Seize the Moment (11 page)

In a desperate effort to find a winning formula, Moscow had traded one Afghan ruler for another until choosing President Najibullah, who earned his stripes as head of the KhAD, the Afghan KGB, where he personally oversaw torture and mass execution of suspected opponents. It is ironic to note that when I visited Moscow in March 1991, KGB chairman Kryuchkov brazenly described the Kremlin's designated killer as “being too humanitarian.” Incredibly, some
U.S. journalists subsequently swallowed this propaganda line in referring to Najibullah as a “moderate.”

The new governments in the former Soviet republics should take decisive action. Since the Soviet withdrawal in early 1989, Gorbachev has obstructed U.S.-Soviet talks to devise a just political settlement of the conflict, while keeping Najibullah's government alive through $300 million in aid each month and thousands of Soviet advisers who not only provide the regime's backbone but also man the SCUD missile bases around Kabul. The U.S.-Soviet agreement to cut off military aid to both the Kabul regime and the resistance and to hold U.N.-supervised elections is flawed. Kabul has stockpiled at least two years of arms and ammunition, while the resistance scrapes by from day to day. A just settlement can only be assured if the elections are preceded by the removal of Najibullah from power and the creation of a neutral transition regime, headed by the former king of Afghanistan, Zahir Shah, that would take full control of the state—including the armed forces and security services—and that would conduct the elections for the new government.

The new leaders of the former Soviet Union—particularly in the republics—should have a natural sympathy for the plight of the Afghan people. The courage of the Afghan resistance was a major factor in precipitating the collapse of the Soviet empire in Eastern Europe. When the Soviet army failed to win decisively in Afghanistan, the peoples of satellite states recognized that their historic opportunity had arrived—that the Kremlin lacked the will to pay the price of empire. Within two years, Soviet democrats had won the same battle. As a spark that started the process, the cause of the Afghan people should receive top priority in our new relationship.

As Yeltsin put it, “Moscow can't afford foreign charity.” The recently announced pullout of military and intelligence
personnel from Cuba and cutoff of economic and military aid does not go far enough. Much of Moscow's assistance to Castro has come not through grants but subsidized trade deals in which, for example, the Soviet Union purchases Cuban commodities at prices far above the free-market levels. It is time to let Castro sink or swim—something which thousands of Cubans trying to escape from the last bastion of communism in the western hemisphere have tragically been forced to do.

Escalating espionage and active measures.
If the cold war has ended, Gorbachev never got the message to the KGB under Kryuchkov. The carefully cultivated international image of a kinder, gentler Soviet Union is starkly contradicted by the escalation of hostile intelligence activities directed at the United States and our allies in recent years. Every great power needs an intelligence service capable of clandestine collection of information about actual and potential threats to its security, but the KGB's activities—both in scale and type—extended far beyond the legitimate requirements of a normal country.

Like the Soviet military, the KGB appears to operate outside any budget constraint. The entire U.S. intelligence community—which includes not only the CIA but also the Defense Intelligence Agency, the National Security Agency, parts of the Federal Bureau of Investigation, and other agencies—employs approximately 35,000 people. The ranks of the KGB and the GRU, the Soviet military intelligence service, number over 900,000. Moreover, according to Western intelligence services, the level of Soviet espionage activity has gone up, not down, in the Gorbachev years, despite the reduction in international tensions.

A key focus of Soviet espionage has been the theft of Western technologies. In the 1930s, the Kremlin sought to boost
the Soviet economy by stealing scientific knowledge and technologies—from basic research to blueprints for turnkey factories—through spies. In the 1970s and 1980s, the Soviet intelligence services returned to this practice with a vengeance, targeting not only military and dual-use but also nonmilitary technologies. The CIA reported that in the early 1980s Soviet intelligence services targeted 3,500 items annually. The KGB's Directorate T, which specializes in acquiring scientific and technological data, orchestrated efforts that secured about one-third of these items every year. In the Gorbachev era, intelligence officers in Directorate T were not furloughed but rather worked overtime.

In addition, the former Gorbachev government continued a vigorous program of so-called “active measures,” covert political activities such as disinformation designed to advance Soviet foreign policy. The KGB has become expert in the use of forgeries to discredit Western governments and in planting false stories in the world's newspapers. One current line of disinformation, which has surfaced in the news media throughout the third world, claims that the AIDS epidemic started after the virus was created by Pentagon experiments to develop new biological weapons. Another widely disseminated KGB fabrication asserted that the United States systematically buys Latin American babies for use in medical experiments and for organ transplants. With the KGB now controlled by Yeltsin's Russia, we can expect a rapid termination of Moscow's disinformation and espionage campaigns.

These are the most important changes that we must insist upon. While we can pursue far more ambitious initiatives with the new commonwealth than was possible when Gorbachev ruled the Kremlin, the new post-Soviet leadership must overhaul its military and security structures from top
to bottom so that they will uphold rather than subvert democracy.

All of these practices must stop before we can forge ahead in a wider cooperative relationship with the new leaders in Moscow and the former Soviet republics. Yeltsin and the democrats around him will not need a hard sell. They have already begun to implement many needed changes and will be receptive to our suggestions. But we should not provide any economic assistance until their foreign policy has made an irreversible break with the past.

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Once the problems of the past are cleared from the agenda, we can turn to the opportunities for wider cooperation for the future. In light of the dire crisis in the former Soviet Union, Western assistance to the newly independent republics must be the initial focus of our partnership.

We must understand when such aid would help and when it would hurt. Under Gorbachev's previous government, Western aid would have undercut, not bolstered, the prospects for reform. Western proposals for unconditional aid or for incremental assistance linked to partial reforms were totally counterproductive, encouraging Soviet policymakers to lobby Western leaders rather than get on with the business of radically reforming their own economy.

In my conversation with Gorbachev in 1991, I discovered that he retained his steadfast faith in the flawed tenets of Marxism-Leninism. I had noted his observation in
Time
magazine in May 1990 that “as we dismantle the Stalinist system, we are not retreating from socialism, but we are moving toward it.” I had assumed, however, that his thinking had grown as the Soviet economy had shrunk. I was thus surprised by how adamantly he defended the Soviet Union's
socialist system. He argued that Soviet society was profoundly “different” from those in the West and that the tradition of “communes” in rural Russia had created a setting conducive to state-directed economic life. He made no bones about his intention to hew to the straight-and-narrow path of socialism. The sad truth was that a college freshman who passed Economics 101 knew more about the workings of the market than the former president of the Soviet Union. While Gorbachev was a brilliant politician, he knew very little about economics—and what he did know was wrong.

His economic mismanagement brought catastrophic consequences upon the Soviet people. Industrial production fell by 20 percent in 1990 and an estimated 40 percent in 1991. Total GNP declined approximately 15 percent in 1991—worse than that of the Great Depression in the United States. Inflation, which exceeded 20 percent in 1990, soared to over 100 percent in 1991 on the heels of a 300 percent increase in the money supply. The 71 million Soviet citizens who lived on $15 per month or less were pushed to the edge of destitution. The monetary “overhang”—the pool of pent-up buying power spawned by inflated wages and the absence of goods to purchase—mounted to an estimated 450 billion rubles. The red ink of the state budget ballooned to 10 percent of GNP in 1990, more than double the level of the U.S. federal deficit. Over 50 percent of record Soviet food harvests were wasted, either rotting in the fields and in transport or stolen outright.

The reason for the failure of Gorbachev's economic reforms can be summarized in two words: half measures. For seven years, he futilely searched for a workable halfway house between the free market and state socialism. No one can fault him for a lack of ingenuity. On twelve occasions—nine during the last two years alone—Gorbachev and his
advisers tabled a new proposed economic plan to rescue the Soviet system. But Gorbachev was tilting at windmills. He was trying to revive an economic system that was dead beyond resurrection. Rapid and self-sustaining economic growth has occurred only in countries that respect the right of individuals to own private property. Yet as late as mid-1991, he continued to denounce private property, remarking in an interview, “People do not want to work in the factory whose owner has accumulated money in some unknown way. Small private property might be allowed in trade.”

In working with the new noncommunist leaders in Moscow and the former Soviet republics, we should not allow the euphoria of their political victory to cloud our judgment on the issue of economic reform. Along with Western Europe and Japan, the United States should provide economic aid once needed reforms are in place. But we should stipulate clear conditions that must be met before major aid could be considered, both for our sake and for that of the reformers in the former Soviet Union. A banker does a borrower no favor by making him a bad loan.

Without the root-and-branch dismantling of the socialist system, any Western aid to Moscow would be wasted. With its estimated GNP of $1,900 billion—the equivalent of the U.S. economy in 1977—the former Soviet Union's fundamental economic problem cannot be a lack of resources. Instead, it is a misapplication of those resources and the absence of proper economic incentives for individuals and enterprises. Until the new noncommunist leadership tackles those issues, no amount of Western aid will bring the economy out of its present nosedive.

Those in the West who favor aid schemes often oversimplify matters by calling for a Marshall Plan for the former Soviet Union. No legitimate parallel exists between the postwar
reconstruction of Europe and Japan and the post-cold-war requirements of the former Soviet Union. The Marshall Plan—which provided $13.3 billion in aid over five years—simply jump-started the world's war-battered free-market economies. While they needed new infrastructure and new investment capital, they already had the basic market institutions and centuries of entrepreneurial experience. In the Soviet case, markets must be invented. Private property, free prices, capital markets, experienced business managers, even personal checkbooks—none of these existed in the Soviet system. Providing economic aid before Moscow and the former Soviet republics revamp their primitive economic institutions would be like pouring water into a leaky bucket.

Even the most enlightened reformers are daunted by the obstacles to overhauling their economy. First, no country has ever undergone a transformation from a command to a market-based economy. The trillions of economic decisions made daily in a market economy had been senselessly concentrated in the endless gray buildings of the Moscow bureaucracy. Untying the proverbial Gordian knot is simple compared to the task of decentralizing the Soviet economy without triggering total chaos.

Second, powerful vested interests—the Communist party apparatus and the central bureaucracy—are not only certain to oppose radical reform but are also fully capable of sabotaging its implementation. After the August 1991 revolution, the commanding heights of the Soviet economy were conquered by the reformers. But much of the battlefield, from ministries through enterprises, still remains under the control of the economic shock troops of communism. Those who had spent their lives shaking down the system will not take kindly to those who seek to shake it up. Communists in the apparatus are on the defensive. But if they close ranks, they could paralyze even the best reform program.

Third, seventy-five years of communism have instilled a pervasive egalitarian ethic and a resistance to change in the average Soviet worker. He came to believe that each should be rewarded equally regardless of his productivity. In contrast to Deng's economic reforms in China, which gave millions of Chinese an equal opportunity to work their way out of poverty, too many people in the Soviet Union prefer a system that guarantees them an equal share of poverty. As one of Gorbachev's former top economic advisers put it, “Ideology has become psychology.”

While the new noncommunist leadership deserves our help in crafting a coherent reform program, we must recognize that the West cannot save the Soviet economy. Only the nations of the former Soviet Union can save themselves. The Soviet system was bankrupt, and many of the new postcommunist leaders understand the need to place it in voluntary receivership. While the reform process will involve wrenching economic dislocations, the Soviet republics must adopt the reforms that will provide the incentives for the people to work their way out of bankruptcy. We should provide whatever help they need to steel themselves for this challenge but should refrain from any assistance that would make them back away from it.