Old Dominion University Graduate Programs in International Studies The Future of NATO Working Paper 95.4 Dec. 1995

Russia: What Next? by William E. Odom This paper is based on a presentation made by the author at Old Dominion University in Norfolk, Virginia on November 2, 1995. Series Editor - Simon Serfaty Associate Editor - Tom Lansford The Future of NATO This paper was prepared for a series of round table discussions, entitled The Future of NATO, held at Old Dominion University during the 1995-96 academic year. This Project, directed by Dr. Simon Serfaty, brings together leading analysts in the field of transatlantic relations as well as academics and military officers from the NATO countries. The papers and related meetings are made possible by generous grants from NATO (Office of Information and Press, Academic Affairs), SACLANT and Old Dominion University.

The optimism over U.S.-Russian relations that surfaced at the end of the Cold War is increasingly muted as an ever-larger number of issues divide the two nations. The pace of Russian domestic reform, both politically and economically, has failed to match western expectations. In addition, Russian nuclear sales to Iran, differences over Bosnia and North Korea, and the acrimonious debate over NATO expansion all exemplify foreign policy issues that may foreshadow difficult relations between the U.S. and Russia in the future. In short, the once promising rapprochement between the two states seems to have reached an impasse. The major issues that trouble the U.S.-Russian relationship can be put into two broad categories. The first major category involves Russian domestic matters and includes questions such as Russia's economic transition, its tentative steps toward democracy, and its problems with its own military. The American attitude toward these questions tends to be apolitical and as such are seen as technical problems amenable to solutions through proper policies which Americans believe they have the best technical expertise for devising. For example, Jeffrey Sachs' advisory effort on the economy and many other assistance programs offered by U.S. agencies and organizations as well as those of the International Monetary Fund (IMF) and World Bank deal with the economic transition problems. An equally wide range of programs deals with the restructuring of the government. U.S. and west European lawyers offer advice on the constitution, laws, and courts. Political scientists lecture Russians on how to create democracy, on federalism, on elections, on how to create political parties, and numerous other such matters. On the military front, the Nunn-Lugar law (named after its two main sponsors in the U.S. Senate) provides money to help assist in demilitarizing nuclear weapons, in understanding democratic civil-military relations, and other such issues. All of these programs take an apolitical, technical approach to Russia and its problems. By implication, therefore, these problems are all seen in the United States as difficult but solvable given the right tools and right expertise. In this regard, Partnership for Peace (PfP) and the Nunn-Lugar monies were supposed to be the means with which to demilitarize and to control their nuclear weapons. There have even been courses on civil-military relations taught at Harvard for the benefit of Russian officers and funded out of these monies. Unfortunately, often too little of this funding has gone for the anticipated purpose, and much of it has been siphoned off into programs that are supposed to address this challenge from the side, because of opposition and a general lack of cooperation from the various Ministries involved. Nonetheless, there still persists the notion that the majority of Russia's problems can be addressed through technical cooperation. The second category of issues includes Russian foreign policy actions that either displease us or run counter to American interests. Examples include selling nuclear reactor technology to Iran, the Russians military's insistence on revising the CFE treaty or abandoning it, Moscow's threatening rhetoric about NATO expansion, and its unhelpful diplomacy related to the Bosnian crisis. Although the present U.S. administration would like to deal with these problems as if they were mere technical challenges, their political content is all the more difficult to ignore as they create political contention in the United States. When examined from this perspective, it seems clear that over the last two years the U.S.-Russian relationship has gained a potential for serious misunderstandings which could, in turn, lead to a serious crisis. How did this trend come about? And what could be done to avert its potential damage? Admittedly, several explanations are possible. This essay, however, will argue that U.S. policies are based on assumptions about domestic developments in Russia which are fundamentally flawed: that Russia's progress in creating a market economy is occurring fairly rapidly; that Russia's political system is on the road to a liberal democracy which, although not perfect, still incorporates genuinely contested and periodic elections, relies on a inchoate constitutional order, and can avoid a serious reversal or return to totalitarianism; and, finally, that even though the Russian military may still be fretting about its loss of status and resources, it is adjusting to the new realities and defining a new role for itself within Russian society. In turn, these assumptions are encouraged by the policy advice provided by the Western scholarly community. Russia And Western Scholarship Evidence that these assessments and advice are erroneous abound. For one, an ample body of Western scholarship that deals with both democratic and free market transitions seems to have been overlooked in these forecasts over Russia's ability to make the transition to democracy and a market economy. In many cases, domestic developments - especially those dealing with the Russian military - are also often overlooked or simply not fully considered. Western scholarship suggests two different but compatible approaches to answering the questions over democratic transitions. First, an impressive body of literature emphasizes the "requisites" for democracy. Robert Dahl's eloquent work Polyarchy provides a detailed, yet succinct summary of these requisites and is supported and elaborated on by the work of scholars such as Seymour Martin Lipset. Comparing Professor Dahl's checklist to the Russian realities is compelling: one finds that none of the identified requisites are present in the Russian case. Remaining optimistic about the Russian transition demands either to ignore this theoretical work or to explain it away. A second approach to the rise of democracies might be called the leadership theory. Because there is nothing organic in this phenomenon, leaders have to decide to launch it. Dahl's study touches on this need. Samuel Huntington's more recent book, The Third Wave, also takes this approach -- so much so, indeed, as to prompt some people to call Huntington the "Machiavelli of democracy" since would-be leaders of democracies are presented with the kind of advice that The Prince offered to the rulers of the unstable principalities of northern Italy. Also important is Dankwart Rustow's work, which looked at how the older democracies of northern Europe were created. In the history of English political thought, for instance, it is not until the late nineteenth century that any philosopher even discussed the word democracy. A general pattern emerged in which nations seemed to almost "back" into democracy. The first step, after territorial boundaries were reasonably clear, was when the elites agreed to rules for deciding who rules, and for guaranteeing a few rights for all elites which the ruler could not abridge. A generation was required before this inchoate constitutionalism was internalized. Thereafter, the franchise for rights gradually widened, creating a liberal political development that eventually also became a democratic development. Countries like Britain, Holland, the Nordic states, and France, then, quite literally backed into democracy. If this literature is applied to the Russian case, we see at once that neither the territorial boundaries nor an elite consensus on the rules to decide who rules have been settled. Furthermore, the most elementary step toward a constitutional order has not yet been successfully taken. All Russian elites simply do not accept Yeltsin's constitution. Rights, civil liberties and a court system that protects and enforces democracy, naturally, cannot really take root until that is accomplished. Yeltsin for a time looked like a leader dedicated to creating democracy, but that assessment now looks less valid. Worse yet, no potential successor dedicated to a constitutional transition is making himself heard in Russia today. Yegor Gaidar, who might be an exception, is not a potential successor if the polling data and recent elections are to be believed. He will not be able to win the top office in the Russian state either by election or by force. Nor can we even be sure that a presidential election will take place as scheduled in 1996. Finally, Charles E. Lindblom's Politics and Markets is particularly relevant to Russia. It points out that there are no liberal democracies without well-established market economies based on laws for private property. Can a democracy rise in Russia in the present status of property rights? It is doubtful at best. Despite well-intentioned sales of state property and equipment and the embryonic steps toward the development of private businesses,the vestiges of the old statist system have yet to be significantly dismantled. This point, of course takes us to the issue of the market transition, and Aslund's assertion that this transition has essentially already occurred in Russia. Aslund makes his case based on neoclassical economic theory. If, however, we took the theories of Nobelist Douglass C. North, and looked at the institutional developments in Russia and the implications for what North calls transaction costs, we would see that although the old command economic system has collapsed, the new institutional developments are placing severe limits on the potential performance of the inchoate Russian market. Statism shows every sign of persisting for decades. We know from many other cases, especially Third World economies, that statism throttles growth and economic development and with it, democratic development. These observations do not pretend to offer a full elaboration of North's challenge to neoclassical economic theory, but his work on institutions, change , and economic performance offers theoretical propositions, based on impressive historical examples and long run performance records, that are applicable to the contemporary Russian case. When the state's allocation of property rights significantly obstructs a competitive market and creates institutions that keep transaction costs significantly high, economic performance will be poor. North cites the example of France and Spain versus the Netherlands and Britain in the 1700s and 1800s. What was the major difference in economic development? His theory of a state is that the state is a system for allocating property rights. Kings tried to make the best deal they could for their own revenues in allocating property rights. The sheep growing corporate structures in Spain got control of property rights which prevented a commercial and market development of the kind that occurred in Britain. Similar kinds of corporate institutions from medieval times were able to force the king in France to make similar arrangements. In Britain, by contrast, the king was forced to compromise with the Parliament. And Parliament was more interested in a free market, which turned out to be a much more efficient way to allow the economy to develop and, by and large, lowered transaction costs. When one applies North's propositions to Russia, one is inclined to predict that the Russian economy will perform very poorly for a very long time. Egypt, Peru, Nigeria, and possibly Brazil offerpictures of the future of the Russian economy. Statist allocation of property rights, uncertain property laws and rent-seeking bureaucracies, among others, impose excessive transaction costs no matter how efficient the production costs. If this prediction proves accurate, then Charles Lindblom's findings about the relation between markets and politics comes to mind as a basis for predicting what will not occur in Russia's political development: a liberal democracy. Role of the Russian Military Next we must examine the military problem. As the world is discovering, the Soviet military burden was much greater for the Soviet economy than generally realized. Between twenty and forty percent of the national income went to the military. The Russian military today has resisted the kind of radical reductions that Mikhail Gorbachev and his supporters of perestroika envisioned. As a result of budgetary cuts, the Russian military is much smaller, and military industries are in economic free fall, but the officer corps is still large, and the conscription system is still receiving renewed reinforcement, although it is also still experiencing massive vasions. The military is desperately searching for a new rationale to justify its present size and future enlargement. For literature on this issue, let me have the temerity to cite my own book, jointly authored with Robert Dujarric, Commonwealth or Empire? Russia, Central Asia and the Transcaucasus. The question in the title provides the proposition that I was testing. Since we have no examples of liberal empires, I assumed that if Russia reincorporates much of the old Soviet empire, the military costs for maintaining it will preclude a liberal political and economic development in Russia. Some will question the assertion that there are no examples of liberal empires by citing the British and French cases. In reply, I would point out that liberalism was the force that helped disestablish those cases. Furthermore, I would argue that large contiguous colonial holdings, as in the Austrian, Ottoman, and Russian cases are more relevant examples. Also, France and Great Britain had developed domestic liberal political institutions before the nineteenth-century imperial expansions. This was not the case in Russia and the Soviet Union. The Russian military has consistently opposed the Russian Foreign Ministry's foreign policy precisely because the military wants to reassert Russian rule over as much of the former Soviet Union as possible. The Russian Defense Ministry wants to reestablish the empire. The Ministry of Defense has won the day on that issue. Moscow's commitments to Tajikistan, its tactics in Georgia, Armenia, and Azerbaijan, and its linkages to the militaries in all of the Central Asian states and Belarus have created an institutional framework within the Commonwealth of Independent States (CIS) for gradually attaining that imperial goal. The West has taken a benign view of this policy in Central Asia and the Transcaucasus, as well as in Belarus, and only a moderate interest in keeping Ukraine and the Baltic republics from suffering the same fate. It is often asserted that we should let Russia keep order in Central Asia and the Transcaucasus because we have no interests there. Is this true? If we have an interest in liberal development in Russia, then we have an interest in keeping the Russian military out of these regions. Once in full control of these areas, the Russian military can continue to press a large claim on the Russian economy. The Russian military can also object to political opposition that opposes the new imperialism. What will happen to freedom of the press and the weight of public opinion in that event? The case of Chechnya is particularly relevant for this issue as it has demonstrated what can happen to press freedoms under these circumstances. Significantly in the two regions of Central Asia and the Transcaucasus, the countries that have retained less autonomy vis a vis the Russians are the ones that have dictatorships. Any country with the exception of Kirgistan that had a democratic transition, the Russians have botched that transition terribly. Everywhere the Russians have sent in peace-keeping forces, the level of violence has gone up. It has not gone up in areas where they are not allowed to send them. Hence, it becomes apparent that the best hope for an orderly transition in these regions is to keep the Russians out of them. I have been interviewing a number of former senior Soviet officers in connection with a research project. They are, with the exception of Marshal Shaposhnikov, unreconstructed imperialists. They make no apologies. Short courses at Harvard University in democratic civil-military relations for small batches of 15 to 30 officers have no impact on their political views whatsoever. There have been only two major positive developments in connection with the Russian military. First, the movement of Russian Soldiers' Mothers is still alive and protesting conscription, life in the military, and the size of the defense budget. The press also rightly accuses the Senior officer of being corrupt, while their troops die from hazing, malnutrition, accidents and suicides. Second, in the Duma budgetary process, the military has to compete with the collective farm bureaucracy, the miners and military industries themselves for funds. Still, because the Duma's control over the purse strings is highly ambiguous, this competition cannot be counted on to control the military. Money can be appropriated for the military off-budget, by presidential decrees. President Yeltsin occasionally uses this method to appease the Ministry of Defense. A most disturbing development of late is General Pavel Grachev's launching of more than 120 active duty officers as candidates for seats in the Duma. He has established a campaign staff in the Ministry of Defense which uses the old military- political cadres. This campaign staff is trying to create a pro-military voting bloc of soldiers, military-industrial workers, veterans, and all of the family members of these people. The military campaign staff believes that if one counts all of these individuals, the military may have a voting bloc numbering some 40 million potential voters. Even if most military candidates fail to win seats, this effort will certainly help the communists and other anti-democratic groups by further splintering an already fractured electorate. To help garner public support for the military, and also to keep open future options for imperial expansion, the Russian military vehemently opposes NATO expansion. The military was able to convince Yeltsin to sign an edict on new strategic directions before his recent visit to the UN and to meet with President Clinton. This edict promulgates the aim of forming a CIS military bloc, based on the CIS collective security treaty, and makes the Baltic states an object to be reclaimed within this military bloc. Russian Foreign Policy By now it should be clear that all of our cooperative efforts and programs with the Russian military have yielded very little in the way of a solution to the military question in Russia. Perhaps the Nunn-Lugar monies for helping de-militarize and control nuclear weapons have been marginally beneficial, but the key word here is marginal. Nuclear weapons are not the core of the issue. The size and policies of the Russian military are the sources of the problem. In short, the operative assumptions about Russia that guide most of our policies, are difficult to accept in full. Hence, it is little wonder that we are facing equally serious problems in the second category, those arising from Russian foreign policy. A more realistic view of Russia's domestic developments throws serious doubts on the prospects of maintaining a genuinely cooperative relationship with Moscow, not only for dealing with the direct bilateral relations but more importantly for dealing with broader foreign policy issues such as Bosnia, Eastern Europe, Iran, Iraq, and North Korea. Without a fundamental reappraisal, the future of U.S.-Russian relations is likely to bring a series of unpleasant surprises and adverse developments. While there are a host of instances that illustrate the contradictions in our overall foreign policy and our basic policy stances towards Russia, a few examples are particularly telling and worrisome. First, consider the Transcaucasus, Iran and Central Asia. The United States continues to reciprocate Iran's hostility. We do nothing to find a roundabout way to a rapprochement with Tehran. That means we deny our oil companies a way to get oil out of Central Asia and Azerbaijan that does not go through Russia. At the same time, the State Department demands that Russia abstain from selling nuclear power technology to Iran. These two policies are helping create an alliance between Moscow and Tehran. In addition, these policies facilitate Russian leverage against Kazakhstan and Azerbaijan as they try to evade Russian control of all pipelines for exporting their crude oil. The administration has shown some interest in helping Azerbaijan escape that control, but the alternative pipeline will go through Georgia, where Russia has great influence. A line through Iran would make a huge difference in opening up Central Asian exports of crude oil. Second, consider the North Korean nuclear program. The Bush administration rejected Moscow's offer in 1990-91 to establish a four power group--Russia, China, Japan and the United States--to deal with instability during a possible transition toward unification of the two Koreas. Since then, Russia has backed away from that offer and is tilting again toward support for North Korea. Although Korea is not in the headlines today, it remains among the most urgent and dangerous challenges for US foreign policy, and Russia is unlikely to be helpful in dealing with it. Third, the whole of Eastern and Central Europe is becoming a zone of competition with Russia. Ukraine's survival as an independent state, the independence of the Baltic republics, and NATO enlargement are all increasingly unacceptable to Moscow. By delaying the NATO enlargement schedule and introducing ambiguities into it, U.S. policy has invited the present Russian campaign against it. By failing to reassure the Nordic states in their efforts to support the Baltic states, U.S. policy is missing opportunities to create and coordinate a division of labor in handling this large zone of potential instability. If Washington is not very firm in setting the criteria of Russian participation in a peace implementation force in Bosnia, the presence of Russian forces there will become a lever for endless Russian diplomatic mischief making. A change is occurring in German attitudes toward both NATO and Russia. A year or so ago, few if any in Germany could be forced to say which takes priority for German policy--NATO or a common European defense and foreign policy within the European Union. Today there is a greater willingness to say that NATO stands in first place. German attitudes have also become much more supportive towards the presence of U.S. troops in Europe. With Jacques Chirac's election in France and with British indecision about the European Union and a common currency, more Germans are realizing that NATO expansion and successful democratic transitions in Central and Eastern Europe are more important than deepening the EU in Western Europe. U.S. policy, however, is not in step with this change, and that poses the enormous danger of an eventual loss of German confidence in U.S. policy and leadership. The last points needs to be underscored because it shows the confusion in the Clinton administration's apparent understanding of U.S. strategic priorities in Europe. Germany is much more important than Russia. Assistant Secretary of State for European Affairs, Richard Holbrooke, personally understands this, but Deputy Secretary Strobe Talbott's grasp of it is not so certain. His "Russia First" approach raises doubts about the administration's focus. Yet it should be abundantly clear that the most basic reality for a post-Cold War U.S. strategy for maintaining international order is the criticality of Germany and Japan. The search for a position by these two nations in the international power structure created the problems in the first half of this century when we had adversarial relations with them. Since we have had strong military ties with them, big wars have been prevented in Europe and East Asia. If those ties fall into question, such wars cannot be ruled out in the future. How can we explain confusion over these priorities? The obvious explanation is that they have been overshadowed by dubious assumptions about Russian political and economic developments. Excessively optimistic expectations about the transition in Russia have led the United States to overlook both its indirect and direct interests in Central Asia and the Transcaucasus. They have also encouraged the view that expanding NATO would undercut the democratic forces in Russia. Precisely the opposite is true. If Russian reformers are to have chance in the near term, then Russian imperial reassertion has to be blocked. Furthermore, it must be blocked for a long time while the present generation of Russian military leaders and old communist political leaders are still around. Preemptive concessions will not re-educate them. Failure to achieve their goals will either re-educate them or block them until younger pro-reform elites can organize to replace them. We may well witness a considerable regression in Russian politics toward an openly anti-democratic and repressive regime. We should not be excessively disturbed by it except in responding to prevent its gaining control over the former Soviet republics. It will fail to improve the economy, and its credibility internally will not last long if it does not. A second wave of reform will eventually emerge. If the United States fails to consolidate the gains for democracy and market economies in Central Europe by expanding NATO and solving the Yugoslav crisis, and if it sits back and accepts a new Russian imperialism within the territories of the former Soviet Union, that second wave of reform will be much longer in coming. Yet this kind of U.S. policy need not be purely anti-Russian and uncooperative in every respect. On the contrary, the door for cooperation should be kept open and encouraged. At the same time, however, the United States needs to make painfully clear what it will accept and what it will reject in Russian foreign and military policy. Many Russians have essentially encouraged us to take this course. Several Russian scholars have supported NATO expansion, and Foreign Minister Kozyrev himself did so until mid-1993. When Russian troops attacked Chechnya, many Russian democrats asked why Americans were not condemning this action far more vigorously. We stood up for human rights during the Soviet period. They ask why were we not doing the same today? Conclusion Let me close by returning to our misreading of Russian internal developments. A large part of the U.S. policy community misread Soviet internal developments, especially after the late 1960s. The totalitarian model became "politically incorrect" as scholars insisted that creeping pluralism and a political transformation was occurring under Brezhnev. In fact, degeneration and stagnation were occurring, the very thing an appropriate use of the totalitarian model encouraged us to see. Today, it has become politically correct to see a slow but certain Russian transition to democracy and a market economy. There is, admittedly, some evidence for that judgment. Yet if we take the fairly rich theoretical literature we have available on how political stability and democracy are achieved, and on how institutional developments effect economic performance, we are forced to be highly skeptical of a straight line projection of the Russian transition. If this were merely an academic matter, it need not cause much concern, but in this particular case, as in the earlier Soviet case, the views of the scholarly community affected, albeit indirectly, U.S. foreign policy. I conclude, therefore, with this challenge. I am open to students of comparative politics to show me that I have misused the literature in reaching skeptical conclusions about the prospects for Russian transition. If I have not misused the literature, then I am also open to different ideas about U.S. policies toward Russia than those I suggest, or to an explanation of why my criticism of the present policies are off the mark. About the Author Lieutenant General William E. Odom (Ret.) is Director of National Security Studies for the Hudson Institute and an adjunct professor at Yale University. From 1985 to 1988, General Odom was Director of the National Security Agency and from 1981 to 1985, he served as Assistant Chief of Staff for Intelligence, the Army's senior intelligence post. During the Carter administration, General Odom served on the National Security Council staff, were he worked on strategic planning, Soviet affairs, nuclear weapons policy and Persian Gulf security issues. A graduate of the United States Military Academy at West Point, General Odom received a Ph.D. from Columbia University in 1970 and has taught history and government at the U.S. Military Academy, Columbia University and Yale University. A widely published scholar, General Odom is the co-author of Commonwealth or Empire? Russia, Central Asia and the Transcaucasus (Hudson Institute Press, 1995), and the author of The Soviet Volunteers (Princeton University Press, 1974), On Internal War (Duke University Press, 1992), Trial After Triumph (Hudson Institute Press, 1992), and America's Revolution: Strategy and Structure After the Cold War (American University Press, 1993).