SPECIAL STUDY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000400710011-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 78
• Document Creation Date: December 22, 2016
• Document Release Date: April 14, 2009
• Sequence Number: 11
• Publication Date: December 14, 1982
• Content Type: MEMO

Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
II
all
PERSONAL/EYES ONLY IUI (~`t(~?HCL 1 9/11.L2
{,/ 02 8
I j
TOP SECRET/CODEWORD December 14, 1982
NSC review completed - may be declassified in
fUIIMEMORANDUM FOR THE HONORABLE WILLIAM J. CASEY
The Director of Central Intelligence
THE HONORABLE LAWRENCE S. EAGLEBURGER
Under Secretary of State for
Political Affairs
THE HONORABLE FRED C. IKLE
Under Secretary of Defense for Policy
ADMIRAL DANIEL J. MURPHY, USN (RET.)
Chief of Staff, Office of the Vice President
LT GEN PAUL F. GORMAN, USA
Assistant to the Chairman, Joint Chiefs of Staff
FROM: RICHARD T. BOVERIE,6
SUBJECT: Special Study
At the special meeting on December 6, 1982, DepSecState Dam asked
that agencies prepare certain papers, that those papers be
delivered to me, and that I put the papers together into a com-
plete package and give a copy of that package to each of the
participants.
Attached is the assembled package. It consists of:
- Four State draft papers on U.S.-Soviet relations.
A paper prepared for DepSecState Dam by Ambassador Nitze.
A paper prepared for DepSecState Dam by Ambassador Rowny.
A CIA paper entitled "Assessment of Andropov's Power."
A CIA paper entitled "The State of the Soviet Economy in
the 1980s."
- An OJCS draft paper (reviewed neither by the Joint Staff
nor the JCS) entitled "Andropov's Military Programs."
- An OJCS draft paper (reviewed neither by the Joint Staff
nor the JCS) entitled "The Brezhnev Era: Military Posture of
the USSR. "JCS review completed.
TOP SECRET/CODEWORD
DECLASSIFY ON: OADR
State Dept. review
completed
CIA TS 820358/1
Copy -of Cys
TOP SECRET
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
TOP SECRET
TOP SECRET/CODEWORD 2
As of this time (4:30 p.m., December 14), we have not received the
OSD papers.
The next meeting is scheduled for 4:00 p.m., Wednesday,
December 15, in the White House Situation Room.
Once again, we would like to emphasize the extremely sensitive and
close-hold nature of this project.
TOP SECRET/CODEWORD
TOP SECRET
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3 1 II
Washington, D.C. 20520
NSC review completed - unredacted segments may be
declassified
SECRET/SENSITIVE
December 13, 1982
MEMORANDUM FOR MR. WILLIAM P. CLARK
THE WHITE HOUSE
Subject: U.S.-Soviet Relations
Attached are the following papers on U.S.-Soviet
relations:
A. Executive Summary
B. The View from Moscow
C. The View from Washington
D. Possible Initiatives.
All of these papers should be considered as still
in draft stage; work on them is continuing within the
State Department.
L. Paul Bremer, III
Executive Secretary
Attachments:
As stated
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 . Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
U.S. - SOVIET RELATIONS
Executive Summary
INTRODUCTION
We considered three questions:
(1) What is the Andropov regime's view of the world
situation and of how Soviet interests can be advanced?
(2) How do we see our interests, and what would we like to
see the Soviets do, not do, or stop doing insofar as their
conduct affects our interests?
(3) How can we affect Soviet conduct in ways that advance
our interests, and counter Soviet conduct that harms our
interests?
(Note: It is possible that the CIA analysis of the
strength of Andropov's internal political position, which we
have not yet seen, will alter the following analysis.)
THE VIEW FROM MOSCOW
In assessing its inheritance, the Soviet leadership finds
major gains and assets:
? superpower status and global reach
? a quarreling, economically shaky West
_ ? domestic political, stability
? an economy strong enough to support massive military
outlays while keeping popular discontent within tolerable limits
. as well as problems:
? instability in Eastern Europe
? declining growth, productivity, and morale
? Western--especially American--rearmament.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
On balance, Brezhnev's successors will be sufficiently
content with these conditions--and unsure of how to effect
basic change--that they will not be inclined to depart from the
country's general historical course.
To be sure, they face choices between: at one extreme,
--economic reform,. reduced military spending, and international
retreat; and, at the other extreme, accelerated military growth
and broad expan*sionisin whatever the cost. But dramatic
movement toward either extreme is unlikely. The leaders
probably think the economy (two percent growth) can sustain
roughly the current pace of military effort and foreign
positions, but not much more. It would take zero growth and
serious hunger to force military and international contraction,
given that this would mean abandonment of Brezhnev's main
achievement: status, might and reach comparable to ours.
This does not imply passive continuity. The Soviet leaders
may see more sophisticated, innovative, agile, and diversified
diplomacy as the best and cheapest way to undercut and pressure
us, expand their influence, and perhaps cut the political costs
of some of their more exposed positions abroad. They may be
contemplating a mix of selective international
"opportunity-seizing" and "loss-cutting," but in both cases
with costs, risks and deviations kept to a minimum.
The new leadership, like the old, sees in Washington an
Administration that refuses to recognize Soviet status and
prerogatives as an equal superpower, even while--in their
view--magnifying Soviet military advantages. They see us as
having raised the costs and risks of military and international
competition, even as they may doubt the Administration's
ability to maintain a national consensus in support of
restoring American strength, or to forge a Western consensus
around Washington's outlook and policies. They doubt our
willingness to respond positively to; anything less than a broad
Soviet retreat, which they will not contemplate.
For some in Moscow, this assessment of Washington argues
for waiting for a new American administration before attempting
to improve U.S. - Soviet relations. Others may believe it
demands an even greater Soviet military effort--and sacrifice.
However,'while resource constraints do not dictate retreat,
they will work against those who advocate a major bulge in
military spending and aggressiveness.
On the whole, with the possible exception of arms control,
it is unlikely that the Soviets see much percentage in making
major concessions in hope of satisfying this Administration.
They are more likely to try even harder to put us on the
defensive politically and to stimulate a public and Allied
backlash against our policies, though in the process they might
take some steps that would partially meet our concerns.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
Consistent with this, the Soviet leaders may feel that
Soviet interests are best served by "out-flanking" us--that is,
by orienting their foreign policy away from U.S. - Soviet
relations, and by trying to come to grips with some of their
problems without reference to us. This would enhance their
freedom to ignore our concerns, their ability to weaken our
relations with others, and their ability to pursue new
-initiatives. The principal. exception-.to..this pattern_i.s.-likely
to be START, where they must deal with us (but will also try to'
reach American public opinion around us).
THE VIEW FROM WASHINGTON '-
Our program to re-establish American ascendancy involves
rearmament, world economic recovery, respect for international
law and order, and the promotion of democratic values.
Progress in achieving these goals affects and is affected by
our competition with the Soviet Union.
? The more successful we are, the better able we are to
induce more restrained Soviet conduct or, failing that) counter
lack of Soviet restraint.
? The Soviets want to impede our program, mainly by
dividing us from those whose cooperation we need for success.
Over the next 6 - 24 months, our chief aims toward the
competition should be:
? to prevent further Soviet encroachments;
? to bring about substantive improvement in existing
problems caused by the Soviets;
? to maintain control of the agenda and the terms by
which problems are dealt with;
? to keep both our general Western coalition and specific
problem-related coalitions intact; and
? to engage the Soviets constructively on. issues where
there would seem to be overlapping interests.
Because the Andropov regime will probably follow a more
active and sophisticated foreign policy, oriented away from
addressing problems with us and on our terms, and because they
may find it easier to mollify others than to satisfy us, we
need to preserve our influence over the manner in which
outstanding issues are played out. Thus, while we are in a
reactive posture in the general sense that only substantive
improvement in Soviet conduct will bring about more positive
policies toward the USSR, we may also need to take initiatives
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
to maintain our coalitions and to establish standards for
Soviet. conduct on outstanding problems that are both demanding
but reasonable. We must also be true to our promise to respond
positively to genuine improvement in. Soviet conduct, or we will
lose our capacity to influence Moscow and to keep our partners
with us.
In effect, just as the Soviets may now try to out-flank us,
- -we have to be ready _to.execute, our own..politica.l. flanking
movements to enqure that the Soviets cannot.,escape from our
agenda of concerns and our standards for responsible conduct
and real progress. This means we have to consider how to use
not only U.S. - Soviet relations to induce improved Soviet
behavior but also our relations with other key actors, such as
our European Allies, Japan, China, ASEAN, Pakistan, and others.
THE INTERSECTION OF SOVIET CONDUCT AND U.S. INTERESTS
In view of the foregoing assessment, we must anticipate our
interests being affected by Soviet policies in the following
specific areas:
Sino - Soviet Relations. The Soviets may be willing to
make limited substantive concessions (e.g., modest withdrawal
of forces from the border) in order to' pressure us and give
themselves more maneuvering room. We would hope that the
Chinese would not accept tokenism. To the degree the Soviets
are prepared to go beyond tokenism, we have an interest in
trying to prevent a reduced Soviet threat against China from
increasing the Soviet threat to NATO, Southwest Asia, or other
U.S. interests. We also have an interest in maintaining
influence over Chinese policies, e.g., toward Taiwan and
Southeast Asia,.which could be eroded to the degree the Soviets
draw Beijing into closer relations.,
Japan. The Soviets might feel they can use conciliatory
actions--perhaps punctuated by threats--to try to reverse the
growing Japanese inclination to support firmer East - West
policies on a global basis. We can hardly regard a Soviet
pull-back.from the disputed islands as misconduct; but we must
hope that the Japanese drive a hard bargain and not regard
Soviet concessions as a reason to reverse their movement toward
a more solid stance on East - West relations. generally.
Rapidly advancing Sino - Soviet relations could make the
Japanese more susceptible to Soviet gestures.
Kampuchea. A Soviet attempt to nudge the Vietnamese toward
withdrawal would fit with Moscow's interests in cooperating
with Beijing, gaining respectability with ASEAN, and easing an
existing problem on their terms and without reference to us.
At the same time, the Soviets greatly value their relationship
with Hanoi and will not want to test its limits. Our interests
are served by maintaining total withdrawal and non-alignment as
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
the standards. We have to guard against mere gestures designed
to crack our coalition with ASEAN (and, tacitly, China). That
said, we would welcome Soviet pressure on Vietnam; and we are
confident that our coalition will survive as long as the
Soviets and Vietnamese represent the threat that they do,
notwithstanding possible moves in Kampuchea.
Afghanistan. The Soviets=-possibly with a Chinese
role--might show limited flexibility in order to promote their.
terms for settlement and satisfy the Paks and our Allies. It
is also possible that they will seriously move toward
extricating themselves, an their terms. As in Kampuchea, we
want total withdrawal, non-alignment, and a government of the
people, and we would welcome substantial partial movement
toward all of these goals. Our immediate interest is in
preserving our ability to influence the terms of settlement and
pace of withdrawal, and in maintaining Pak support for Afghan
resistance until total withdrawal is achieved.
Middle East and Persian Gulf. The Soviets will exploit
lack of progress on our peace initiative, as well as our
support for Israel, to recover if not expand their influence
among the Arabs, if possible beyond their standard clients.
Efforts to destabilize regimes are not excluded but would be
quite limited. Like us, they cannot drive the Iran - Iraq war
toward either a military or political conclusion. Our
interests are clear: minimize Soviet influence in the Arab
world and defeat any attempts to sabotage the peace process or
subvert our friends.
The Horn of Africa. The Soviets'are unlikely to consider
engineering a draw-down of Cuban forces in this area. It is
more likely that they will test us here--if they are disposed
to pressure us anywhere--since their client has?a military
advantage and because they may doubt our willingness and
ability to save Siad if pressed. Our interest over the next
year or so is in stabilizing the status quo while gradually
building up Sudan and Somalia.
Southern Africa. Our interest in a Namibia - Angola
settlement includes but goes beyond our desire to weaken the
Soviet position in this volatile and strategically important
area. The Soviets are likely to be uncooperative unless
convinced that they will bear the onus for failure throughout
black Africa. We will not achieve our immediate goal of Soviet
acquiescence if they believe we would try to portray our
success as their retreat.
Central America. Our interest is in defeating subversion,
advancing economic and political development, and eventually
restoring tranquility on our Southern porch. The Soviets are
unlikely either to escalate or to try to curb the Cubans. Our
aim should be to convince the Soviets that we have a far more
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 . . Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
compelling interest in defeating threats in Central America
than they do in fueling them--and thus, that we will do what it
takes to prevail in a show-down, e.g., over introduction of
MIGs or Cuban combat units into Nicaragua.
Eastern Europe and-Human Rights. We have an interest in
evolution toward greater pluralism, national autonomy, and
respect for human rights. Andropov may-subtly try to-exploit
Romanian and Yugoslav-problems,-while deciding between
crackdown'and tolerance of controlled reform, or at least
gestures in that direction, elsewhere. Our immediate aims
include convincing the Soviets that the risks of pressuring the
Yugoslavs are prohibitive, and that we will not exploit--indeed
we will respond positively to--movement toward greater openness
in Eastern Europe.
We want the Soviets to permit national reconciliation and a
resumption of reform in Poland. But we also have an interest
in ensuring that cosmetic concessions not undermine West
European support for our stance or increase pressures on us to
agree to a CDE. On such questions as Afghanistan and
Kampuchea, while we want genuine progress and can't be seen to
ignore it, we may need to counter Soviet efforts to work around
us and defeat our coalition without conceding any substance.
Western Europe. Blocking INF deployments may well be the
Andropov regime's highest foreign policy priority. To achieve
this, they will work toward offering a deal which our Allies
feel would justify cancellation of our deployment program--in
which case we would have to accept or else witness collapse of
support for deployment anyway. (See more on arms control
below). The Soviets will also try, with carrots and sticks, to
abort our attempt to achieve Western agreement to constrict
East - West economic relations. We have an interest not only
in defeating efforts to isolate us, but also in deterring _.
and/or countering Soviet threats against our Allies should it
come to that.
Arms Competition and Arms Control. We cannot exclude that
the Soviets will decide that arms control progress will not be
possible until there is a new U.S. administration. However, it
would be far more consistent with their overall outlook,
internal situation, and likely. international strategy for them
to become even bolder in this area. They have an interest in
confronting us with choices between: on the one hand,
agreements in START and INF which meet their concerns; and, on
the other, collapse of our domestic consensus and Alliance
consensus in support of our defense program and INF deployment,
respectively. Either outcome would offer some easing of their
military burden.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECP..ET/SENSITIVE
Focusing U.S. - Soviet relations on arms control would be
consistent with their aim of taking the rest of the agenda of
international problems-out of our hands. We should be prepared
for major concessions on their part. Our interest-is in
drawing them toward our-goals-of reductions, equality and
verifiability, -while keeping'popular support-for our-
negotiating efforts and force programs intact.
U.S. - Soviet Cooperation. In addition to possibilities
mentioned above notably Southern Africa), we have an interest
in getting the Soviets to cooperate concretely on functional
problems where we have overlapping interest and where the
Soviets matter. The most obvious is non-proliferation; there
is no political reason why the Andropov regime would be averse
to helping tighten up international safeguards and enhance IAEA
effectiveness, though it is not clear that they would view such
limited U.S. - Soviet cooperation as a sign of a generally more
constructive attitude on our part. Ina different vein,
challenging the Soviets to provide more support for economic
development might produce modest but welcome results, or at
least undercut their pursuit of closer "East - South" relations.
Less Likely.Developments. If our overall assessment of the
view from Moscow proves to be too conservative, the most likely
contingencies that could affect important U.S. interests--for
worse or better--include:
? Soviet directed escalation in Central America
? support for large-scale aggression against Somalia
? shipment or deployment of "offensive arms" to Cuba
? major concessions on Afghanistan, including substantial
withdrawal
? major concessions in'START and/or INF.
In a way, such actions would present us with more
straightforward--if not easier--choices. The real dilemmas
will arise when the Soviets make more limited encroachments
and/or concessions. We will have a harder time gaining support
for effective responses to more subtle Soviet misconduct, and
conversely, preserving support for our positions when the
Soviets take partial steps to satisfy others' concerns but not
ours. This is exactly the sort of conduct that seems most
likely.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
POSSIBLE INITIATIVES
Our basic approach should continue to reflect our view
that outstanding problems are the product of Soviet behavior,
which must improve if.the relationship is to improve. Thus,
in the most fundamental sense, we are reactive. However, in
the face of Soviet policies as projected-above, we need to
consider moves-of our own to serve several. purposes:
to preempt, deter, and counter new Soviet encroach-
ments, which they might otherwise consider to be
low-risk;
_ to offset Soviet efforts, to undermine international
support for our overall East-West approach;
? to avoid being outflanked and losing our coalitions
on specific problems;
? to induce Soviet cooperation where it is needed and
achievable.
We should also be ready to deal with the less likely
possibilities: either broad retreat or a burst of expan-
sionism. But until we see signs that either may be in the
works, we should focus on initiatives designed to advance
our interests in the face of the more sophisticated Soviet
strategy we foresee. Some of the possibilities follow:
A. Steps to head off new Soviet encroachments:
? Enhance intelligence effort regarding possible
targets.
? Warn Soviets directly when specific intelligence
so warrants.
? If needed, threaten to respond in kind, e.g.,
stepped-up US support for national liberation
struggles where the Soviets have an interest
in the status quo.
? Attempt to engage the Soviets in a discussion of
the limits of competition in unstable areas (e.g.,
Central America and Eastern Europe).
? Remove temptations (e.g., helping to ease Yugo-
slav problems).
B. Steps to induce improved Soviet conduct:
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
? Discuss with Chinese how to prevent the Soviets
from exploiting either party in a way that da-
mages the other (e.g., shifting SS-2.0s from West
to East or troops from East to West).
? Respond sympathetically to Chinese interest in
US technology, consistent with our security re-
quirements.
? Minimize Sino-American flare-ups over Taiwan,
consistent with our recent-understanding.
? Organize a joint initiative on Afghanistan with
Pakistan, China and possibly the EC, calling for
phased complete withdrawal, transition leading
to safeguard of Afghan non-alignment, self-
determination, return of refugees.
? Develop -- and possibly discuss with Moscow --
a plan for step-by-step progress towards recon-
ciliation in Poland.
? Challenge the Soviets to aid LDCs.
C. Steps in the event Soviet behavior improves:
? Expand trade, within the limits, worked out in
forthcoming Alliance studies.
? Make a significant effort to move toward arms
control agreements.
(Note: These steps would obviously have to be graduated and
refined to fit the significance and character of positive
Soviet actions.)
D. The Use of "Process" and '"Presence" to enhance our
access and influence and to communicate how we will
respond to improved Soviet behavior:
? Proceed with dialogues on non-proliferation,
Southern Africa; human rights.
? Consider opening consulates in Kiev and Tashkent.
? Hold Hartman-Korniyenko substantive preparations
for Shultz-Gromyko meeting.
? Plan Shultz-Gromyko meeting before next fall.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
We cannot and need not make any decision on a summit until
we get a better fix of how Andropov views such a possibility
and of whether the Soviets are prepared to make it successful,
_ .. by our definition . . .
SECRET/SENSITIVE '
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE December 13, 1982
Task II:
THE VIEW FROM MOSCOW
I. Brezhnev's Legacy
Yuriy Andropov's replacement of Leonid Brezhnev as CPSU
General Secretary-followed an eighteen-year period in which,
from Moscow's perspective, the Soviet Union made impressive
gains in both its domestic and foreign policies. During
Brezhnev's years as General Secretary, the Soviet Union emerged
as a global military power, unprecedented stability was
achieved within the ranks of the Communist Party, and slow but
steady growth was maintained in the civilian economy. At the
same time, Andropov has inherited a number of problems that
will have to be addressed in the coming decade. These
problems, together with the capabilities and opportunities
bequeathed by Brezhnev, form the basis of the review of Soviet
policy now underway in Moscow.
Achievements of the Brezhnev Era
The new Soviet leadership can justifiably argue that
Brezhnev's term in office witnessed a shift in the 'correlation
of forces" in Moscow's favor. Together with its substantial
military build-up, the Soviet Union has developed a global
network of friends, allies and client states that extends
Soviet influence, enables Moscow directly to challenge Western
interests in the developing world, and gives credibility to
Moscow's claims to be a global power without whom "no
international problem can be solved.'
Favorable developments have also occurred in several areas
of importance to Moscow: the NATO Alliance is experienc-
ing severe political, military, and economic strains; Iran is
no longer a U.S. strategic asset on the USSR's southern
border; and a process is in motion toward improved relations
with China at a time when. the threat of a Sino-American
alliance is receding.
Domestically, Brezhnev's most striking achievements were on
the political side: under his leadership, intense factional
rivalries at the top of the CPSU gave way to relatively consen-
sual politics. Brezhnev's leadership style paved the way for
what thus far appears to be the first smooth succession in
Soviet history. In parallel with stabilization among the elite,
Brezhnev presided over a largely successful effort to suppress
dissent and non-conformist tendencies within Soviet society.
SECRET/SENSITIVE
DECL: OADR
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE -
- 2 -
On the economic side, Brezhnev was able during much of his
tenure to sustain a long-term military build-up while keeping
consumers satisfied by slow but perceptible growth in living
standards. Although growth has slowed in recent years and
structural problems are becoming increasingly appare.it, Soviet
leaders can still tell themselves that the Soviet economy has
made great strides since the Khrushchev era -- let alone in
comparison with the dark days of collectivization and World
War II, when the Brezhnev-Andropov generation got its political
start.
Unresolved and Emerging Problems
Alongside these gains, the new Soviet leadership must cope
with a series of unresolved problems inherited from the
Brezhnev era,'as well as some emerging new ones:
In foreign policy, detente with the United States -- from
which the USSR derived important benefits -- has collapsed, and
a more openly competitive and militarily threatenin Administra-
tion has taken charge in Washington. Despite a greater West
European attachment to detente, Moscow sees NATO as having
embarked upon an effort to deprive the USSR of its longstanding
advantage in medium-range missiles. And closer to home, there
is continuing discontent and potential instability in Eastern
Europe at a time when the. USSR finds it difficult to meet the
growing economic burdens of empire.
At home, economic growth rates continue to decline. Many
factors are involved: shrinking labor resources, declining
worker productivity and morale, difficulties in developing and
assimilating new technologies, a decade of miserly industrial
investment, systemic deficiencies in'Soviet agriculture, plus
chronic problems of alcoholism and corruption. These factors
combine to threaten the regime's ability to maintain growth in
defense capabilities without cutting living standards and, if
not attended to over the longer term, could contain the seeds
of domestic unrest. On the political side, the advanced age of
the leadership confronts the regime with the problem of a
continuing succession process in the next several years.
The Soviet leadership's immediate preoccupation will be the
consolidation and allocation of political power within the key
Party and state organs. Differing views on questions of
resource allocation and economic revitalization are likely to
surface. At one extreme,. economic stringencies may be cited as
requiring major structural reforms to the economic system,
reduced defense spending,, and/or_ a_pull-back in foreign policy
from some of the USSR's more exposed and costly positions. At
the opposite extreme, some leaders, particularly within the
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 . . Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
military establishment, will argue that the current U.S.
Administration is so thoroughly anti-Soviet that growth in
defense spending should increase.
In the next two years, dramatic shifts in either of these
directions are unlikely. Despite the acknowledged gravity of
the economic situation, the regime may well believe that there
is still some breathing space before corrective action becomes
urgent: the economic growth rate is still 2 percent, not zero;
consumer discontent, while rising, is still controllable; and
there is likely to be a respite from chronic grain shortages if,
consistent with the laws of probability, the USSR enjoys a
decent harvest after an unprecedented four successive years of
bad weather.
Andropov admitted to the Central Committee that he has no
'ready recipes' for improving the economy's performance. He
will probably rely in the short run on stop-gap solutions --
tighter discipline, importing selected economic reform measures
from abroad, new incentives for speeding introduction of new
technology in Soviet industry -- in an attempt to spur economic
growth. He will also continue to import Western technology,
equipment and farm products.
Whatever the course followed, economic ;tringencies are not
so-severe as to require any retrenchment in foreign affairs or
any substantial reduction in defense spending in the next two
years. Nor is it likely that Soviet leaders see the longer-
term economic outlook as so bleak that it is necessary for the
Soviet Union to embark on a desperate effort to capitalize on
its waning military advantages, before it is too late.
In sum, Brezhnev's legacy provides incentives over the long
term for change in Soviet policies, and constituencies
doubtless exist for such change, particularly on the domestic
side. Moreover, it is conceivable that Andropov, having
assumed the top leadership at 68 years of age, may feel he has
to make his mark quickly and undertake some innovations in the
near term -- in foreign as well as domestic affairs.
However, the continuance in power of Brezhnev's closest
lieutenants is more likely to militate in favor of continuity.
Over the next two years, Brezhnev's heirs will not feel
compelled by domestic economic constraints to undertake sudden'
shifts or new departures in domestic-affairs. -By the same
token, neither the immediate task of political consolidation
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 4 -
nor the longer-range need for economic reform is likely to
compel near-term changes in Soviet foreign policy.
Continuity in foreign policy should not be confused with
passivity. The active diplomacy practiced before Brezhnev's
death -- most notably the anti-INF campaign and the opening
toward China -- will almost certainly continue, and new
opportunities in the Third World are likely to be seized as
they arise.
II. Soviet Assessment of the United States Under
The Reagan Administration
Andropov's ascension will not affect the basic Soviet
outlook on the United States that has taken shape over the past
two, or indeed six, years. Since 1977, the Soviets have faced
two Presidents about whose views they knew little in advance,
and whom they perceived as unpredictable, perhaps dangerously
so. Moscow judged the Carter Administration as initially
schizophrenic in its policies toward Moscow -- espousing
disarmament on the one hand while stimulating a NATO military
build-up on the other -- with anti-Sovietism taking hold in the
latter half of the Carter Presidency.
Since January 1981, Moscow has seen itself up against a U.S.
Administration that is, for the first time since the 1950s,
openly and unequivocally anti-Soviet, and unwilling as a matter
of principle to accept what Moscow sees as a new historical
reality: the USSR's attainment of 'superpower' status, and the
right to assert itself on an equal basis throughout the world.
This perception has been progressively reinforced by the
Administration's defense build-up, a continued push for INF
deployments, the harsh and ideological rhetoric employed by
Administration officials from the President on down, our
continuing emphasis on human rights, and the appointment to
high posts of individuals seen by Moscow as philosophically
opposed to US-Soviet cooperation and arms control agreements
under any circumstances.
The Soviet leadership is doubtless worried by the U.S.
military build-up (perhaps more worried than is warranted by
the programs per se), and nervous about U.S. political efforts
to diminish Soviet influence in such regions as the Middle East
and southern Africa. Moreover, the Soviets recognize that the
Reagan Administration is a more serious competitor than its
predecessor in regional contexts, more willing to defend its own
interests, and capable of-driving up the costs of Moscow's ad-
venturist behavior (as evidenced by our actions in Afghanistan).
In comparison with the Carter years, the Soviets are probably
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 5 -
somewhat more fearful of an assertive U.S. response to Soviet
actions toward situations in the developing world where the
position of Soviet-backed forces is fragile (e.g.,. arms
transfers to the Salvadoran insurgents; MiG deliveries to
Nicaragua).
But whatever marginal increase in Soviet cautiousness has
been induced by this Administration's policy, it has not been
enough to bring about a Soviet retreat. Despite early concerns
aroused by this Administration's threatening rhetoric, Moscow
is by now probably considerably less apprehensive about direct
U.S. action against Cuba. In Angola, despite nervousness about
our diplomatic initiative, the Soviets have held firm and, in
fact, presided over a sizeable increase in the Cuban military
presence. In short, the Soviets do not presently feel
pressured toward retrenchment in the Third World.
Looking further ahead, the Soviets may have reason to doubt
the staying-power of this Administration's harder-line policies.
From Moscow's perspective, factors impinging on U.S. policy
include: domestic economic constraints which have undercut the
pro-defense consensus; the anti-nuclear sentiment reflected in
the freeze movement; Alliance pressures and disagreements on
trade and security issues; problems and uncertainties in
relations with China; deteriorating conditions in Central
America; and 1984 electibn politics, upon which all of the
foregoing will converge, and which may bring to power a new
Administration more amenable to improving relations with Moscow.
If it views the Reagan Administration in this light, the
Soviet leadership may conclude that the best course is to "wait
out' the Administration until the "forces of history" have
forced the U.S. back to more 'realistic' policies. In other
words, while not breaking off the diplomatic and arms control
dialogue with us, the Soviets would not expect any major
agreements could be reached. While not feeling themselves
-under any pressure to make major concessions to the U.S., the
Soviets would defer decisions on a substantially increased
defense effort.
The foregoing appears to be the current Soviet assessment
of the Reagan Administration. Some in the Soviet leadership,
however, may have come to the conclusion that U.S. unwilling-
ness to accommodate itself to the Soviet Union's emergence as a
global superpower has deep roots, and represents a strain in
U.S. foreign policy that antedates and will endure well beyond
the Reagan Administration. If this should become the dominant
view, Soviet policy would confront two separate, but fundamental
choices: sustained arms competition vs. a negotiated modus
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
vivendi; and recurrent confrontation vs. greater restraint in
the Third'World.
Whatever their long-term outlook, the Soviets will seek to
pressure or isolate the Q.S. by cultivating relations with
China and Western Europe, and by fueling the nuclear anxieties
of Western publics. Moscow will in the near term continue to
express the hope that it will prove possible to do business
with the Reagan Administration, and may even advance new
proposals to test U.S. flexibility, particularly in the arms
control area. But based on two years' experience, the Soviets
are increasingly skeptical of this Administration's willingness
to do business on a basis that would not require the.-USSR to
`change its foreign policy' in fundamental ways.
Moreover, Moscow probably believes that, even if this
Administration were willing to do business, the pay-offs would
be minimal in terms of expanded trade or constraints on U.S.
weapons programs. In sum, Moscow doubts the credibility of our
efforts to establish 'linkage' between Soviet conduct and
improved US-Soviet relations and, at the same time, does not
believe that we would follow through on linkage in terms of
rewarding Moscow for positive changes in Soviet behavior.
Thus it is unlikely that the Soviets see much cause to make
significant substantive concessions toward the United States
with the purpose of inducing us to do business. But the Soviets
will probably undertake new initiatives in the next two years
designed primarily to put the U.S. on the defensive
politically, and to stimulate Allied and public pressures on
the Administration to alter its policies.
III. The USSR's Other Foreign Relations.
Other Soviet foreign relations which have direct
consequences for U.S. interests include:
China: The Soviet leadership clearly is interested in
creating at least the appear-ance of movement toward Sino-Soviet
normalization, among other reasons to put pressure on the
United States to be more accommodating in bilateral relations.
The Soviets may also perceive a common interest with the Chinese
in actual substantive steps toward more stable relations (ideo-
logical differences are no longer as significant, permitting
restoration of party-to-party ties; mutual benefits are possible
from trade). Thus Moscow may take limited substantive steps in
the near term, such as troop cuts bn the Sino-Soviet border, to
advance the process. If the Chinese reciprocated, Moscow would
go further, although in the forseeable future the Soviets'
interest in avoiding friction with the Vietnamese is an .
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 7 -
inhibiting-factor against any effort to resolve the Kampuchea
problem. In any case, the Sino-Soviet relationship will
continue to be burdened by deep mutual suspicions ajad
conflicting political and strategic interests.
Japan: The Soviets do not view Japan, even in Alliance
with the U.S., as a serious near-term military threat in the
Far East. Despite Soviet interest in acquiring Japanese
technology, they have made no effort in the past to improve
relations with Tokyo. It is conceivable that the new Soviet
leadership could launch a peace offensive as it has done in
Western Europe to sow divisions between the O.S. and Japan,
perhaps involving troop reductions on some of the disputed
islands or an offer to freeze Asian SS-20'deployments. But
because of the non-negotiability of the main issue dividing
Moscow and Tokyo -- the Northern Territories -- it is unlikely
that there will be any serious substantive initiatives on
Moscow's part. Threats to Tokyo, including continued moves
toward Sino-Soviet normalization, are more likely than
blandishments in the Soviet effort to discourage Japanese-
American strategic cooperation.
Western Europe: The Soviets perceive West European govern-
ments as more concerned about defusing East-West tensions, more
willing than the United States to tolerate Soviet adventurism
in'the developing world, and more receptive to cooperation with
Moscow without political preconditions. Thus, while seeking to
avoid rekindling interest in separate European defense arrange-
ments, Moscow seeks to exploit West European interests in trade
with the USSR and expanded East-West human contacts, popular
opposition to NATO defense improvements, and other strains in
Atlantic relations as means of weakening NATO's defense posture
and putting pressure on the U.S. to move back toward more
'realistic' East-West policies. At the same t,me, the Soviets
also see intrinsic benefits in expanding their relationship with
Western Europe, principally economic (a source of technology,
as well as markets for Soviet exports, especially energy).
Since the late 1970s, the Soviets have been particularly
concerned about NATO efforts, instigated by the U.S., to 'upset
the established balance" in Europe, particularly the long-
standing Soviet superiority in longer-range INF missiles. They
may have feared that the 1979 decision to deploy 572 GLCM and
Pershing II missiles was but the first step toward a larger
U.S. 'Eurostrategic" force, to be reinforced by modernized U.K..
and French nuclear forces. This fear has likely subsided in
light of the problems INF deployments have encountered among
West European publics. But if Soviet concerns about the
potential military impact of INF deployments have declined,
Moscow's number-one political objective in Western Europe
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
8 -
continues to be to exacerbate US-West European strains over the
INF issue and, in the process, to derail the deployments
themselves.
In 1983, we accordingly can expect to see a continued
Soviet carrot-and-stick-strategy designed to block INF
deployments. This will likely entail new or repackaged
proposals suggesting Soviet willingness to reduce SS-20s if
NATO-deployments are suspended or cancelled, accompanied by
ambiguous threats of counterdeployments and adoption of a
launch-on-warning policy. If the initial phase of deployments
begins on schedule in December 1983, the Soviets will, move
quickly in 1984 to respond -- perhaps through cruise missile
deployments or stepped-up pressure in Berlin or the Caribbean,
but more likely with further efforts to appeal to growing
anti-military sentiment in Western Europe -- in an effort to
derail subsequent deployments, or at least to maximize the
political damage to US-European ties of carrying the deployment
program to completion. (Regardless of whether the Soviets
succeed or fail in heading off INF deployments, they will still
be able to sow considerable discord in Atlantic relations.)
Eastern Europe: For strategic reasons, maintaining Soviet
control and internal tranquility in Eastern Europe will be of
fundamental concern to any Soviet leadership. In recent years,
however, it has become increasingly costly for the Soviets to
sustain the higher living standards of their Allies, and they
have in fact reduced subsidies to the East European economies.
For this reason, and in light of their experience in Poland,
the new leadership must be especially concerned by the risk
,..:..,. 1 nr Ai annntent in the region and the
NSC review completed - unredactedsegments may be influences could lead to
declassified; j"" " _
"j.Wa,..Z to stability and Communist rule. Moscow's dilemma is
finding the proper balance between continued repression to
enforce the political status quo, and tolerance of economic
reforms and political liberalization to relieve underlying
social tensions.
In the near term, however, the Soviet leadership is
probably confident that the worst is past in Poland, and that
the immediate danger of spillover of the Polish contagion to
the rest of the bloc has passed. A year of calm in Poland has
already dampened the Western reaction to the imposition of
martial law; another year of calm will simply confirm that the
threat to Communist regimes has receded, and provide the
Soviets with the grist for further efforts to dismantle Western
sanctions piecemeal. In-the longer. run, it is conceivable that
Andropov will stimulate increased economic experimentation in
Eastern Europe along Hungarian lines, perhaps in tandem with a
tightening of the political screws.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 9 -
The new leadership will also be alert to opportunities to
strengthen Moscow's position in Eastern Europe, both inside and
outside the Warsaw Pact. For example, Andropov may, try to
exploit Romania's economic difficulties to bring Ceaucescu (or
his successor) back in step with Soviet foreign policy. Steps'
to exploit Yugoslavia's economic troubles or to foment
separatist movements are also possible. In addition, the
Soviets.may perceive a target of opportunity in Albania, should
Hoxha die or be overthrown.
Third World: The Soviets have historically considered the
Third World as a major arena for advancing the USSR's interests;
particularly since World War II, Moscow has also viewed
competition with the U.S. (as well as other Western countries
and China) for influence in the developing world both as a
primary means of establishing their credentials as a global
power, and as a means of undermining Western strategic and
economic interests. Despite periodic setbacks, and despite the
increasing burden of supporting client states economically, the
Soviets have persisted in an assertive Third World policy. The
new leadership will likely continue to view the Third World as
one of the most important arenas for East-West engagement.
The Soviets have generally taken a low-risk, opportunistic
approach to the Third World competition, relying on proxies or
security assistance in order to minimize the risk of direct
confrontation with the U.S. Afghanistan is unprecedented in
that the Soviets' own troops were directly involved, and may
signify an increased readiness for direct engagement elsewhere.
With respect to specific regional issues:
-- Afghanistan: The, Soviets must appreciate that there
can be no near-term military solution at current levels of
involvement. Soviet strategy is probably based on the judgment
that the resistance can be worn down over a period of many
years, as done earlier in the Boishevization of Soviet Central
Asia. The domestic burden of the Afghan adventure is not
significant enough to impel the SovieEs toward an early with-
drawal. Thus the Soviets will continue to focus on influencing
the Pakistanis (through both threats and blandishments) in
order to curtail armed assistance to the rebels. One means of
doing this will be to create the appearance of a willingness to
negotiate on a political solution, without offering any
concessions which would undercut Soviet insistence on
maintenance of a pro-Soviet Afghan regime.
-- Middle East/Persian Gulf:--In the Middle East, the
Soviets suffered a setback with the us-engineered PLO
withdrawal from Lebanon, continue to be excluded from the
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 10 -
Arab-Israeli peace process, but nonetheless continue to maintain
important clients in the region. Thus the Soviets can be
expected to continue to seek a role in the peace process and to
improve ties with moderate Arab states, while attempting to
undermine US-sponsored initiatives and exploit future breakdowns
in the process. In the Gulf, Soviet strategic interests
received a major boost with the fall of the Shah and expulsion
of the U.S from Iran. Since then, the Soviets have been playing
a waiting game, looking for new opportunities to expand their
influence.
-- Africa: In southern Africa, the Soviets probably will
continue quiet efforts to scuttle the Namibia/Angola nego-
tiations, while endeavoring to position us as the scapegoat for
the failure they hope will eventuate. They also may seek to
reinforce their regional position by providing additional
military aid, directly or via surrogates; to governments
threatened by South African destabilization. In the Horn of
Africa, the Soviets' intimate relations with Ethiopia's Marxist
regime, and the latter's military preponderance in the area,
offer the Soviets a possible proxy should they decide to seek
an 'easy' geopolitical advantage. The Sudanese and Somali
leaderships' are both closely identified with us and quite
insecure at home. Should the Soviets decide on such an
initiative, they could be. emboldened by the-belief that no
political base exists in the U.S. for direct American military
support of these regimes.
-- Central America/Caribbean: The Soviets have made it a
priority objective to build up Cuba's military capabilities in
the fade of what they perceive as an increased U.S. threat to
Havana, as a means of sustaining their destabilizing actions in
the region indirectly, and as a way of diverting American
attention and efforts from the global competition.
Moscow may have become more cautious about exploiting fluid
situations in this hemisphere in response to this Administra-
tion's strong representations about the region. But the
Soviets realize that U.S. sensitivity about the area provides a
low-cost opportunity to challenge us in our own back yard. As
a result, they have not hesitated to seize opportunities when
they arise and to defy U.S. warnings against involvement in the
region, relying on Cuba as an intermediary in order to avoid
provoking a direct confrontation with the U.S. It is possible
that this Administration's stance made the difference in the
Soviet decision not to supply MiGs to Nicaragua, but the
Soviets have not in-any.way cut back on their military support
for the Sandinistas.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3 ;
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 11 -
-- Southeast Asia: The Soviets consider themselves the
chief outside beneficiary of Hanoi's 1975 victory and its
extension of domination to Laos and Kampuchea. While obtaining
greater military access to the region, they have been unable to
build politically on this advantage due to Hanoi's isolation in
the region, and have had to shoulder the growing burden of
subsizidizing the-Vietnamese economy. Prospects for improve-
ment in Sino-Soviet relations and the advent of a Sihanouk-led
coalition, which creates another option for Hanoi, may tempt
Moscow to nudge the Vietnamese toward accommodation with their
neighbors; its own fears of Sino-Soviet normalization could
prompt Hanoi to move in this direction. But a close,
aggressive Soviet-Vietnamese relationship -- which Moscow will
be reluctant to jeopardize in the near term -- will effectively
preclude extension of Soviet influence outside Indochina; a
satisfactory settlement and general accommodation in Southeast
Asia, however, could lead to a marginal increase in Soviet
activity in ASEAN.
IV. Moscow's U.S. Policy Agenda Over The Next Two Years
If, as we expect, neither leadership politics nor broader
domestic concerns veer out of control, the Soviet Union will
continue to conduct an active foreign policy over the next two
years, invigorated at least to the extent that Andropov is
personally more engaged and skillful than his predecessor. We
do not anticipate either a dramatic retrenchement or a new
burst of expansionism.
This judgment could, of course, be altered by the
unpredictable consequences of such events as the outbreak of a
divisive leadership struggle within the Politburo, a new
breakdown of order in Poland, or a major US-Cuban confrontation.
In such unforeseen circumstances, the Soviets could offer major
-substantive concessions, for example moves to accommodate U.S.
positions in START and INF, or a compromise in their stance on ?
requirements for a negotiated settlement in Afghanistan. On
the other hand, the Soviets could follow a more aggressive
course, including an escalation in destabilizing activities in
Central America, shipment or deployment of 'offensive weapons'
to Cuba, or support for large-scale aggression against Somalia.
Short of such unanticipated developments, over the next two
years the Andropov leadership is likely to see opportunities
for initiatives in several areas -- some substantive, some
atmospheric, some propagandistic -- designed to put the U.S. on
the defensive and undermine our-Alliance relationships: efforts
to block INF deployments; steps toward Sino-Soviet normaliza-
tion; efforts to influence Pakistani policy in Afghanistan;*and.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 . . Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
- 12 -
the like. 'The Soviets may also launch an INF-style propaganda
campaign concerning the START negotiations, in order to appeal
to pro-SALT II forces in Europe and the U.S., and to make the
case that U.S. intransigence in START is blocking an INF
agreement. It is also possible that the Soviets may make some
low-cost gestures on the human rights front in order to induce
greater U.S. flexibility on issues of central importance to
them.
In US-Soviet relations, we expect a continuing deemphasis
on conducting substantive business with the United States so
long as we refuse to move off our current agenda. Emphasis will
instead be placed on isolating and/or pressuring the U.S. and
gaining influence among our traditional friends and in selected
developing countries, as well as with China.
The Soviets will continue to express interest in a
'carefully prepared' US-Soviet summit meeting, in order to
demonstrate Moscow's constructive attitude, to pressure the
Reagan Administration to accommodate Soviet position::, and to
place the onus on the U.S. for preventing a summit (or for
precluding the possibility of a positive outcome should a
summit take place). In general, Moscow will continue the arms
control and diplomatic dialogue with us -- maximizing the
propaganda value of this dialogue, while probing for signs of
U.S. flexibility -- but insist that since t?Te U.S. bears
virtually all responsibility for the downturn in relations, it
must make the first move toward improvement.
Drafted:EUR/SOV:AVershbow Cleared:EUR/SOV:RECombs, Jr.
12/13/82 x28040 (0656/3m) PM:JAzrael
S/P:SSestanovich
INR/SEE:RBaraz
P:DJohnson
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 SECRET/SENSITIVZ
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
Task III -"The View from Washington"
A. U.S. Interests and Soviet Behavior
Our objective in world affairs is an international environment
in which our interests are secure. In its current form and with
its current expansionist tendencies, the Soviet Un.on is the
greatest obstacle and threat to such an environment. Over the
past decade at least,-the USSR has acted on the sense that the
basic forces of history were moving in its favor, and against
U.S. and Western interests and values. We and the Soviets are
and will remain competitors. The question for us is not whether
to compete, but how to compete. Clearly, our task is to manage
relations with the Soviet Union in ways that [1] advance U.S.
and Western interests and values, and [2] avoid damage to those
interests and values.
In the broadest sense, our priority objective vis-a-vis the
Soviet Union over the next 6-24 months is to maintain the sense
of American recovery and ascendancy we have already established
under this Administration. We need to show that it is the U.S.,
rather than the Soviet Union, which has the superior capacity to
understand the issues on the international agenda and shape
developments to its advantage.
Domestic economic recovery and increased military strength are
necessary ingredients. Substantial restoration of American
economic health and substantial American and Western rearmament
will be needed if we are to demonstrate that the tide of history
is running our way. At the same time, capable conduct of
American foreign policy is needed to protect and support its own
basis in economic recovery and in rearmament. Both are
threatened if we mismanage U.S. international interests.
Our foreign policy priorities are thus designed both to provide
a firm framework for our domestic and rearmament programs, and
to shape the international environment -- in general and in
competition with the Soviet Union --'in ways favorable to our
interests. Specifically:
-- We seek increased and modernized military strength for
ourselves, our Allies and our friends.
-- We seek to consolidate and strengthen our alliances and
friendships with key countries.
-- We seek to resolve regional crises and tensions in
cooperation with area parties, thus depriving the Soviets of
entries and opportunities and building conditions for future
stability. - ? - -
SECRET/SENSITIVE
DECL: OADR
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-- We seek to promote respect for the rule of law and for
internationally accepted norms of behavior, as the proper basis
for relations between states and for world order.
-- Finally, we seek to advance world economic recovery and
stable arrangements and rules for international economic life.
Thus, we have a broad program which extends far beyond our
competition with the Soviets but promises major U.S. advances in
that-competition to the extent that it is successful:
It will demonstrate our mastery of events and trends;
-- It will demonstrate how irrelevant the Soviet Union --
dictatorial, overmilitarized, expansionist -- is to the solution
of the real problems facing mankind; and
-- It will set the terms and a framework for constructive Soviet
participation in world affairs if the USSR moves in that
direction.
There are both dangers and opportunities in a.program intended
both to limit Soviet mischief-making and induce constructive
Soviet participation in international transactions. Two
examples illustrate this. Non-proliferation is an area where
Soviet assets are so lar?e that little progress can be made
without Soviet participation but where the Soviets share many
motives for constructive behavior with us. It is thus an issue
where cooperation is both essential and possible. World
economic relations are a contrary example. The Soviet economy
is large enough and related enough to the world economy to
count, but not dependent enough on outside inputs to make
constructive participation. come naturally. Hence, Soviet
conduct in the world economy is mainly opportunistic, involving
use of economic assistance to gain political advantage, without
contributing in substantial ways to solutions of the financial,
energy, food and other resource issues which define the global
economic problem. Here a dual approach is called for: to
pillory the USSR for its irresponsible passivity in the face of-
global economic issues and its exploitative approach to economic
tensions in individual countries, and to set the terms and
define standards of performance for a genuinely constructive
Soviet role.
We have also developed a specific program to guide us directly-
vis-a-vis the Soviet Union. It focuses on three tasks:
-- To contain and overtime to reverse Soviet expansionism by
competing effectively on a sustained basis with the USSR in all
international arenas:
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-3-
--To promote, within the narrow limits available to us, the
process of change in the Soviet Union in the direction of a
pluralistic political and economic system; and
-- To engage the Soviet Union in negotiations to att.:mpt to
reach agreements which protect and enhance U.S. interests and
which are consistent with the principle of strict reciprocity
and mutual interests.
We can expect the Soviet Union to resist implementation of both
the broad U.S. foreign policy program and our specific program
vis-a-vis the USSR with all the considerable political and
diplomatic assets at its disposal. It is too early to say
exactly what steps the Andropov leadership will take.-to do so.
There are limits -- in resources, in outlook, in the shape of
issues -- to what it can do. No doubt it will be prudent.
Nevertheless,*it would also be prudent for us to examine the
shape of an activist Andropov foreign policy going somewhat
beyond the cautious limits that are most likely in order to
envisage the challenges it could pose to our own foreign
policies, and the adjustments that we may wish to tz?ce to meet
them.
So far under this Administration, we have demonstrated that the
historic.tide is not running against the U.S. and the West. We.
have not yet succeeded in showing that it is shifting in our
favor. To do so, we will need over the next 6-24 months to
manage both bilateral relations and, more importantly, the key
elements of the international environment skillfully and
forcefully.
In order to block progress on our program, the most plausible
objective for an activist Soviet foreign policy over this period
is to isolate the U.S., either by making moves in which the U.S.
is not involved, and/or by demanding "ready and positive"
responses to moves which do not go to the heart of U.S. and
Western concerns but can nevertheless be advertized as
"contributions to lessening tensions." The point will be to
show our Allies, friends and public opinion that we cannot
control events, and that we let issues slip away from us because
we are not alert or firm enough, in order to demonstrate that
the Soviets rather than the Administration hold the initiative.
Regional Issues
In our direct dealings with the Soviets, we have made clear our
general concern with the adventurist pattern of Soviet conduct
on regional issues, and-our specific concerns with regard to
Poland, Afghanistan, southern Africa, Central America/the
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-4-
Caribbean and Kampuchea. They have accepted discussion with us
on the basis of this agenda, and in two cases -- Afghanistan and
southern Africa -- we have conducted more detailed discussions
at the sub-ministerial level. Nevertheless, resolution of these
issues on a basis which advances our interests will not depend
primarily on U.S.-Soviet bilateral discussion. Rather, it will
depend on how the specific regional situations evolve, under
U.S. and Soviet influence, but not U.S. or Soviet dictation.
Reviewing these issues, it is natural to begin with an area
where new Soviet activism met with a local response even before
Brezhnev's death: the Sino-Soviet negotiating process. A
Soviet policy approach designed to isolate the U.S. could well
begin in Asia.
1. Improvement in Sino-Soviet Relations
The U.S. interest in Sino-Soviet relations is to retain maximum
flexibility for ourselves in relations with both; to limit the
degree of rapprochement before it damages regional stability or
U.S. alliances and friendships in the area; and to ensure that
partial solutions to area problems which may emerge from
Sino-Soviet discussions do not stop short of addressing the real
causes of instability we have defined.
Both for historical and geographical reasons, and because both
sides have substantial interests in Europe, Asia, and elsewhere
which could be jeopardized if they sought-a return to their
relationship of the 1950's, we believe it is unlikely that
Beijing and Moscow will move quickly to any strategic
realignment that would face the United States with the two-front
challenges of the Cold War era. Nonetheless, however sparse the
substantive achievements might.be, Moscow and Beijing have
already derived some diplomatic advantages from their
negotiating process, and it would be imprudent to exclude
results altogether.
A modest relaxation in Sino-Soviet tensions need not damage U.S.
interests, provided we do not over-react in our own dealings
with Beijing. However, the further the process goes, the
greater the potential damage, particularly if accompanied by
further strain in U.S.-China relations.
--Force Postures. Some of the global strategic benefits
resulting from the Sino-Soviet confrontation could be lost if
there were substantial reductions in troop levels on the borders
of China. Even if Soviet troops were not redeployed westward,
Western military planners would have to calculate a larger
possibility that, in a war contingency, Moscow could free Soviet
Far East forces for use-in Europe. Moscow, in turn, would have
fewer grounds to fear U.S.-China collaboration in a global
confrontation.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-5-
-- Political Impact. Regionally, if China's flexibility to
redeploy its own troops were increased, the concerns of our
Allies and friends [perhaps most notably Taiwan] could be
increased. The latter factor could make it harder to implement
the August 17 U.S.-China Joint Communique, which is critical to
preventing deterioriation of U.S.-China relations. Moreover,
improvements in Sino-Soviet relations could well increase
pressures on Deng's reformist group from hardliners, who
question the importance of U.S.-China relations to China's
security and want an assertive policy vis-a-vis the U.S. and
Taiwan, which could further reduce the counterweight to the USSR
China now constitutes. A significant improvement in Sino-Soviet
relations could also reduce the long-term influence on China
which we seek through the large and still-growing student
exchange program giving us access to future Chinese elites.
2. Japan
The U. S. interest is to keep our principal Pacific ally
confident of U.S. capacity to maintain our common security
interests; increasingly willing to contribute to their
maintenance; willing to work with us to resolve both bilateral
issues and multilateral problems, in both the political and
economic areas; and supportive of Western positions in a
variety'of international fora. In terms of resources devoted
to regional security, we have an interest in seeing the Soviets
reduce their threat to Japanese security, but should recognize.
that Japanese concern about soviet military forces as the only
plausible hypothetical threat to Japan serves to cement
US-Japanese ties.
Japanese attachment to the U.S.' security tie is unlikely to be
called in question by any foreseeable development, and the
direct Soviet blandishments to Japan which are most likely would
arouse skepticism rather than responsiveness. However, there is
some Japanese nervousness about the implications of the
Sino-Soviet negotiating process. Our ability to collaborate
with Japan in Asia as well as we do has been conditioned in
large part by common approaches to China over the past decade.
Substantial movement toward Sino-Soviet reconciliation could
possibly lead to a renewal of differences over China policy and
to charges in some Japanese political circles, right and left,
that U.S. mismanagement of China policy had been among the
factors responsible for such rapprochement. there would be no
inclination to weaken the U.S.-Japan security treaty as a
result, and this in turn should act as a brake on Japan's moving
off on its own, but Japan might in these circumstances be less
inclined to follow the U.S. lead with regard to Asian policies,
particularly where China is a factor.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-6-
Direct Soviet blandishment could take the form of troop
reductions in the Northern Territories; offers to discuss SS-20
deployments in Asia with the Japanese; or hint at a return to
the defunct 1955 offer to return the two smaller-of the four
islands that constitute the Northern Territories. Mere Soviet
overtures on the Northern Territories would have limited
resonance, and would on balance be viewed with suspicion by the
Japanese. An offer to discuss SS-20 deployments with Japan
would suggest to the Japanese that Japan is a target to an
extent the Soviets have thus far avoided. Thus, in terms of
bilateral blandishments only actual return of the two islands
would cause serious Japanese questioning of the tough
anti-Soviet stance that comes naturally to them.
Soviet positions on the Northern Territories have been very hard
.for almost two decades, so that it is highly speculative to
envisage Soviet offers, much less a Japanese response.
Nevertheless, a combination of expressed Soviet willingness to
deal on the Northern Territories and rapidly advancing
Sino-Soviet reconciliation which the U.S. appeared helpless to
affect could produce the kind of Japanese anxiety which would be
detrimental to U.S. interests.
3. Kampuchea
As one of the Chinese obstacles to normalization of relations
with the USSR, Kampuchea is on the agenda of Sino-Soviet talks,
and the Chinese have now presented a proposal for phased total
withdrawal of Vietnamese troops in that context. Our interest
in both regional and U.S.-Soviet terms is in total withdrawal of
Vietnamese troops, leaving an independent, non-aligned
Kampuchea. But a partial withdrawal which left Kampuchea under
Vietnamese control and deprived our ASEAN friends of the will
and/or means of promoting their consensus conditions for
regional stability, would not be in either the U.S. or Chinese
interest.
In Kampuchea, the Soviets and Chinese could theoretically
convince the Vietnamese to withdraw all forces in return for
Chinese security assurances, termination of support for the
Khmer resistance, and increased Soviet and possible Chinese aid,
with a payoff in Sino-Soviet relations and in a reduction of
ASEAN pressure. It might improve Moscow's image and marginally
improve Soviet access to ASEAN, but might perpetuate general
ASEAN wariness of China, and might well also lead to increased
access for our friends and us in Indochina. A Soviet-Chinese
induced partial Vietnamese withdrawal, by contrast, might only
.heighten ASEAN suspicions of both-the Soviets and Chinese.
ASEAN could react in two ways. First, it might feel obliged
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
simply to acquiesce. Or, it would act to maintain its control
of the Kampuchea situation and pressure for total Vietnamese
withdrawal. The legacy of strong U.S. support for ASEAN and the
attractions to Hanoi of normalization of U.S.-SRV relations and
access to Western resources, and inevitable fear in ASEAN of a
Sino-Soviet-Vietnamese condominimum in Southeast ALia, give our
friends and us important leverage unavailable to Moscow or
Peking.
4. Afghanistan
As in Kampuchea, our interest in both regional and U.S.-Soviet
terms is in total withdrawal of Soviet troops and restoration of
non-aligned, independent status under a government-of the
Afghans' choice. But, as in Kampuchea, a partial Soviet
withdrawal that deprived Pakistan of the will and/or capacity to
resist a Soviet troop presence in Afghanistan, led to a partial
Soviet withdrawal that left the Soviets in control of
Afghanistan, and was achieved without U.S. input, would not be
in our interest. Again, the Chinese also would be unlikely to
cooperate in a solution of this sort. But, althouth no concrete
proposal has yet surfaced, Afghanistan figures, like Kampuchea,
as one of the "obstacles" to normalization on the Sino-Soviet
agenda.
Faced with a Soviet offer to reduce troop levels and perhaps
reconfigure the puppet Afghan government in return for
reductions in Pakistani support for the resistance, our
proximate goals should be to ensure that the Pakistanis, rather
than the Soviets, control the pace of Soviet reductions, and
that Pakistani support for the resistance does not cease until
total Soviet withdrawal is achieved.
5. Persian Gulf and the. Middle East
These two regions are of course fundamental to our interests,
and the Soviets possess considerable assets in the area. These
are of two kinds, though the Soviets do not distinguish between
them in pursuing their own purposes. They have a wide variety
of covert means to influence critical situations: in Saudi
Arabia, among PLO and other Arab radicals, in Iran. They are
used to obstruct U.S. peace and mediation efforts, and to
position the Soviets to exploit new opportunities. In terms of
political and diplomatic leverage, on the other hand, Soviet
assets have been seriously reduced in recent years.
In the Iran/Iraq war, they must lack confidence in their
capacity to derive advantage from any possible outcome, and the
Gulf states will be difficult for- them to penetrate in the next
6-24 months even if the Saudis were willing. Here our objective
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE_
-8-
is to prevent the Soviets from exacerbating the current Iran/
Iraq conflict, and to deny them the chance to set the terms for
its solution, through our relations with third parties.
On Arab-Israeli issues, only if Syria became a pure Soviet
client through some unlikely combination of reduced Saudi
support and Syrian failure of nerve would the Soviets be in a
position to block US-mediated forward movement. Should the
current US peace initiative not succeed in producing
negotiations, the Saudi reaction could include the establishment
of active diplomatic relations with the Soviets; but for
internal reasons and because of the strength of our position, it
would not have substantial or far-reaching effects on our
interests. Hence, while the Soviets can continue to play a
modest blocking role in the area, their chances of reentering
the mainstream of area developments in the next two years are
small.
6. Ethiopia
Across from the Peninsula on the other side of the vital Red Sea
oil route, the situation is threatening for U.S. interests. The
regimes closest to us -- Sudan and Somalia -- are so weakened
by economic crisis as to be living on borrowed time. Libyan
intrigue and the overwhelmingly dominant Ethiopian military
establishment could be used by the Soviets to topple Siad Barre
.and/or Nimeiri, thus dealing us a geopolitical reverse at little
cost or risk to themselves. Our primary interest vis-a-vis the
Soviets is that they refrain from doing so. Drawdown or
departure of Cuban forces in Ethiopia is a secondary priority.
7. Southern Africa
Here our primary interest is that the Soviets refrain from
obstructing and preventing conclusion of the Namibia/Angola
settlement process underway. The U.S. is held responsible for
the success of a diplomatic initiative that has been difficult
from the beginning and is encountering heavy weather now. The
Soviets realize it is not yet exhausted and fear it may succeed,
thus undercutting their influence in the region. At the same.
time, they wish to avoid seeing the onus for failure placed on
themselves or the Cubans, so their opposition must be low-key,
and thus possibly ineffectual
Ultimately, a deal must be cut if there is to be a regional
settlement, and some degree of Soviet association will be
required if their Cuban surrogates are to cooperate, as they
must for settlement to be achieved.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
.SECRET/SENSITIVE
-9-
In the near term, if the Angolans and other Africans insist on
Cuban troop reductions in Angola, it is not to be excluded that
the Soviets and Cubans will accede in order to avoid the blame
for keeping Namibia enslaved. If they do, a plausible offer
would be a Cuban-free zone in southern Angola and'perhaps some
reductions in return for a comparable commitment from the SADF
in Namibia, and perhaps a Cuban commitment to withdraw entirely
"near" in time to total SADF withdrawal from Namibia. This
would be damaging to our interests if it were inadequate to
secure SARG cooperation on the total settlement, or if Cubans
were redeployed to Mozambique.
8. Central America/the Caribbean
Our general interest is that the development process in the area
go forward without outside subversion or threats to our security
interests. Whatever the complexities of the Soviet-Cuban
relationship, the Soviets are currently -engaged in fostering
outside subversion, in building up Cuban power-projection
capabilities through direct military supply, and in building up
Nicaraguan military strength indirectly through Cuba'. While the
region is peripheral to core Soviet interests, they have a
strategic interest in causing trouble for us in a vital area
close to the U.S. It would be in our interest for the Soviets
to stop any or all of these activities.
The most urgent contingency in terms of escalatory capability
[and thus of U.S.-Soviet relations overall] is introduction of
jet combat aircraft and Cuban combat forces into Nicaragua. In
our bilateral dialogue with the Soviets, we have said this would
be unacceptable, and they have the means, within the "normalcy"
of their Cuban relationship, to-prevent it. Aside from this
contingency, the Soviets can increase or relieve pressure on us
in the region by.altering the pace of military supply to Cuba.
Over the longer term, this is already a problem for us, since a
conflict contingency would require us to use NATO-designated
forces in order to counter Cuban forces now existing; increasing
them will make the problem worse.
9. Other Extra-European Areas.
Elsewhere in the world, military conflicts, economic recession
or simply societal development can produce fresh opportunities
for the Soviets to expand their influence to our detriment at
little cost to themselves. The Falklands crisis was such a
case. Economic/financial distress in the Third World -- Mexico
comes to mind -- provides the raw material for a potential loss
of U.S. prestige and influence that the Soviets could seek to
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-10-
exploit. U.S. losses need not lead to Soviet gains, but to the
extent they are exploited by the Soviets they will serve to
"prove" the failure of U.S. leadership.
The Soviet Empire
Within the Soviet Union and in Eastern Europe, the U.S. interest
is in evolution toward greater diversity, individual freedom and
national autonomy, and respect for human rights and
internationally accepted norms of behavior, both between states
and "toward one's own citizens. In practical terms these goals
are not always perfectly compatible; Romania is a case of a
country whose human rights performance makes U.S. support for
national autonomy [in the specific form of access to the U.S.
market as an alternative to the Soviet market through MFN
treatment] difficult. An active Soviet diplomacy under Andropov
is capable of increasing this difficulty through moves that are
both welcome and troublesome to us. Adjustments are unlikely to
be fundamental, or made as "concessions" to us; but it will be
hard or impossible to dismiss them either in terms of our own
principles or in relations with our European Allies.
Three types of possible adjustments come to mind:
-- A) Human rights. Since state control over Soviet citizens
is basic to the Soviet regime, basic changes are not in the
cards, but the regime could easily make small moves in the human
rights area designed to require a "positive response" in view of
the importance we attach to this topic. The Soviets could
release or improve treatment of more or less well-known
dissidents, possibly allowing some to emigrate, under cover of a
broader amnesty, in return for spy trades, or simply as gestures
timed for internationl impact, e.g., in CSCE. Or they could
make sudden moves to meet Western "balance" requirements in
CSCE. Or they could make new gestures like the invitation just
accepted by the ILO to observe labor conditions in the USSR.
-- B) "Normalization" in Poland. Without judging the degree of
Polish initiative/Soviet tolerance of every step, the process is
sure to cut both ways in terms of U.S. interests. It will
alleviate suffering, and show that Western pressure in some
sense "works." But it will also reflect greater regime
self-confidence; it will keep most fundamental aspects of
repression intact; and it will increase tensions among the
Western Allies.
-- C) Economic Reform. Within the next 6-24 months, the
Soviets could broaden the limits of their tolerance for economic
reform in selected-East-European countries [though they are on
balance unlikely to do so in a major way]. The motives would be
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-11-
to relieve themselves of some of the economic burdens they
carry; to consolidate party hegemony before developments reach
the "Polish" flashpoint;.and to observe [outside the Soviet
Union] experiments with efforts to contain the political
consequences of economic reform through greater discipline in
non-economic areas, in case they also choose this path to
dealing with economic dilemmas. Here too, we may have to decide'
how far we welcome or even support reforms undertaken to achieve
such goals.
Military Security/Arms Control
The U.S. interest is to modernize our military forces and
correct shifts against us in the military balance, at the lowest
possible level of forces achievable through agreements that
protect and enhance U.S. interests. The Soviet objective is to
undercut public and political support for this effort here and
among our Allies, and to defeat it. Over the next 6-24 months,
the Soviet leadership under Andropov is-likely to make vigorous
moves to achieve that objective. Andropov will need to keep
military support for his leadership, and major reductions in
forces are unlikely. However, some adjustments ara possible.
The Soviets may consider some redeployment or even disbandment
of conventional forces, and have offered to reduce
intercontinental strategic forces in START. At the same time,
the war'fears infecting West European, Japanese and U.S.
politics are genuine, so there will be a high premium on
parleying modest willingness to adjust force levels downward
into showcase negotiating moves designed to undercut Western
rearmament. Current Soviet attacks on and veiled threats with
regard to MX and INF deployment may thus be increasingly
counterpointed by well-publicized negotiating "concessions"
intended to paint the Administration as insincere and unwilling
to negotiate, the better to isolate it. Once again, we may have
to deal with offers we know are superficial or malign.
Western Europe
At the present time, we are pursuing a large number of specific
objectives of very high national importance to us in Western
Europe: implementation of the NATO two-track decision on INF
modernization; increased West European defense spending; West
European cooperation in shaping and implementing a coherent new
policy for East-West economic relations; European willingness to
work with us on both bilateral and multilateral trade and
financial issues. Many and ultimately all of these objectives
are important to the success of our broad program for managing
relations with the USSR. In defensive terms, we wish to prevent
the Soviets from threatening either our West European Allies or
our capacity to accomplish our larger goals; more broadly,
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-12-
however, we wish to move with our European Allies to shape a
sounder and more stable environment for East-West relations.
The Soviets know this, and can be expected to try to make our
efforts fail. They have always done so, and they will almost
certainly try harder under Andropov. Their East European
glacis, where Andropov has his most extensive direct foreign
policy expertise, is under strain, and at a time when Western
Europe must be returning to the center of Soviet
preoccupations. It is conceivable that the Soviets see in
East-West tendencies a historic opportunity to achieve a
permanent weakening of the Western alliance system. The Western
rearmament effort will be at a critical stage in 1983, when the
INF deployment decision will be implemented; the Soviets must
try to prevent implementation in any event, and will try to do
so in a way that maximizes 'strains in the Alliance. Hence, it-
is no surprise that a European angle figures prominently in
much of the action program for Soviet diplomacy sketched out
above.
-- Even a program which begins in Asia can be used to show
Europe that the USSR is the superpower most actively seeking
political solutions to problems:
-- "Reducing tensions" on the USSR's Asian borders while
threatening a retaliatory buildup in the West could be a
worrying contrast for Europeans;
-- Forcing a stiff U.S. response to Cuban moves in the Caribbean
would play to Soviet advantage on a sharp contrast in U.S. and
European priorities; and
-- The Soviets have a small but impressive arsenal. of moves --
human rights gestures and arms control "concessions" -- to fuel
the lingering West European detente mystique.
Thus, in this critical area as well the USSR could present a
mixture of threats and blandishments which will be'hard to
handle.
B. U.S. Priorities and U.S. Leverage
The U.S. has a strategic approach reflecting its real interests
in world affairs at this time, and a comprehensive program for
pursuing it. There is no need to adjust fundamentals.
Precisely because the program is so comprehensive, however, we
may need to concentrate our efforts and prioritize among the
elements of the program if we are faced with new Soviet activism
along the lines suggested above.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-13-
Soviet moves of this sort would in fact constitute a response to
our overall policy approach, and a validation of it. Soviet
military adventurism and Soviet disregard for human rights and
other international commitments have after all been at the top
of our agenda for U.S.-Soviet and East-West relatio,._s. Moves in.
Afghanistan, in Kampuchea, in Poland, in human rights would be
movement in our direction. The problem would be that if the
Soviets remain in control of the process of movement, such moves
will stop well short of addressing our basic concerns. Our task
would be to keep the Soviets moving over the border between
shadow and substance, by our own efforts and together with our
Allies and friends. To do so, we would need to concentrate on a
limited number of priority objectives in our program.
It is premature at this point to identify such priorities. It
is not even clear that the Soviets under Andropov will wish or
have the capacity to proceed as projected above. But it is not
premature to begin thinking about the criteria we would have to
use to choose wisely the objectives on which we might
concentrate.
Briefly, there are four possible criteria, and they are not
mutually exclusive:
-- Strategic. Attention to this criterion would define areas of
critical importance to our security interests where these
interests are under significant threat. Examples would be the-
Persian Gulf and the Red Sea/Indian Ocean supply lanes; Central
America; our military modernization program [and hence European
defense spending as well as our own, and management of arms
control negotiations with the Soviets]..
-- Western Values. This criterion defines areas where our own
self-respect and our broader leadership credibility require
sustained political and diplomatic efforts whatever the
near-term strategic advantage. Examples would be human rights;
respect for the rule of law and international commitments; our
program for promoting democratic development; and reciprocity in
bilateral relations.
-- Unity in Strength. In the U.S.-Soviet competition, we will
be obliged to act unilaterally on some occasions, but in most
cases our ability to determine outcomes depends on common or
harmonized action with other countries. This fact defines a
criterion which focusses on issues where cohesion with Allies
and friends is needed either to effect a particular outcome or
to maintain a reserve of cooperative inclinations for future
contingencies. Examples-would-be-Afghanistan, Kampuchea and INF
deployments in Europe.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE-
-14-
-- Initiative. Maintaining the initiative in our own hands has
independent political value as an element for effectiveness
everywhere. In determining priorities we would therefore need
to consider issues which permit us to display mastery of events,
even if they are not in areas of preeminent strategic interest
to us. Southern Africa is the most salient current example.
Since we cannot yet choose priorities, it is doubly premature to
identify the specific leverage at our disposal in priority
situations. But, again, it is not too early to begin thinking
about the kinds of leverage we would wish to bring to bear.
The key distinction here is between direct leverage on the
Soviets and our capacity to shape the Soviet leadership's
environment to our advantage.
The overall quality and tone of the bilateral relationship
affects Soviet decisions of interest to us, and we have
substantial control over it in our ability to set the style of
public statements and determine the protocolary aspects of doing
business. Moreover, we are in negotiation with the Soviets on a
variety of arms control issues, and it may be in our interest
over the next 6-24 months to engage new negotiations with the
USSR on various topics, ranging from arms control [nuclear CBMs
and TTBT/PNET verification] through economic issues [a maritime
.agreement and a new long-term grains agreement] to other
bilateral topics [a new cultural agreement ensuring reciprocal
cultural access to the USSR for us, new consulates in the two
countries].
Nevertheless, our capacity to shape the Soviet environment
indirectly will continue to provide our best leverage in this
period, given the high degree of mutual mistrust and suspicion
in and the current low level of direct transactions. We
regularly discuss "indirect leverage" directly with the Soviets
under the rubric of regional issues. In these discussions, we
have the option of threatening to turn up the heat on them, or
promising to turn it down, depending on Soviet conduct on a
given topic, so long as we exercise it realistically and in
coordination with other players on these issues.
In the main, however, we will exercise indirect leverage most
productively by effecting changes in actual'power configurations
of interest to the Soviets. Our public posture on
Soviet-related issues and our rearmament program are of course
key assets here. But they are matched in importance by two
others:
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-15-
1. On Asian issues [Sino-Soviet relations, Kampuchea,
Afghanistan, Japan], we can promote our interests and keep up
pressure for genuine solutions only by strong but prudent
efforts to keep our relations with China, Japan, Pakistan,
Thailand and the other ASEAN states in good repair. With China,
this means managing U.S.-China relations well, buil:ling the
bilateral aspects of our relationship where we can and renewing
our dialogue with the Chinese on strategic topics of common
interest, while managing our unofficial relations with Taiwan
with care. With Japan, we should give more weight in our
dialogue to political/security issues that unite us, alongside
trade and defense burden-sharing issues that divide us. With
Pakistan, we should develop our bilateral relationship where we
can; maintain our support for the Afghan national resistence and
firm Pakistani insistence on total Soviet withdrawal; consult
intensively on ways of advancing political solutions in
Afghanistan;'and not hesitate to advance them, or encourage
others to do so, if common approaches are agreed. With ASEAN,
we should maintain our firm support for ASEAN strategy, and
continue to stress our bilateral security relationships,
particularly with Thailand. In that context, our continued
support for ASEAN's efforts to strengthen the Kampuchean
coalition and its non-Communist elements is important. With
all, we should make the point that forces reduced should be
disbanded, and not redeployed against other friends of ours.
2. In southern Africa,-we should maintain the considerable
leverage we have by continuing to work with all interested
parties for concurrent solutions in Namibi and Angola. We
should consider increasing it by developing specific contingency
security assurances, acceptable to the SARG, for the MPLA
government, thereby preparing more specifically to tag the
Cubans and Soviets with responsibility for failure if we do not
succeed. Finally, we should continue working with the SARG and
with Mozambique to reduce the likelihood that Cubans will be
transferred to Mozambique rather than home.
3. In Europe, our multiple efforts to engineer a new
post-detente consensus depend critically for success on
developments in arms control negotiations, given the importance
both the Soviets and the West Europeans attach to this area, and
the decisive character the INF dual decision has assumed for
NATO. The leverage we develop in other areas will not
compensate for the loss we will sustain if we are unprepared to
manage a Soviet carrots-and-sticks offensive in Europe which
mixes new "proposals" or "concessions" in'INF and START with
heightened threats to Allies.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-16-
The dilemma new Soviet activism could pose for us recurs so
often, in case after case, that it can be considered generic to
the current situation. The Soviets have a running shot a
preventing success of our overall program by threatening the
integrity and effectiveness of U.S. policy from two sides: we
will sacrifice essential support for our tough approach, our
basic "leverage-," if we refuse any positive response to Soviet
moves, or if our response is too positive. We have it in our
power, working with Allies and friends, to pursue our own
objectives by making measured responses that take credit for
Soviet moves where credit is due us, give credit where it is due
the Soviets, and insist on further progress toward real and
potentially stable solutions of the issues we have identified.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
Task IV. US Policy: Possible Actions/Initiatives
put on the defensive or caught off guard.
NSSD 11-82 and NSDD establish the framework for U.S. policy
towards the Soviet Union over the next 5-10 years. The
question this section addresses is what we can do concretely
over the next 6-24 months to implement the longer-term policies
established in the NSSD and NSDD.
The preceeding three sections of this paper set out our
best estimate of the context for the next two years. There are
important uncertainties both about Soviet conduct and other key
variables (global economy, crisis spots, US domestic consensus,
etc.). However, in order to determine US policy now, we need
to proceed on certain explicit assumptions -- being prepared to.
adjust as required by subsequent developments.
We believe the most prudent assumption is that the Soviet
Union will pursue a somewhat more active diplomacy, and
continue its opportunistic course in regions of instability (as
opposed to an immobilized, inward-looking Soviet leadership).
The probability of really radical changes in the substance of
Soviet policies across the board is not high. But they are
likely to be more active on the margins across a fairly broad
front. By proceeding on this assumption, we can prevent being
But we face this dilemma. Our approach has been -- and
should remain -- that outstanding problems relate to Soviet
behavior and they need to change. This could put us in a
largely reactive mode. At the same time, in the face of a more
activist Soviet approach, American policies over the next 6-24
months must be geared to meet these four concerns:
1. To preempt, counter new Soviet threats against Allies.;
and friends (in Europe re INF) or new encroachments
(Somalia, Central America).
2. To offset Soviet efforts to undermine support for our
overall stance on East-West relation -- peace
offensives vis-a-vis China, Japan, Europe.
SECRET/ SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
3. To avoid losing the initiative or becoming irrelevant
on specific outstanding problems because the Soviets
make deals without reference to us, i.e. Afghanistan,
Kampuchea-, perhaps Poland (this is not to say, that any
change of Soviet behavior in which we are not involved
must be bad. It is to say that certain situations
which the Soviet Union and its allies created
(Afghanistan, Kampuchea, etc.) are unlikely to be
settled on optimal terms without the participation and
weight of the United States).
4. To induce Soviet acquiescence or active cooperation in
areas where this is needed, i.e. southern Africa,
non-proliferation, other arms control.
. The strategy of American activism, momentum, and strength
which this requires does not define the content of our policy
in each area. For example, we do not need to rush into a
summit just to demonstrate activism. Nor should we change
policies for the sake of doing something. Clearly our approach
will depend in part on the situation in each area, i.e. whether
in INF the Soviets make an effective presentational or
substantive move determines in part whether we need to take
steps in Geneva to assure that our deployments move ahead. But*
it does mean moving now to get the initiative in our hands in
areas where there is already evidence of Soviet movement --
China, Kampuchea, Afghanistan. In general it means being
acutely conscious that the Soviets have opportunities and the
power to move in directions both unfavorable and favorable to
the United States.
The most important determinants of the success of our
policy towards the Soviet Union over the next two years will be
external to the direct bilateral relationship. The major
determinants will be our ability: to sustain major defense
increases and restore economic growth; to keep the cohesion of
our alliances; and to help shape regional situations like the
Middle East where the US-Soviet relationship is of tertiary
importance. But there will be an important role for action and
initiative in the US-Soviet relationship as well. We will need
disincentives and incentives, a willingness to penalize
misconduct and to stimulate positive steps. This will require
discipline and sophistication -- the ability to take limited
steps while keeping from another large swing. in atmospherics.
What can U.S. policy realistically be designed to achieve
vis-a-vis the Soviet Union in this limited period of time.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
First, we need to avoid another major Soviet victory at
our expense and/or major new instance of Soviet
misconduct (of which there was one nearly every year
from 1975 to 1980), whether negative like preventing
INF deployment or expansive like a Soviet-backed
insurgent takeover of El Salvador.
o Second, we need to stimulate reassessment in Moscow
about the costs of using their normal policy tools vs.
the benefits of a more responsible approach to
international problems, i.e. that national liberation
struggles are now a two-way street -- witness
Afghanistan, Kampuchea, Angola, Nicaragua -- and that
Soviet influence/prestige could be enhanced through
participation in negotiated/peaceful solutions in
places like southern Africa.
The bottom line is that in two years the Soviet Union is
likely to present much the same challenge it does today no
matter what policy the U.S. pursues. We will not get a broad
Soviet retreat or an abandonment of their long-term view of
history. But we can try to compel a pause, while we rearm, to
sustain serious pressure at points where ultimately reversals
are possible, and to test Moscow to determine whether and where
it is prepared to engage in more constructive pursuits. Thus
we need U.S. moves which are both politically effective and
serious enough to engage the Soviet Uni6h.
How should we accomplish these objectives. The following
sets out under four categories a fairly rich menu of actions
and initiatives. Taken together, they constitute a broad
program for US actions over the next 6-24 months to deal with
greater Soviet activism -- whether of the new pressure, peace
offensive, or positive substantive movement variety.
A. What steps should we take to head off new instances of
Soviet misconduct? Warnings? Preemptive action?
We need to be prepared for a somewhat more formidable
Soviet challenge, particularly in the areas of covert action-
and military adventures, given Andropov's background and
growing Soviet military projection capabilities. These could
range from support for terrorism (PLO), to increased support
for guerillas (El Salvador), to political/military moves
(raising the fear-level in Europe, Cuban troops into Nicaragua
penetration into Pakestan), to full scale invasions (a move,
into Somalia, Iran).
What should the U.S. do to head off these possbilities.
Clearly each potential situation deserves detailed individual
consideration which this paper cannot provide. But we can take
steps in five areas:
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET /SENSITIVE
-4-
Prediction. Prediction. As the to-date success of our effort to
persuade the Soviets to keep MIGs out of Nicaragua
demonstrates, we need the best possible intelligence
collection and assessment efforts in areas where--the
Soviets might move. Unless we know in advance, we will
be unable to warn against them or take a counter-move.
We would face a fait d'accompli, or a much more
difficult and dangerous effort to reverse the
Soviet/proxy action. Specifically, we recommend that
intelligence community tasking set a high priority on
monitoring potential areas for Soviet moves over the
next 6-24 months.
2. Warnings. With advance knowledge, we can and should
issue warnings to the Soviets. We should do so in
future areas where intelligence raises serious concerns.
3. Reciprocity. The reason words had an effect in the
Nicaragua case is that the Soviets judged that t;.-iis
Administration had the will and capability to back them
up and/or to reciprocate in other areas. This is one
of several important reasons for us to sustain our own
programs to help national liberation struggles in
certain countries, and keep in good repair the
relations with other pountries we need Co do that. We
also should be prepared to increase these programs
inter alia if the Soviets increase their threat in
situations of importance to us and to indicate to
Soviets that we will.
4. Preemption/Reaction. We need to continue developing
our military capabilities for preemption/reaction,
notably the RDJTF. And we should encourage Allied
capabilities, i.e. in French in Djibouti.
5. Dialogue. One idea which needs further development is
the possibility of a dialogue with the Soviet Union
about the use of force versus peaceful settlement in
areas of instability. We are now in a stronger
position to discuss this than in the 1970s because we
are hurting the Soviets and their clients in various
areas, even as they continue to hurt us. Clearly we do
not want another set of principles which the Soviets
proceed to ignore. Nor at the other extreme can we
engage in specific.trade-offs or discussions of spheres
of influence, i.e. abandoning Afghanistan if they get
out of Nicaragua. One positive thing we have
established these past two years is that what happens
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 SECRET SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
-5-.
in Poland -- a Warsaw Pact country -- is a matter of
serious international concern. We should continue to
extend our droit de regard to the old "Soviet sphere"
and that is another reason to resist its extension --
to Afghanistan. But there might be some area for
useful thought and potential exchanges in between. The
discussion could be over "means" -- acknowledging that
we each believe in political/societal change but in
different direct-ions, that we are and will remain
essentially competitors, and that the central question
is whether support for armed liberation struggles, etc.
isn't becoming too dangerous for both sides in the
nuclear era, i.e. to use a head-clearing example, if an
insurrection starts in Mexico and the Soviets arm it,
would the United States respond by arming underground
worker movements in Poland. We could for example make
clear that there is a general relationship between the
growth, necessity for and level of our programs in
these areas and Soviet use of covert action and
military force. This is a subject Andropov and Ustinov
are particularly well equipped to address either
through others or in any direct meetings with us. This
perhaps could be done in dialogue between
non-governmental people. It probably should not lead
to any specific agreements but might result in some
reciprocal and understood demonstrations of will on
both sides.
6. Removing the Temptation. In a broader sense, one of
the key element is to prevent the source of temptation
from becoming so attractive that the Soviets
intervene. The Middle East and Southwest Asia is the
best example. Yugoslavia is another good one. US
policy must place high priority-on helping to ease
Yugoslav economic problems to prevent Soviet meddling
or worse., This applies in a number of other areas.
Security assistance is particularly critical to friends
who are potential targets of Soviet-sponsored
pressure. We should work with the environment to make
it less receptive-to Soviet use.
7. Individual Game-Plans. Finally, as we develop
individual policies for areas which Task II has
identified as most likely for Soviet action, i.e.
raising the fear level in Europe, Cuban troops into
Nicaragua, further Soviet moves in the Horn of Africa
and the Gulf we need to keep this potential for greater.
Soviet activism in mind. These papers should develop
strategies which incorporate all of the elements listed
above (warnings, reciprocity, preemption, etc.), plus
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 crnorm /cr,,TCTmT~n~
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
the traditional diplomatic use of Allies, the U.N.,
etc. As we deal with individual problem areas around
the world, we must not assume that the new Soviet
leadership is so preoccupied at home that it cannot
cause us new troubles.
B. What steps should we take to induce both general and
specific improvement in Soviet conduct? What leverage can we
apply? What initiatives-can we take?
1. Under the category of sustaining leverage and/or
turning up the heat, there are these key areas for
action:
o East-West economic policy. As the NSSD points out,
one key to our success in dealing with the Soviets
and-bringing about long-term change in the Soviet
system is a united, firm Western approach to
economic relations with the Soviets. We need to
finish the first phase of the Western effort to
define such a policy by the Williamsburg summit,
i.e. six months from now. It will take additional
time to have specific agreement and teeth for each
component: credits, COCOM, energy, etc. What this
means for our overall approach to US-Soviet
relations in the 6-24 month period of this paper is
that we can move in the right direction, but slowly
and with some predictable bumps. We need to take
this into account as we examine other areas of the
US-Soviet relationship, i.e., our economic leverage
will be growing but still limited and fragile. We
need to avoid moves which could ease pressure on the
Allies for a tougher economic policy, i.e., overly
positive atmospherics. Equally important we need to
sustain Allied consensus, not pushing them on
specific near-term problems so hard that we kill the
overall exercise.
o US-China relations. We need to provide sufficient
content to the US-China relationship to sustain this
key factor in our relations vis-a-vis the Soviets.
To accomplish this, we will need to proceed calmly
to develop US-China relations on their own merits,
in a manner that will avoid giving either the
Chinese or the Soviets the impression that they can
manipulate us.
The series of high level US-China exchanges
already planned for 1983 will be key to advancing
the relationship. The aim of the Secretary's
February trip to China -- the first in the series --
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/ SENSITIVE
will be to restore an atmosphere of trust and
confidence. We have already made clear to the
Chinese, and have received positive responses from
them, that we expect the visit to include detailed
exchanges of view in areas of common interest,
regionally and globally.
In the Soviet context, we need to focus more
closely on ensuring that any agreement the Chinese
reach with the Soviets accords with our own
interests. As the US-Chinese dialogue resumes, we
should seek to engage the Chinese in discussions on
how to prevent the Soviets from taking advantge of
any reduction in Sino-Soviet tensions in a way that
would be damaging to either of our interests. For
example, any Sino-Soviet agreement to reduce troop
levels along the border which allowed the Soviets to
redeploy southwest (e.g., Afghanistan) would be
damaging to both US and Chinese interests. It is
also in both of our interests to avoid increasing
the burden on NATO forces. Therefore, in our
dialogue with the Chinese, we should encourage them
to seek genuine demobilization, rather than
redeployment. We should also maintain close
dialogue on Afghanistan; and, on Kampuchea, we need
to keep the US-China-ASEAN consul-tative process
intact.
Improvement in US-China relations will require
not only restoring high-level rapport but also
managing problem areas, and reduces Beijing's
incentives for expanding relations with Moscow. We
need to define our long term national security
interest with China carefully, weighing export
control needs against our interest in.strengthening
China against Moscow. We must bear in mind also
China's strong sensitivity to discriminatory
treatment and need for help in its modernization.
US-China defense relations offer a means to
reinforce the bilateral relationship and nurture its
potential vis-a-vis the USSR. Proceeding too
aggressively could backfire however, furthering both
Beijing's and Moscow's suspicions that we see China
solely as an anti-Soviet weapon.- The ball is in
Beijing's court on arms sales; we can leave it there'
while nonetheless pursuing a visit by Secretary
Weinberger, which the Chinese have indicated they
would welcome.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 - - Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
We must handle unofficial relations with Taiwan
carefully, enhancing their substance while avoiding
missteps that inflame relations with Beijing and
give friends and allies the impression that we are
mismanaging this key area.
o The Middle East. Here it is important that we
conduct ourselves in ways which deny the Soviets
opportunities for advances. We should show
sufficient forward movement -- evacuation of foreign
forces from Lebanon and a beginning to broadened
autonomy talks -- for us to maintain the support of
moderate Arabs and deter the extremists from
becoming instruments of the Soviets. We should, of
course, continue to deny the Soviets a role in
either the resolution of the Lebanon problem or the
peace process. While planning for success regarding
Lebanon and Middle East peace, we should also forsee
the problems which might be caused by failure. In
doing so, we should recognize that if we play our
hand correctly, even in failure we should be able to
prevent significant Soviet gains in the Middle East.
o Other areas for sustaining leverage and/or turning
up the heat include those touched upon briefly in
"A" above: programs directed at Afghanistan,
Kampuchea, Nicaragua, southern Africa, the Horn of
Africa, etc. -
2. These same areas provide possibilities for constructive
initiatives or measures in concert with key regional
countries. We set forth proposals so that we cannot
be undercut by Soviet initiative's, but also that can
serve as the basis for genuinely useful negotiations if
the Soviets are interested.
o Afghanistan. A joint initiative on Afghanistan with
Pakistan, China and possibly the EC in the next few
months could have multiple benefits: it would be an
early way to test the possibilities for positive
movement with the Andropov regime, and make somewhat
more difficult a further toughening of the Soviet
position, i.e. raising troop levels, attacks on
Pakistan; it would keep the U.S. in-the mainstream
of this key issue, where there is some danger of
separate Pakistani and/or Chinese deals with the
Soviets on less than optimal terms; if done
carefully and in full consultation with the
Paxistanis and Chinese, it would provide some
additional content for our relations with these
countries at a time when this is needed;
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
here and abroad it would show the U.S. as active
diplomatically with a positive program vis-a-vis the
Soviet Union. Launching a joint initiative will
require considerable effort and may not succeed.
But we should attempt to do so as soon as possible
-- ideally prior to the Secretary's trip to
Beijing. We envisage a package of four substantive
elements: phased, complete withdrawals of Soviet
forces; -transitional leading to permanent safeguards
of Afghanistan as a non-aligned state which is not
threatening to its neighbors; self-determination
through electoral or traditional means; arrangements
for return of refugees.
o Southern Africa. As our southern Africa effort
moves toward critical choices in the next 3-6
months, it is predictable that Moscow will pursue a
two-track approach of (a) publicly berating us for
the Angola-Namibia linkage and stirring up African
dismay and allied nervousness over the possibility
of a breakdown, while (b) making careful
behind-the-scenes calculation of how we are doing
and what degree of compromise will be needed.
Moscow will formally reject linkage while indirectly
participating, via its influence with Luanda and
Havana, in a de facto negotiation.
In these circumstances, it is essential that
the US game plan include potential moves to maximize
pressures/incentives on the MPLA to deal and to
strip-away arguments that could shift the onus for
failure to us. One element of our approach should
be continued exchanges at sub-Ministerial level
which give us useful opportunities to probe Soviet
intentions and test Soviet flexibility. Another is
continued development, with our CG allies, of
proposals which give the MPLA (and indirectly
Moscow) something concrete it must react to.
Maintenance of CG cohesion is central, and the
French involvement in developing proposals,
scenarios and security assurances should enable us
to keep the initiative and disarm Soviet divisive
maneuvers. Assurances for the MPLA--put forward to
obtain an adequate bid on Cuban withdrawal and to
demonstrate our resonableness and good faith--range
from SAG commitments to us, to international
undertakings in the UNSC context including, perhaps,
outside observers, to bilateral help in the security.
field from the French or Portuguese.- We can best
maintain the.high ground by means of SAG cooperation
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET /SENSITIVE
in a "peace offensive" that reduces conflict in
southern Angola and--at an appropriate
moment--considering recognition of the MPLA which
would strip away the argument that our.purpose was
its overthrow. S
We should recognize that it is highly unlikely
that Moscow will come down off its "principled"
position on linkage until the pieces of a package
are in place--both to protect itself from the charge
of selling out its clients and to maximize pressures
on us. A consistent record of reasonableness--
shared with both the MPLA and Moscow--and a firm
reiteration that we cannot be shifted on the
Cubans--will give us the best chance to track Soviet
moves and shape the final outlines of a settlement
on our terms. It will also give us the basis for a
solid public presentation of who caused failure if
the process (or the MPLA) falls short. Proceeding
thus will enable us to point out that despit .its
principled position the Soviets were (already are)
prepared to consider parallel withdrawal in Phase
III. We will need to push the South Africans to
gain more high ground if this becomes necessary.
o The Horn. Via our. military assistance to Somalia
and periodic exercises, we must create the
impression in Addis Ababa and Moscow that further
aggression against Somalia runs real dangers,
including greater U.S. involvement. Economic
pressure, both direct and indirect, must be
maintained on Ethiopia to'curb its adventurism. We
should consider how we might facilitate a negotiated
decrease in border tension.
o Poland. We should do a separate paper on the
Polish-Soviet connection. Can we encourage further
progress towards reconciliation in Poland by taking
the same step-by-step/dosage approach to removing
the Poland-related sanctions in effect against the
Soviet Union? Do we want to approach the Soviets to
discuss the course we would like to see in Poland
over the next 6-24 months and how it would affect
our relations (this issue was not addressed in the
President's Dec. 10th remarks). Clearly all of this
requires close consultations with the Allies.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
o Cuban Proxy Problem. This is another possible area
for initiative which requires careful and more
detailed consideration than this paper can give.
For example, we could consider making an offer to
normalize relations with Havana if they withdrew
their forces from Angola and Ethiopia, and ended
their destabilizing activities in the Western
Hemisphere. If the. Cubans and Soviets refused to
accept the proposal, it would paint them as the
intransigent party; if they accepted, it would
constitute a major geopolitical triumph for U.S.
policy. To give this project some teeth, we could
try simultaneously to sustain pressure on Cuban
forces/presence in these areas and in Cuba itself
(at the same time, we must recognize the
complexity/difficulty of carrying this out).
In considering the foregoing we should keep in
mind these factors. There are areas where we could
consider discussing with the USSR the desirability
of reduction of withdrawal of Cuban forces (e.g.,
Africa, the Middle East). In Central America, while
we would not wish to begin a dialogue with the
Soviets, we need to warn them of the risks that arms
supplies to the area can cause. Most important we
need to make them continually aware of the
unacceptability of the introduction of Cuban combat
forces in this region.
We need to bear in mind that (a) the direct
role of the USSR in the Western Hemisphere is
relatively small; (b) its control over Cuban actions
in this region is rather in the nature of a veto on
certain possible Cuban initiatives than it is any
blanket directive authority; (c) the Cuban proxy has
strong interests of its own, particularly in Latin
America, most of which are starkly antithetical to
US interests; (d) the capacity of the United States
to change the aggressive course of the Cuban-proxy
are limited in nature; (e) in the Western Hemisphere
the actions of third countries and their reaction to
U.S. or Cuban activities will be at least as
significant as the Soviet reaction.
This means that we may wish to persuade the
Soviets to take specific steps of self-restraint or
restraint of the Cubans but that no general dialogue
on this region is desirable.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
VY~/iW ~ Vr
C. What should we be prepared to do in the bilateral
relationship if Soviet behavior improves?
Defining an improvement in Soviet behavior is more
difficult than demonstrating the reverse. In the midst of what
will continue to be a basically adversarial relationship, with
far more points of friction than agreement, what constitutes a
significant enough improvement to warrant a U.S. move? In
terms of human rights, does release of some prominent
dissidents in the midst of general repression call for
something from the U.S.? Does the absence of a new aggression
each year, an improvement over the past decade, mean we should
reward this behavior or should we continue to require progress
on existing aggressions? And how much progress on these
continuing problems warrants what level of-response in either
the direction of the overall relationship or specific areas of
it?.
There are no easy, abstract answers. To some extent we
will need to deal with issues in their own regional and
functional context, keeping in mind our overall policy; of
linkage and the realistic tone we want to sustain in the
relationship. But perhaps we can view the next 6-24 months in
terms of three general situations: no movement on the Soviets'
side except presentational insincerity; some minor moves; or a
fairly significant move(s) either in terms of political impact
or actual major substantive changes. The fo-lowing assumes the
Soviets take no major new negative action which overshadows
their neutral or positive moves.
We see three basic alternatives for U.S. policy towards the
bilateral relationship (as opposed to Sections A and B above
which ranged more broadly -- most of the actions/initiatives
set forth in those sections should be done on their own merits
regardless of improvement or lack thereof in Soviet conduct).
1. Maintain the Status Quo, including its Presentational
Aspects: Reiterate the basic policy we have
articulated since the outset of this Administration;
reaffirm that we are prepared to work for better
relations on the basis of mutual restraint and
reciprocity, but undertake no bilateral initiatives,
gestures or signals of increased U.S. flexibility on
the substance of the major issues; continue to
emphasize the need for changes in Soviet conduct as the
precondition for improved US-Soviet relations, while
pursuing an active dialogue with Moscow on the full
range of issues in order to demonstrate U.S.
willingness to find constructie solutions.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
2. Status Quo Plus Small Steps: While reiterating our
basic policy, make minor changes to our existing
positions in order to reinforce minor Soviet moves and
the "two tracks" we wish to pursue vis-a-vis the
Soviets: building our strength, and engaging in
serious efforts to improve relations on that basis.
The purpose would be to reinforce any small evidene of
movement and to test the intentions and flexibility of
the new leadership -- without offering significant
moves on the main arms control and other bilateral. US
steps could include negotiation of a new long-term
agreement on grains, reestablishment of government-
to-government contacts on trade through the Joint
Economic Commission, or minor.steps forward in arms
control, such as greater flexibility in Madrid on
CSCE/CDE issues.
3. -Bilateral Activism: Within the framework of our
existing approach, announce U.S. initiatives in arms
control or other bilateral areas, and perhaps even
agree to an early summit as well; the purpose would be
to demonstrate forcefully to the U.S. public and our
Allies that we are prepared for a substantial
improvement in US-Soviet relations, and to encourage
further positive Soviet actions. This paper cannot and
should not get into the details of possible
initiatives. We just note the centrality of arms
control -- particularly START and INF. In addition, if
there are really substantive as opposed to political
major moves in Soviet positions, we could consider
other areas for U.S. moves. For example there is some
room for expanded trade once we have clearly demarcated
the boundaries, i.e. when we"have Allied agreement on
COCOM, credits, energy, etc. This would be related to
confidental talks and significant steps on human rights.
In keeping with our overall approach, moves under all three
options would be so designed as to yield nothing of substance
unless the Soviets reciprocated.
In weighing the choice among these alternatives, we must'
keep in mind what the Soviet Union's main objectives are likely
to be in East-West relations over the coming months:
particularly, undermining the U.S. consensus in support of
increased defense spending; and undercutting the cohesion of
the Alliance -- derailing INF deployments in particular. To
counter Soviet efforts toward these ends, we need a policy
which holds firm to the principled positions we have taken on
the major issues, but which at the same time convincingly
portrays us as sincerely prepared to work for improved
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 . Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
relations. Such a policy would, at a minimum, help to defuse
the Soviet "peace offensive". If amore stable and
constructive relationship were to result, all the better.
The first approach would be the course to follow if:the
Andropov leadership were simply to maintain the foreign policy
line established under Brezhnev, and avoid any substantive or
presentational departures. Absent major Soviet initiatives or
a stepped-up rhetorical campaign, we could successfully fend
off pressures to alter our policy, and keep the pressure on
Moscow to make the first move.
The third approach would be the appropriate course of
action if the Andropov regime were to take the offensive either
on the substance of the issues, or successfully on the
atmospherics. Even if there were little Soviet flexibility
behind the intensified rhetoric, it would be a mistake to yield
the initiative we have seized in US-Soviet "relations by simply
standing pat, and we would have to develop our own program
aggressively to keep the high ground. At the same time, a more
.activist policy would not imply a shift in our basic policy
toward the USSR; we would still demand changes in Soviet
behavior as the prerequisite to changes in our own positions.
The second approach is the course that many commentators
are pressing for, but would have some important drawbacks. it
might be seen as unjustifiably forthcoming in the face of only
minor moves by a still largely unimaginative Soviet leadership.
A strategy of small steps could risk overly stimulating public
and Allied expectations of a "new dawn" in US-Soviet relations,
yet the gestures themselves would not go far enough either to
pressure the Soviets necessarily to move On to major moves or
to position us as the clearly more forthcoming party in the
relationship. They could also undermine domestic support for
our defense buildup.
The Allied dimension is particularly important as we
consider our choices. A major Soviet objective is and. will
remain to influence West European public opinion in the
direction of opposition to U.S. policies. Sustaining Allied
unity on East-West trade and defense policies will be even more
difficult during the Soviet transition, when many of our Allies
will be especially eager to let bygones be bygones and seek a
new rapport with the Andropov regime. Thus it is vital that we
coordinate closely with the Allies, including the Japanese, as
we weigh the choice between a cautious and a more activist
approach. Above all we should try to restrain the Allies from
striking out on their.own in new directions.
We also need to take into account how our policy toward
Moscow will affect our relations with the Chinese. While the
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
basic'direction of our Soviet policy will be determined by
factors intrinsic to the US-Soviet relationship, we may want to
consider the Chinese angle in deciding, for example, how we
handle the different regional issues.
D. How can we use "process and presence" to communicate
how we will respond to improved Soviet behavior, alter Soviet
incentives and disincentives, and enhance our influence on and
in the Soviet Union.
Assuming no new Soviet act of aggression, we need to
consider how to strengthen our communication with and presence
in the Soviet Union. There are three categories of "process
and presence."
1. Dialogue on specific issues. We need to go ahead with'
our talks on non-proliferation, southern Africa, human
rights and to get on with some-new areas, i.e. TTBT,
nuclear CBMs and perhaps CW.
2. Enhanced presence and the means to get to the Soviet
population are key to enhanced influence. We need to
look seriously at consulates in Kiev and Tashkent to
give some meaning to our more active nationalities
policy -- the Ukraine and Central Asia are at the heart
of the Soviet empire question. We also should review
how to gain both greater presence and greater
reciprocity through exchanges and particularly
exhibits, next to the radios the most powerful tool we
have had to influence Soviet citizens and now absent
from our arsenal because we unilaterally decided not to
proceed with a new cultural agreement. The
strengthening of the radios themselves must proceed in
accordance with approved Presidential guidance. And
finally, our overall ideological/political action
offensive must move ahead.
3. Higher-level meetings are important to getting across
our message and determining how far the Soviets are
prepared to go.
We envision a three stage process over the first six
months of 1983.
a. Meetings between Hartman and Korniyenko/Gromyko in
Moscow, and with Dobrynin here in Washington. One-
objective would be to determine whether and when
another meeting between Secretary Shultz and Foreign
Minister Gromyko makes sense.
SECRET/SENSITIVE
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET/SENSITIVE
-16-
b. Another Shultz-Gromyko meeting could make sense
before the regular one at the fall UNGA. It in turn
could determine whether or not there is reason for a
summit.
We could try to avoid these pitfalls by lowering our own
and the public's expectations with regard to a summit but that
would be no easy task. We should try to move our public line
away from emphasis on the need for "positive results" to the
theme that a summit should be "carefully prepared". Such an
approach would attempt to demystify the whole summit question,
and seek to minimize the danger that the lack of concrete
results would be interpreted as a "crisis" in the US-Soviet
relationship. Another possible way to make them lower key and
more routine would be to establish the principle of annual
summits -- this clearly requires consideration. But altering
public expectations will be very difficult no matter what we
do. Another question we would need to answer is whether we
could control the pressure for substantive results once summit
preparations were in train. (One means of lowering
expectations would be to arrange a summit on the margins of
some other event, e.g., an Andropov visit to the UNGA. Such a
summit could be more of a "get-acquainted" session, but it is
difficult to. predict whether the opportunity for such a chance
encounter will occur in the coming year).
The timing of a summit would be as critical a question as
whether to have a summit. Seeking a summit within the next six
months could be interpreted in Moscow as an attempt to meddle
in succession politics, and at home as a deviation from the
basic policy course we have established these past two years.
On the other hand, if a large number of our Allies seek early
meetings with Andropov, this could argue for an early US-Soviet
summit, perhaps in late spring, after the Williamsburg Summit
(a spring meeting could give INF a needed boost at a time when
public opposition to deployments will be reaching a
crescendo). Moreover, if the President visits Beijing, it
might be prudent to consider a meeting with Andropov in roughly
the same time frame, in view of our own difficulties with
Beijing and the nascent Sino-Soviet rapprochment.
No decisions on a summit are needed at the present time.
Until we have a better fix on Andropov's policies, and until we
can better judge whether a summit would be beneficial, we
should avoid discussing it with anyone.
SECRET/SENSITIVE
- Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3 TIVE
8238220
SECRET
UNITED STATES ARMS CONTROL AND DISARMAMENT AGENCY
Washington, D.C. 20451
NSC review completed - unredacted segments may be
declassified
MEMORANDUM FOR KENNETH W. DAM
DEPUTY SECRETARY OF STATE
December 10, 1982
Per your request, this memorandum provides a brief review
of the current status of INF negotiations and provides my
views on future strategy.
1) After a year of INF negotiations, the Soviets have
adapted their position to make it highly plausible to European
public opinion and to German public opinion in particular.
The main elements of that position are
a) The USSR will reduce the level of its "medium-
range" nuclear missiles in Europe (or within range of important
targets in Europe) from the-current level of approximately 500
(with over 1000 warheads) to a ceiling of about 150 (with no
more than 450 warheads) provided that the US foregoes its _
planned deployments of Pershing II and GLCMs in Europe and
agrees not to increase the number of its "medium-range" nuclear-
capable aircraft in Europe.
b) This will result in the USSR having fewer "medium-
range" missiles and fewer warheads on such missiles than the
US claimed the USSR had in Europe in the early 1970s before
any SS-20s,'the threat the US deployments were designed to
`counter, had been deployed.
c) Furthermore, the USSR, as evidence that all it
seeks is equality and not any advantage, is prepared to assert
SECRET
DECL: OADR
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET 2
that it seeks no more "medium-range" nuclear missiles than NATO,
it seeks no more "medium-range" aircraft than NATO, it seeks no
more shorter-range nuclear missiles than NATO, and it is pre-
pared to discuss equal limitation on shorter-range nuclear air-
craft.
2) Public opinion in Europe, and most significantly, in
Germany and the UK, no longer supports the zero/zero solution;
what they want is a negotiated. settlement that makes U-S deploy-
ments unnecessary.. From -my discussions in Bonn and London last
month, I received the impression that both the CDU and the
British government, if not yet Mrs. Thatcher, publicly stand
firmly behind the US position but desperately hope we can find
some other solution. Both face elections and don't want deploy-
ment of US nuclear weapons on their territory to be a central
electoral issue.
3) The time between now and March is the optimum time to
finalize an agreement. After that, the first physical elements
of deployment are scheduled to become evident. After that, the
positions of both sides are likely to harden, not soften; too
much will be at stake to demonstrate what could seem to be weak-
ness under political and public opinion pressure. If no agree-
ment is reached by March, and we stick to the zero/zero option,
it is unlikely that in Germany the CDU will continue to back
deployment as scheduled. It is certain, however, that the SPD
and the Greens will.more and more violently oppose; that if
deployments proceed, physical violence will be used; and that
that violence will have to be suppressed. Even then it would
be far from certain that deployment could proceed. The polit-
ical cost of attempting to proceed, particularly in Germany,
is likely to be enormous. Accordingly, we should identify now
the best alternative to sticking with zero/zero.
B. A Suggested Course of Action
1) Procedures
The governments of the countries in which deployments are
to take place fully understand the necessity of maintaining a
firm public position if anything is to be gotten from the
Soviets. They also understand the danger of leaks. The key
countries with whom prior coordination is necessary are the
UK (where.the first deployments are scheduled.to occur) and
Germany. I would suggest that Pym be talked to first, merely
to alert him that Secretary Shultz (or someone on his behalf)
intends to talk to Kohl. about a position other than zero/zero.
Only later after negotiations with the Soviets are underway
should the other deploying countries be informed.
SECRET
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
2) The substantive position to be taken:
I have found it useful to divide the options into Plan A
and Plan B.
a) Plan A
The objective would be to give Kohl and Mrs. Thatcher
the best possible ammunition in support of undelayed deployments
within the proviso -that-any agreement with the USSR must meet
the test of "equal rights and limits" as to the USSR versus the
US (not Warsaw Pact versus NATO). I would suggest that either
Secretary Shultz in negotiation with Gromyko, or I in negotiation
with Kvitsinskiy, be authorized to explore the full spectrum of
arrangements that meet those two parameters. This would include
50 missiles on their side in Europe versus 50 for us, or 75 each
or 150 each. It would also include concepts such as an equal
number of warheads on each side, freedom to mix ballistic and
cruise missiles, and even the differential choice concept included
in the Nitze/Kvitsinskiy exploratory package of last summer.
If the Soviets reject all such approaches we could make
a case that we had negotiated seriously on the basis of a number
of possible solutions other than zero/zero.
b) Plan B
The reason for considering another Plan,.a Plan B, is
that there are two difficulties with Plan A.-
First, there is little possibility the Soviets will
agree to any of the alternatives meeting the criterion of equal
US/USSR levels rather than equal NATO/USSR levels. They do not
intend to sanction US deployments of medium-range missiles in
Europe. They do not believe they need to; they think there is
a good chance US deployments will be impossible in:the absence
of an agreement.
Second, there is little possibility that European public
opinion will agree that we have negotiated seriously and explored
all useful possibilities unless we have explored possibilities
other than zero/zero that would make US deployments on their
territory unnecessary.
Any agreement other than zero/zero could be monitored
only with low confidence. Furthermore, it would set an unde-
sirable precedent to record in a bilateral treaty limitations
which are not seen to be equal between the US and the USSR.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SECRET 4
I would therefore suggest that if Plan A fails, there
be an exchange of letters between President Reagan and Andropov
rather than an INF treaty.
The exchange of letters would be in the context of an
expanded charter for START to consider INF systems as well as
START systems. The US goal would remain zero/zero but in the
interim the President's letter would state our intention to
forego INF deployments pending a START agreement; Andropov's
letter would agree to reduce over five years the number of
Soviet medium-range missiles within range of important targets
in Europe to less than 150 and to agree that 80% of the missiles
removed would be destroyed. Additional provisions such as ceil-
ings on nuclear-capable aircraft in Europe and on Soviet INF
missiles outside.of range of Europe would be included in the
letters or annexes thereto.
C. Recommendation
I recommend I be authorized to explore with Kvitsinskiy at
the outset of Round IV a package of proposals such as contained
in Plan A and that Plan B be considered in the event that
exploration pursuant to Plan A proves fruitless.
Paul H. Nitze
Ambassador
SECRET
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3_VE
8238221
UNITED STATES DELEGATION
TO THE STRATEGIC ARMS REDUCTIONS TALKS WITH THE SOVIET UNION
Geneva, Switzerland
--December 13,-"1982
NSC review completed - unredacted segments may be
declassified
MEMORANDUM
TO: Acting Secretary of State
FROM: E. Rowny, Chairman, US START Delegation c)
SUBJECT: Short-Run Tactics and Long-Range Strategy on START
1. ' What is the situation' in Geneva? We finished the
second round of START on December 2 an resume the third round
on February 2. During the second round the United States laid
out most of the remaining details of President Reagan's Eureka
proposal. The Soviets proposed little new and essentially
stalled.
2. ' What is the 'situat'ion 'in Mo's"cow? Andropov has moved
in rapidly, is in complete charge, and is putting younger
proteges into key positions. He apparently struck a deal with
the military and will not reduce the momentum of buildup in
strategic arms. Andropov has shown he is well aware of the
Soviets' serious economic and foreign policy situations and
will tackle them energetically. In arms control he will be
more sophisticated and clever than Brezhnev. He will seek to
appear flexible and reasonable while in actuality'he will-be
tougher than Brezhnev. Andropov will exploit public opinion
sentiment in the West, giving priority to Europe.
3. What is the situation in Washington? President Reagan
achieved a victory in the Nov-ember elections by keeping intact
the Senate majority but suffered a defeat by losing 26 Repub-
lican seats in the House. Since the economy has yet to show
a conclusive turn-around, defense cuts are the prime objective
of an increasing number of legislators. The deletion of funds
for MX on December 7 by a substantial majority (and the less
publicized deletion of funds for the Pershing II) are severe
blows to our defense programs and will have grave implications
for START and INF. Meanwhile, the freeze movement and highly
publicized Catholic Bishops' activities, although cooled off
somewhat, are still very much alive and need to be actively
countered by prominent Administration officials.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 II
Approved For Release 2009/04/14 :TCIT
TA-RDP84B00049R000400710011-3
2
4. What is the situation 'in Western Europe? We are,
unfortunately, faced with a tired and weary Europe, reluctant
to face up to the threat and the needs of their own security.
Europeans are increasingly skeptical about the direction of US
foreign policy and about US sincerity in arms control. They
show increasing resentment over US role in Europe but at the
same time are unwilling to take care of their own needs. The
Soviets have skillfully exploited this-European malaise and
Andropov can be expected to work harder to.split us_from Europe.
5. What will be the Soviets'' strategy and tactics for
'START? The Soviet strategy an ong-term goals will not undergo
any major change. Andropov, while seeking to improve f e
internal economic and social situation and the external inter-
national situation, will continue to rely heavily upon military
power to back up Soviet foreign policy objectives. Tactically,
he will make arms control proposals and foreign policy moves
which will make him appear moderate, flexible, and reasonable.
In Geneva the Soviets have linked any reductions in START to
no deployments of GLCMs and P-II's in Europe. While Moscow
will probably not make such linkage public, it will undoubtedly
publicly accuse the United States of lack of flexibility in
INF, and of stalling in START. Dobrynin will attempt to estab-
lish the back-channel as a way of exploiting US internal differ-
ences and influencing US arms control policies.
6. ' What should' be our long-term 'strategy and short-term
tactics? Our long-term strategy should be to continue the two-'
trams approach of modernization of US programs and arms control.
Without a strong defense posture US foreign policy goals will
not be achieved. At the same time, only an improved military
posture will provide the Soviets incentives for entering into
arms control agreements.. Most importantly, we need a strong
and steady public relations campaign. The President, although
the most important player, cannot carry this program alone.
Other officials should carry the main burden of the stepped-up --
public relations program. I would suggest that the President
shift his rhetorical style and let others point out that the
Soviets lie and cheat. Andropov wants, more than anything,
respect; he will react sharply to being humiliated.
As for START, we should do the work now in Washington
which will.allow us to lay out the full scope of our proposed
agreement in Geneva early in round three. This will do much
to blunt Soviet criticism that we expect them to "disarm uni-
laterally" without the US accepting constraints on cruise mis-
sile and other modernization programs. Beyond this we need to
"show progress" on arms control.by pursuing a separate and
early agreement on confidence-building measures.
7. What should be our 'course of action in 1983? 1983 will
be a critical year for arms control. Since Andropov will engage
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
in a more dynamic Soviet diplomacy, we should be in a position
to initiate action in US-Soviet relations, not just react. Other-
wise, the Soviets will be perceived as setting the East-West
agenda, not us, and scoring diplomatic gains at our expense.
The last full year before the election year of 1984 affords us
opportunities to get beyond the stage of tactical skirmishing
in START before domestic pressures and Soviet hedging of bets
begins to set in. The.next year may also. be the las-t chance
to achieve a truly effective deep-cuts agreement since the USSR
is on the threshold of production and deployment decisions.
Allowing START negotiations to stall could mean lost opportun-
ities. From many vantage points, therefore, 1983 could be an
excellent time to draw the Soviets into a real bargaining situ-
ation.
As for timing, it is too early to make any shifts or
take any major initiatives. We should stick to our basic posi-
tion and extol its virtues. We should see how MX/CSB Peace-
keeper fares in Congress, and see how our defense authorizations
stand up. We should also wait to see what the Soviet leadership
does during the next several months. In April, at the end of
round three of START,.we will be in a position to evaluate
whether it would be in our national interest to move to get an
agreement by the end of 1983. This decision should not be tied
to domestic politics. Nevertheless, it should be obvious that
if we take no initiative by the summer of 1983 nothing will
happen until after the elections in 1984. On the other hand, if
we decide next spring,.after careful evaluation, to move to get
an agreement by the-end of 1983, it will take us at least six
months in Geneva.to work out the details. Such an agreement
would probably have to settle for:
- Reductions in warheads and deployed missiles to figures
higher than our proposed levels of*5000/2500/850.
Reductions in throw-weight less than could be achieved~
through reductions to the Eureka levels.
Limits on the number of ALCM-carrying bombers. We
should explicitly link any. willingness to constrain
cruise missiles to Soviet willingness to agree to
substantially lower levels of ballistic missile throw-
weight.
Thus, while some current US goals, such as equal throw-
weight, reductions to. low levels of missiles and warheads, and
limits on the number of non-deployed missiles, might not appear
achievable the near-teerm, we would want to retain them as long
term objectives and continue negotiations toward these ends. We
would need to retain sufficient leverage with which to achieve our
long-term goals.
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
However, these are not decisions we need to make now.
By round three we need only be prepared to table our Basic
Elements and certain definitions.
8. Relationship of INF and START. As the time for INF
deployments draws nearer, Soviet agitation will act on Allied
nervousness to make our political position in these negotiations
less secure. The Soviets can-be expected to make their major
propaganda effozts in Europe.- They will contrast their supposed
flexibility with our unwillingness to consider any possibility
other than zero-zero. They may also indicate a willingness to
move ahead in START if we show "reasonable" in INF. In
my view this is the time to be firm and patient. The United
States should adhere to zero-zero and not reevaluate it until
after the German elections in March.
9. What surprises might' we e'xpe'ct and how should we react?
As indicate above, Andropov will be energetic and clever; he
can be expected to deal us some surprises. We should anticipate
these and make preparations now to head them off or turn them
to our advantage. These surprises can be grouped under three
clusters: (a) The Soviets may try to appear more.reasonable
and forthcoming; (b) The Soviets may opt to play hard-ball; and
(c) The Soviets may seek interaction between INF and START.
a. The' Soviet's' may' try * 'to' appear more reasonable and
forthcoming. Soviet leaders and negotiators in Geneva may make
new proposals, such as offering to include missile 'throw-weight
if we include bomber "throw-weight," may make new proposals
on warhead and cruise missile limitations, or may try to show
that the 1800 proposal is a good "way station" on the way to
further cuts. Counter: We should be prepared to-table our
Basic Elements, to demonstrate that bomber throw-weight is not
the same as missile throw-weight, and that the 1800 proposal (in
the.absence of limitations on missile warheads) could lead
to little or no reduction in Soviet strategic capability.
b. The Soviet's' may 'opt* to' la hard-ball. This could
cover a number o actions. They might charge that since we
are deploying MX/CSB,-the'Soviets need not be limited by SALT.
This could be followed by decisions to build new systems and to
cease to dismantle older systems, for example, Yankee submarines,
as newer systems are deployed. The Soviets could stop their
current "moratorium" and begin deploying additional SS-20s or
SLCMs against Europe. They could also announce adecision to
deploy Soviet GLCMs against Europe and offer:to trade-.them for
US GLCMs..: They could carry--out Brezhnev's threat to place
the US':in an "analogous" position should INF deployment proceed
by deploying SS-20s ox cruise missiles in Cuba or by stationin
SLCM-carrying submarines off the US coasts. Counter: We should
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
J L., l\L 1
make the necessary preparations now so that we can play hard-
ball in return.
c. The Soviets may' 'seek interaction between INF and
START. They could p ay this card in a number of ways. For ex-
ample, they could offer us concessions in START if we offer them
concessions in INF, walk out of INF because we are not being
"flexible and reasonable," and offer to-fold INF into START.
Counter: We should insist that intermediate and strategic sys-
tems are separate, that no concessions can be made for so-called
"FBS," and that no compensation can be made for UK and French
systems. We should fold INF into START only when it is in our
interest to do so.
Whatever happens, the Soviets can be expected to inten-
sify their propaganda efforts that the US is stalling while they
are moving ahead. This could take the form of renewed calls
for a freeze, saying we are fueling the arms race, exploiting
the Bishops' movement, etc. We-must start now to devote the
time and effort to our public affairs planning and implementa-
tion. The effort at the negotiating table could be won or
lost depending on whether-we succumb to public pressures or
turn public opinion around.
10. Back-channel. The use of the back-channel by Dobrynin
or others in Was ington should be discouraged. It can only
lead to a repetition of past exploitation of US internal
differences and cause confusion and erosion in our negotiations
in Geneva.
11. Conclusion. The above is a realistic approach to
continuing the bolJ-initiative in START announced-at Eureka.
Now is not the time to compromise on START. Now is the time
to get 1 TCSB and defense expenditures approved. Tt is also
the time to step up the public affairs effort and.prepare to
react to surprises. Now is the.time to invigorate the Washington
bureaucracy.
SFrRFT
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
NSC review completed - and takes no action on
document
Next 8 Page(s) In Document Denied
NSC review completed - unredacted segments may be
declassified AIPS6.4v
Q
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
vV 1\i 1 lJ ril1111tlL
Central Intelligence Agency
NSC review completed - unredacted segments may be
declassified vdashingon.D.C.20505
DIRECTORATE OF INTELLIGENCE
The State of the Soviet Economy in the 1980s
The Basic Situation
Soviet economic growth will continue to decline in the 1980s
as average annual rates of increase in labor and capital decline
and productivity gains fall short of plans. We expect average
annual GNP growth to fall below 2 percent per year in the 1980s.
? The labor force will grow more slowly in the eighties
than it did in the seventies--at an average annual rate
of 0.7 percent compared with.1.5 percent.
? Growth in the productivity of Soviet plant and equipment,
which has fallen substantially since 1975, will continue
to drop as the cost of exploiting natural resources rises
and Moscow is forced to spend more on infrastructure.
? Continued stagnation in key industrial materials--
particularly metals--will inhibit growth in new
machinery, the key source for introducing new technology.
? Energy production will grow more slowly and become more
expensive, whether or not oil production falls.
? With continued growth in domestic energy requirements,
Moscow will face a conflict between maintaining oil
exports and meeting domestic needs.
? Agriculture will remain the most unstable sector of the
Soviet economy, with performance in any year highly
dependent on weather conditions.
Slower growth of production will mean slower expansion in
the availability of goods and services to be divided among
competing claimants--resources for future growth (investment),
the consumer, and defense.
This memorandum was prepared by the Soviet Economy Division, Office of
Soviet Analysis. Comments and queries are welcome and may be addressed to
Deputy Chief, Soviet Economy Division,
25X1
25X1
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
CONFIDENTIAL
? Continued rapid growth in defense spending can be
maintained only at the expense of investment growth.
? Slower expansion of investment will be compounded by the
increasing demand for investment goods in the energy,
transportation, metallurgy, and machinery sectors.
? An increased share of investment in heavy industries,
together with continued large allocations to agriculture,
will depress the expansion of housing, and other consumer
goods and services.
Making up production shortfalls through imports will become
more expensive as the need for imports increases and Moscow's
ability to pay (hard currency earnings) declines.
? The Soviet need for imports of Western grain and other
agricultural commodities will remain high in the 1980s,
as will requirements for Western machinery and techology.
? We expect real export earnings to decline between now and
1990 as sales of natural gas fail to offset the drop in
oil earnings, and opportunities to expand exports of
other commodities remain limited by their low
marketability and tightness in domestic supplies.
? The availability of Western credits will be crucial for
Moscow to maintain or increase its imports from the West;
a tighter credit market would complicate Soviet economic
problems and make resource allocation decisions more
painful.
Options for the New Leaders
Changes in Decision-Making Process
The poor performance of the economy during the latter years
of the Brezhnev regime has driven home to the new leadership the
notion that there are relatively few opportunities for quick
fixes and that the economic problems of the current decade may
spill over into the 1990s. Because the new leaders can expect to
reap the benefits of policies with longer pay-off periods, their
policy decisions may be more forward looking. The new leaders
will be especially sensitive to the fact that severe disruption
of the economic system by the implementation of hasty, ill-
conceived policies might be a quick route to both economic and
political disaster.
The new leadership probably will continue to favor
bureaucratic centralism rather than moving voluntarily toward
fundamental systemic change. These leaders--because of the
stringent economic situation and their own personalities--will
rely more on tightened discipline and control to effect economic
-2-
CONFIDENTIAL
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
VV1.1'l illil.l ltlL
policies of long standing than on coaxing desired behavior
through increased incentives. Andropov's long tenure in the KGB
has given him experience in using administrative measures to
modify behavior. Moreover, the Soviet people, faced with
unsettling economic and social problems, seem ready to accept a
leader who would demand greater discipline.
This trend, however, would not rule out a mix of liberal and
authoritarian measures. Greater dependence on the private
sector, for example, is a distinct possibility that could be
classified as liberal, while harsher penalties for labor
absenteeism and mismanagement, though authoritarian in nature,
need not mark a return to neo-Stalinism.
Changes in Policy
The new leaders will surely bring changes in economic
policy. Because they have laid particular stress on continuity,
and because it may take some time to develop a strong consensus,
new policy lines may not appear until the 1986-90 five year plan
has been drafted--i.e., 1984/85. Some indications of change are
likely to be discernable next year, however, as discussion and
debate about policies for the late eighties ensues and annual
plans for 1984 and 1985 are formulated.
Major Claimants. The hardest policy decision for the
Andropov leadership will be resource allocation among the-major
claimants. Maintaining historical growth in defense spending
would squeeze investment and consumption further. Keeping
investment growth at current rates as well, might result in an
absolute decline in consumption.
The Military. Strong incentives exist for at least some
slowdown in military hardware procurement. In addition to
needing more resources to break economic bottlenecks, a slowdown
(or even zero growth) in military procurement for a few years
would have no appreciable negative impact on forces already in
the field, and modernization of these forces could still
proceed. We believe the groundwork for such a course may have
already been laid in Brezhnev's speech to top military officers
on 27 October 1982. In any event, this course will be required
if the Andropov Politburo wants to improve economic performance
substantially.
Investment. A strong condidate to receive more investment
funds is the machine-building sector--because of the need to
modernize Soviet industry and because of constraints on importing
foreign machinery and technology. Modernizing machine-building
would also help justify a temporary slowdown in defense hardware
as such action could ultimately enhance military hardware
production. The new leadership, with its longer time horizon,
might launch such an effort.
-3-
CONFI DENTIAL
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
l.V PIr 1 LL.1\ 11LAL
Consumption. A new leadership prone to authoritarian
solutions is likely to be more pragmatic in its consumer policy,
and may place more stress on tying wages and "perks" more closely
to production results. Retail prices may also be raised on all
but essential goods and services, and an expansion of the private
sector in consumer services may be in the offing.
Reform. The new leadership's predilection for
administrative measures and bureaucratic centralism would
severely limit the extent of future economic reform. The
difficult economic situation argues against reform measures--like
those lauched in Eastern Europe--that had never been tested in
the USSR. Some movement toward a regionally organized economy
might be thought more suitable to today's problems--for example,
exploitation of energy and raw materials in Siberia.
Agriculture. The new leaders will continue to support the
farm sector, but might decide to favor the industries that
support agriculture and those that process its output. The Food
Program already does this to some extent, but an actual cut of
investment inside the farm gate would be a stronger signal of the
new leaders' dissatisfaction with the returns from agricultural
investment.
Labor. In addition to instilling tighter discipline, the
new leaders are apt to focus on automating manual labor
(consistent with more investment in machinery), and developing
social and cultural infrastructure in labor-deficit regions. The
latter would provide some inducment for emigrants from labor
surplus areas and reinforce a regionally differentiated pro-natal
policy favoring the labor deficit areas.
East -West Trade. With economic problems pressing from every
quarter, the new leadership might welcome--though perhaps not
publicly--the opportunity to expand economic ties with the West
in general and with the US in particular; the more so if
decisions are taken to slow growth in military hardware, step-up
investment in machinery, and reduce investment on the farms.
Under these circumstances, Moscow might find it advantagous to
press for (1) economic ties that provide them with technology and
goods for both civilian and military purposes and (2) arms
control arrangements that limit Western advances in military
technology which they would find difficult and costly to counter.
Impact of Changes. These changes in approach and policies
will not be a panacea for the Soviet economy's ills.
Nevertheless, the changed policies could bring marginal
improvements in key areas and allow the new leadership to
continue to muddle through even in the face of economic
conditions probably worse than they had expected. Of primary
importance to the new leaders, these policies would not require
the surrender of power and would continue to allow them the
freedom to impose their will on the smallest economic or
administrative unit. In this way, they could feel assured of
4-
CONFIDENTIAL
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
their ability to handle such problems as public unrest, external
economic or military threats, or internal disasters that would
require an emergency redistribution of resources.
Opportunities for the US
Opportunities for the US to influence the policy changes
discussed above lie mainly in whether and to what extent we are
willing to expand commercial ties with Moscow and in the signals
we send the new Soviet leaders with respect to arms control
negotiations. Of most immediate use to Moscow would be an arms
control agreement that would provide a more predictable future
strategic environment and thereby permit the Soviets to avoid
certain costly new systems--and perhaps thereby enable them to
increase somewhat future investment for bottleneck sectors of the
economy--particularly transportation, ferrous metals, and machine
building. Soviet officials have clearly indicated that staying
with the United States in an arms race would have dire consequences
for their economy. They probably are also uncertain of their
ability to keep up technologically.
Moscow's recent attitude toward purchases of US grain not-
withstanding, the United States could again become an important
source of Soviet purchases of agricultural products and machinery
and equipment for both agriculture and industry. The need is
there, if the "price" (including sanctity of contract) is right.
Soviet agriculture could benefit substantially from US technology
in livestock feed production, fertilizer application, and animal
breeding, and the US is still Moscow's best long-term bet for
grain imports on a large scale.
The USSR faces increasing dependence on the West in developing
and processing its oil and gas resources in the 1980s. From a
technical viewpoint, the US is the preferred supplier-of most types
of oil and gas equipment because it is by far the largest producer,
with the most experience, the best support network, and often the
best technology. In some products--for example, large capacity
down-hole pumps--the US has a world monopoly (albeit one that could
be broken in a few years by entry of other Western producers),
and the most critical needs of Soviet oil industry are for just
such equipment.
Because the prospects for Soviet hard currency earnings in
the 1980s are far from bright, Western credits will have to cover
an increasing proportion of Soviet imports from the West. An
increase in the availability of US government backed credit could
look very attractive to the new leaders in Moscow.
However, since the mid-1970s, the Soviet experience in com-
mercial relations with the US has been disappointing to Moscow,
and it would probably take a strong initiative on our part just
to get their attention. Although a US offer to renew close economic
ties with the USSR might be welcome, it would probably be greeted
skeptically by the Soviet leadership as primarily a tactical maneuver--
-5-
CONFIDENTIAL
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
a further retreat by Washington (following the grain and pipeline
decisions) brought about by US-West European economic competition
and pressures from US business circles. Needing to consolidate
his power, Andropov could not--even if he wished--respond unilat-
erally to such an initiative, but would have to move within a
leadership consensus strongly influenced by the views of Gromyko
and Ustinov, who would urge caution. Thus the Soviets might:
? Accept part of the offer as a means of coping with
particularly acute bottlenecks, especially in technology
and food supplies.
? Seek to avoid the establishment of long-term economic
dependencies on the US.
? Exploit any new atmosphere of mutual accommodation as a
means of reinforcing support in the United States and
Western Europe for cutbacks in defense spending and arms
control measures favorable to Soviet interests.
We would expect the Soviets to give any US initiative low-key
treatment, publicly casting doubt on US motives, but at the same
time seeking to engage the Administration in a dialogue about it.
A US offer to return to a "business-as-usual" basis would probably
not result in any surge in orders for US companies beyond the sectors
in which the US is already an important supplier. Moscow is at least
as likely to use the opportunity created by a US offer to put commercial
pressure on the West Europeans and Japanese, and exacerbate existing
tensions in the Alliance. At a minimum, Moscow would press for US
government guarantees regarding fulfillment of contracts while at a
maximum it might seek repeal of the Jackson-Vanik and Stevenson amend-
ments. In either case, it would refuse to make any significant
political concessions in return--which Andropov probably could not
deliver even if he desired. If this process permitted- the Soviets
to acquire more technology on acceptable terms from the United States,
they would do so--but not at the expense of established ties with
Western Europe and Japan, or of their own long-term economic inde-
pendence. The Soviets have traditionally taken advantage of
opportunities to exploit relations with the West to acquire tech-
nology and goods for both military and civilian purposes and we
expect they will continue to do so.
-6-
CONFIDENTIAL
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SEURLI ED"ITUI1
On the basis of observed military activity in the USSR, Soviet resource
allocations for defense will continue to grow at 4 to 5 percent per year
through 1985, just as they did through the 1970s. Soviet marshals and
other supporters of defense programs among the Soviet leadership probably
consider the state's investments in its military establishment during the
Brezhnev era amply justified by the security the USSR has enjoyed over
the past two decades and by the political power exerted by Soviet arms
worldwide. The behavior detailed in the enclosed paper (The Brezhnev Era:
Military Posture of the USSR) indicates that their strategic priorities
are these:
(1) Acquiring the means to attack and defeat American military
forces at all levels of conflict.
(2) Maintaining the integrity of the Warsaw Pact.
(3) Securing the borders of the USSR in Asia.
(4) Extending the influence of the USSR in the Third World.
In recent years these priorities have apparently underwritten
unprecedented military research and development programs. Current R&D
includes work on some 200 major weapon systems which will reach deployed
forces sometime over the next 10 years. For example, we know that floor
space at 168 key military R&D facilities, which work on all types of
weapons, more than doubled between 1963 and 1981; and from construction
underway, we expect that steady expansion to continue at least through
1985. Recent expansion has been greatest in facilities for missiles,.
space systems, and lasers. During the 1980s, some 165 to 180 new or
substantially modified major weapon systems should be introduced into the
Soviet Forces--about 25 to 40 more than in the '60s or the '70s. Compared
with the 1960s and 1970s current Soviet R&D exhibits much less emphasis on
evolutionary modifications to existing systems and concentration on new
designs of higher technological risk and inherent costs.
Since R&D and procurement together absorb about half of Soviet defense
outlays, these ongoing programs point to ever higher resource allocations
for defense. The Soviets are already working on counters or counterparts
to almost every impending US weapon system. PEACEKEEPER could evoke
deployment of a mobile, land-based ICBM, and a new thrust in ABM defenses.
Military missions of the US space shuttle could be matched by a Soviet
space plane and a space-based antisatellite laser. US SLBMs like C-4
and D-5 will be answered by SS-NX-20 deployments. Deployment of Pershing II
could trigger a surge of SS-20 deployments (they are stockpiling precast
concrete base-parts during the present "moratorium"), and GLCM could be
answered by land-attack SLCM deployments to "put the US in an analogous
cy ? of ' 2 copies
CPDCT Classified By:
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3 sified 4N; 4/9 D
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
JtLtt
I
position." US ALCM, GLCM, and SLCM systems will almost surely cause new
air defenses to be deployed, including more capable radars and laser
weapons. These and improved antiship and ASW systems could be fielded,
and from all present indications,will be.
Were Andropov and his colleagues so to choose, they will have
the military means to adopt more aggressive and confrontational policies,
including new arms for offensive and defensive intercontinental warfare,
which would be inherently more threatening to the US. Moreover, they could
pursue military programs which could threaten Europe directly, as with
increased deployments of "Eurostrategic" weapons, or indirectly, via
Southwest Asia. They will be able to intimidate Japan in the same ways.
Clearly, there are inhibiting factors. One is Afghanistan, where
Muslim insurgents have successfully challenged the might of the Red Army,
raising problems for the Soviets among their own Muslim minorities and
calling into doubt the wisdom of projecting Soviet land forces further
into Southwest Asia, e.g., into Pakistan or Iran. Another is the PRC
and its implacable opposition to Soviet "hegemonism." And undoubtedly
a third is concern that a militant, militarist USSR might catalyze a
return to US defense budgets of 9 percent GNP, a revitalized NATO, and
even an anti-Soviet military coalition including the PRC, Japan, and the
US. A fourth is the poor performance of the Soviet economy, which could
support continued growth of the military sector only by increasingly
painful deprivation of Soviet and East European consumers.
The Soviet economy's overall productivity continues to decline,
with the 1982 industrial performance the fifth straight year of decreased
growth. Soviet GNP will rise in 1982 about 1.5 percent, the fourth con-
secutive year in which growth has been below 2 percent. The outlook for
1983 is for more of same: slow growth, endemic industrial shortfalls.,
and no improvement in consumer living standards. This year,-after three
years of harvest shortfalls, the government launched a well-ballyhooed
food program designed to improve the production, processing, and marketing
of food products. But it seems evident that there will have to be other
policy shifts to arrest and reverse the pervasive malaise. Options
include modest cutbacks in defense spending, a reallocation of investment
to industrial bottlenecks like transportation and ferrous metallurgy,
broader use of personal incentives to energize labor, and a systematic
attempt to solve the geographic maldistribution of the labor force.
CIA recently published an assessment entitled "Can the Soviets
'Stand Down' Militarily?" (Directorate of Intelligence, June 1982),
which concluded that cuts as high as 20 percent by 1990, phased in
gradually after 1985, were possible, but unlikely. The CIA paper,
written before Andropov., characterized prospects for a resource shift
as follows:
ornnrT, IMM1111"
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
"To be sure, on a "micro" level the Soviet military-industrial complex
has on occasion been directed to help reduce Soviet dependence on Western
imports by shifting resources to the civilian economy. we have informa-
tion that suggests the defense industries are now charged with helping to
modernize the civil gas turbine industry so that the Soviets will be able
to produce their own efficient turbines for gas pipelines.
"The Soviet economic predicament is in many ways a product of Moscow's
own choosing. By placing a priority on military research and production,
the leadership has slighted the civilian sector, thus helping to create
pronounced imbalances in the economy.
"Although the Soviet economy is in deep trouble, the country's present
leaders do not believe the time has come for drastic action. They are
convinced--and we concur--that some growth remains to be squeezed from
the present resource-allocation scheme. In a sense, Soviet leaders have
reached the point of banging and shaking the ketchup bottle to get out a
few more drops--the effort is tremendous and the return is small, but at
least there is a return. The Soviet economic bottle is not yet empty--
so to speak--and until it is, the leaders are likely to remain unwilling
to launch a program designed to improve economic performance by shifting
resources.
"Any near-term decision by the Soviet leadership to shift resources
from the military to civilian investment is unlikely for other reasons
as well:
? The Soviets recognize that military power is their principal
currency as an international actor and that continued high
levels of defense investment are necessary to sustain the
present dimensions of Moscow's global role.
? The Soviets' assessment of their security requirements for
the 1980s would probably hold little prospect for reduction
in defense spending. The recurrence of instability in
Eastern Europe, the prospect of an increased arms competition
with the United States, and continuing hostility with China
will maintain the pressure for continued high levels of
military outlays.
? Given the current support within the Soviet elite for main-
taining a strong military position, advocacy of deep cuts
in military spending would necessarily involve formidable
political risks for any faction within the Politburo inclined
to move in this direction. This would be particularly true
during a succession period, when those maneuvering for power
would be reluctant to advocate major changes in defense policy.
"No faction would propose a resource shift, and the Politburo as a
whole would be unlikely to authorize a shift, unless in the judgment of
Uf'.RPT unr
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
SLUKEi ~` FO~
the Soviet leadership, a resource shift were economically necessary.
Moreover, Soviet leaders would resist the idea of a resource shift
unless and until they had reason to believe that the West would not
seize the opportunity to forge ahead militarily while the Soviet Union
stands down.
"Nonetheless, the Soviets could at some time feel impelled to reduce
defense expenditures if:
? Economic conditions in the USSR turn out to be poorer than
we currently project (for example, a series of disastrous
harvests causing an actual reduction in economic output).
? Extraordinary political shifts occur, such as a Sino-Soviet
rapprochement, a general lessening of tensions with the West,
or a move by Western European countries away from US influence.
? Soviet political leaders who are sympathetic to consumer
needs come to power."
The CIA assessment noted that for the USSR East-West trade and
technology transfer has been a key factor in staving off economic disaster
and sustaining military growth. In the 1970s imported chemical equipment
accounted for one-third of all machinery purchased in the West; the Soviet
chemical warfare capability is the largest in history. The Soviet motor
vehicle industry has been especially dependent on Western technology;
the Kama River truck plant, largely purchased in the US, produces nearly
one-half of all Soviet heavy trucks, which are supplied directly to the
Soviet military. Western computers have been imported in large numbers;
to date the USSR has not been able to match. the militarily relevant
computer hardware, software, or expertise available in the US, Japan,
or West Europe. Soviet imports of tungsten have been crucial, for its
submarine construction and tank munitions. The CIA assessment concludes
as follows:
"Since the credit, goods, and technology provided by the West have
helped Moscow to maintain its current allocation scheme, it follows that
if the West were able to deny or limit Moscow's access to these forms of
assistance, pressure would be increased on the Soviet leadership to
shift resources from arms production to the civilian economy.
"The action that would impinge most quickly on the resources available
for military production would be a denial of machinery and materials used
either to produce machinery or to supplement domestic machinery production.
For example:
? An embargo on specialized oil and gas production equipment
would force Moscow to allocate military-oriented metallurgi-
cal and machine-building facilities to produce such equipment;
reduced Soviet petroleum output in the interim would aggravate
civilian industrial problems and might, therefore, cause addi-
tional civilian encroachment on defense production.
Q Cf%D CT mcnom
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
 Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3
~ lU K L I , rtutul
? An embargo on large-diameter gas pipe and other high-quality
steel products could possibly cut into production of such
military items as submarine hulls.
? An embargo on equipment for plants manufacturing cards,
trucks, and mining and construction vehicles (as well as an
embargo on such vehicles themselves) could increase the
pressure in the Soviet Union to produce these items in
military plants.
"Western denial of grain and other agricultural products would also
hamper the Soviet military effort. For example, to increase domestic
farm output, Moscow might have to allocate more factory space to producing
farm machinery instead of tanks and armored personnel carriers. A Western
embargo on selling farm machinery or on building the facilities that manu-
facture such machinery would also put pressure on existing priorities.
Reduced per capita food consumption would work against Soviet efforts to
raise worker productivity, increasing the problems facing industry.
"By curtailing the Soviets' import capacity--primarily by restricting
credits but also by hampering their oil and gas production and thus their
hard currency exports--the West would further raise the cost to the USSR
of maintaining its present policies on resource allocations.
"It is, of course, impossible to say for certain that the Soviet
leaders would respond to Western pressure by shifting resources. However,
it is important to note that in some instances they have deemed a shift to
be in their best interests and have directed the military-industrial
complex to support the civilian economy."
NFP.P1: i 18FOR1
0
Approved For Release 2009/04/14: CIA-RDP84B00049R000400710011-3