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*Decriminalize Russian participation in American energy investments. The U.S. should impose disclosure rules affecting joint ventures that go beyond private company efforts. Such requirements would, in all likelihood, expose criminal structures behind Russian entities in the existing Sakhalin energy exploitation projects.

* Limit access to U.S. capital markets. Russian oil and gas companies or other entities engaged in production, transportation and export should be denied access to capital markets if there is evidence of criminalization.

In addition to its policies, the United States can affect the situation in Russia with its rhetoric. In many respects, this is the most important instrument of influence of all.

The Soviet Union was based on the notion that there are no absolute standards of right and wrong but only the interests of a specific economic class. Unfortunately, after the Soviet Union fell, the notion of class values, in the form of faith in economic determinism, continued to dominate on Russian territory. If the communists held that for perfect justice, it was necessary to put property in the hands of the state, the reformers held that all that was required for a law based state was to give property back to private owners. In both cases, the need to establish a legal and moral framework for economic transformation was ignored.

As we now know, property was put in private hands in Russia but a law-based state did not develop. Instead, the attempt to introduce capitalism without law led to gangsterism and, rather than economic reform reinforcing the notion of universal values and with it the concept of inherent human dignity, it provided, on the contrary, support in the eyes of many Russians for the idea proclaimed by communism that there is no such thing as law per se but only the means by which a regime secures the domination of one or another economic class.

In this situation, the ability of the United States to identify itself with universal values - those values spelled out in the Declaration of Independence - and not with any particular organization of economic structures can have a salutary and much needed effect.

The better we are able to identify the question of values which underlies not only justice in Russia but stability in the world, the greater will be our impact on the Russian population. The greater our impact on the Russian population, the better the chances that the genuine democratic forces inside Russia will gather encouragement and strength and begin to take steps to reversing the process of disintegration with which their country is afflicted. In any case, we will have taken the first step toward real engagement with the Russian people and have avoided making enemies of a nation whose fate is actually intimately connected to our own.

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The Foreign Policy Panel

The foreign policy panel met in May 2000 to discuss Russian foreign policy and its implications for U.S. foreign policy interests, and in particular to consider the analysis submitted by Dr. Richard Pipes. The panel was composed of Senator Fred Thompson (R-TN), Chairman; Dr. Richard Pipes, Dr. Constantine Menges, Hon. Richard Perle, Hon. Roger W. Robinson, Jr., and Hon. Paul Wolfowitz. Tryfan Evans served as rapporteur.

General Findings and Conclusions

The panel was unanimous in its praise of Dr. Pipes’ paper as a thoughtful and cogent appraisal of the problems posed by Russian foreign policy. Consequently, the panel devoted its efforts to developing guidance for future policymakers. In this regard the panel reached three conclusions relating to the connection between internal and foreign policy issues in Russia; the need to both reprioritize and redefine U.S.-Russia relations; and the problems posed by US-Russia relations in a geopolitical context.

The panel was in full agreement with Dr. Pipes’ premise that internal and foreign policy issues are closely linked in Russia. One need look no further than President Putin’s campaign in Chechnya to see that domestic political issues play a central role in Russia’s behavior in its ‘near-abroad’ and its relations with the West. In particular, the panel was concerned with the possible connections between political leaders and criminal elements in Russia. While a majority agreed that there is no evidence that Putin is simply a puppet of criminal elements, determining the full extent of this connection will be a crucial component of assessing risk in U.S.-Russia relations in the future. The panel set forth a number of measures that will serve as initial indicators of the character of the Putin government. These include the extent to which the Putin administration can reduce bureaucratic corruption, throttle organized crime, rein-in the oligarches, protect and expand media rights and interests, and develop and implement a common property law. President Putin’s early efforts to remove power from regional leaders was a source of some concern to many of the panel members. Finally, and most importantly, the priority President Putin affords systemic economic reform will be an excellent indicator of whether the U.S. can expect to find common ground with Russia in the future. The panelists argued that these internal issues will shape areas of conflict and cooperation with the United States and thus must inform future U.S. foreign policy toward Russia.

The panel concluded that U.S.-Russian relations must be broadly redefined. Over the past ten years U.S. defense requirements have changed significantly. As a result, the panel argued, the primacy of U.S.-Russia military/security relationship has diminished fundamentally. In the meantime Russia’s economic failure, the endemic corruption that has arisen, and the Yeltsin government’s failure to curb that corruption, have received inadequate attention from U.S. decision-makers. As a result, the United States’ economic resources as well as its economic and financial relationship with Russia have not been successfully leveraged or productive. The panel concluded that economic and financial concerns must be placed at the forefront of a new relationship with Russia. In addition, the panel argued that effective communication has broken down between the United States and Russia. This breakdown is primarily a function of reactive and ad hoc decision-making on the part of U.S. foreign policy decision-makers. U.S. interests have been poorly communicated, leading to ambiguity and uncertainty in the U.S. relationship with Russia. The panel concluded that the bilateral relationship would improve if these interests as well as expectations for future behavior were clearly defined. While there was broad agreement that neither Russia nor the U.S. wants a hostile relationship, the panel argued that it is important that the U.S. clearly communicate to the Russians what thresholds or ‘trip-wires’ exist and what the A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org consequences will be if those thresholds are crossed.

Finally, the panelists agreed that assertive American leadership in world affairs will improve the prospects for greater understanding and cooperation between the U.S. and Russia. U.S. efforts to forge agreement with Russia have often been complicated by the non-cooperation of our allies. In large part this problem stems from perceptions of U.S. hegemony. It is therefore critical that the U.S. engage in active diplomacy designed to assuage such concerns as well as make the case to the rest of the world that the U.S. can make a unique and positive contribution to the advancement of international security goals as well as an international economy that offers opportunity to all. The panel was in fall agreement that the failure of the present administration to effectively challenge allegations and perceptions of U.S. hegemony represents a fundamental failing. These allegations must be rebutted and assertions that America is exploitive and selfish refuted. This new brand of diplomacy is part and parcel of an effort to rebuild American leadership. It was argued that doing so will produce significant benefits for U.S.-Russia relations.

Specific Recommendations

Several specific policy recommendations emerged from the group’s discussion. Together these recommendations form a robust new framework for U.S. -Russia foreign policy.

Make Non-Proliferation a Priority

The spread of weapons of mass destruction represents a first-order threat to U.S. national security. As such, one of the panel’s foremost concerns was the United States’ continuing efforts to halt the flow of such weapons from Russia. In this regard, the panel suggested that programs such as the Cooperative Threat Reduction program be expanded as long as full transparency and accountability were guaranteed. The panel believes the U.S. should practice a zero-tolerance policy toward Russian proliferation and therefore should both impose sanctions on Russian firms engaged in such activities and reduce U.S. economic assistance by the amount needed to counter the security consequences.

Increase Funding and Attention Given to Democracy Assistance Programs

The cumulative total of direct U.S. grant assistance for Russia between 1992 and 1998 has been some $4.4 billion. These aid flows were designed to provide assistance for democratization, privatization of the economy and demilitarization of certain nuclear and other weapon of mass destruction programs. Unfortunately, far too little of this assistance has been provided for the encouragement of democratic political parties (approximately $20 million over this time period) and far too little aid has been directed toward independent, pro-democratic labor and trade unions (-$16 million). Currently, pro-democratic political parties are few and weak, and approximately 90% of Russian workers in unions belong to those linked to the communist movement. While there are effective institutions for providing assistance to pro-democratic alternatives for Russian workers (e.g., the National Democratic Institute, the International Republican Institute and the Free Trade Union Institute), the U.S. has inadequately invested in such programs. The panel proposed increasing the funds available for democratization purposes fivefold (from the current $3 million per year to $15 million annually).

The panel unanimously agreed that the encouragement of a broader and more firmly institutionalized political democracy in Russia should be among the United States’ primary policy goals. More broadly, these A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org efforts must be directed toward political party building, trade unions, private business associations, and other grass roots organizations. In this regard, the panel’s views were strongly shaped by precedents established in the Reagan administration. President Reagan recognized that Soviet external behavior was a function of the communist system and made changing that system the primary goal of his foreign policy. The panel argued that similar motives should drive U.S. policy today.

Impose Conditionality

The panel unanimously recognized that significant danger exists if positive U.S. initiatives are not connected to clear expectations of Russian behavior. U.S. strategic goals as well as the activities for which Russia should be held accountable must be clearly stated and areas of disagreement and conflict spoken to. In particular, the panel argued that grant and aid flows should be tied to Russia’s political behavior. The panel proposed that ‘trip-wires’ be clearly established with the Russians in the following areas to guide policymakers both in the U.S. and in Russia:

-Assistance to Hostile Regimes: The panel was particularly concerned with Russia’s energy sector assistance to such regimes (e.g., in Iran, Iraq, Cuba, etc.); intelligence gathering activities (e.g., maintenance and expansion of the Lourdes facility in Cuba); and transfers of sophisticated weapons. Several members of the panel suggested such activities warrant sanctions and consequences similar to those described above.

-Relationship with China: Russia’s relationship with China commanded a good deal of the panel’s attention. The panel agreed that concerns that Russia and China will develop a genuine, durable strategic partnership are exaggerated. The Panel was deeply troubled, however, by the possibility for further limited and/or ad hoc cooperation-- particularly with respect to further advanced weapon transfers-- as both powers have explicitly and repeatedly stated that such cooperation has been aimed at countering the United States and its allies. Therefore, the panel recommended establishing which weapon systems pose the greatest threat to U.S. interests in East Asia and clearly linking the transfer of those systems to the reduction or cancellation of U.S. economic and financial assistance as well as the denial of access to the U.S. capital markets.

-Wasteful and counterproductive fiscal polices: The panel was concerned with Russia’s significant investment in the modernization of its strategic nuclear forces and its apparent intention to maintain an active space program. Given their expense and often-non-essential nature, the panel felt U.S. policy should find appropriate ways to discourage further spending on these and other wasteful programs.

The panel concluded that the least sensible approach would be to continue to provide economic and financial assistance to Russia while providing no incentives for good conduct or sanctions for malevolent behavior.

De-Prioritize Legacy Agreements

There was strong agreement in the panel that one of the most important things the U.S. must do is to recognize that our defense requirements no longer match Russia’s. The United States’ ability to adapt its defense posture in the post-Cold War era has been seriously encumbered by legacy agreements such as the ABM Treaty and START. Thus, further concessions for the sake of these or other similar arms control A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

agreements would be a mistake. The panel concluded that it is essential that the U.S. no longer predicate its defense posture and foreign policy on the maintenance of this legacy-ladened relationship.

There was some disagreement within the Panel, however, regarding the manner in which this restructuring of U.S.-Russia relations should be implemented. Some members of the panel felt outright withdrawal from legacy agreements is necessary in order to separate ourselves from the notion that what matters to the United States should be dependent on Russia’s approval. These panelists felt such agreements were no longer relevant and thus it is inappropriate to bind U.S.-Russia relations around them in the future. Others agreed in principle but were concerned that unilateral withdrawal could ultimately set a counter-productive precedent. Beyond the larger conclusion that the U.S. should refocus relations away from military/security affairs and unanimous concern that these agreements not be imbued with further importance, the panel was unable to reach a consensus in this regard. (It should be noted as an aside that the panel felt that refocusing this relationship will be complicated as the Russians now feel they have the upper hand in arms control negotiations due to their recent ratification of START II and the Comprehensive Test Ban Treaty.)

Utilize U.S. Leverage in Capital Markets

The panel unanimously agreed that capital markets will play an increasingly important role in Russia’s relations with the United States and other industrial democracies. The global debt and equity markets have emerged as a preferred source of funding for foreign governments and enterprises, and now dwarf the role formerly played by Western government institutions and syndicated commercial bank loans. These markets constitute a powerful new area of leverage to advance U.S. policy goals. This new source of leverage was deemed particularly attractive to the panel because of the absence of significant collateral consequences for U.S. interests (e.g., in most cases U.S. exports and jobs are not implicated.) Russia plans to expand substantially its presence in the U.S. capital markets in the period ahead, including sovereign bond offerings. Access to the U.S. debt and equity markets should be linked to the behavior of the Russian government and enterprises, particularly with regard to proliferators, technology theft and intelligence front companies, strategic entities in the military sector, organized crime syndicates, arms smugglers and Russian entities inordinately assisting terrorist-sponsoring regimes.

Actively Encourage Free Speech, Free Flow of Information

The panel session included an interesting discussion of the potential for the Internet to advance free- speech rights in Russia. It was noted that U.S. support for the Solidarity movement in Poland included the provision of fax and mimeograph machines and VCRs, and that this component of that program was critical to the success of the movement. The panel concluded that the Internet could play a similar role in advancing free speech and ultimately political pluralism in Russia. To this end, the panel suggested exploring ways in which U.S.-Russia cooperation and commerce in Internet-related technologies could be expanded.

It was also noted that the U.S. still has an important role to play in the provision o information to Russia’s citizens. The panel concluded that programs such as Radio Liberty and Voice of America have been prematurely de-emphasized. In addition, it was suggested that educational content on U.S. political ideas and institutions be provided to visiting Russian citizens free-of-charge.

Improve Military-to-Military Contacts

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Military-to-military contact forms an important part of U.S. power projection efforts. Despite their interest in broadening the discussion of the U.S.-Russia bilateral agenda beyond military-security relations, the panel felt military-to-military programs still have an important role to play and that these programs have been neglected in recent years. The panel was concerned in particular that the Department of Defense Joint Contact Team program and the United States National Guard State Partnership programs have received far too little attention and funding in recent years.

Promote Russo-Japanese Relationship

The panel suggested that the U.S. work to facilitate greater cooperation between Russia and Japan. Such cooperation would produce significant economic benefits for both nations as well as engender a Russian commitment to a positive and productive role in the Western Pacific. The panel was concerned that promotion of cooperation between Russia and Japan has received inadequate attention from U.S. diplomats for fear of possible repercussions with regard to the U.S.-China relationship. The panel found these fears to be unwarranted and misplaced.

Forgive Soviet Era Debt

The panel felt strongly that the Russian people must be afforded the opportunity to rebuild the Russian economy now that they are a free society. While the panel expressed concern for the fragility of that society, all the panelists recognized the importance of starting on the right foot. To this end, some on the panel suggested that Soviet-era debt be forgiven and that disciplined macroeconomic assistance to Russia is warranted. Several panel members contended that the forgiveness of Soviet-era debt should be linked to specific Russian commitments including an end to nuclear weapons and other WMD assistance for hostile states, Russian compliance with existing arms reduction agreements that it has signed and is currently violating (e.g., the biological and chemical weapons conventions), and a halt to sales of sophisticated weapons to China, especially those which directly threaten U.S. forces in the Pacific.

In addition to reestablishing positive relations, this step would also provide the ancillary benefit of discouraging other countries from investing in failed or failing states (e.g., Canadian lending to Cuba).

***

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Hudson Institute U.S.-Russia Relations Study Group Foreign Policy Panel June 6, 2000

Remarks by Senator Fred Thompson (R-TN) Chairman of the Panel

I want to thank the Hudson Institute for hosting today’s discussion on U.S.-Russian relations. The Institute’s contributions in this area have been invaluable, as evidenced by the importance, depth, and timeliness of this research effort.

The United States’ relationship with Russia is one of the most important matters that our leaders are going to have to address in the coming decade. Where is Russia going? To what extent can the U.S. influence that direction? And what specific policies would achieve those ends? These are all important questions that merit serious discussion before policy is formulated and implemented.

At a Crossroads

Russia is at a crossroads. It has experienced its first democratic change of power, modest economic growth, and, overall, seems to be moving in the right direction. At the same time, however, old Soviet tendencies persist, including: a hardened anti-American perspective; a populace that, in many respects, is more concerned with stability than with democracy and free markets; and corruption that is rampant at all levels of the government. I think everyone agrees that the United States must continue to engage Russia while seeking ways to assist the Russian people. But we must do so without propping up a corrupt or ineffective government, and while protecting our interests from a resurgent and bellicose Russia. Our previous efforts have, in many cases, worked against our intended objectives. It is important that we find ways to effect positive change in Russia, while maintaining the respect and appreciation of the Russian people.

Unfortunately, Russian entities continue to engage in the proliferation of weapons of mass destruction (WMD), and ballistic missile and advanced conventional weapons technologies to rogue states such as Iran and Libya. These countries and others have all received considerable expertise, materials, and know-how from Russian entities that need the revenue to stay afloat. The United States has done a poor job of linking non- security related U.S. policy and assistance programs to Russian behavior. This has led me to introduce legislation that will provide the consistency and transparency that has been absent from U.S. policy toward Russia.

My legislation provides an annual review mechanism that assesses the behavior of key suppliers of weapons of mass destruction and missile technologies, which currently include Russia, China, and North Korea; requires the President to impose non-trade-related measures on individuals, or groups, if he determines a violation has occurred; establishes procedures to notify U.S. investors that are considering investing in foreign firms listed in the annual report mentioned above; and permits the Congress to propose non-trade related actions against a key supplier of weapons of mass destruction technologies if it determines that the President’s actions in response to proliferation are insufficient. These are important initiatives that will provided the transparency and statutory backbone to our ineffective nonproliferation policies, and hopefully inhibit the dangerous proliferation activities of key suppliers that are fueling our need for a National Missile Defense system.

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Mixed Messages

Mixed messages undoubtedly lead to misunderstandings, which could then lead to confusion and conflict. The United States cannot afford to be sending mixed messages to Russia, which despite its decline, remains one of the world’s most powerful countries. This is particularly important when Russia is undertaking, or at least failing to control, activities that are detrimental to U.S. national security, such as weapons proliferation, aiding Iraq, and assisting Iran’s civilian nuclear program. At the same time, Russia should not consider itself absolved of its responsibility to abide by international norms and standards just because the U.S. has not communicated its concerns effectively. Each nation has a responsibility to abide by these standards, and this responsibility should not be ignored or pushed aside whenever it is expedient. Therefore, I think it is time for the U.S. to reassess the current status of the U.S.-Russian relationship, and how Washington deals with Moscow.

Panel Conclusions

I want to thank everyone, and certainly our panelists, for being here today. We have a distinguished panel of foreign policy experts. Paul Wolfowitz, Richard Perle, Richard Pipes, Constantine Menges, and Roger Robinson have all traveled far to be here. Using an excellent essay by Dr. Pipes as a baseline document to generate discussion, the foreign policy panel reached three general conclusions:

First, there is a strong connection between foreign policy and domestic issues in Russia as most dramatically evident in the Chechnya conflict and the election of President Putin. In the past, the United States has tended only to concern itself with Russia’s foreign policy and regard Russian domestic issues as their own business. In retrospect, we may have had it wrong. As we now see, the United States needs to look at Russia’s internal issues in order to understand and possibly predict its foreign policy.

Second, the United States needs to redefine its bilateral relationship with Russia. We need to move away from the Cold War legacy agreements, such as the START and ABM treaties, that cast the U.S. and Russia as adversaries. Our relationship needs to be based on relevant economic, financial, cultural, and other issues that define normal state-to-state relations.

And, finally, we determined that assertive American leadership in world affairs will improve the prospects for greater understanding and cooperation between the U.S. and Russia. This means that the U.S. must engage Russia, and the world, based on our national interests, values and principles. It also means that we must communicate clearly to Russia our expectations, whether it be human rights, Chechnya, stopping proliferation of WMD technologies to rogue states, such as Iran and Iraq, or ending the sale of advanced conventional weapons to China.

Beyond these general conclusions, several specific policy recommendations emerged from the group’s discussions. Together, these recommendations form a robust framework for a new U.S. foreign policy toward Russia. These recommendations are as follows:

• Containing the proliferation of weapons of mass destruction, missile, and advanced conventional weapons technologies;

• Increasing funding and attention given to democratic assistance programs, while imposing conditions on A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

U.S. aid and assistance;

• De-prioritizing legacy agreements;

• Utilizing U.S. leverage in capital markets;

• Encouraging free speech and free flow of information, improving military-to-military contacts; and,

• Possibly forgiving Soviet-era debt.

It is my hope that the Administration will begin implementing these recommendations, and bring consistency and transparency to U.S. policy toward Russia.

Thank you for being here today.

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FOREIGN POLICY

By Dr. Richard Pipes

1. Factors shaping Russian foreign policy in the early 21st Century.

The foreign policy of Russia, as that of every other country, is closely linked to its internal conditions and, in some ways, reflects them. For this reason one cannot discuss the one without the other.

Ever since the reign of Peter the Great two contradictory trends have contended in Russian history. One urges the country inward, pressing it to devote its main energies to the solution of domestic problems dominated by poverty and the absence of both social and political cohesion. The other impels Russia outward, driving it to aspire to the status of a “Great Power.” But because Russia cannot covet global power by virtue of its economic prowess, which, as the histories of Great Britain and the United States demonstrate, is the principal means by which it is acquired in the modem world, Russia has to rely on military power. To the extent that Russia and the Soviet Union have been able to claim such status it was by building up an awesome war-fighting capability: under tsarism, a standing army that at times exceeded in size all European armies combined; in Soviet times, by transforming the country into a vast military encampment with a huge arsenal of nuclear missiles.

The trouble is that the two objectives are mutually exclusive. To become a genuine global power, able to exert significant influence on international politics, Russia needs to modernize its obsolete economy and reorganize its political structure in order to bring the population into closer relationship with the government. But these objectives require a sharp reduction of military expenditures and a de-militarization of society. The country thus faces a difficult choice: whether to take the slow, arduous road to genuine world influence by way of political and economic reform, or the easier one leading to illusory power derived from the ability to threaten the rest of the world.

Judging by public opinion polls, a substantial majority of the population favors the latter course: to be a great and dreaded power seems for most Russians to be more a desirable objective than to turn into an affluent society capable of exerting global influence by means of economic power and an attractive lifestyle.* Thus 78 percent of Russians interviewed in 1999 wanted their country to enjoy the status of a Great Power and 72 percent expressed regret that it no longer qualified as one. Asked whom they regard as the ten greatest men in human history, Russians list 9 Russians, headed by Peter the Great and followed, after Pushkin, by Lenin and Stalin, that is, leaders who had made

______

* The statistics which follow come from the findings of the AU-Russian Center for Study of Public Opinion (VTsIOM) published by the Moscow School of Political Studies (MShPI): Sapere aude, especially No. 13 for 1999.

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Russia a strong and respected power. Their single greatest source of pride in Russian history derives from victory in “The Great Patriotic War.” A sizeable proportion believe that Russia confronts foreign enemies: 28 percent designate them as the “Industrial-financial circles of the West,” 22 percent as the United States, and 19 percent as NATO. 58 percent want Russia to fight “foreign” western influences and seek its “own way.”

The puzzling reference to “Western industrial-financial circles” as Russia’s foremost enemy refers to economic globalization in which, by reason of its poverty, Russia is reduced to the role of a pawn, while America plays the Queen and the Europeans are the rooks, bishops and knights. Projecting unto others their own aspirations, Russians believe that America’s dominance in the world economy today is the result of a deliberate pursuit of global hegemony rather than the byproduct of its economic strength.

These polls, which show impressive consistency, suggest that Great Power status is of highest importance to the majority of Russians and that the unpopularity of the democratic, post-communist regime is in good measure due to the perception that it has robbed Russia of this exalted status. (Overwhelmingly, by a margin of 91 percent, respondents blame this decline on the policies of Gorbachev, Yeltsin and their “democratic” advisors.) When asked “Which idea would be best capable today of uniting Russian society?” more respondents say “strong power” than “freedom and prosperity.”

These realities need to enter into any analysis of Russian foreign policy. Even in a semi-democracy such as Russia is today, the government must make allowance for popular opinion, and this opinion pushes it in a direction that is not conducive to friendly relations with the West. Nor can the West do much about it because hostility to it is deeply rooted in national consciousness for both historical and psychological reasons.

Historical factors pushing Russia into an anti-western stance are mainly due to the religious heritage. After the fall of Byzantium to the Turks in 1453, Russia remained the only major country in the world professing Orthodox Christianity. The Orthodox establishment regarded western religions -- both Catholicism and Protestantism -- as heresies. And since it treated Muslims and Buddhists who bordered on Russia in the east and south as heathens, its religion isolated Russia from the rest of the world. The Communist regime, which saw its principal adversary in Western “capitalism,” secularized this legacy. Thus, if so many of today’s Russians see the West as a principal antagonist, they are reacting not so much to what the West actually does but to what, in their eyes, it is: a traditional enemy.

The psychological factor has to do with attitudes of rural people. Anthropologists have observed that peasants in many parts of the world regard economic activity as a zero-sum game. Since land, unlike capital, is finite, they tend to believe that the only way to grow rich is at the expense of others. Given that the overwhelming proportion of today’s Russians are descended from peasants, who until 1928 had formed 80 percent of the country’s population, this rather primitive outlook continues to prevail, even if most of them no longer live on and off the land. This explains why, when asked what motivates the West to invest in Russia, close to two-thirds respond confidently that it is to acquire cheaply Russia’s natural resources and industries, i.e. to impoverish Russia. The commercial culture which rests on the premise that a sound business transaction brings benefits to all the parties involved is as yet alien to Russia. The prevalent view holds that what one party gains another loses and hence that allowing western firms, with their vastly superior resources, to participate in Russia’s economy brings nothing but ruin.

2. Does Russia have a foreign policy strategy and, if so, what is it?

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As pointed out, the foremost objective of Russia’s foreign policy is to regain the status of a World Power, that is a power whose wishes are treated respectfully and whose might instills fear. During the Cold War, this objective led to an uncompromisingly hostile attitude towards the West. Today, the issue is more complicated.

Despite the popular suspicion of western involvement in Russia’s economy, the country’s leaders realize full well that reconstruction is unthinkable without massive foreign loans and investments. Hence their foreign policies vacillate between cooperation and hostility.

Immediately after the collapse of communism the foreign policies of the Yeltsin government, directed by the 39-year old Andrei Kozyrev, adopted a pronounced pro-western course for which it would be difficult to find a parallel in that country’s entire history. Kozyrev was aware that Russia’s path to true greatness lay through reform based on western models and close cooperation with the West. He was no less aware that the alternative to such a course, looming in the wings, was an alliance of communists and nationalists eager to transform Russia once again into a “beleaguered fortress” inasmuch as raising the phantom of foreign threats enables them “to impose the yoke on their own people.” * Philosophically, such a move would be buttressed with claims that Russia was a unique “Eurasian” nation which had to follow its own, “separate” path.

Time bore out Kozyrev’s apprehensions. Toward the end of his first presidential term, in 1994--95, sensing his popularity waning largely as a result of economic reforms that had produced hyper-inflation and wiped out savings, Yeltsin changed course by appealing to nationalist sentiments. His first campaign against Chechnya was in no small part inspired by the desire to regain popularity by reasserting Russia’s military might: he might have succeeded were it not that the campaign ended in military disaster. In his second term, as his public support continued to plummet, sinking to 10 percent, Yeltsin increasingly disassociated himself from the West. This trend culminated during and immediately after NATO’s Kosova campaign when Yeltsin threatened World War III and reminded the US President of Russia’s nuclear arsenal. These actions did not save him politically, but they paved the way for the remarkable ascent of his hand-picked successor, Vladimir Putin, whose rise to power rested on a combination of appeals to nationalism and the yearning for “order,” without concrete concessions to civil rights and without a specific economic program.

In sum, Russian post-communist foreign policy vacillates in large measure depending on internal factors. It is difficult to discern in it anything resembling a “strategy” of the kind that had guided Soviet behavior. If, for example, the current war against the Chechens were to lead to another humiliating defeat, it is quite conceivable that public opinion would swing back to the pro-western policy popular in the early 1990’s, and the leadership react accordingly. ______* Andrei Kozyrev, Preobrazhenie (Moscow, 1994), 25.

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3. What is a proper role for Russia in the international system?

This question cannot be answered since there is no “proper” international role for any country. The question seems to postulate that countries, like citizens of a democracy, have inherent “rights.” In fact, countries acquire international status by virtue of power, be it military or economic.

This said, it must be conceded that Russia is in a rather unique position of carrying weight in the international system by the simple fact of its geopolitical location. It happens to occupy the heartland of the Eurasian continent, bordering on three strategic regions: Europe, the Middle East, and the Far East. Everything that happens here, therefore, in some ways affects the rest of the world. Its stability at home and behavior abroad are matters of grave concern to others. Russia, therefore, even without military or economic clout, is still of grave concern to the international community, benefiting from the fear that it is able to wreak havoc in the world’s most populous and important regions.

4. To what extent do Russia’s aims remain imperialist?

Russians have always taken pride in the size of their country: already in the seventeenth century, foreigners visiting Muscovy were told that the empire of the tsars exceeded the visible surface of the moon. An agricultural people par excellence, they tended to measure national wealth and power in terms of land -- never mind that the bulk of that land was uninhabited and uninhabitable.

Another reason for Russia’s attachment to the empire which covers so vast a territory is that, unlike western empires which came into being after the formation of the nation-state, in the case of Russia the nation- state and the empire grew concurrently. Being a land-locked country, Russia from earliest times expanded in all directions: empire-building, since it coincided with colonization (in the sense of settlement), was indistinguishable from it. For this reason, Russians were never conscious of ruling an empire even though at the end of the nineteenth century they constituted but a minority (44 percent) of the country’s inhabitants. The Communists institutionalized the fiction by constructing an allegedly voluntary “union” of sovereign republics inhabited by a common “Soviet” nation.

The dissolution of the empire in 1990-91 occurred with such speed that few realized what was happening as one after another of the “republics” declared its independence. The breakup which reduced Russia to its borders of the sixteenth century, left Russians bewildered and angry: in opinion polls, 74 percent regretted the collapse of the Soviet Union, a high proportion of them on the grounds that “the Soviet Union was a strong, unified country.”

There is little doubt that Russia’s elite, along with the population at large, yearns to reconstruct the lost empire. (It does seem reconciled to the separation of the western possessions, once known as the “satellites,” and has lost the appetite for imperialist ventures in the Third World). It is aware, however, that this objective cannot be attained by force, in part because it lacks the military power needed to reconquer the separated republics, in part because any attempt in this direction would ignite a civil war.

Russia has traditionally relied in its empire-building not so much on the application of direct military force as on internal subversion: such was the case in the conquest of the khanate of Kazan in the sixteenth century and Poland in the eighteenth, as well in its encroachments on the Ottoman Empire during the eighteenth and nineteenth centuries. The Communists followed this tradition. The same strategy is being instinctively A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org resorted to by their democratic successors. Russia maintains military contingents and bases in all of its former republics save the Baltic ones and Azerbaijan. Through treaties signed (sometimes under duress) within the framework of the CIS, Moscow arrogates itself the right to intervene militarily in all member states if it deems its own security endangered. Recently, Putin has been stressing the common threat to CIS members from “international terrorism” as grounds for closer cooperation.

The most blatant Russian intervention in an ex-dependency has occurred in the Republic of Georgia which holds the key to the control of the Caucasus and the oil deposits of the Caspian region. Moscow has encouraged and assisted the Abhaz rebellion against Tbilisi, and incited dissent in Adjaria and South Ossetia. There are grounds for believing that Russian military bases on Georgian territory were involved in attempts on the life of President Shevardnadze. The current campaign against Chechnya has occasionally spilled into the South Caucasus and the Georgians are not being paranoiac when they fear that Moscow will use their alleged complicity in the Chechen rebellion as justification for further encroachments on their sovereignty.

5. What are the prospects for Russia’s foreign policy in the years ahead?

The answer to this question depends much less on the conduct of foreign powers toward Russia than on developments inside Russia. If the country progresses, however haltingly, toward democracy and a regime based on law, the contrast between it and the West will diminish and the temptation to harass and frighten the West wane as well. If, on the other hand, Russia reverts to its traditional authoritarianism, then the chances are that it will once again turn its back on the West. In this case it will also feel tempted to exacerbate relations with the West because by creating a phantom external threat and transforming the state into a “beleaguered fortress”, the country’s rulers will be able, as in the past, to justify their despotic rule. From which it follows that it is in the greatest interest of the West to ensure Russia continues its commitment to democracy. (Adherence to the free market is less important because, as history demonstrates, dictatorship is compatible with concessions to private enterprise.)

In a shorter time frame, Russia, feeling excluded from Europe by NATO’s expansion into Poland, Hungary and the Czech Republic, seems eager to compensate for this rejection by fashioning a bloc of its own as a counterpoise to NATO. One expression of this effort is strengthening CIS as a surrogate for the lost empire. Another is to draw closer to countries outside the western bloc. Here in the forefront stands China, with which Russia has entered into a “strategic partnership”. Iraq and Iran are also suitable partners for this purpose.

It is questionable whether over the long run the eastward orientation will bring Russia the desired results. In its relations with China, Russia finds it difficult to shed the sense of being the “elder brother” even though this attitude no longer corresponds to reality. The two nations also share a deep-seated suspicion of each other. The principal interest they have in common is negative, namely opposition to America’s global “hegemony” and western “interference” in what they insist are their internal affairs (Chechnya, Taiwan and human rights). As a result, negotiations between them are stronger on anti-American rhetoric than on substance.

As for Iraq and Iran, Russia’s troubles with its own Muslim minorities also preclude close relations. In this case, too, negative factors predominate, namely common hostility to the West, especially the United States. An important if imponderable factor mitigating against a genuine rapprochement with the Middle East (as well as China) is that Russians tend to look down on Oriental people.

Thus, in the final analysis, unless Russia adopts a firm pro-western course in both its domestic and A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

foreign policies, it will condemn itself to isolation which will mean, among other things, failure to participate in the globalization of the world’s economy. It raises the prospect of it ending up as a Third World country in a First World location.

6. What the West can do and what should it avoid doing in its relations with Russia?

If the above considerations are correct, the West’s ability to influence Russia’s foreign is limited. Even so, it is not entirely lacking.

Russian governments watch closely the West’s reactions to their behavior: as an aspiring world power, they care how the world perceives them, and this sensitivity gives the West a certain leverage. Forceful opprobrium of aggressive behavior or violations of human rights makes an impression. Conversely, Moscow interprets feeble protests, not backed up by meaningful action, as tacit approval. The author of these lines attended two years ago a conference in Poland devoted to the events of December 1981 when General Jaruzelski had imposed Martial Law on his country. The general, who took part in this conference, declared that the failure of the U.S. government to give him unambiguous signals that it would respond to a crackdown with severe punitive measures helped him overcome lingering hesitations. In particular, he had interpreted Vice- President George Bush’s silence on this subject during a meeting with his deputy in early December to mean that Washington had no objections to the imposition of Martial Law. This incident, though it occurred under different conditions, is a useful reminder how important it is to speak out clearly and unequivocally when Russia or a country under its control engages in unacceptable behavior. And if words do not produce the desired effect, the West has at its disposal powerful financial levers.

The current campaign against Chechnya shows the counterproductive effects of timidity. The western powers have been ineffectually protesting the Russian army’s violations of human rights in this region -- if, indeed, mass murder qualifies as nothing more than a “violation of human rights”-- but they have done next to nothing to back such disapproval with concrete punitive measures. Neither diplomatic relations nor financial dealings have been affected by Russia’s appalling behavior. At a recent gathering, the Council of Europe generously allowed Russia three more months to “pacify” Chechnya. As for Acting President Putin, the architect of Russia’s aggression, President Clinton and Secretary of State Albright have declared him a person they can do business with. European leaders have echoed these sentiments. At the very time when Putin promises to “kill off” all Chechen “bandits” and subject the conquered region to direct Presidential rule, the European Bank for Reconstruction and Development has extended a $150 million loan to Lukoil, Russia’s giant oil concern. And Prime Minister Blair, the first western leader to meet with Putin since the latter became Acting President, said as they parted, even though Putin had made no concessions on Chechnya, that he had “greatly enjoyed the dialogue.” “I believe,” he concluded, “that we and the European Union should never forget that a closer partnership between the European Union and Russia is in the interest of all our people and in the interests of the continent we share.” To maintain the atmosphere of bonhomie, Mr. Blair pointedly refused to voice in public any criticism of Russia’s actions in Chechnya.

Such tacit endorsement has two effects, both of them adverse. It signals to Moscow that the West, for all its hand wringing, really does not care what happens inside Russia. At present this sentiment affects Chechnya, but potentially it can extend to the suppression of freedoms and civil rights in Russia proper. It encourages Moscow in the belief that as along as it refrains from overt aggression abroad and duly services its debts, what it does at home is its own business. Such a way of thinking completely misses the close link between Russia’s domestic and foreign policies, and ignores that, sooner or later, undemocratic Russian governments turn anti- A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

western.

Secondly, western passivity discourages the democratic, pro-western intelligentsia in Russia. This group is relatively small, comprising perhaps no more than 10-15 percent of the electorate, and it concentrates in the large cities. Nevertheless, it constitutes an important ally that ought not to be abandoned. We have seen what an effect the minuscule dissident movement had on the Soviet dictatorship.

The current western policy toward post-Yeltsin Russia shows disturbing parallels with the “soft” approach to the Soviet Union popular during the Cold War. Then as now, the proponents of “detente” and “Ostpolitik” acted on the premise that given Russia’s geopolitical position and nuclear arsenal it was imperative to “get along with it,” whatever its regime and the regime’s treatment of its own citizens. The supreme objective was “stability.” This approach was proven wrong for the simple reason that then as now the roots of Russia’s aggression lay in its internal condition, i.e. that its foreign policy was (and is) determined by its constitution. The confrontational policy of President Reagan, which proceeded on this premise, contributed far more to the end of the Cold War than the accommodation advocated by his critics.

The events of the past several years indicate that Russia’s attempt to adopt democracy has failed -- at any rate, for the time being. Russia today stands at a crossroads. Its temptation is to revert to “strong” i.e. arbitrary rule with all the adverse consequences this has for Russia’s domestic and foreign policies. The West can influence these choices only indirectly: but such influence as it has, it should not hesitate to exert.

In summary:

• The West should never lose sight of the fact that there exists an intimate bond between Russia’s domestic and foreign policies, the latter being a function of the former; hence that it is a mistake to ignore internal conditions in the hope of gaining a more conciliatory Russian foreign policy;

• The West should unequivocally condemn all evidence that the Russian government, even if it formally adheres to democratic principles, violates the political and civil rights of its citizens; words matter -- they make an impression;

• The West should condemn any Russian interference with the sovereign rights of its one-time Soviet republics (euphemistically called “the near abroad”); the latter should not be treated as Russia’s legitimate sphere of influence but be given such assistance as they require to secure effective independence from their one-time imperial master; if Russia manages to reincorporate in some fashion its former colonies, this will surely whet its appetite for further encroachments along its frontier;

• The West has potent leverage in its financial resources and it should not hesitate to withhold loans, investments and other economic benefits if Moscow violates democratic standards at home or behaves aggressively abroad;

• At the same time, the West should take into consideration Russia’s national sensitivities and abstain from actions in and near Russia which bring home its impotence, such as expanding NATO to the Baltic republics or engaging in military exercises near its borders. The more reasons the Russians have to feel powerless, the stronger the impetus to sacrifice everything to regain the status of a Great Power with all that this implies. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

The Panel on Security Issues and the Russian Military

The Military/Security Issues Panel was composed of Maj. Gen. (USA, Ret.) William Odom, Director of National Security Studies, the Hudson Institute; Frank Gaffney, President of the Center for Security Policy; Robert Joseph, Director of the Center for Counterproliferation Research, National Defense University; Keith Payne, President of the National Institute for Public Policy; Robert Pfaltzgraff, President of the Institute for Foreign Policy Analysis; and William Van Cleave, Department Head, Defense and Strategic Studies, Southwest Missouri State University. Willis Stanley served as rapporteur. The panel met on May 15 and produced the following conclusions.

Russian Strategic Objectives

Russia’s principal strategic objective appears to be to regain great power status politically and militarily. Russia seeks to create an international coalition united around an anti-American theme. It promotes proliferation, particularly WMD and missile technologies, to so-called rogue states. It seeks to perpetuate the 1972 ABM Treaty to lock in U.S. vulnerability to missile attack. President Putin’s declared goal is to restore Russian military power, relying on Russia’s nuclear capability while undertaking the task of reforming and modernizing Russia’s conventional forces. Ultimately, Russia hopes to divide the United States from its allies and undermine the network of economic, diplomatic, and political alliances that are key to U.S. security and prosperity.

Another perspective on the panel stressed Russia’s strategic objectives embodied in its “national security concept,” that commits Russia to achieve a “multipolar world.” It emphasizes diplomacy and other political and economic means to create trouble for the United States and undercut its alliances, while the military component emphasizes nuclear weapons and arms control as Russia’s only credible claim to status.

Russia’s overall strategy requires comprehensive engagement with the United States and the West. However, Russia risks being isolated by the West as the “trouble making” aspects of its strategy become more apparent.

If Russia succeeds in exploiting cracks in Western alliances, it could become a serious strategic challenge. Leadership skill alone, however, cannot make it successful. Russian capabilities will be critical and, at present, they do not appear adequate to fulfill Russia’s strategic ambitions, although some of them will become serious problems for the United States and its allies in the decade ahead.

Russian Military Capabilities

Nuclear Forces. It is evident by Russian behavior and reflected in Russian strategy that nuclear weapons are increasingly important in Russian military doctrine, not less. Russia has advocated a START III agreement with a ceiling of around 1500 accountable strategic warheads. However, Russia retains the nuclear weapon and delivery system design and production capacities to deploy a force larger than 1500 warheads. In contrast to the United States, Russia has several strategic modernization programs underway.

For example, Russia is currently deploying a new ICBM, the SS-27 TOPOL-M. It also is building a new ballistic missile submarine and designing a common ICBM/SLBM. Russia’s arsenal of tactical nuclear weapons is far larger than its strategic arsenal, possibly numbering in the tens of thousands. Work on the next generation A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

of nuclear weapons almost certainly includes modernizing the tactical and strategic arsenal. Russia continues to conduct subcritical nuclear tests at Novaya Zemlya, and maintains strategic nuclear weapons in numbers substantially in excess of those acknowledged and used for arms control purposes and projections. Russia intends to maintain and to modernize high levels of both strategic and tactical nuclear warheads, and since nuclear forces are relatively inexpensive compared to conventional forces, they may be able to afford to do so. Russia also has a nuclear-armed ABM system surrounding Moscow. The effectiveness of this strategic defense system is likely enhanced by supporting deployments of advanced TMD systems. Both the ABM and TMD systems are netted with Russia’s early warning systems to produce a national missile defense system that would have significant capability, especially at lower offensive force levels.

A contrasting opinion noted that the U.S. Intelligence Community has claimed publicly that Russia will have to struggle to maintain a strategic nuclear force of 1500 strategic warheads beyond 2010. Russia’s existing Strategic Rocket Forces are quickly aging. Russia’s 10-warhead SS-18s are rapidly approaching the end of their service life and, despite service life extension programs, their reliability is increasingly questionable. Russia’s modest SS-27 production does not at present appear able to catch up with SS-18 and SS-19 obsolescence. Assembly on the new TU-160 bomber was actually completed in 1995, but the Air Force reportedly did not until now have the funds to acquire the aircraft. The Russian SSBN fleet appears to maintain only a minimal patrol rate and some platforms may not be sea-worthy. The new SSBN program has been plagued by funding shortfalls, work stoppages, and design issues. The original SLBM program intended for the submarine, the BARK, was canceled after three failed test launches.

With regard to the A-135 ABM complex surrounding Moscow, Russia’s technical and organizational problems make it doubtful that any existing integrated ABM/air defense system would have significant strategic effectiveness. Finally, the higher priority in the military budget for strategic nuclear forces than for conventional forces reflects Russian acknowledgement of its dramatically weakened conventional forces. To claim the status of being a major military power, therefore, Russia’s only feasible option today is to beef up its nuclear forces.

Conventional Forces. Russia has an armed force of approximately 1.2 million men. According to the International Institute for Strategic Studies’ Military Balance for 1998-99, the Army includes 6 tank divisions, 19 motorized rifle divisions and 5 airborne divisions. President Putin has announced his intention to modernize Russia’s conventional military. Yeltsin as president was unwilling to face the hard choices associated with reform and modernization, and settled for creating reductions by underfunding. President Putin, however, appears dedicated to fixing conventional force problems as well as maintaining robust nuclear forces. It is important to recognize that in the European context, Russian conventional forces are still formidable and, in Chechnya, have demonstrated capabilities that no other European country could match.

A contrasting perspective on the panel pointed out the serious problems that afflict Russia’s conventional forces. Data are unreliable, but it is possible that Russia could have 800,000 or fewer men in uniform. Draft evasion is so severe that a full complement of conscripts has not been enlisted since 1988. Moreover, health problems, drugs, and criminal activity among each new draft-age cohort are so widespread that the pool of acceptable conscripts has become a major concern for the military.

Of all the divisions that Russia has on paper, perhaps only the Tamanskaya and Kantemirovskaya divisions near Moscow are near full strength, and they have been drawn down significantly to supply soldiers to units in Chechnya this year. Three or four of the airborne divisions are also in fairly good shape. The bulk of the conventional force units, however, are not only undermanned but without more than nominal tactical training. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

The Russian Defense Ministry has reportedly concluded “the average Russian soldier is only marginally combat capable.”

Tactical air force units have been through a comprehensive consolidation as the Air Defense branch was merged with the Air Forces and both experienced deep cuts. The sustained operations in Chechnya may well have brought a few air units up to a passable level by providing so much flying time, but they have not solved the overall training problem.

The situation regarding Russian conventional armaments is no better. According to the Defense Minister, 30 percent of Russian weapons are not combat-ready and 70 percent of the Navy’s ships are in need of repair. According to a 1997 DIA public report, Russia has only limited capabilities to project conventional military power beyond its borders-- a situation that has not likely improved in the past three years.

Chemical and Biological Weapons. Much of Russia’s chemical and biological weapons programs remain unknown despite Russia’s status as a signatory to the CWC and the BWC. Russia is not complying with its CWC commitments and funds only a tiny fraction of the CW destruction program required of it. According to knowledgeable Russian defectors like Dr. Kenneth Alibek, Russia’s biological weapons infrastructure boasts a workforce of some 60 to 70 thousand workers, and it is unlikely that it has been brought into compliance with the BWC.

Command and Control, Mobility, and Logistics. Russia continues to invest heavily in improving its underground command and control facilities. According to reports, work continues on the massive underground complex at Yamantau Mountain. The facility is reportedly the size of Washington, DC and the surrounding suburbs inside the Beltway.

Despite its difficulties, the 1999 invasion of Chechnya demonstrates that Russia has command, control, mobility and logistics capabilities that no other European state can match. Russia has been able to organize, transport, maintain and fight with a sizable invasion force in Chechnya. That is an impressive achievement.

Another perspective was that there has been significant discussion in Russia and the West about Russia’s problems in maintaining space and ground-based early warning assets, some of which are not on Russian territory. In addition, Russian command and control for conducting conventional combat operations is suspect. Military district headquarters have been reduced in number and consolidated, and a couple of major joint forces command headquarters have been created in other consolidations. The effects of these changes are still uncertain.

Military Industry. Russia retains a great deal of surplus military production capacity, and select parts of Russia’s military industry remain quite healthy and capable. Russia has actively sought to maintain its nuclear infrastructure and its ICBM production capabilities. Other industries, like those producing the S-300 family of TMD/SAM systems, have products that are viable in the international marketplace. Russia actively promotes the sale of military hardware abroad. There are economic, diplomatic and domestic political drivers for these exports. President Putin has indicated that he sees investment in military industry as an ‘engine’ to pull the overall economy. Putin also hopes that additional funding to military industry will politically co-opt this important part of Russian society.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

An alternative interpretation of the health of Russia’s military industry noted that the Russian economy has not been reformed and even favored sectors are not producing cutting edge equipment because Russia lacks a whole set of modern industrial capabilities (e.g., microelectronics, systems engineering, etc.). The strategy of restoring a significant but select part of the old military industrial structure may have some near-term benefits, but it will keep Russia economically weak and militarily backward in the longer run.

Russian Views on Military Security Relations with the West

Military Response to Western Threat. The Russian government has clearly identified the United States and NATO as threats to Russia. General Leonid Ivashov, head of international cooperation for the Russian Ministry of Defense has said that: “Our mission is to use all our arsenal of means available to reduce the threat represented by NATO: from the resumption of contacts to the widening of the means of pressure, if necessary.” In practice, the cornerstone of Russian strategy is to foster and leverage anti-Americanism. One way Russia has pursued this is by promoting proliferation of missile technologies to countries like Iraq and Iran (such transfers serve political and economic interests in Russia). The strategic partnership with China, including the sale of anti-ship missiles, advanced aircraft and ICBM-related technology, also serves the Russian objective of challenging U.S. power. Russia clearly seeks to form a coalition of states, including China, for the purpose of challenging the United States. Russia’s military doctrine and national security concept reinforce these points.

A different interpretation noted that the Russian approach may be self-defeating. It may alienate the West and leave Russia isolated. Yet the key to achieving what Colonel General Ivashov cries out for is comprehensive engagement with the West. Technology, trade and capital of the kinds and amounts Russia wants can only come from the United States, Europe, and Japan. The only way the strategy can work is through detaching Europe and Japan from the U.S. affiance system.

National Security Concept and Military Doctrine. The October 1999 Russian National Security Concept is explicit in identifying the United States and the West as threats to Russian security. In sum, the Concept asserts that the West, led by the United States, seeks to dominate the international system by “applying unilateral solutions, including the use of military force, to key problems in world politics, flouting fundamental principles of international law.” This is posited as contrary to the Russian interests in “contributing to the formulation of a multipolar world ideology.” External threats to Russian security identified in this document are more explicit than those in the Military Doctrine, specifically identifying NATO expansion for example. Russia’s April 2000 Military Doctrine includes explicit references to the Russian view that the United States and its NATO allies are a significant external threat to Russian security.

Russian Practices Overseas and in the “Near Abroad”

China. Russia’s desire for a “strategic partnership” with China is centered on challenging the U.S. and reflects the anti-Americanism at the core of Russia’s international military policy. A closer relationship with China allows Russia to focus on southern and western borders while China is freed to focus on its outstanding territorial claims (e.g., Taiwan, Spratley Islands). However, a closer Russian relationship with China may be such a doubled-edged sword for Russia that the long-term net risk such a partnership poses to U.S. security is not likely problematic. While the long-term security implications for Russia of transferring sophisticated military technology to China should be quite sobering for Moscow, the near-term value of challenging America (and the financial benefits of arms sales) appears to dominate Russian thinking. It is unclear how deeply this “strategic partnership” will develop or how long it will last. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Bosnia and Kosovo. Russian policy in the former Yugoslavia reflects the value Russia sees in “making mischief’ for U.S. interests when given the opportunity. Russia has consistently tried to weaken the U.S. hand in the region. One example is the dash of Russian IFOR troops into Kosovo to occupy the Pristina airport before NATO troops could arrive. Another opinion held that these cases show painfully the danger of treating Russia as having far more power than it actually does; that is, by behaving as though “no major security issue in Europe can be decided without Russia.” This lesson has much wider relevance, especially in deciding how far to engage Russia in the present arms control framework, a vestige of the Cold War that implies that Russia still has globally important military power-- a most dubious proposition.

Chechnya. Many Russians believe Moscow needs Chechnya to control the exploitation of the Caspian oil fields, and so Russia’s military policies in Chechnya have for the moment given domestic credibility to the Putin government. But if the war drags on, the conflict may ultimately undermine Putin’s authority. And there are other ominous implications of the war for Russian domestic politics. It has already propelled strongly anti- liberal forces into power, given the military a strong position, and made it more difficult for a Russian leader to be cooperative with the West. The war also reveals to the CIS that President Putin has larger aims than just the subordination of regional components of the Russian Federation. Both Georgia and Azerbaijan has seen the war as a threat to their own independence, as a step toward restoring Russian rule in the whole of the Caucasus.

Baltics, Commonwealth of Independent States. Russia has been increasingly assertive within the CIS and leaders of the former Soviet Republics are disturbed by the trend. Moscow is using the energy dependence of the Baltics and Ukraine to increase its influence and attempt to diminish Western influence. Russia has also been more assertive toward Georgia, Azerbaijan and Armenia. Russia also recognizes the value of controlling Caspian oil and access to it. Belarus and Russia are moving toward outright reunification. The transfer of Russian troops into Belarus would place Russian forces on the Polish border. President Putin’s first CIS summit meeting revealed a strongly assertive hand and prompted considerable fears in other members. The Putin government is clearly trying a number of political and economic levers in attempting to assert hegemony over the CIS states.

Iran, Iraq. Russia’s policy of promoting proliferation to countries hostile to the United States such as Iran and Iraq demonstrates that Russia is quite willing to flout international norms in ways threatening to U.S. interests. Russia also seeks a broader partnership with Iran that would be consistent, not only with the Russian interest in challenging American influence, but with Russia’s desire for increased influence in Central Asia. Russia has transferred both nuclear and missile technology to Iran. The relationship with both of these countries demonstrates the vulnerability of some U.S. foreign policies. The U.S. policy of wholly isolating Iran merely invites this most unnatural Russian-Iranian alliance. In Iraq, Russian dabbling demonstrates that sanctions and economic isolation will increasingly erode. This problem for the United States would be serious even without Russian actions.

Arms Control

In the case of START III, the Russian arms control objective is to drive the U.S. down to low strategic force levels that are compatible with Russian spending priorities, but far below what the United States could otherwise maintain. Russian arms control initiatives also are intended to divide the U.S. from its traditional allies. Russian and Chinese efforts to bring UN General Assembly pressure on the United States regarding the A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

ABM Treaty are clear examples of this. In doing so, Russia seeks to split off traditional U.S. allies like France and the UK, and use the Treaty is to keep the U.S. vulnerable to missile threats, even while Russia contributes to missile proliferation and pursues its own ABM system.

Russia’s appeal to the sanctity of the ABM Treaty is markedly in contrast to Russia’s approach to the CFE Treaty. In that case, Russia demanded that the Cold War era agreement be modified to meet its own security concerns, and the West largely acquiesced. Even so, Russia has proven willing to violate the Treaty to pursue its agenda in the Caucasus.

The Clinton Administration continues to treat Russia as a peer in the area of strategic arms, probably encouraging Russian leaders to hold to the Cold War vision of Russia as a peer competitor. This is a vision Russia can afford only if the United States voluntarily reduces its forces in tandem with Russia. Administration pandering to Russia about the future of the ABM Treaty has made the U.S. appear deceitful in Russian eyes, with Washington one month expressing continuing fidelity to the ABM Treaty as “a cornerstone of strategic stability,” and the next declaring that it may decide to deploy National Missile Defense and require revision of the Treaty.

How Do Military Capabilities Compare with Russian Interests and Actions?

The Putin government has promised a substantially increased defense budget. There may be a domestic fight for resources unless the whole economic pie increases. Putin has indicated his spending priorities by promising to reform and modernize conventional forces while also continuing the emphasis on nuclear modernization. A different opinion offered on the panel was that the Putin government is staking out aims and objectives vastly exceeding Russian capabilities. Increasing military spending significantly today can neither produce a military force projection capability of importance beyond the CIS-- except in strategic nuclear forces- - nor help improve the economy. In fact, it risks restoring institutional patterns that will make Russian economic performance indefinitely poor.

Critique of U.S. Approach to Russian Military Policy

The U.S. remains caught in Cold War-era “old think.” It continues to treat Russia as a peer and to pursue arms control objectives that are inconsistent with U.S. security needs and that reinforce Russia’s view of itself as a competitor. The current U.S. approach is overly solicitous of Russian sensibilities and panders to Russian interests. For example, the United States pointedly did not mention Chechnya during Foreign Minister Ivanov’s recent visit to the United States, a fact celebrated in Moscow upon Ivanov’s return. U.S. official condemnation of Russia’s military excesses in Chechnya has been muted at best, encouraging their continuation. The United States also continues to follow the Cold War form of arms control with Russia, providing Moscow with continuing influence over U.S. nuclear forces and missile defense programs. There is no reason to continue in this Cold War framework that undermines U.S. security and reinforces Russia’s aspirations to be a strategic peer of the United States. Perhaps most egregiously, U.S. policy with regard to the ABM Treaty and a National Missile Defense deployment decision has granted Moscow a de facto veto over a matter of vital U.S. security.

What Should the U.S. Do?

The United States should cease pandering to Russian concerns, complaints and demands. The United States should recognize, for example, that arms control, as practiced during the Cold War, serves only to A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

reinforce Russia’s outmoded view of itself as a strategic peer competitor of the United States, and does not address U.S. security concerns in the post-Cold War period. In addition, the U.S. refusal to call Russia on its movement toward authoritarian government and remilitarization can only embolden those in Moscow who seek these ends. Pandering to Russia serves only to reinforce those voices in Russia that have forestalled true military, economic, and political reform in favor of maintaining the facade of superpower status and hostility to the United States.

Other panelists advocate that the U.S. continue to engage Russia, but without treating Russia as a global power, or even a major European power. If Russia acts constructively, our policy must acknowledge and reward it. But engagement must include sharp reproaches for unconstructive Russian behavior. It must openly oppose the emerging anti-liberal domestic policies in Russia, not least the war in Chechnya, and also the phony elections, the repression of press freedoms, and other such crackdowns. And it must not ignore or discount disturbing aspects of Russian military developments.

Specifically, Russia should be removed from a number of international groups. For example, it has no basis for a claim to attend the G-7 meetings. The OSCE should be used more vigorously by the United States and Europe to monitor and condemn Russian behavior within the CIS and the Baltic states.

Shifting away from the “old thinking” of Cold War-era U.S. military and security policies toward Russia will take time, not least because US allies must be brought along in this regard. To ignore our allies or override their concerns could easily give Moscow precisely the kind of undeserved opening it seeks for increasing tensions within our alliances. Essential to a successful shift is letting our allies, particularly Germany and Japan, realize that they are more important than Russia in the U.S. view of the world and for the maintenance of our mutual security and economic well being.

It would be easy to offer a blanket condemnation of Russia in light of several Russian policies, and those policies must not go uncondemned. Washington should, however, remove Russia from the central place in U.S. and European strategy that it has long held but no longer merits. And it is easy to forget how much we have succeeded vis-a-vis Russia in a decade. Even the most demanding of the Cold Warriors in the West before “perestroika” never expected a unified Germany in NATO, the abolition of the Warsaw Pact, and the breakup of the Soviet Union - certainly not within the 20th century.

***

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Hudson Institute U.S.-Russia Study Group Russian Military and Security Issues Panel June 6, 2000

Remarks by Major General William Odom, USA, Ret. Panel Chairman

Until late 1999 or early 2000 it would have been difficult to be very confident that the Russians had art official set of strategic objectives. But now with President Putin’s new national security concept and a written military doctrine, we at least have one that’s official and is on paper.

What is most significant about these documents is the emphasis on Russia achieving multi-polarity. This is a sort of lineal descendent of the international class struggle, which makes the U.S. the enemy and anything that limits U.S. power seems to make sense.

Why did this doctrine emerge now and not earlier? Part of the explanation is the Chechen War, which helped Putin to power and which has given the Russian military an entree into Russian military policy. We in part contributed to this situation. Our inviting the Russians to participate in settling the Chechen affair opened the door to the Russian generals, who have been playing a more significant role in national security decision making ever since.

This ties in with Putin’s rather assertive approach to the CIS. He is much more firm and strong, and certainly less ambiguous than when Yeltsin was chairing the summit meetings of the CIS. Therefore, it seems clear that reasserting Russian control of Chechnya is only a tactical objective. There is a larger strategic objective in the region; namely, to change the governments in Georgia and Azerbaijan so that they will heel to Moscow’s policies.

Another part of Putin’s strategy is to gauge the West economically because Russia does need Western engagement for improving its resource base. We on the panel do see promises by Putin of more military spending. There is a problem of whether he can afford it, what he will have to give up, and what kind of stresses that will put on the system.

Looking more broadly at the Russian situation today, it’s clear that Moscow is playing the role of the traditional frustrated power. The frustration is felt more by the Russian political class than the general public. The political class is very angry about having lost its empire. Because of the emotional drive behind the current policy it is clear that there can be a very troublesome aspect to Russian strategy in Europe and East Asia.

How should the U.S. approach Russia? Rather than focus so heavily on Russia, it is far more important for us to concentrate strategically on our alliances with NATO, Japan, Korea and Taiwan. If these alliances are kept strong, there is not much Russia can do. They can cause a great deal of trouble, but we won’t be very vulnerable to it. If, however, they succeed in weakening these alliances, we will be much less prepared and capable of handling any threats to our position posed by Russia.

At the same time arms control appears to be an increasingly obsolete approach to Russia. It perpetuates Cold War thinking and unfortunately the current administration in Washington appears very much locked into the paradigms of the Cold War. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

Thank you for participating in this panel and in this important study.

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Russian Military Threat

Keith Payne

The circumstances that shape the bilateral U.S.-Russian relationship have changed dramatically in the last decade. The ideological contest between Soviet Communism and the western liberal democracies is over. The Soviet Union did not survive losing the Cold War and disintegrated in a relatively peaceful fashion. As the Soviet system of control failed, the satellite states left Moscow’s orbit. Germany is united and former Warsaw Pact members Poland, Hungary and the Czech Republic have actually joined NATO. The Russian Federation now controls the hub of what was once the Soviet empire, and retains control of most of what remains of the Soviet military machine, including tens of thousands of nuclear weapons.

And yet, despite these fundamental changes, the relationship between the United States and Russia is still strongly affected by issues of confrontation and threat, and each retains thousands of strategic nuclear weapons. Russia and the United States have not established a “strategic partnership,” as some on both sides had hoped during the early 1990’s. Instead, Moscow sees an active, expanded NATO as a threat to Russia while the United States takes a dim view of the flow of Russian military technology to countries like China and Iran. Indeed, a fledgling strategic partnership between Moscow and China has emerged around the shared goal of challenging U.S. power and influence.

Even if the bilateral relationship has not shaped up as we had hoped, there could be a basis for some optimism if Russia’s internal transformation was on track toward a democratic polity with a market-based economy. A brief survey of Russia’s internal and international discontents, however, points to a dangerous trend. Russia’s varied ills, and the leadership’s view that the West is largely responsible for those ills, have transformed the former superpower from an ideologically-driven non-status quo power into a more familiar type: a state profoundly dissatisfied with its power position in the world with a ready target for grievance and blame. Many in the Russian leadership clearly seek to reestablish a position more akin to its superpower heritage.

Russia’s attempts at economic reform have been undermined have been undermined by corruption and profiteering and no effective rule of law exists to discipline the process. The industrialized world, eager to support a stable, “friendly” Russia under Boris Yeltsin, has been quick with financial assistance that has largely disappeared into unaccountability. Further, this aid has produced no significant reforms and, most importantly, little benefit apparent to the average Russian citizen. According to one poll, for example, 7 out of 10 Russians consider themselves poor.

Politically, the massive power of Russia’s presidency has been turned, first to preserving Boris Yeltsin’s control of the system, and subsequently to anointing his handpicked successor, Vladimir Putin. Under Yeltsin, the Presidential administration had come to resemble more the court of a king than the office of an accountable, elected official. There is little to suggest that Putin will be able to reform the system, even if he wishes to. For example, the so-called “oligarchs,” the handful of people who have built vast fortunes by taking advantage of economic “reforms,” benefit from the system of political patronage and occupy an important place in the “court” of the Russian president. Their financial clout and control over major media outlets clearly helped Yeltsin win a second term as president. No doubt they have also been helpful in controlling and shaping media coverage of the ongoing war in Chechnya to Putin’s advantage. Putin has, on occasion, appeared hostile to the oligarchs. On one occasion he even threatened to, “destroy [them] as a class.” There is little evidence, however, A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

to suggest that any future initiative to limit the power of the oligarchs will be more successful than past attempts.

There has been only spotty progress towards an accountable democratic government in Russia, and even some recent improvements in the economy do not seem to raise the average Russian citizen’s standard of living measurably. In those circumstances, average Russians have been cast adrift in an important way with nothing in which to believe. They no longer have an idealistic ideology to give some purpose to their efforts and privations. For most Russians, what we would hope to be alternatives, capitalism and democracy, have become synonyms for corruption and mismanagement.

With nothing to replace the Communist ideal, some Russians have embraced varying forms of Russian nationalism, some of them quite virulent. Nationalism is evident in Russia’s public support for the current war in Chechnya and the “strong hand” that Putin has justified with a comment that “The people want order to be introduced in Russia.” The widespread placement of former KGB officers in key positions and the increasing power of the domestic security apparatus suggests that Russia yet again is headed toward an authoritarian regime. There appears to be relatively little public outcry in the face of increasing government pressure on press freedoms, privacy, lack of candor about the Chechen war, and increasingly intrusive security services. Domestic dissatisfaction with the status quo has led the Russian public to embrace Putin’s “strong hand.” Many appear willing to pay the price of that strength-- authoritarianism-- to achieve a degree of social stability.

The apparent outcome of the recent Russian presidential election is illustrative. According to preliminary results, Putin won the election in the first round of voting, with 53% of the vote. The Communist candidate, Gennady Zyuganov, had a stronger than expected showing at 29%. And the liberal-leaning candidate Grigory Yavlinsky received a very modest 6%.

Russia’s resurgent nationalism may have some economic roots. After the Cold War, Russia expected to enter the international marketplace as a leading source of high technology goods. However, in terms of quality, service and reliability relatively few customers have been willing to take a chance on the civilian products of Russia’s defense industries. Investment in Russia’s private sector, once hotly contested among the major international sources of development capital, has dwindled as no system of laws and law enforcement has evolved in Russia to protect investments. Thus the only internationally competitive Russian industrial concerns produce military hardware, for example, the S-300 family of air defense/missile defense systems. Moreover, the primary customers for exported Russian military hardware are not the rich, industrialized nations or their allies but states like India and China interested in acquiring advanced technologies that cannot be obtained easily from the West.

The nature of Russia’s military trade, her trading partners, and the absence of consistent government regulatory authority over such trade have caused significant problems for international nonproliferation concerns. For example, the Russian sales of nuclear technology to Iran and rocket technology to India both led to heated discussions between Moscow and Washington. Other incidents, like the recent U.S. seizure of a Russian tanker carrying Iraqi oil, have been embarrassing for Russia even though there is no evidence that the Russian government was complicit in the illicit shipment. It is a common view in Russia, particularly among nationalist politicians, that U.S.-led Western collusion has limited its access to economic markets in an effort to “keep Russia down.” Another consequence of Russia’s reliance on defense industries is the ease with which an increasingly authoritarian leadership in the Kremlin can militarize society in the name of improving the

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economy. Putin has already indicated that he believes Russia’s defense industry can serve as the engine of Russia’s economic recovery.

Nationalism has also led to an outward focus in the familiar Russian search for “who is to blame” for Russia’s current plight. Russian nationalism and dissatisfaction with the status quo has led the leadership to identify the West as the source of Russia’s problems. In retrospect, we can see that to satisfy Russia’s expectations of a U.S.-Russian “strategic partnership” the United States would have had to align its superpower position and global commitments in the direction of promoting Russian welfare and interests.

Yet, the United States has retained its global commitments and often has chosen to act contrary to the expressed desires of Russian leaders. Alarmingly for Moscow, NATO expanded eastward, bringing former Soviet clients into its fold, and adopted new strategic guidelines that allow for out of area operations. Similarly, from the Kremlin’s perspective, U.S. military activities in Iraq and the former Yugoslavia are evidence that the U.S. and its allies seek to undermine Russia’s interests during its time of weakness. Moreover, some Russian observers see within these U.S. acts a web of conspiracy directed explicitly at Russia. For example, sanctions against Iraq serve to deprive Russia of income that would otherwise be available if Iraq were allowed to sell more oil. In another case, NATO military steps in Kosovo, taken despite clear Russian objections, were seen as a demonstration of the power the alliance might bring to bear in Russia’s “near abroad” or within Russia itself. From Moscow’s vantage point, Russia has become a second tier power that is unacceptably vulnerable to U.S. “bullying.” A recent statement by Foreign Minister Ivanov is illustrative.

The more extensive the campaign in the West to discredit the image of Russia, the more difficult it will be for us to carry out our political tasks and develop scientific and cultural contacts ... It is difficult to evade the impression that there is a definite scheme behind such actions: by blackening Russia, pushing it into secondary roles and depriving it of an independent voice in world affairs.

This is the status quo that Russia hopes to unseat through steps like a “strategic partnership” with China. That insecurity is also likely to lead an authoritarian regime with a militarized economy and society to seek new “buffer zones” through territorial expansion. In its mildest form, this might lead to Russian attempts to reintegrate with select former Soviet republics like Ukraine and the Baltics. Russia has, for example, already taken steps toward a voluntary “Union” with Belarus. The new Russian national security concept mentions the potential for again stationing military “contingents” outside Russian territory, and Putin has emphasized his intention to increase military spending by 50% over 1999 figures.

An authoritarian Russia with military ambitions is not a problem America’s national security establishment would prefer to face. The current Administration’s Russia policy often appears to be guided by the assumption that Russia will not slide into militarism and an authoritarian future. U.S. policies ranging from economic assistance to arms control appear to be formulated on the assumption that Russia is on track to a market-oriented democracy.

The Clinton Administration continues to treat Russia as a peer in the area of strategic anus, probably encouraging Russian leaders to hold to the Cold War vision of Russia as a peer competitor; a vision Russia can afford only if the United States voluntarily reduces its forces in tandem with Russia. Administration pandering to Russia about the future of the ABM Treaty has made the U.S. appear deceitful in Russian eyes, with Washington one month expressing continuing fidelity to the ABM Treaty as “a cornerstone of strategic A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

stability,” and the next declaring that it may decide to deploy National Missile Defense and require revision of the treaty. This follows the pointed U.S. discontinuation of the surprisingly successful Ross-Mamedov Talks, set in motion by President Yeltsin in 1992 to promote a cooperative approach to the deployment of a “global defense system.”

In contrast, Russian security policy has been formulated to support Russia’s perceived need to deter and confront the status quo power, i.e., the United States. Nuclear weapons are increasingly accepted in Moscow as the only guarantee of Russian national security and as the foundation of Russian military strategy. The Russian Federation reportedly still possesses about 4,500 accountable strategic nuclear weapons and about 1,000 operational long-range ballistic missiles. Less certain is the number of tactical nuclear warheads in Russia’s arsenal, with estimates beginning at six thousand warheads and quickly rising to tens of thousands. Unclassified U.S. intelligence estimates suggest that in the coming decade, Russia will be hard pressed to maintain an arsenal of 1,500 strategic warheads. Informed Russian sources echo that analysis, some suggesting that Russia may only have a force of several hundred strategic systems at its disposal.

Despite the fact that Russia’s ability to maintain a strategic nuclear force clearly is eroding, Russia has nevertheless increasingly focused its post-Cold War defense strategy around its status as a nuclear power. In 1997, Russia rejected its earlier “no first use” pledge, and in a draft Security Concept stated that Russia would use whatever means were at its disposal, including nuclear weapons, if the survival of the Russian state were threatened by aggression.

The Security Concept approved by Acting-President Putin in February 2000 is similar to the 1997 draft. It appears, however, to lower the threshold for nuclear use. Where the 1997 draft referred to the survival of the Russian state as the stakes making nuclear use acceptable, the 2000 Security Concept refers to a broader threat category of “armed aggression” as justifying nuclear use. It also explicitly identifies the U.S.-led West as a threat to Russia’s security, a new development in a document that otherwise focuses on internal threats like domestic instability, organized crime and corruption.

Russian officials have denied that this amounts to a liberalization of the circumstances under which nuclear weapons might be used. However, Col. Gen. Vladimir Yakovlev, the head of Russia’s Strategic Missile Troops has said, “Russia is compelled to reduce the threshold for the use of nuclear weapons and to extend nuclear deterrence to conflicts of lesser scales and to openly warn about that.”

Russia’s approach to military spending has confirmed this priority for nuclear weapons. Funding for Russia’s strategic nuclear forces has been “fenced off’ by the lower house of Russia’s parliament and a classified minimum funding criterion established. Until the most recent budget, Russia’s only fully funded military acquisition program has been the new TOPOL M ICBM that has been entering the service at a relatively slow pace of ten missiles per year. Other spending on strategic systems includes a new ballistic missile submarine and SLBM, as well as improvements to Russia’s nuclear command-and-control systems.

Although Russian nuclear forces are facing an austere budget climate, their relative health when compared to Russia’s conventional forces is clear. In terms of conventional forces, Russia’s army has scaled back to approximately 1.2 million men, of which perhaps as few as 200,000 could be considered operational. The Russian Defense Ministry has reportedly concluded that “the average Russian soldier is only marginally combat capable.” There may in fact be no full-strength units at the divisional level. According to Defense Minister Igor Sergeyev, 30 percent of Russian weapons are not combat-ready and 70 percent of the Navy’s A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

ships are in need of repair. As a consequence of these deficiencies, Russia has only limited capabilities to project conventional military power beyond its borders.

In the context of the current Chechen conflict, the Russian General Staff’s response to this state of readiness is to only move troops forward after an area has been thoroughly destroyed by artillery, air and missile strikes. Russian military leadership has clearly improved between the 1994-1996 war and the present conflict, and morale is likely also improved over the first war where young conscripts often were not even told they were heading into a combat situation. However, despite Russia’s “success” in prosecuting the current war, the state of her conventional forces remains poor.

It appears that Russia hopes to rely on its nuclear shield during the longer and more expensive process of building up a modem conventional military capability. While this strategy has limits (e.g., Chechnya), its economic advantages are clear. The current Russian budget, if carried out, represents not only an overall increase in spending, but conventional as well as nuclear force acquisition monies. In addition, strategic nuclear capability is the only claim Russia has to its former status. In the words of retired paratroop General Alexander Lebed, a former head of the Security Council, “the only thing for which Russia is respected in the world and which makes us worthy partners ... is our strategic rocket forces.” Indeed, President Yeltsin’s remarks about a potential “world war” and the retargeting of nuclear weapons at NATO countries in response to NATO bombing of Serbia are evidence that Russia recognizes its dependence on nuclear weapons to get the West to pay attention. From this Russian perspective, only nuclear weapons offer Russia influence on a global scale. Reestablishing such influence on a global scale is precisely the objective of this non-status quo power, and numerous senior Russian civilian and military leaders openly advocate a major expansion of Russia’s strategic nuclear capabilities, including the equipping of new land-based ICBMs with multiple warheads.

How this Russian dynamic may play out in coming years must, of course, be speculative. But the recent past offers some plausible suggestions. We may expect limited, but slowly growing Russian challenges. Unable to compete with the United States directly, Russia is likely to challenge Western policies and actions indirectly, and by using proxies, particularly in regions on the periphery of NATO’s likely areas of operation.

In a future acute regional crisis, for example, Russia may challenge Western actions more resolutely than it has in Kosovo, including the delivery of military aid that could make Western air operations more difficult (e.g. the S-300 air and missile defense systems). In an escalating regional conflict in which Russia has staked out a stridently anti-Western position, Russia may resort to thinly-veiled nuclear saber rattling. There already are some recent precedents for such Russian behavior, in addition to the unfortunate example for the Russian leadership of explicit Chinese nuclear threats to Washington over the issue of Taiwanese independence. Informed Russia analysts have even suggested that in extreme cases, such as the deployment of nuclear weapons to the new NATO countries, Russia would promote the transfer of weapons of mass destruction (WNM) to regional “rogues” in support of their challenges to the West.

How should the United States respond if Russia continues in this trend toward an authoritarian, militarized, non-status quo power that identifies the U.S. as the enemy? The United States should, of course, assist Russia when possible should it choose to discard authoritarian controls on its society and economy. Russian movement toward a market-oriented democracy should be abetted whenever practicable.

However, the United States must no longer make policy based on the assumption that concessions to an authoritarian Kremlin now will preserve some seed of democracy for the future. Concessions now may well A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

have the perverse effect of confirming for many in Moscow the wisdom of their course toward authoritarian rule, expansionism, and remilitarization.

If current trends hold, U.S. strategy should seek to contain renewed Russian expansionism. With nationalism and anti-Western sentiment as their political instruments, successful territorial expansion could serve only to enhance the legitimacy of Russia’s nationalists. Similarly, Washington should cease pandering to Moscow in the area of strategic arms. There is no apparent reason for Washington to continue to pace the size of its strategic forces with the erosion of Russia’s forces. The concept of “parity” as a goal for U.S. strategic forces is a vestige of the Cold War and lacks logical integrity.

The United States also should be prepared for Russia to pursue “asymmetric” or indirect challenges to U.S. influence. And, of course, reliance on nuclear threat is the most obvious “asymmetric” response to U.S. conventional preeminence. Given Russia’s current economic weakness and inability to confront U.S. global power directly, Russia may also use manpower (e.g., technical expertise or training cadres), technology transfer, and diplomatic assets to complicate the U.S. strategic environment. The “strategic partnership” with China clearly reflects these components. Moreover, the China partnership demonstrates that Moscow is willing to run long-term risks (transferring technology to a formidable future competitor) for the sake of near-term gains. If emerging trends continue, Russia may be more risk tolerant than was the Soviet Union.

Despite extreme social and economic disruptions, Russia has the human and industrial potential to pose a serious mid-to-long term threat to the United States. Russia’s return to authoritarianism and militarism would undoubtedly exploit that potential. Washington’s discounting of this very plausible and serious future threat carries the seeds of equally plausible and serious regrets down the road. In fairness, there is the possibility that the traditionally resilient Russian people may stiff retain an interest in democratic freedoms that could ultimately survive current trends. However, at present, developments in Russia seems to point more in the opposite direction-- that Russia will move increasingly toward authoritarianism and confrontation with the U.S. The analogy to the Weimar Republic of the late 1920s and early 30s can easily be overdrawn, but there are some strikingly similar elements at play in Russia. For the sake of both countries, Washington should recognize this trend and cease all behavior that panders to and rewards this dangerous direction in Russian development.

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RUSSIA:

Its Place in the 21st Century and the Implications for the United States

Part Three

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Luncheon Address by R. James Woolsey, former Director of Central Intelligence Public Briefing, Dirksen Senate Office Building, Washington, DC June 6, 2000

Let me begin by recalling something that Dwight Eisenhower used to say to friends. It was based on something a professor of his once told him: “If you want to understand how the United States deals with really difficult problems, you need to understand the wagon train.”

Ike meant that a wagon train was a uniquely interesting institution. For example, imagine all those people leading normal lives on the East Coast, and suddenly an important objective comes up. Let’s say it’s 1849, and suddenly the word is, “Get to California because the Gold Rush is there”, and overnight a temporary society comes together. It’s a meritocracy. If you’re the best person to lead the wagon train, you lead it. It doesn’t matter what your name is or how wealthy you are. Everybody comes together, all for one, one for all, for a common purpose. It’s almost like a family. It accomplishes remarkable things against remarkable challenges. And then when it gets to California, hey, it’s beach time. The temporary society dissolves. Everybody goes off to pan for gold or be a shopkeeper or a doctor or whatever he was before. And they look back on it, just as the title was of the old post World War II movie, as the best years of their lives. It was a time of total commitment. It was a time of remarkable achievement. But the main point is you don’t always live that way. It was a temporary and remarkable society.

Ike meant that this is the way the United States has always dealt with really difficult challenges. Start unrestricted submarine warfare against us, bomb Pearl Harbor, invade Kuwait--this is a remarkable nation and we will pull together, form essentially a wagon train of the entire nation, mobilize, and go get the job done.

But what we are not very good at is meeting the challenges between wagon trains. Between periods of clear major national commitments, it’s hard for us to deal with a clear threat or a clear problem. It takes extraordinary leadership to do that. The best example I can think of came from here in the Congress. During the Great Depression, Congressman Carl Vincent, opposed by virtually the entire federal bureaucracy, many of his colleagues in the Congress, and not even supported by Franklin Roosevelt until 1938, got the two-ocean navy built, the navy that effectively won World War II at sea.

By October of 1942 the United States was down to one functioning aircraft carrier in the Pacific, and the U-Boat wolf packs in the Atlantic were destroying most shipping going to Britain. But Vincent’s two-ocean navy started coming off the ways, and it turned the tide, not only the Battle of the Atlantic, but also the entire war in the Pacific. That was hard. It was hard to get the United States to focus on what it needed to do before Pearl Harbor, before there was a clear-cut challenge of the sort that this nation organizes so remarkably around.

Today we are in a similar dilemma. In another good and easy period, sort of like the 1920s, the stock market is up, there appears to be no major threat, and the diplomats are focused on arms control. Back then it was the Kellogg-Briand Pact that was supposed to outlaw war, and the Washington and London Naval Agreements. The American economy and the American political system bestrode the world like a colossus, just as it does now. In these good and easy times, like the 1920’s and the early 21st century, it is difficult to get people to focus on how things might go wrong and what might need to be done in order to deal with them.

An editorial in The Washington Post offered a remarkably fine statement of the dilemma we are in today with respect to national missile defense and the ABM treaty, and preparing ourselves to deal with the threats of A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

rogue nations -- perhaps other nations down the line. It began by speculating that President Clinton’ s support for national missile defense was primarily political and not substantive; and then it said that, well, they would take him at his word. I quote: “We believe that Mr. Clinton’s public position that a missile defense is worth considering is right. And if it’s worth considering, it should be considered on its merits, political, diplomatic, technical, with no options ruled out simply because the 1972 ABM Treaty disallows them. No technology’s yet proven itself, but eventually the most effective option may include sea-based components, relying on space- based sensors. These aren’t permitted under the ABM Treaty. The President is right to seek continuing dialogue in cooperation with Russia, but declaring the treaty a cornerstone before deciding which if any missile defense system makes sense is backward.” Precisely.

In its twilight months, the Clinton Administration finds itself in a major dilemma. It wants smooth relations with Mr. Putin’s Russia. To do so, it must leave the 1972 US Soviet ABM Treaty virtually untouched, probably completely untouched. But the Administration also says that it wants to mount an effective defense against North Korean, Iraqi, Iranian ballistic missiles and weapons of mass destruction, and that of course would require, at the very least, huge revisions in the 1972 treaty.

Why has the administration taken this long, seven plus years, to deal with this problem? One reason may be that in early--I’m sorry--in late 1995--I hasten to say I resigned from the CIA in early 1995--in late 1995 a National Intelligence Estimate badly understated the rogue state ballistic missile threat. And in the summer of 1998 the Rumsfeld Commission’s report was followed by a dramatic North Korean missile test that clearly makes it impossible to deny the rogue state threat for anyone who pays attention to these types of issues.

Now, to deal with this really serious strategic problem, the Clinton Administration is doing what is has learned to do quite effectively in domestic politics-- triangulation; that is, to adopt just enough of its critics’ position that it can claim that it has accommodated their basic position. The Administration plans to begin with 100-interceptor defense based in Alaska, and perhaps will add another 100 interceptors and several other radars at a later point. The GAO estimates this will all cost somewhere around $60 billion, and it will require at least some limited but important amendments to the 1972 ABM Treaty.

As far as sea-based systems are concerned, under a protocol that the Administration negotiated and invented-- this was not the Russians’ idea-- in 1997, and never been approved by the Senate, the Aegis cruisers and other theater defense systems but particularly Aegis, would be restricted in their effectiveness in order to accommodate Russian demands that they not even be marginally able to intercept Russian ICBMs.

Basically this triangulated position is sort of a school-uniform program for national defense. Its effects are purely cosmetic, and it does almost nothing to deal with the basic problem. But it may, at least in the press, give the President some credit for trying something. But unlike school uniforms, which at least don’t undercut the cause of education reform, this effort at national missile defense will in fact impede our efforts to deal in a serious way with the growing vulnerability to rogue state missiles. It need not have turned out that way. Several speakers have commented on the Rossman-Yetov talks that began in early 1992 after President Boris Yeltsin’s remarkable United Nations speech. These were cancelled by the Clinton Administration in early 1993, even though, as President Yeltsin had proposed, the talks were pointing toward U.S.-Russian cooperation on a global system, in President Yeltsin’s words, for protection of the world community. Discussions were proceeding to leave aside restrictions on research and development, to deploy over a thousand interceptors at multiple sites, and to put a time limit on the ABM Treaty to allow possible future deployment of space-based and other

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org systems. Well, those negotiations were cancelled, now seven years ago. That mistake planted the seeds of our current dilemma.

Now, in the face of the newly acknowledged rogue state threat, the Administration has chosen far and away the most difficult and most expensive way to try to intercept attacking ballistic missiles, simply to avoid the need to amend the ABM Treaty. Early in its trajectory, a ballistic missile is large and hot because the booster is still burning, and relatively slow. For an ICBM with a range of about 6,000 miles, which takes around 30 minutes from launch to get to its target, a missile is in boost phase until it’s about 300 miles above the earth and about 500 miles or so down range. But when that boost phase ends and all that’s left is the warhead, the package is small, cold and thus hard for infrared sensors to see, and fast --a much more difficult target. By this time the customary analogy of trying to hit a bullet with a bullet is in fact apt, and that is what the Administration’s system must seek and try to do, and must try to do flawlessly.

To make matters worse, even primitive decoys or multiple warheads can, after boost phase, bedevil a defensive system. Various observers have talked about early release right after boost phase of small containers of biological agents, giving a multiple reentry vehicle capability which would require the Administration system to hit each of a large number of very small targets in space, and perhaps the other countermeasures that will become available to rogue states.

Robert Walpole, a very able national intelligence officer for strategic and nuclear programs, testified in February before the Congress that Russia and China, “...probably are willing to sell some countermeasure technologies to rogue states...” and that North Korea, Iran and Iraq, “...could develop countermeasures based on readily-available technology and could do so by the time they flight test their missiles.”

But it’s not just actions by an enemy that limit the effectiveness of the Clinton Administration system. The Administration has purposely designed vulnerabilities into the system in order to assure the Russians that they can penetrate it with ease. I refer you to a New York Times report in late April of the Defense Department’s briefing of Russian Foreign Minister Ivanov and his accompanying military experts in The Tank, the Pentagon’s most secure conference room. This article revealed how the Administration stressed that its system’s radars would be inherently limited to handling only a few targets, and consequently the system’s capability could not be expanded effectively by adding a large number of additional interceptors. There must have been particular smiles in both Pyongyang and Baghdad, not to speak of Beijing, as their ballistic missile designers read about this briefing.

Now, serious technical problems are inherent in a bullet-to-bullet intercept system, a mid-course system such as the Administration has hypothesized, and some have been built in intentionally. But in any case, these technical problems have caused the Administration’s system to be criticized by those who support much more ambitious defenses and are opposed to the ABM treaty; and also by such intellectually honest ABM treaty supporters as Senator Joe Biden and scientist Richard Garwin as well. Senator Biden wrote in The Wall Street Journal in late April, “If we deploy a system, I would favor ascent-phased interceptors that could be located either at fixed sites or on ships near the countries that pose the threat.” And Garwin has advocated defending against rogue state intercontinental ballistic missiles with similar earth-based, boost-phased intercept defenses; that is, interceptors based near North Korea, or near Iraq, or near Iran, that could intercept the rogue-state ballistic missiles early in their course when they’re most vulnerable.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

It’s interesting to speculate what President Putin means in his interview with NBC, but some have interpreted it, including in this morning’s press, as some degree of openness to this type of surface-based boost- phase intercept. We need to stay tuned.

What is noteworthy is that while intellectually honest ABM supporters such as Biden and Garwin see the fundamental problem with the Administration’s system, the Administration and its supporters, on the other hand, consistently ignore two facts: “A,” that the earth is round; and “B,” that as a consequence, land-based defensive systems based in the United States, even in Alaska, cannot track, target, and intercept ICBMs from rogue states when those missiles are large, slow, and hot in boost phase. Instead they must wait until the enemy missiles come over the horizon and warheads are deployed, and the targets are small, cold, and fast. And they may be masked by decoys, probably multiplied, and dispersed.

Now, if the Administration’s system is likely to be this ineffective, why shouldn’t the Russians welcome it? Why shouldn’t they welcome our wasting $60 billion on such an ineffective system? There are probably two reasons. I spent a couple of hours in March in Moscow talking with a very senior Soviet-excuse me, slip- up-Russian general from the Ministry of Defense who is widely quoted in the West, and whose responsibilities extend to this area. I tried out a number of ballistic missile intercept plan ideas on him, some of Dick Garwin’s, and the Administration’s. Everything I said brought him back to one single concern, China. China has become a central feature, as many people on this panel reported, the focus of Russian foreign policy in recent years, and particularly in recent months. It has become a tenet of Russian foreign policy, particularly among the military, that in order to hold us in check, a quasi-alliance with China is necessary; and consequently, any defensive deployment of the United States that conceivably could protect us from Chinese ballistic missiles is almost certain, at least in the near term, to draw strong Russian opposition.

The second reason is Schadenfreude, best illustrated by an old Russian joke. A destitute peasant comes across a bear that has fallen into a pit that he has dug and put some branches over. He’s about to shoot the bear. It’s the best thing that’s ever happened to him. It’s meat for the winter. It’s a rug for the floor. But the bear stands up and speaks, and says that he is in fact a magic bear and that he will grant this poor peasant one, but only one, wish if he’ll spare the bear’s life. The poor peasant looks into the distance at his own dilapidated cottage and his hungry children and his angry wife and the hole in his roof And then he glances a few hundred meters away to his very prosperous neighbor’s lovely little farm. The neighbor, a few years previously, was able to save enough to buy a cow; and the cow’s milk and the butter and the cream have brought in a nice income. The neighbor has been able to reinvest. He has a nice little farm with chickens and pigs, a mended fence, happy and healthy children, and a happy wife. The poor peasant looks into the distance. He looks at his neighbor’s prosperous farm, and he says to the bear, “All right, my one wish. Let his cow be dead.” A revealing story. Russians today, in many cases, are so embittered that it is more important for them to deny something to the lucky and prosperous Americans than to obtain it for themselves. That’s why the Russians are nostalgic about the 1972 US/Soviet ABM Treaty. What’s our excuse?

I may have some disagreements on this point with some of our friends on the panel with whom I have had both agreements and disagreements going back many years on many issues. But at the time the ABM Treaty was negotiated, in the early 1970’s, I think you could make the case that the Treaty had some strategic utility for the United States. After all, we faced the substantial technical difficulty of hitting a bullet with a bullet -- trying to intercept small, cold, fast objects in space, the same problem that the Clinton Administration system has given itself today. The Soviets had a huge nationwide deployment of antiaircraft surface-to-air missiles. Some of our intelligence people believed, understandably, that those SAMs had some capability to A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

intercept our ballistic missiles. And the Soviets had a huge advantage in large land-based ICBMs. We were concerned that in a crisis a Soviet attack with their large ICBM force might attrit our Minutemen and bombers enough that their ballistic missile defenses, even beyond their surface-to-air missiles and a single system at Moscow, could neutralize a counter-attack by our surviving nuclear forces. Such a scenario could cause our European allies to lose confidence in us in a crisis, for example, over Berlin. They were already facing massive Soviet land forces, and we felt that a Soviet ballistic missile defense deployment would have been simply too much.

At the time we also worried that a Soviet ABM capability would have emboldened Soviet decision- makers to take greater risks or act more aggressively in a crisis. And finally, and decisively, as far as Henry Kissinger has been concerned in his writings, the Nixon Administration was having an extraordinarily difficult time getting Congress to back ABM deployments, even the most modest ones scaled back to protect the Minuteman fields. So in those circumstances, many of us felt that the ABM Treaty with the Soviet Union was making the best of a bad situation. Even in 1972, however, none of us who were involved in arms control actually believed that America’s vulnerability was something desirable. The mutual side of Mutual Assured Destruction was deemed a price we had to pay, but certainly not a positive benefit.

Now, this world into which the U.S.--Soviet ABM Treaty was born over a quarter of a century ago is gone with the wind. The centerpiece of our deterrent is at sea in the Trident submarines, and invulnerable to Soviet attack by ICBMs, large or otherwise. There are no Russian land armies 100 miles from the Rhine; indeed, there really aren’t any effective Russian land armies any place at all. The only crisis in Berlin is over real estate prices. And we have no need to keep the Russians from deploying ballistic missile defenses at least oriented toward their south and turbulent South Asia. Indeed, we may well have reason to help them do so. Europe feels on some issues “decoupled” from the United States, but it’s all about genetically modified foods and banana tariffs; it has nothing to do with Russian strategic superiority.

Now, some object that even though today’s circumstances are different, in the absence of an ABM Treaty, the Russians will build more offensive missiles to penetrate any defenses that we build, and that this will re-ignite an offensive arms race.

Let’s look at the reality though. Assume for a moment that the 1972 treaty is no longer in place and that we deployed ballistic missile defenses. In order to counter them, the Russians began to add to their numbers of missiles and warheads. Suppose they withdraw from the START II Treaty that they ratified. Suppose they refuse to continue with START III? So what? The reason we pursued the START Treaties to limit strategic offensive launchers and warheads was not because we worshipped numerology or we thought for some reason 5,000 strategic warheads in Russia was going to be massively less of a problem than 10,000. We were focused on trying to protect our Minutemen and the bombers, trying to protect the U.S. strategic deterrent. We were trying to reduce the likelihood that Soviet generals might think they could succeed with a first strike. But today it’s much more important that custody and command and control of Russian weapons be sound, rather than whether the Russian Strategic Rocket Forces have slightly more or slightly fewer missiles or warheads. The Russian’s overall strategic problem today--and I take the point that it may not affect their nuclear modernization substantially --is poverty. The reason they want to move from the START II levels of 3,000 to 3,500 warheads down to START III with 2,000, 2,500, or even lower, to 1,500, is because they want equality on the cheap. They don’t want to have to modernize more than they need to in order to be equal to United States’ levels, even considering those undeployed weapons that they may keep on the side.

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The Clinton Administration thwarted President Yeltsin’s 1992 effort for Russia to obtain strategic equality with the United States through cooperation on ballistic missile defenses. The next President will be in a position to try to recapture the spirit of 1992. How might he do that? Well, the 1992 approach could be very promising. But it can’t be pursued now, if it ever could, through amendments to the ABM Treaty.

There are two reasons. The first is the issue of treaty succession. Multilateral treaties have their own rules of succession; and certainly Russia has succeeded, for example, to the Soviet Union’s UN seat and taken many of the former USSR’s positions in other multilateral treaties. With bilateral treaties, succession is generally automatic. That is, Russia could succeed to the position of the Soviet Union automatically, but only in a very limited class of treaties. They’re called dispositive treaties, treaties that dispose of territory. If the Soviet Union had sold the northern territories to Japan, Russia, as the successor state to that portion of the Soviet Union, would be bound, even without Russia or Japan reaffirming. But most bilateral treaties require each country to reaffirm in order for a successor state to be adopted. Let’s say that Russia has decided it reaffirms its position as a successor state to the Soviet Union. Has the United States reaffirmed? That question is governed not by international law, but American Constitutional Law. One of the clearest responsibilities stated in the Constitution, and one of the only three that give Congress a substantial role in foreign policy --the others being appropriations and Senate confirmation of appointees--is the Senate’s power to advise and consent to treaties. It has been true now for well over a century that even very small changes to solemn treaties get submitted to the Senate for its approval. So I would say that, yes, the 1972 treaty may well, at some point, be binding between the United States and Russia. It would be so as soon as the United States affirms it, which is to say, as soon as two-thirds of the Senate goes along with the Administration’s position. But that is not likely to happen any time soon.

The second reason is that Russia and the Administration have now combined against the Senate to, in effect, make the ABM Treaty unamendable. They did this when the Administration proposed that the successor states to the Soviet Union should not be merely Russia, but Russia, Ukraine, Belarus and Kazakhstan. This was negotiated in 1997, and that provision for the ABM Treaty was tacked on by the Russian Duma to its ratification of the START II Treaty.

So now it is the situation that in order for the United States to obtain the benefits of the Russian START II reductions, it must agree that the successor states to the Soviet Union are not only Russia, but also Belarus, Kazakhstan and Ukraine. Now, this includes the execrable Lukashenko regime in Belarus, which is closely tied, financially and in all other ways, to the most unreconstructed parts of the Russian military industrial complex. So through corrupt means or whatever, Lukashenko now has a veto over ABM Treaty amendment, thanks to the White House and the Russian Duma. Under those circumstances, I don’t see how anyone could suggest that the ABM Treaty is realistically amendable.

In my view, the Senate should turn away from both affirming the 1972 treaty, and if necessary, even the START II reductions. We should, however, in my judgment, invest a great deal of effort in trying to preserve a cordial working relationship with Russia on strategic matters, but without the ABM treaty. We have many important matters on the agenda. Helping them place their fissionable material under secure control, the essence of the Nunn-Lugar program, working on preventing proliferation of weapons of mass destruction and other missile technologies, working on anti-terrorism, cooperating against crime and corruption, helping on debt management, and promoting outside investment. That’s a major agenda that we need to pursue with Russia.

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And there is one area where we and only we can help them regain something extremely important to them, namely, their national pride. They desperately want to be regarded as retaining at least a share of the former Soviet Unions super-power status, and our history of arms control negotiations with them creates an understandable expectation on their part that we will at least consult with them and discuss major strategic shifts and strategic programs. The key question is: how could a new president both defend the country effectively against rogue state threats, and still let Russia maintain a sense of strategic equality?

First, our principal concern really should not be, any more than it was back during the Cold War, a “bolt from the blue” attack. The problem is not that Kim Chung-II or Saddam Hussein may wake up some morning and randomly launch a missile at the United States, although that is not absolutely impossible and is something to think about. The major problem is blackmail. The major problem is that by holding the United States at risk with intercontinental ballistic missiles, North Korea, Iraq, Iran, and at some point other states such as Libya, could checkmate our ability to prevent them from doing crazy things aggressively in their own regions.

So we have to be certain that a rogue state would know that our defenses could be used in times of political tension. And for this reason, coming back to the ideas proposed for land-based or surface-based boost- phase intercept, I would say that localizing a deployment of boost-phase interceptors, by putting them on land or on aircraft near the rogue state, is not a sound approach over the long run, although some interim measures of that sort might be considered. The U.S. is developing an aircraft-carried laser, which can intercept ballistic missiles in boost phase, and it may have some utility for battlefield circumstances in the future. But the basing requirements are such that if one is trying to deal with Iran and Iraq, you cannot have large laser-carrying aircraft perpetually orbiting over the Caspian Sea, Southern Russia and the like. That severely limits this kind of system’s effectiveness.

The idea of basing boost-phase interceptors on the ground, particularly in Russia, say north of North Korea or north of Iran, would create substantial uncertainties about whether we would be able to use them when needed. The degree to which the space station has become bogged down in our dependence on Russia is instructive in this regard.

Now, sea-based boost phase interceptors, such as based on Aegis ships, might well be a very reasonable way to deal with North Korea, but it’s not going to be effective in dealing with Iraq or Iran. If you want to see an American naval officer collapse with laughter, talk to him about operating in the Caspian Sea.

One is thus driven, I believe, to consider moving toward deploying boost-phase intercept in space. Of course it was precisely the possibility of space-based lasers or other directed energy systems that drew the derisory label “Star Wars” following President Reagan’s 1983 speech. But there has been on the drawing boards for some time a considerably less exotic version of space-based boost-phase intercept, namely kinetic energy interceptors. These would be very small satellites placed in low-earth orbit, equipped with enough fuel that they could move into the path of a ballistic missile as it was rising, when the missile was big, hot, and slow. Collision would destroy the missile.

Now, small and relatively simple interceptors of this sort were named “Burros” when they were first thought up by one of their inventors. The distinguished physicist, Greg Canavan at Los Alamos, named them Burros because they were to perform only one task and to do so quite dependably and not be all that sophisticated. Burros were designed to defeat most missiles of more than a few hundred miles in range, as well as countermeasures, because the countermeasures would be still be on board the missile when it was A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

intercepted. A more ambitious version of this small satellite interceptor program, called Brilliant Pebbles, was designed to deal with advanced Soviet threats, such as ICBMs with shortened boost phases, and it was receiving major emphasis by the end of the Bush Administration.

The Clinton Administration canceled all work on these small satellite interceptor programs as soon as it came into office, but there has been some progress anyway. Some of the national missile defense tests with hit- to-kill interceptors have relevance to this type of boost-phase intercept. There was some progress during the Bush Administration on Brilliant Pebbles. And most interestingly, commercial launch systems for low-earth orbit communications satellites such as Iridium and Teledysic have produced technologies for launching large numbers of very small satellites from a single booster with relative ease. A defense system such as Greg Canavan’s Burros would have some major advantages in dealing with our allies. One major problem with the Administration’s system is that some of our allies see it as an expression of “Fortress America” since it protects only the United States. But boost-phase intercept based in space could intercept any ballistic missile of more than a few hundred miles in range as long as the missiles were launched within latitudes over which the small satellites were passing. Thus, such a U. S. system could deal with threats to Europe from the Mideast, or it could deal with threats to Japan from North Korea. Certainly no “Fortress America.”

And in addition--and this is an important point--the fact that this type of space-based boost-phase intercept can be localized, can be designed to cover only part of the globe, leaves open at least the possibility of an agreement with Russia. Since the small satellites would be in low earth orbit, they would continually circumnavigate the globe in an area determined by their inclination of their orbits. For example, if a satellite were inclined at 43 degrees, it would never travel over any part of the globe north of 43 degrees north, or for that matter south of 43 degrees south. Now, virtually all of the areas which the United States at the present would like to cover against ballistic missiles are south of 43 degrees--North Korea, Iran, Iraq and so on. Virtually all of Russia lies north of 43 degrees north, and the areas where its ICBMs and submarines are based are considerably north of that.

These facts raise some interesting possibilities. In the Naval Institute Proceedings issue earlier this year, the veteran strategist and friend of many in this room, Leon Sloss and his co-author Benson Adams, proposed replacing the 1972 ABM Treaty with a new U.S.--Russian ABM Reassurance Treaty. That treaty looks to me very much like what the Bush Administration was heading for in 1992 with its very substantial amendments to the 1972 treaty. Essentially, the Sloss--Adams idea would be to have only one provision that mattered, that the two countries agree not to deploy ballistic missile defenses against one another. There would also be exchanges of information and a joint warning center and the like. If we combine this concept with Greg Canavan’s, it seems at least plausible to propose to President Putin that we not deploy space-based boost-phase interceptors or other interceptors vis-a-vis one another, and that this posture could be part of a new treaty with Russia. As part of this package we could offer even some incentives, such as giving launch capabilities to the Russian military industrial complex as an employment incentive. We could even offer to help Russia to some extent with its own defenses, for example, against threats from the Middle East; but we should avoid depending on Russia for any of the technology of this system or for sharing aspects of the technology that are sensitive. It is very much in our interest for Russian early warning and many aspects of Russian defenses to be sound. We do not want the Russians to mistake the launch of a Norwegian research rocket, for example, for an American submarine ballistic missile launch, which once nearly occurred. And there is no particular reason why we should not offer even to use an American space-based system of this sort to protect Russia itself if Russia so wished. As part of an overall package in dealing with Russia, I think we have some flexibility with respect to offensive limitations.

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The START Treaties, II or III, inherit all of the baggage of the Cold War, during which what we were mainly interested in doing was restricting the Soviets’ ability to attack our Minutemen and bombers. Today, with the Trident force at sea, we can afford to be more flexible about numbers and basing modes of our offensive forces.

Now, suppose Russia should agree to such a package and we signed a new ABM reassurance treaty, and then subsequently Russia turned totalitarian and hostile? We would not be limited in those circumstances. All these treaties have their withdrawal provisions. We could withdraw if necessary and then deploy in polar orbits either Burros or something more advanced, Brilliant Pebbles or space-based directed energy weapons in order to protect ourselves against Russia as well.

In the meantime, it seems to me that we would want to continue current plans to deploy theater missile defenses, particularly on Aegis ships. These defenses should not be limited by the demarcation agreement the Administration negotiated with the Russians in 1997. And since Aegis would almost certainly become available before any other type of defenses, we might be able to use it in a boost-phase mode to protect ourselves at least against North Korean ballistic missiles for an interim time.

As for Mr. Putin, he would need to decide. He would need to decide where Russia’s interests really lie. He cannot both help Chinese missiles obtain free passage across the Pacific and accommodate our need to protect ourselves from the likes of North Korea and Iraq and Iran. As far as our own relations with China are concerned, we owe China absolutely nothing on this point. We have no moral, political or any other reason to make life easy for Chinese missileers. China is today simply seeking a free ride across the Pacific for its ballistic missiles on the back of an old U.S.--Soviet treaty. How do you say “chutzpa” in Mandarin?

[Laughter.]

If we deployed space-based defenses of any kind, China would, of course, threaten to build more ballistic missiles. But it would be an idle threat, since it would be a costly race for them, and one from which, I believe, in all probability, they would turn away; because we could add small space-based missile interceptors, these very small satellites, far more cheaply than they could add missiles.

This point applies to rogue nations as well. Critics of ballistic missile defense are fond of claiming that if we defend ourselves, other countries will just be encouraged to build more offensive missiles to overwhelm them. Well, when you’re talking about the Administration’s easily defeated bullet-against-bullet system that’s exactly the serious problem. But if defenses are relatively cheap and effective, the incentives are reversed. Today every two-bit rogue is moving sharply to build up his ballistic missile force because he can be assured that nothing will interfere with such missiles in reaching their targets. Once launched, they’re invulnerable. Consequently, they’re very valuable. Effective defenses would reverse these incentives. They would discourage, not encourage, investment in offensive missiles.

Mr. Putin’s other major concern would be that such a deployment for the United States would obviously put us in a strategically very dominant position. Even when Britain ruled the waves after its victory in 1815, throughout the 19th century it did not have the capability to sail back and forth in front of each of the world’s ports to decide who got to use the seas. But an American capability of the sort I have described, would

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org essentially give us that type of capability in deciding who did and did not get to launch ballistic missiles, and who did and did not get to move into space.

A space-based kinetic energy intercept capability would give us an extraordinary leverage. Russian leaders would know that we could maintain the ability to launch enough small satellites in relatively short order to cover northern latitudes if their government turned against us.

There is no avoiding the fact that for the next President to defend the country effectively, he will need to decide what his first priority is. The President would say, in short, that as strategic circumstances change, so must strategy. And arms control agreements have to conform to strategy, not the other way around. After eight years of a President more Wilsonian than Wilson himself, this would be a substantial change.

Will Mr. Putin eventually buy this package? I don’t know. He’d have to choose. Option 1 for him is unique treatment as a super power in a new treaty-guaranteed relationship with the United States, one in which we do not defend against Russian missiles; and includes investment from the West, being welcomed to the Western family of nations; and protection of Russia’s territory from ballistic missile attack by other states. Option 2, he has a quasi-alliance with China, cool relations with us, and the risk that the new U.S. President and Congress will refuse to accept any Clinton Administration Russian agreements and simply go ahead and deploy what defenses the United States believes it needs against Russia as well as rogue states.

In defending this country of ours, the next American President has plenty of cards to play, if he will but play them. Thank you.

[Applause.]

DR. LONDON: We have time for a few questions. Please use the microphone if you care to ask a question.

REP. WELDON: Jim, an excellent talk and very, very stimulating. But conspicuous in it, and perhaps by on purpose, was an omission of the Chinese factor. Should such an anti-rogue missile deployment also be capable of handling a Chinese first or second strike?

MR. WOOLSEY: If we deployed the way I described, and 43 degrees is the northern edge of North Korea, and is effectively, except for the very southern caucuses, the southern edge of Russia, small interceptors in that belt from 43 degree north to 43 degrees south, would cover all of the rogue states, and they would cover most of China, but about 10 degrees worth of China sticks up in Manchuria and Inner Mongolia north of that line.

It’s a complicated issue because some types of these interceptors, depending upon the amount of fuel and the like, can intercept some types of missiles slightly north of their orbit, assuming the missiles are being fired to the north. I think there would be no real chance that a system of the sort that Canavan has hypothesized could intercept Russian missiles launched from considerably further north, but China, it would in fact cover most of China, and possibly all but possibly not. It’s a close case.

If one wanted to defend against China as well as the rogue states, one might have to do something in addition to what I have described. Certainly one thing that could be done is more technologically sophisticated, A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

faster interceptors with better sensors, the sort of thing that was called Brilliant Pebbles in the Bush Administration. And you’d need to talk to a scientist like Greg to say whether or not if deployed at 43 degrees or so they would be able to get all Chinese launches even from the north of China. I’m just not absolutely certain.

FROM THE AUDIENCE: You have mentioned that the American nuclear strategy forces will be sea- based. I heard the other day on Russian television that Russian strategy group forces will all be sea-based. Now, you mentioned Chinese strategy capabilities. Is it true that China is about to buy a Russian-made Typhoon Class nuclear strategic submarine with 200 warheads, which is capable of submerging up to 1,000 meters-- and I understand it would be not detectable when approaching any coast? What, then? To what extent could these satellites be helpful in that case?

MR. WOOLSEY: My view of Russia and China strategically at sea is to implicitly tell them, “Come on in, the water’s fine.” I speak here as a former Under Secretary of the Navy and somebody who has followed naval matters closely for many years. It’s not quite fair to say the world’s oceans are, as the Romans said of the Mediterranean, mare nostrum, “our sea.” But we are much better than anybody else at sea, along with our British colleagues who work very closely with us. And although in time one might need to be concerned with such threats as Chinese submarine-launched ballistic missiles, it takes a long time for a country to build up a navy that really works and to build the operating experience that’s required to operate ballistic missile submarines quietly and effectively. If an evolution of that sort occurred and we needed to protect ourselves against China, it would likely be decades down the road. And in those circumstances we would be able to look at later generations of ballistic missile defenses, not only boost-phase intercept from things like Brilliant Pebbles, but also directed energy.

As far as Russia basing its ballistic missile defenses at sea as a complement to its offensive capability... Well, Russia is going to have to get busy and build submarines and SLBMs to replace the ones that are wearing out if it wants to have more than a handful of ballistic missiles at sea. Although it may choose to do that, I have long been of the view--as I said about China--that this is our area of strategic dominance and superiority. If Russia wants to come to sea more than to be on land, we’ll be out there waiting with our sonars and other sensors.

SENATOR THOMPSON: Jim, could I ask a little bit more about the arms race that people use as an argument against NMD, and specifically whether or not you think the Chinese would do anything much differently? You mentioned that it would be too expensive for them, but on the other hand isn’t there some indication that they’re going to be expanding anyway, and is there any indication that they would not, absent NMD, go in that direction?

MR. WOOLSEY: I think even in the absence of NMD the Chinese are going to be moving away from the fixed ICBMs that they now have, toward a new generation of mobile ballistic missiles, both for short-range and theater missiles targeted against Taiwan principally. They may include ICBMs and possibly at some point a submarine launched ballistic missile version to go on either a Russian submarine that gets sold to the Chinese or one of their own construction. And this modernization of the missiles to make them mobile will make it much harder of course for us to find them, and that would make it much harder for us to preempt in a crisis. That is coming. The Chinese are going to do that, I think, anyway.

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They are also going to benefit from some purchased and some stolen technology and be able to design small warheads that would be able to go on these mobile ballistic missiles. I think it’s simply a question of numbers. I think it’s probable that the Chinese would threaten, perhaps quite loudly, that if the U.S. deployed ballistic missile defenses, they would build a much larger number of their new land mobiles than they otherwise would. But as I said with respect to Russia, the basic problem is not so much numbers. The basic problem is command and control and custody, and I think that it was an error to make numbers the exclusive focus in the late ‘60s and early ‘70s because we were trying to keep the Russians from compensating for the relative inaccuracy of their ICBMs by having large numbers of warheads, particularly large warheads, even if relatively inaccurate.

In helping other countries like Russia and perhaps China in such matters as nuclear custody of fissionable material, we want the strategic rocket forces to be well disciplined, instead of their personnel starving and out digging potatoes, as some of them were a year or two ago. Command and control and custody are more important than whether the Chinese have 300 warheads or 200 warheads or 100 warheads. And I think we shouldn’t spend a great deal of our negotiating capital or strategic emphasis to get the Russians to have 2,000 warheads rather than 4,000 or the Chinese to have 200 rather than 400. I just don’t think that is what ought really to drive our strategic thinking.

FROM THE AUDIENCE: Jim, I find your proposal intriguing and look forward to circulating it to the 1,000 delegates currently assembled in Philadelphia for our International Missile Defense Conference, and we will do that tomorrow when we get the piece.

But I have a question about an accidental launch that could occur in Russia, as we saw in ‘95 with the response to the Norwegian research rocket, and I assume that you’re putting a stronger emphasis on the command and control angle, and the detection capabilities of the Russians to perceive and be able to differentiate. Is that what your response would be? Because, obviously, this system would not be able to deal with an accidental launch.

MR. WOOLSEY: That’s right. That’s the tradeoff. If you offer Russia a deal of the sort I described, you leave yourself open to a Russian accidental launch, and you have to deal with that problem exactly as Congressman Weldon suggested. You have to deal with it by things like assisting them in some ways with early warning so they don’t mistake Norwegian sounding rockets for U.S. submarine launched ballistic missiles, with joint warning centers, with suggestions about command and control and the like. It’s a paradox that some of the things that Russia would need in order to be able to use nuclear weapons effectively also are the same things they need in order to maintain clear and solid command and control of them. But the one thing we don’t want in the event of some political crisis or regional split off or something like that in Russia in the future is for there to be any lack of clarity about solid and clear command and control.

And so that is the tradeoff. If one needs to be able to defend unilaterally against accidental Russian launch, then one either needs a system which covers the entire globe from space, the sort of system I described we could deploy at some later point. Or one needs a system based in the United States, a mid-course intercept system of the sort the Administration is suggesting, but one that would not be spoofed by Russian decoys and the like, that might well be deployed in any accidental launch as well as an intentional one. I have never really thought that defending against a Russian accidental launch that was primitive enough to be able to be intercepted by a system of the sort the Clinton Administration is proposing was one of the major things I would want to design a strategic defensive system around. A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

MR. GAFFNEY: Jim, one of the most striking things of what you said, I think, at least to an audience that has probably not focused as much as you have on the importance of space as a national security theater of operations as well as an economic area of activity, is your comment about the utility of this kind of space-based interceptor capability to allow the United States to control access to space, not just weapons, but for other purposes as well.

And I wondered if you were aware of an effort that the Clinton Administration has allowed to get under way in the Conference on Disarmament in recent months, in which they have begun a negotiation about space control for the purposes of, presumably, producing a treaty that would prohibit just such kinds of leverage, as you put it, from being brought to bear. Do you think that would be an advisable direction for us to go as a country?

MR. WOOLSEY: Stop them before they negotiate again.

[Laughter.]

MR. WOOLSEY: No, that’s news to me, Frank. I wasn’t aware they were off on that one too.

DR. LONDON: In the absence of other questions, Jim let me thank you very much. It was very kind of you to give us your insights.

Let me thank those of you who attended. If you are interested in the report that has emerged, please give your card to one of the interns, one of the fine interns we have outside. We’ll make sure that you get a copy of this Hudson Institute Report when it’s published. Let me thank those who participated. Let me thank members of the panel, and let me thank you who attended this event.

[Applause.]

The conference concluded.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org

FURTHER SUGGESTED READING ON RUSSIAN AND THE UNITED STATES

The following list includes books published by participants in this study group.

Constantine Menges, Transitions from Communism in Russia and Eastern Europe: Analysis and Perspective (University Press of America, 1993)

William Odom, Commonwealth or Empire: Russia, Central Asia, and the Transcaucasus (Hudson, 1996)

William Odom, Collapse of the Soviet Military (Yale University Press, 1998)

Keith Payne and Colin Gray, Deterrence in the Second Nuclear Age (University of Kentucky Prfess, 1996)

Robert Pfaltzgraff, ed., War in an Information Age: New Challenges for U.S. Security Policy (Brassey’s, 1997)

Richard Pipes, Communism: The Vanished Specter (Universitetsforlaget, 1994)

Richard Pipes, The Russian Revolution (Vintage, 1991)

David Satter, Age of Delirium: The Rise and Fall of the Soviet Union (Knopf, 1996)

Peter Schweizer, Victory: The Reagan Administration’s Secret Strategy that Hastened the Collapse of the Soviet Union (Atlantic Monthly Press, 1994)

Report of the Speaker’s Advisory Group on Russia: “Russia’s Road to Corruption: How the Clinton Administration Exported Government Instead of Free Enterprise and Failed the Russian People.” Rep. Christopher Cox, Chairman.

A Special Report of the U.S.-Russia Relations Study Group June l, 2001 Sponsored by Hudson Institute, Inc. http://wwww.hudson.org