WHITHER GORBACHEV: SOVIET POLICY AND POLITICS IN THE 1990S

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• Collection: General CIA Records
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• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: December 27, 2016
• Document Release Date: August 11, 2011
• Sequence Number: 13
• Publication Date: November 1, 1987
• Content Type: NIE

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Director of
Central
Intelligence
Whither Gorbachev:
Soviet Policy and
Politics in the 1990s (v)
National Intelligence Estimate
NIE 11-18-87
November 1987
407
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS,
EXCEPT AS NOTED IN THE TEXT.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organization of the Department of State.
Also Participating:
The Deputy Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
Warning Notice
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NIE 11-18-87
WHITHER GORBACHEV:
SOVIET POLICY AND
POLITICS IN THE 1990s (u)
Information available as of 24 November 1987 was used
in the preparation of this Estimate, which was approved
by the National Foreign Intelligence Board on that date.
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CONTENTS
Page
SCOPE NOTE ...................................................................................... 1
KEY JUDGMENTS .............................................................................. 3
What Gorbachev Wants ....................................................................... 13
How He Plans To Get It ...................................................................... 13
Gorbachev's Vision ........................................................................... 14
The Political System ......................................................................... 15
The Economy .................................................................................... 17
Defense Policy .................................................................................. 21
Foreign Policy ................................................................................... 22
Support and Opposition for Gorbachev's Agenda .............................. 25
The USSR Through the 1990s: Future Scenarios ............................... 27
Rejuvenation of the Existing System ............................................... 29
Systemic Reform ............................................................................... 29
Neo-Stalinism .................................................................................... 31
Indicators of Systemic Reform: How Will We Know? .................. 32
Implications for the West ..................................................................... 34
Rejuvenation of the Existing System ...............................................
Systemic Reform ...............................................................................
Neo-Stalinism ....................................................................................
The Impact of US Policy ..................................................................
ANNEX B: Gorbachev as a Leader .................................................... 43
ANNEX C: Gorbachev and Ideology .................................................. 45
ANNEX D: Gorbachev and the Third World .................................... 47
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SCOPE NOTE
This Estimate is the Intelligence Community's first overall assess-
ment of the reforms Mikhail Gorbachev is attempting to introduce in
the Soviet Union and their implications for the United States and the
Western Alliance. It was stimulated by the accelerating pace of events
inside the Soviet Union since the beginning of 1987 and by the evidence
of growing debate abroad about the threats and opportunities that
fundamental reforms in the USSR could present to the West.
The Estimate is designed to summarize our view of Gorbachev's
pressures for change in Soviet politics and policies in the 1990s. It
presents our judgments about how far that change might go in domestic,
defense, and foreign policy arenas. It does not attempt an exhaustive
analysis of the future of economic reform, defense programs, or any
other specific policy area. The dimensions and prospects for Gorba-
chev's economic strategy will be discussed in more depth in a National
Intelligence Estimate on the Soviet economy to be published in the
spring of 1988.
Predicting Soviet policy in the 1990s and estimating the impact of
Gorbachev's changes on Western interests is an inherently uncertain
enterprise and there are persisting differences of view on some of the
key questions within agencies, the Intelligence Community, and acade-
mia. These differences are reflected in this Estimate
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KEY JUDGMENTS
Mikhail Gorbachev has staked his future on a bold effort to
revitalize Soviet society, improve Moscow's abilities to compete with the
West, and more effectively advance Soviet influence in the global
power arena. The reforms he is pressing in pursuit of these objectives
have the potential to produce the most significant changes in Soviet
policies and institutions since Stalin's forced regimentation of the
country in the late 1920s.
Gorbachev's Vision. We believe Gorbachev is now convinced that
he must make significant changes in the system, not just tinker at the
margins, if he is to achieve his ambitious domestic and foreign
objectives. To revitalize the society and the economy he:
- Has launched a thorough-going turnover of party and govern-
ment officials designed to consolidate his political power and
prepare the ground for his ambitious policy agenda.
- Intends to revamp the main institutions of the Stalinist system.
He wants to create a "halfway house" that preserves the
essential features of the Leninist system (the primacy of the
Communist Party and strategic control of the main directions of
the economy), while grafting onto it approaches not seen in the
USSR since the 1920s-a political atmosphere more tolerant of
diversity and debate, a less repressive environment for Soviet
citizens, an expanded role for market forces in the economy,
and a dose of economic competition.
On the national security front, Gorbachev adheres to traditional
objectives: first and foremost enhancing the security of the Soviet
homeland; expanding Soviet influence worldwide; and advancing Com-
munism at the expense of capitalism around the globe. In order to
pursue these goals more effectively, however, and to create the
necessary conditions for his ambitious internal agenda, we believe
Gorbachev wants to introduce potentially profound changes in Soviet
strategy and tactics in the international arena. He believes that a more
pragmatic approach to ideology, a more flexible and accommodating
diplomacy toward the West, the Communist Bloc, China, and the Third
World, and a corresponding deemphasis on military intimidation as an
instrument of foreign policy will help him achieve his objectives.
Specifically, we believe he wants to:
- Constrain the growth of defense spending-and perhaps even to
reduce spending somewhat-in order to concentrate resources
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on the task of rebuilding the economy, improving Soviet
technological competitiveness, and ensuring Moscow's ability to
fulfill military requirements over the long haul.'
- Sustain a vigorous diplomatic effort to reduce East-West ten-
sions in order to restrict the momentum of US arms programs
and especially the Strategic Defense Initiative, which, besides its
strategic implications, could impact adversely on his plans to
control defense spending.
- Move beyond past Soviet positions on arms control to achieve his
domestic and foreign objectives. He will not accept steps that
reverse the relative gains Moscow has made, but he may be
willing to trade some military advantages for commensurate
military or political gains.
- Exploit the favorable image created by change at home and
new flexibility abroad to undercut foreign perceptions of a
Soviet threat and better advance Moscow's influence abroad by
political means.
Can He Do It? Historically, change of this magnitude in Russia
and the Soviet Union has been successfully imposed only by extremely
autocratic leaders. Gorbachev does not have and is not likely to acquire
such power. He faces a protracted struggle against long odds to bring his
colleagues in the Politburo oligarchy along with him
Gorbachev has succeeded in selling the notion that a muddling-
through mentality must be discarded if the Soviet system is to remain
competitive. But there are clear differences even within Gorbachev's
coalition over how much change is needed and how fast it should
come.
- He can count on close colleagues such as Party Secretary
Yakovlev, Foreign Minister Shevardnadze, and Premier Ryzh-
kov-as well as reform-minded elements within the elite as a
whole-to back his program. But others, such as "Second
Secretary" Ligachev and KGB Chairman Chebrikov, represent
forces within the ruling elite who want to slow the pace of
change and emphasize more traditional approaches. Between
these two poles remain others whose preferences vary from one
issue to another, making formation of a consensus on the agenda
a day-to-day battle.
- Progress will be uneven at best and reverses along the way are
probable. While Gorbachev has scored some remarkable suc-
make an overall reduction in defense spending during the period of this Estimate
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cesses, the struggle in the Politburo over the pace of change in
the country has lately become more intense. The cautious tone
of Gorbachev's speech to the October Revolution anniversary
celebrations and the removal of Boris Yeltsin as Moscow party
chief indicate that for now Gorbachev has been forced to
temper his call for change. He will be under pressure to find a
way to impart new momentum to his reform agenda in the
months ahead.
Beyond the battle in the Kremlin, Gorbachev will have to traverse
a variety of other shoals that could block his path and ultimately sink
him as well as his agenda:
- Other than overt political opposition, Gorbachev's greatest
obstacle may be sheer inertia. Centuries of centralized decision-
making have produced a society used to avoiding initiative and
not sure how to assume it.
- His effort to encourage a degree of spontaneity in the political
system promises a protracted period of heightened political
tensions that will test the limits of party control.
- There is a risk that some of the reforms will set loose centrifugal
forces in the Soviet empire, triggering unrest among national
minorities or other disgruntled social groups. We see little
chance of nationality unrest sufficiently serious to threaten the
regime, but a good chance of tensions that cast doubt on
Gorbachev's program and slow the pace of change.
- We believe there is an even greater chance that reform in
Moscow will add to the potential for instability in Eastern
Europe, forcing the USSR to crack down once more, and
producing pressures for retrenchment at home.
- Efforts to undertake a radical reform of economic planning and
management over the next several years may disrupt economic
performance and fuel doubts in the leadership and the society
about the viability of Gorbachev's program. It is by no means
certain that the returns will be sufficiently impressive to allow
him to continue with his long-term program.
- Failure to effectively manage relations with the West could also
complicate Gorbachev's position, giving support to those who
oppose his more flexible diplomacy and his national security
policies.
We judge that his removal is very unlikely for at least the next two to
three years. But, given the risks inherent in his program, Gorbachev will
remain vulnerable to a political challenge despite the further progress
we expect him to make in moving more supporters into the leadership.
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His political survival will depend on a combination of political skill,
effective management of the difficulties reform will inevitably cause,
and luck.
The USSR in the 1990s. We believe that current political and
economic conditions in the Soviet Union have created an environment
in which substantial change is possible over the 'next decade. Given the
obstacles, the likely ebbs and flows of the reform process, and the
susceptibility of the outcome to unforeseen events, we cannot predict
with confidence how much change will occur:
- We believe the most likely outcome is a rejuvenation of the
existing system. In this scenario we would see a continuation of
the less controversial elements of Gorbachev's program: more
competent leadership, a priority for industrial modernization,
increased emphasis on discipline and anticorruption, implemen-
tation of limited reforms, and a more adroit foreign policy.
There would, however, be no substantial expansion of the
boundaries of political debate or the role of market forces in the
economy. This scenario would bring important changes to some
sectors of Soviet political and economic life, but we do not
believe it would produce the decisive improvements in Mos-
cow's competitive position that Gorbachev seeks.
- Given the obstacles, the chances that Gorbachev will succeed in
going beyond rejuvenation to implement what we call systemic
reform are small (perhaps less than one in three). Nevertheless,
given what we believe to be the potentially significant conse-
quences, we assess in detail what such fundamental changes
could look like and how we would detect progress in this
direction. In this scenario the party's controlling role would
remain unquestioned. But Soviet authorities would condone a
measure of political diversity and dissent and expanded partici-
pation at the lower levels of the system. The economy would be
far more responsive to market forces, mainly in the consumer
and agricultural sectors. Such changes are largely uncharted
water for any Communist system and would be inherently risky.
The process of implementing such reforms could be severely
disruptive in the near term, producing political tensions, height-
ened nationality frictions, and dislocations in the economy. As in
Czechoslovakia and to some extent China, these problems could
become serious enough to threaten the reform process itself. But
if the regime managed to successfully negotiate these shoals, we
believe that by the end of the century this scenario could begin
to produce some progress toward the ambitious economic and
social goals Gorbachev has set.
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- Even less likely than successful systemic reform, in our view, is a
return to a more authoritarian neo-Stalinism scenario that
would feature recentralization. rather than decentralization of
political and economic decision making. There remains a
certain reservoir of support in the elite and society for such a
course, and its prospects could increase if Gorbachev's effort to
push for fundamental reform fails dramatically, triggering
significant unrest at home or in Eastern Europe or severe
disruptions in the economy. But we believe the odds will remain
remote.
- At the other end of the spectrum, we believe the odds of a turn
toward democratic socialism, featuring a more radical push for
a market economy and a pluralistic society than systemic
reform, will remain virtually nil under any circumstances.
We believe Gorbachev will press ahead persistently with the
implementation of his program, making tactical adjustments and
accepting delays when necessary. As long as he stays at the helm, we be-
lieve the prospect of significant progress toward systemic reform
remains. If he dies in office or is removed, we believe the odds that the
leadership will stop short of fundamental change increase substantially.
How Will We Know? We believe that progress toward truly
fundamental change-the scenario we call systemic reform-can be
measured by the extent to which:
- The proportion of enterprise output dictated by central minis-
tries declines substantially.
- The regime follows up on its promise to deregulate prices by al-
lowing enterprises to engage freely in buying and selling at
negotiated prices any production beyond that allotted to the
state.
- We see a growing role for private entrepeneurs and cooperative
enterprises operating relatively independently of the state.
- Glasnost-the more open debate of problems and unorthodox
ideas-continues to expand into new areas and is effectively
institutionalized.
Failure to see continuing movement along these fronts-not to
mention retreat-would be a sure sign that the push for reform was in
trouble
Implications for the West. Given its superpower ambitions,
military power, and ideological predilections, the USSR will remain the
West's principal adversary whether or not Gorbachev is successful in
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rejuvenating the system or introducing systemic reforms. But we believe
the impact on Western interests and on the nature of the Soviet
challenge would differ in important respects.
Rejuvenation of the Existing System. In this scenario, the nature
of the Soviet challenge to Western interests would not significantly
change. While the USSR would remain a formidable military threat, we
do not believe the expected modest improvements in economic perfor-
mance would give Moscow the wherewithal to significantly improve its
ability to compete with the West in the economic and military arenas
over the longer term. We would continue to see a more adroit foreign
policy, but conservative pressures forcing a retreat at home would also
be likely to limit bold innovations in diplomacy, undercutting the
Soviets' efforts to improve the image of their intentions and lessening
the political challenge to Western interests.
At the same time, rejuvenation would be likely to bring less
change in traditional Soviet policies and institutions than systemic
reform.
- We would expect little change in internal repression or in the
boundaries of political dissent.
- The military establishment would be better insulated from
change than under a systemic reform scenario. The intrusion of
glasnost into military affairs would be sharply limited. The
economy would generate sufficient resources to fund growth in
military programs, albeit not without forcing the leadership to
make difficult choices that could undermine the effort to
increase investment in the economy or provide improvements in
the standard of living.
- In the Third World we believe the Soviets would continue to
rely on military power as their primary means of influence. We
would see little change in the nature of East-West competition
in the region.
- Traditional approaches to East-West issues would remain large-
ly intact. We would be less likely to see major departures in
arms control diplomacy or negotiations leading to significant
reductions in Soviet conventional or strategic forces than under
a systemic reform scenario. Soviet economic ties to the West
could expand somewhat in this scenario, but there would be no
significant change in the barriers that seal off the Soviet
economy from the world market.
Systemic Reform. The impact of this scenario on Soviet capabili-
ties, policies, and behavior could be much more substantial, and we
have therefore examined its implications for the West in considerable
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detail. We believe this scenario would pose new threats as well as
opportunities.
On the one hand, expected technological and productivity gains
would enhance the Soviets' long-run competitive position and broaden
the base of the challenge to the West:
- Given the slow rate at which we expect change to occur, we be-
lieve that successful systemic reform would produce only
modest improvements in Moscow's ability to compete in the
economic arena in this century. Although we do not believe the
Soviets would make much progress in improving their ability to
innovate and assimilate advanced technologies, Soviet defense
industries would nevertheless benefit more than under any
other scenario and the military competition would continue.
- The political challenge could grow substantially. Overturning
important features of the Stalinist system-systemic change-
would provide a more credible backdrop for Soviet diplomacy
and propaganda than a rejuvenation scenario alone could offer,
forcing the United States and the West to reexamine traditional
strategies for containing Soviet influence. Relations within the
NATO Alliance would be complicated as shifting perceptions of
Soviet intentions weaken the glue that has held its members
together.
On the other hand, we believe changes in Soviet policies and institutions
in this scenario would also open up new opportunities for Western
diplomacy:
- The more open political climate would make it easier for the
West to get its message across directly to a wider cross section of
the elite and the population.
- The ultimate direction of defense spending in this scenario will
depend on leadership's future decisions on weapon programs as
well as on factors-such as the state of the East-West relation-
ship-not completely within their control. Soviet leaders would
fund a robust military R&D program and push ahead to
modernize their strategic and conventional forces. But they
would have an incentive to constrain the growth of defense
spending through the 1990s.2
- Soviet leaders certainly would not end the East-West competi-
tion, accept an inferior strategic position, or draw back from
2 The Director, Defense Intelligence Agency, believes that under the systemic reform scenario
improvements in economic performance would be likely to provide enough resources by the late 1990s for
military expenditures to grow without the constraints likely during the next five-year plan.
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pursuit of a global superpower status. But we believe systemic
reform would be more likely than rejuvenation to create
conditions for meaningful arms control negotiations, leading to
potentially sizable reductions in Soviet conventional and strate-
gic forces opposite NATO and China. There could be significant
changes in Moscow's foreign economic strategy, including more
rapid development of trade with the West.
- While there would be no retreat from Moscow's determination
to expand its influence in the Third World, we believe a
reform leadership would place more emphasis on political and
diplomatic approaches to regional issues and in some areas, such
as the Middle East, pursue more cooperative approaches as they
seek to expand their political role and legitimize their presence.
- We believe systemic reform in the USSR would be contagious
in the Eastern Bloc, producing a measure of increased plural-
ism, more indigenous approaches to political and economic
reform, and new opportunities for US diplomacy.
The Impact of US Policy. We believe that the fate of reform will
be sensitive to the state of East-West relations. The proponents of
reforms that attempt to introduce market forces and political diversity
into the Soviet system are more likely to be able to advance their cause
in a climate of reduced tensions. We also believe that Gorbachev's effort
to direct a larger proportion of resources into industrial modernization
depends in part on his ability to manage perceptions of the foreign
threat, and hence on his ability to achieve arms control arrangements
that constrain Western defense programs.
- While the push for reform is not immune to outside influence,
we cannot confidently predict the impact in Moscow of West-
ern policies specifically designed to affect the process.
We believe Gorbachev's success, and the fate of reform, will largely rest
on the outcome of power struggles, political debates, and economic and
social developments inside the USSR and Eastern Europe that are
subject only indirectly to influence from outside.
Alternative View
The Director of NSA holds a different view on the general
interpretation of Gorbachev's "vision" and the primary purposes of his
domestic policies. Gorbachev has staked his future not on revitalization
of Soviet society, but on revitalization of the party and its ability to
overcome localism and deviant behavior vis-a-vis central control,
behavior that became so widespread during Brezhnev's rule. This
revitalization of the party actually began with Andropov, and the
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stimulation for it may have come as much from the decay of party con-
trol in Poland as from concern about modernity in the Soviet economy.
Such a decay in the USSR would probably bring the prospect of major
disorders and serious questions about the ability of the regime to
survive. Glasnost and perestroika (restructuring), ostensibly aimed at an
economic and social revitalization, are primarily instruments devised by
Gorbachev to weld a coalition of intelligentsia that can break party
resistance to an administrative purge and the restoration of strong
Leninist standards of democratic centralism. Put in the historical
context of previous reforms in the USSR and Eastern Europe, Gorba-
chev's economic and social reforms do not appear to be the primary
aim. Rather, they seem to be the "means" for a de facto party and
state purge, the traditional vehicle for restoring the party's vitality.
Certainly, he would like improved economic performance, but that
is less critical than improved political control. Historically, economic
reforms both in the USSR and the Warsaw Pact states have been linked
to leadership struggles and purges. The correlation in this regard is
perfect. Such reforms only occasionally have coincided with poor
economic performance, and just as often their result has not been
economic improvement. Moreover, the Gorbachev reforms, as they can
be inferred from laws and decrees, are hardly "bold" in comparison
with reforms and policy actions during the Khrushchev years. They do
not, therefore, as the text asserts, "have the potential to produce the
most significant changes in Soviet policies and institutions since
Stalin's forced regimentation of the country in the late 1920s." On the
contrary, the actions inspired thus far by glasnost and perestroika are
rather modest when compared with those of the 1956-62 period in the
USSR
Concerning future scenarios, "rejuvenation," as it is described in
the text, amounts to a traditional party and state purge of cadres,
greater cadre discipline, and a reduction of localism and deviant
behavior by officials. "Neo-Stalinism" is a better name for this scenario.
"Systemic reform," in order to have meaning, needs specific definition,
economic and political. If it does not include a fundamental shift to
market pricing in the majority of the economy's activities, particularly
in the industrial sectors, it can hardly be called "systemic." There is no
sign of such an intention in either the recent new laws on the economy
or in Gorbachev's pronouncements on his "vision" of the future. A
"systemic" shift of the locus of political power through law or elections
would destroy the centralization of political power Gorbachev needs to
carry through any kind of reform. This scenario, therefore, is most
unlikely.
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"Democratic socialism" is no scenario for change. The "social
democratic" parties of Western Europe rule over market economies, not
socialist economies. In the logical sense of "democratic socialism,"
Lenin and the Third International inherited the banner of "democratic
socialism," not the Western parties of the Second International. Stalin
put substance under the banner by state control of virtually all property
and capital. The text's use of the term "democratic socialism," there-
fore, is confusing.
As an alternative answer to the NIE question, "whither Gorba-
chev," there are two conceivable scenarios. First, he will succeed in
purging the party, and in the process he will unleash many social forces
which he will later have to bring back under control through KGB and
party means. This is the best possible outcome for Gorbachev, and it
may or may not be accompanied by moderate economic improvements.
Second, he will fail in his effort to revitalize, or purge, the party and
government ranks. He may be overthrown as he fails or he may
compromise sufficiently to survive as the leader of a new era of
"Brezhnevism," that is, internal immobilism coupled with external
mobilism. The latter seems the most probable.
The first scenario would strengthen the Soviet political system,
although it could easily lead to major disorders in Eastern Europe as the
Soviet political struggle is mirrored there. The second scenario should
create a stable but slightly weakened political system. In both scenarios,
Soviet external policy is likely to remain mobile, more adept and
flexible than in the latter Brezhnev years, and a greater challenge to US
interests both in the Third World and in the advanced industrial states
of Europe and East Asia.
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DISCUSSION
What Gorbachev Wants
1. By Gorbachev's own admission, the USSR is
confronting a systemic crisis. The failure of his prede-
cessors to grapple effectively with growing decay at
home and declining credibility abroad have under-
mined the credibility of the Soviet model, leading
foreigners as well as the domestic population to doubt
that the system is capable of meaningful improve-
ment. Gorbachev and his allies have made clear that
they see the party's leading role, the USSR's super-
power status, and the future of the Communist system
at stake
the Soviet population are important goals for Gorba-
chev. But we believe he is driven in particular by a
determination to create a system which can innovate
more successfully and produce advanced technology
more efficiently than the Soviets have ever been able
to accomplish.
How He Plans To Get It
4. Gorbachev stands out clearly from his predeces-
sors in his willingness to adopt unorthodox methods to
achieve his objectives. He is determined to proceed
and impatient with rigid interpretations of traditional
ideology or precedents that may stand in the way. (See
2. Gorbachev's effort to engineer a decisive im-
provement in Soviet performance is driven both by
domestic and international considerations. At home,
he believes economic stagnation and societal malaise
have potentially dangerous consequences for the sta-
bility of the system. Internationally, Gorbachev sees a
growing threat to the Soviet Union's long-term com-
petitive position. He believes that Moscow's declining
economic position vis-a-vis the West (see figure 1)
could ultimately undermine the global gains that
Moscow has achieved over the last two decades
through a steady military buildup. He is committed to
improving Moscow's abilities to compete with the
West, while convinced of the decisive importance of
economic power and political factors in achieving that
objective; he is less inclined than his predecessors to
measure Moscow's progress in primarily military
3. Last year Gorbachev told a gathering of the
foreign ministry elite that "economics is the deciding
factor, the field of action where we face our enemies."
He sees economic revival as a means for achieving not
only the USSR's domestic but also its national security
objectives. In the view of the current Soviet leadership,
the ability of the USSR to compete militarily with the
West will depend increasingly on its ability to stay
abreast of the global technological revolution. Gorba-
chev believes that the Soviet economy's inability to
innovate poses an increasingly grave threat to its global
position and, ultimately, to the military gains the
USSR has made over the last two decades. Higher
growth rates and an increased standard of living for
annex B, "Gorbachev as a Leader.")
5. The new leadership inherited a system that,
despite tampering by both Khrushchev and Brezhnev,
closely resembled the essential political and economic
institutions that Stalin forged in the late 1920s and
1930s. While Gorbachev came into office with an
agenda for change, it was by no means clear at first
that his intentions or impact would be any different:
- On the political front, Gorbachev's first year
featured an emphasis on cadre renewal, while his
social policies featured an attack on corruption,
alcohol abuse, and workplace indiscipline.
- His greatest energies on the economic front went
into manipulation of traditional policy instru-
ments such as resource allocation. He engineered
a sharp jump in funding for retooling the USSR's
antiquated industrial base.
6. These policies address real problems in the Soviet
system and were long overdue. Some have already had
a positive impact on economic performance, and we
believe they will remain central tenets of the new
leadership's approach. But Gorbachev and his spokes-
men have been increasingly frank in expressing their
view that such measures won't be enough. Their vision
of the remedies that will be necessary has grown
increasingly radical as they have come face to face
with the challenge of reforming a system that repels
reform. In our judgment Gorbachev and his allies are
now well aware that if they hope to achieve their
objectives they must make fundamental changes in
the Stalinist system that they inherited.
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Figure 1
USSR-US: Comparative Levels of Economic Development
fl USSR
Western Europe
? US
a Large computers include all general-purpose machines larger than microcomputers.
bEstimated.
regime
During the rest of the 1980s and well beyond,
the domestic affairs of the USSR will be domi-
nated by the efforts of the regime to grapple
with these manifold problems, which will also
have an influence on Soviet foreign and nation-
al security behavior.
NIE 11-18-85, assessing the inter-
nal maladies facing the Gorbachev
direction is clear.
Gorbachev's Vision
7. Gorbachev has no carefully drawn master plan
for the system he wants to create. His vision of change
will continue to evolve if-as we believe-the reme-
dies they are now putting in place fail to achieve the
new leadership's ambitious objectives. But the general
8. By his own admission, Gorbachev believes that
excessive centralization, by stifling individual initiative,
lies at the heart of his problem. He wants to remove the
dead hand of bureaucracy and decentralize sufficient
operational authority to regional officials, local econom-
ic enterprises, and individual citizens to fuel a burst of
initiative and creativity. To do this he is prepared to
attack aspects of the system that Soviet citizens and
foreigners alike have come to identify as its essential
features-a political culture that demands conformity
and denies diversity, an economy that ensures control at
the expense of innovation, and a social contract with the
Soviet citizen that offers security and stability at the
expense of dynamism and efficiency.'
9 Ironically, Gorbachev must reassert central control over region-
al institutions of the party and state apparatus-which won increas-
ing autonomy under Brezhnev-in order to effectively implement
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9. Gorbachev and his colleagues claim that what
they want to do is "reveal the full potential of
socialism"-a posture dictated by political necessity.
But they understand and appreciate some benefits of
Western-style systems-especially their ability to nur-
ture individual initiative, innovation, and efficiency.
In pursuit of those benefits this leadership wants to
create a "halfway house" that would preserve the
primacy of the Communist Party and strategic con-
trol of the main directions of the economy, while
adopting a political and bureaucratic environment
more tolerant of political and policy debate, market
forces in the economy, competition among economic
enterprises and individual citizens, checks on the
power of central authorities, and expanded rights for
individuals. In some respects, Gorbachev wants to
reject Stalinism in favor of Leninism.
It is notable that all current proposals draw
inspiration from Western practice or from
`market socialism.' The direction of current
thought suggests that the Soviets, like the East
Europeans before them, are perceiving the limi-
tations of Communist doctrine as applied to a
modern economy and that, at least in this field,
they recognize the need for change.
NIE 11-5-65, assessing the Brezh-
nev regime's economic vision in its
June 1987 plenums-will depend on how suc-
cessful he is in pushing ahead with its imple-
mentation over the next decade.
The Political System
11. Gorbachev's plans for the political system re-
main less well defined than his economic agenda. But
he and his colleagues have shown a growing conviction
that the revitalization of society and the economy that
they want to achieve can succeed only if there are
significant changes in the political arena as well. They
are trying to pull back the tentacles of state control to
encourage a controlled expansion of local initiative
and participation in political institutions. They want to
move far enough to undercut popular cynicism about
the leadership and enhance the credibility of the party
apparatus, but not so far as to threaten a loss of
control. The regime appears to be moving on at least
three fronts to create the new political climate it seeks:
introducing a more flexible approach to ideology,
easing traditional controls on public debate about
sensitive issues, and restructuring political institutions.
There is no democracy without openness. At
the same time, democracy without limits means
anarchy.
first months
10. Accomplishments. Gorbachev has made a
strong start on implementing this ambitious vision for
change:
- His bold political and economic initiatives and
radical rhetoric have thoroughly shaken Soviet
elites and disrupted the status quo. He has
succeeded in moving further and faster to con-
solidate power and articulate a new policy agen-
da than virtually any foreign or Soviet observer
would have anticipated in the spring of 1985. In
30 months, Gorbachev has gone a long way
toward challenging the viability of the Stalinist
political and economic institutions and creating a
climate more hospitable to significant structural
change.
- But Gorbachev is still only at the beginning of a
long process: due to political opposition and the
complexity of the issues, the regime's actual
reform initiatives have been carefully circum-
scribed to ensure that they do not depart too
boldly from existing approaches. The ultimate
fate of Gorbachev's radical agenda-articulated
most clearly in his speeches at the January and
Gorbachev, speaking to a group of
Soviet writers in June 1986
12. Ideology. Gorbachev is frustrated with the
straightjacket of inherited doctrine that opponents of
change have sought to impose on him. He seeks to
expand his maneuvering room by increasingly attack-
ing the directions of theoretical thought in the Soviet
Union in the last 50 years and by depicting his own
proposals as an effort to return to Lenin's original
intent. The effort by Gorbachev and some of his allies
to invoke the spirit of Lenin's so-called New Economic
Policy (NEP) (an era in which the new Soviet regime
scaled back its early pretensions to domination of the
country's political, economic, and cultural life) aims to
legitimize their policies and break with those inherited
from Stalin and his successors. (See annex C, "Gorba-
chev and Ideology.")
13. Glasnost. Tight controls over the flow of ideas
and information are central to the Soviet system. The
traditional penchant for secrecy has stifled debate,
establishing the party as the sole dispenser of truth and
creating an environment in which winners of political
arguments have anathematized the losers and sought
to rewrite history to conform to their views. An
accumulating body of public and private remarks by
Gorbachev, Politburo member Aleksandr Yakovlev (a
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key architect of the domestic reforms) and other
Gorbachev associates indicates that the new leadership
believes that the traditional approach is incompatible
with an increasingly well-educated society, complex
economy, and the political needs of the moment.
14. Gorbachev's campaign for glasnost (openness)
began as an expose of past failures and abuses, a means
for enhancing the regime's credibility at home and
abroad, and a powerful instrument for pressuring and
purging officials resisting his reform program. But
glasnost has begun to take on a more fundamental
dimension as Gorbachev's assessment of the scope of
the problem he faces has grown. Gorbachev and his
associates' recent statements suggest they see glasnost
as an essential element of their reform program, a
concept designed to rationalize an expansion of the
boundaries of legitimate public debate of controversial
issues:
- Glasnost is not a new concept. Lenin and Stalin
endorsed it in a more limited context. More
recently, the need for glasnost in the discussion of
Soviet problems predated Gorbachev's rise to
power in March 1985. But Gorbachev has taken
the concept much further, making it the center-
piece of his drive for change. For Gorbachev,
glasnost is a necessary step to achieve his longer
range goals.
- The regime does not intend to allow a free
press-they will place limits on how far glasnost
will be allowed to proceed. But just where those
limits are to be drawn is not yet clear, and for
now the boundaries on public debate are con-
tinuing to expand, to the predictable and increas-
ingly public dismay of some conservative ele-
ments in the leadership and the society.
It is necessary to master a democratic way of
thinking and acting, making it possible to treat
people holding a different viewpoint as worthy
opponents, as interested allies in the struggle
for restructuring.
Politburo member Aleksandr Ya-
kovlev, speaking to a plenum of
the Tajikistan party Central Com-
mittee
15. Democratization. Gorbachev's campaign for
"democratization" is designed to revitalize-not re-
place-the country's political institutions. By moving
to sanction multiple candidates for local and regional
elections in the party and state apparatus, and reciuir-
ing secret ballots, Gorbachev hopes to dislodge conser-
vative officials who are resisting his reforms. But these
The Role of the Party in Gorbachev's Reforms
I listen to you yet I can't understand: Do you
really reflect the line? Do people in Moscow
really think like this? Self-management, you say,
and independence-what are we (local party
chiefs) going to do then?
A veteran party leader speaking to a
proponent of Gorbachev's reforms
(from an imaginary dialogue published
in the Soviet weekly Literary Gazette
in October 1986 by journalist Fedor
Burlatskiy)
The traditional role of the party apparatus in the
Soviet system will be profoundly effected if Gorbachev
is successful in implementing the reforms he has pro-
posed. The functions from which local party leaders
have traditionally drawn their power will be redefined
and redistributed:
- Multicandidate elections and an expansion of
grassroots participation in local party organiza-
tions will dilute their ability to control personnel
appointments.
- An environment of more open political commen-
tary and public debate will restrict their ability to
control who should be criticized by the Soviet
media, and will bring their own record under
greater scrutiny.
- The emphasis on the independence of local enter-
prises and an expanded role for market forces will
reduce the decisive role the party has played
historically in local and regional economic man-
agement. (c NF)
Gorbachev has yet to lay out in any definitive way
the role he expects the apparatus to play in the new
system he is attempting to create. Judging from some of
his own comments as well as those of prominent
reformers, Gorbachev evidently expects the party to
move away from its extensive involvement in day-to-
day management to a greater emphasis on broad strate-
gic guidance-overseeing the implementation of Mos-
cow's policies and serving as the eyes and ears of the
central leadership. This view is not new but its serious
pursuit would force the party apparatus into a very
different political environment.
Most veteran party leaders are ill-equipped by train-
ing or experience to perform in such a role. Many have
responded with skepticism and resistance. Gorbachev
faces a protracted struggle to overcome that resistance
and transform the party into an effective instrument for
managing the revitalized society that he seeks.
measures are also intended to sanction a measure of
diversity and debate in order to give Soviet citizens
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and the party rank and file a sense of greater partici-
pation in and commitment to the political system.
Even though carefully controlled by Moscow (the
party can still manipulate the nomination process)
effective implementation of multicandidate elections
in the party apparatus could have a major impact,
weakening the ability of regional party chiefs to
control personnel appointments and the political
agenda.
16. Human Rights. We do not believe Gorbachev
values the expansion of the boundaries of individual
expression as a goal in its own right. In our view,
however, he recognizes that more freedom to question
authority, more tolerance of open dissent, better pro-
tection against arbitrary justice, and relaxed restraints
on travel, among others, are necessary to achieve a
revitalized society. He wants to bring dissenters into
the political debate, adding their criticisms to the clash
of ideas that he hopes will produce a new consensus.
He is less concerned than his predecessors about the
threat of political instability created by a relaxation of
strictures in this area
17. Gorbachev appreciates the international impact
of the apparent relaxation of internal repression. For-
eign policy considerations played an important role in
the initiatives to resolve divided family cases, release
some political prisoners, and allow a modest expansion
of emigration. Some of these gestures also respond to
domestic imperatives, such as building support within
the intelligentsia, that are critical to his success. We
expect the Gorbachev regime's performance on hu-
man rights to continue to fall far short of Western
concepts of individual liberties. But our reporting
indicates that more significant steps are on the way to
adjust the Soviet legal code and ease some of the more
repressive aspects of the system.
18. Accomplishments. Glasnost is Gorbachev's
most substantial accomplishment so far; only here do
actions match his radical rhetoric. Glasnost already
goes well beyond anything attempted since the rela-
tively open debate of the first years of the Soviet
regime. Senior leaders are still immune from criticism,
and many issues (such as the party's leading role)
remain off limits. But Gorbachev's glasnost has al-
ready moved into areas-such as social policy and
international affairs-that remained untouched un-
der previous leaders. The spread of glasnost has gone a
long way toward creating the conditions for more
fundamental changes in the economic and social sys-
tem in the years ahead. Glasnost remains at risk to
conservative elements in Soviet society, represented by
leaders such as "Second Secretary" Ligachev and KGB
Chief Chebrikov, who fear disorder more than repres-
sion. But we judge that its impact at home and abroad
has been sufficiently dramatic that any attempt to
return to the status quo ante will be politically costly.
19. Glasnost aside, Gorbachev's accomplishments
on the political front are modest. Adjustments to the
legal code have provided new channels for citizens to
lodge protests against abuses of power by local authori- 25X1
ties. But secret-ballot, multiple-candidate elections for
regional party and state offices and other potentially
radical political reforms aired at the January 1987
plenum are so far being tried only on an experimental
basis. It remains unclear just how much control over
the process central authorities are prepared to relin-
quish. While there have been some gestures on the
human rights front (Sakharov's release, modest im-
provement in emigration trends, and rumors of more
substantial measures) (see figure 2) the legal frame-
work that provides the basis for repression of political
dissent remains so far largely untouched.) 25X1
The Economy
20. Gorbachev's major challenge is to create an
economic system that can generate progress through
technological change, more efficient use of resources,
and individual initiative. The leadership's strategy has
three key elements: 1) placement of better managers
and enforcement of greater work discipline at all
levels (the "human factors" campaign), 2) substantial
new investments in the civilian machine-building sec-
tor and a new quality-control bureaucracy designed to
accelerate modernization of the USSR's production
base, and 3) fundamental reform of the economy's
planning and management mechanisms.
21. The first two elements represent changes in
economic policy that Soviet and Western economists
alike believe are long overdue. Success in these efforts
will be critical to Gorbachev's goals of accelerating
economic growth and improving the quality of pro-
duction. They are necessary but not sufficient condi-
tions for achieving his objectives. Gorbachev agrees
with Western economists who judge that the lasting
gains in productivity, efficiency, and the pace of
technological change he seeks will demand a compre-
hensive reform of the planning and management
mechanism as well.
Pulling our economy out of the precrisis
situation in which it has found itself dictates
the need for profound and genuinely revolu-
tionary transformations.
Gorbachev at the June 1987 ple-
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Figure 2
Emigration From the USSR
Jews
Germans
Armenians
1972-87
Thousands departing
a For Jews, figure shows number departing from January
through October. For Germans and Armenians, data are for
January through September. German figure is estimated.
22. Like Brezhnev and others before him, Gorba-
chev knows that to decentralize the system he must
reorient central ministries toward strategic planning
and overall guidance of the main directions of the
economy, and shift to local authorities and individual
enterprises more responsibility for running their own
affairs. Where Gorbachev and his associates stand out
from their predecessors is in their approach to achiev-
ing this objective. They are more aware of the com-
prehensive scope of change that will be required in
political and social as well as economic institutions,
and more determined to push change upon the system,
despite the economic obstacles and political resistance
they are certain to face.
If ... opportunity emerges for realizing in-
come not through Moscow, not by means of
bowing and scraping to the highest bodies, but
in the market, freely, easily, and quietly, money
will once again begin to turn into something
weighty, significant, highly desirable.
Soviet economist Nikolay Shmelev,
writing in the June 1987 issue of
Noviy Mir (New World)
23. We believe that Gorbachev and his closest
advisers appreciate that moving from "administrative"
(detailed planned targets) to "economic" (manipula-
tion of pricing, financing, and credit) methods will in
fact require the introduction of market forces (supply
and demand) as a more decisive guiding ingredient in
the economy. Gorbachev and his lieutenants have
signaled their intentions in this regard by increasingly
favorable references to the NEP; the need for a new,
more flexible price-setting mechanism; the benefits of
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1987
Number departing
bBecause of US Embassy personnel constraints, number of
Armenians processed each month beginning in July for exit to
the United States is considerably lower than the number
receiving exit permission from the Soviet Government.
c Estimated.
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Lenin's New Economic Policy
People-even those who were dedicated to our
cause-did not immediately comprehend the new
conditions, the new tasks, the need for new ap-
proaches... during the NEP period, when Vladi-
mir Ilich Lenin had to make great efforts to prove
both the need for a new economic policy and the
fact that it was not a return to capitalism, but a
means of transition to socialist construction ....
We can, and must, make use of Lenin's lessons in
organizing the restructuring we have started.
Gorbachev 1986 speech to Krasnodar
party officials
The New Economic Policy (1921-28) was an earlier,
largely successful, attempt to establish a mixed econo-
my. Under War Communism (1917-21), the govern-
ment had nationalized all industry and instituted grain
requisitioning in the countryside. By 1920, the excesses
of War Communism and the ravages of a four-year
Civil War had taken their toll: peasants produced at
subsistence levels, starvation was pervasive, scores of
industries closed, consumer trade was reduced to barter,
and political discontent intensified. The NEP injected a
variety of market mechanisms into the collapsing com-
manded economy:
- Introducing an agricultural tax-in-kind where in-
dividual peasants were free to market their own
production after paying the tax.
- Allowing many light industries to engage in pri-
vate trade and control their own production, with
limited supervision from regional organs.
limited competition among individuals and enter-
prises; and (in Gorbachev's terms) the goal of forging a
"harmonious combination of the plan and the mar-
ket. "
24. The Industrial Sector. The results of the June
1987 Central Committee Plenum are the clearest
indication yet that Gorbachev is determined to pro-
ceed with a radical overhaul of the command econo-
my. The blueprint for reform approved by the plenum
indicates that Gorbachev has now gained approval for
a shift from piecemeal approaches to a comprehen-
sive, integrated economic reform program. The blue-
print is evidently the result of a compromise between
those who want to move now to significantly decen-
tralize economic decision making and those who want
to move more cautiously. It does not by itself go far
enough in restricting the role of central institutions
to constitute a decisive break with the command
economy. But it contains the outlines of a new, more
market-based mechanism for running the economy
- Legalizing private business by individuals and
cooperatives in the consumer sector, selling a
limited number of small factories to private entre-
preneurs, and tolerating, until the mid-1920s, pri-
vate traders known as NEPmen.
In 1921, Lenin publicly justified the NEP's "petty-
bourgeois" policies as a means of forging an alliance
between the peasant and factory workers. But many
party conservatives opposed the NEP as a "capitalistic"
retreat from War Communism's socialist policies.
By injecting market mechanisms into the collapsing
economy, the NEP spurred economic growth. Under
War Communism, agricultural production had dropped
to approximately two-thirds of 1913 levels and industri-
al output had fallen to one-fifth of 1913 levels; after
seven years of NEP both agricultural and industrial
production had surpassed their pre-war levels, accord-
ing to official Soviet statistics
The recovering economy suffered from inflation and
high unemployment, however, triggering government
intervention and fueling a debate over the advisability
of continuing the reform. The debate over NEP escalat-
ed after Lenin's death in 1924, with some leaders
(Nikolay Bukharin) pushing for an extension of NEP
policies and others (Trotsky's Left Opposition) pressing
instead for an end to NEP and a shift to forced-pace
industrialization. Stalin used the debate to consolidate
power, and then abandoned NEP policies in favor of
rapid industrialization and collectivization.
that we believe Gorbachev will continue to push
further in the months and years ahead:
- Central planning agencies and economic minis-
tries would be sharply scaled back in size and
function.
- Enterprises would have radically expanded rights
and responsibilities. They would be required to
negotiate contracts directly with each other,
choosing their own suppliers and competing with
one another for customers.
- The enterprise would compile its own annual
plan, to be based on contract orders placed by
state organizations and other enterprises. The
state would ensure its needs by sending orders to
the enterprises.
- Many prices would be partially deregulated-set by
negotiation between consumers and suppliers, albeit
under close supervision by state agencies.
25. The Private Sector. In its search for ways to
unleash individual initiative, the regime has embarked
on a cautious expansion of the private sector as well as
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a limited decentralization of the state sector itself. In
part this effort represents a belated official recognition
of the burgeoning semilegal "second economy" that
already exists, especially in the service sector, and a
determination to bring it under tighter state regula-
tion. But the architects of this policy also hope that it
will bring a significant and relatively quick expansion
in the availability of consumer goods and services
without an expansion of centrally allocated investment
that the state can ill afford. A quick improvement in
the lot of the consumer could be critical to Gorbachev,
fueling a growth in labor productivity (giving the
Soviet worker something worthwhile to spend his
money on) and exhibiting the apparent benefits of
"restructuring" more quickly than the planned
changes in the industrial economy.
26. Agriculture. Unlike the Hungarians and the
Chinese, the brunt of Gorbachev's early reform efforts
have been directed at the industrial sector, not agricul-
ture. Changes approved during his first year stream-
lined the agro-industrial apparatus and gave farms the
right to sell slightly more of their produce at market
prices. We believe Gorbachev's early focus on industry
reflects his preeminent goal-closing the technological
gap-as well as his close identification with agricultur-
al policies that he inherited.
27. Gorbachev's plans for reform in agriculture are
evidently still evolving and more fundamental change
may be on the way. He and some of his associates have
begun to talk about the need for a "turnaround" in
agriculture within the next two to three years and to
tout more openly the benefits of private initiative
under the guise of the so-called family contract. The
family contract, if pushed far enough, could provide
the basis for the most significant overhaul of the farm
economy since collectivization in the 1920s, replacing
the collective farm with the family as the key manage-
rial unit in fact, if not in name
28. Foreign Economic Relations. We believe
Gorbachev will move cautiously to expand foreign
trade and open the Soviet market to foreign competi-
tion. He is concerned about excessive technological
dependence on the West and believes domestic eco-
nomic reform will play the dominant role in the
success of his effort to rejuvenate the economy. He
and his advisers, however, see long-term benefits in a
substantial expansion of trade and economic ties to the
West. They have launched some sharp departures in
foreign economic policy (breaking the monopoly of the
Ministry of Foreign Trade, and approving joint ven-
tures that allow foreign partners substantial equity)
that could eventually have a significant impact on the
Gorbachev's Family Contract
The concept of family contracting, which attracted
scant leadership attention only a year ago, has become a
central focus of the leadership as it searches for solu-
tions to the troubled state of Soviet agriculture. Atten-
tion to family contracts, like recently adopted measures
promoting individual and cooperative activity in the
consumer sector, reflects Gorbachev's long-established
preference for small-scale organizations that encourage
a "proprietary" attitude. A family-focused variant of
the collective contract system in which the farm man-
agement subcontracts some aspects of farm production
to individual groups of workers, the family contract is
being introduced in a wide variety of farming, from
livestock to crops. In a typical contract, the family
"pays" for all materials and services provided to the
farm and gets to keep any profit left after all expenses
are accounted for. The wages of family contracting
units are generally three to five times that of the
average state farm worker.
While many of the families under contract appear to
be little more than field hands, some family contracts,
including those singled out by Gorbachev, obviously
involve large-scale operations. One Estonian family
livestock operation is reported to have a farmhouse,
fenced pasture, and a fully mechanized barn, complete
with milking machines, an automatic feed conveyor,
and refrigeration-in outward features seemingly indis-
tinguishable from a Western family farm.
At the extreme, if state and collective farms are
divided into parcels managed relatively independently
by small groups or families working on contract, the
farm itself could turn into a relatively powerless, formal
"collective" body. Substantial movement in this direc-
tion could have a powerful impact on local incentives
and, potentially, on the quantity and quality of agricul-
tural production. Opposition to change of this scope,
with echoes of a return to private farming, would be
substantial. Apart from ideological concerns, the devo-
lution of decisionmaking would eliminate many admin-
istrative jobs and take power away from a wide variety
of officials-not only farm-level officials but local and
central ministry officials and regional party secretaries
and apparatchiks.
The future of the family contract in the Soviet Union
will ultimately depend on the prospects for reform of
the economy as a whole. Soviet collective and state farm
managers will themselves have to gain the kind of
independence that their Hungarian counterparts have
won if the family farm venture is to flourish
domestic economy, the role of foreign trade, and the
way the Soviets interact with Western commercial
interests
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29. Accomplishments. While we believe Gorba-
chev intends to radically overhaul the command econ-
omy, he is just beginning the process and recognizes
that it will take years, if not decades:
- The June plenum has imparted new momentum
to radical reform. The promised decrees fleshing
out the plenum's decisions were approved on
schedule, and our reporting indicates that the
staff and structures of many ministries and state
committees will be significantly reduced.
- Nevertheless, the decrees are too general to serve
as more than guidelines. It remains to be seen
how the leadership will address apparent design
flaws and reconcile potentially conflicting provi-
sions. Plans for changing the price-setting mecha-
nism remain particularly ill defined.
- A series of obstacles, from political resistance to
economic constraints, have forced Gorbachev to
settle for more cautious steps than he wants to
take.
Over the next few years, the regime will have to
choose between steps that expand on the more radical
elements of the economic vision Gorbachev has articu-
lated or, on the other hand, steps that dilute the thrust
of the reforms and maintain the dominance of central
planning.
There are changes, but they are insignificant
and not radical. The main work to form an
integral system of managing the economy lies
ahead.
Gorbachev's report to June 1987
plenum
Defense Policy
30. Gorbachev is committed to improving Soviet
military capabilities and maintaining a global presence
in an era of increasingly sophisticated high-technology
weaponry. He believes his economic policies are the
key to strengthening the industrial base that will
ensure Moscow's ability to continue to fulfill military
requirements as well as produce higher quality goods
in the civilian sector. But modernization of the econo-
my will place sharply increased demands on the Soviet
Union's limited supply of investment resources, mana-
gerial talent, and technology and production potential
in the 1990s, increasing competition with traditional
military claims on those same resources.
31. We do not believe Gorbachev wants or expects
to extract significant savings from the defense sector in
the short term. But we do believe he has a strong
incentive over the longer term to constrain the growth
of defense spending, force greater efficiency out of the
Soviet military-industrial complex, and avoid an esca-
lating arms race with the Unites States. Gorbachev is
not likely to achieve his economic objectives without
constraining the growth of resources allocated to the
military establishment.
32. Drawing on an infusion of new plant and
equipment in the 1970s, Soviet defense industries are
in relatively good shape to produce what the military
will need into the early and mid-1990s. But economic
reform and modernization will be a lengthy process,
and Soviet industrial performance will probably slow
before it improves. The need to make decisions in the
next few years on weapon programs for the late 1990s
will force the leadership to face politically difficult
choices on resource allocation.
33. Gorbachev has taken a series of steps to improve
the ability of the political leadership to oversee de-
fense decision making:
- By firing the minister of defense, replacing other
top defense officials, and reducing the military's
protocol role in affairs of state, Gorbachev has
strengthened his control over the military estab-
lishment and the process by which national
security priorities are established.
- Gorbachev and his allies have placed new em-
phasis on the political and economic dimensions
of national security issues, providing a strategic
rationale for giving greater importance than in
the past to diplomatic initiatives and to the
health of the domestic economy, and less promi-
nence to military power as the symbol of Soviet
strength.
- The new leadership has put forth the concept of
"sufficiency" as a principle to guide its defense
program. This concept is subject to differing
interpretations in the USSR. In addition to its
foreign propaganda value, it has been used to
exact greater efficiency from the military and to
justify arms control reductions. It could be used
to rationalize far-reaching changes in the size
and composition of Soviet forces.
- At a minimum, the military is being required to
use resources more efficiently.
34. Accomplishments. We are not likely to be able
to assess Gorbachev's impact on defense spending for
some time. The future direction of defense programs
will depend in part on factors not completely under
his control. But we believe he has made significant
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progress in establishing the control and political ratio-
nale necessary to constrain growth in defense spending
over the years ahead-if not actually reduce spend-
ing-if he can at the same time create an international
environment that diminishes internal perceptions of
the foreign threat.4
Like his predecessors, Gorbachev hopes that a
detente environment will produce political pres-
sures in the West that limit defense budgets,
restrict military modernization, and contribute to
frictions within the NATO Alliance over strategy
toward the Communist world.
Foreign Policy
35. Gorbachev adheres to traditional foreign policy
objectives: first and foremost enhancing the security of
the Soviet homeland, expanding Soviet influence
worldwide, and advancing Communism at the expense
of capitalism around the globe. He has acknowledged
that what he has called the "precrisis situation" in the
Soviet Union threatens Moscow's strategic position in
the world. His domestic reform agenda is intended in
good part to reverse the trend and preserve and
expand the USSR's superpower role.=
36. In order to pursue these goals more effectively,
however, we believe Gorbachev wants to introduce
potentially profound changes in Soviet strategy and
tactics in the international arena. He believes that a
more pragmatic approach to ideology, a more flexible
and accommodating diplomacy toward the West, the
Communist Bloc, China, and the Third World, and a
corresponding deemphasis on military intimidation as
an instrument of foreign policy will help him achieve
his objectives
37. Moving quickly to recreate a detente relation-
ship with the United States helps him achieve domes-
tic as well as foreign objectives-disarming latent
domestic critics of his national security policies and
protecting his ability to concentrate on the task of
reform at home:
- Measures that his opponents are already attempt-
ing to paint as departures from socialism, such as
advancing glasnost and expanding the role of
market forces in the economy, will be more
difficult in an environment of East-West hostil-
ity. Increased tensions with the United States
would pose a clear risk to his economic game
plan, undermining his ability to constrain de-
fense spending and devote scarce resources to
industrial modernization.
The Director, Defense Intelligence Agency believes that Gorba-
chev will not be in a position to make an overall reduction in
defense spending during the period of this Estimate
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- We do not believe that trade with the West will
play a major role in the revitalization effort, at
least for the foreseeable future, nor do we believe
Gorbachev expects it to. But the Soviets do hope
that increased trade and technology transfer in a
more relaxed international environment will give
their plans an added boost.
Without an awareness that diplomacy must
create a favorable foreign policy environment
for domestic restructuring, we do not have and
cannot have today a qualified, competent diplo-
mat or a competent diplomatic service.
Foreign Minister Shevardnadze,
speaking to a conference of foreign
ministry officials in May 1987 F_
38. The US-Soviet relationship poses substantial
risks and opportunities to Gorbachev's plans for do-
mestic reform, and we believe that reshaping that
relationship remains his first priority in foreign affairs.
His ultimate goal remains constraining SDI and
slowing the overall momentum of US military pro-
grams. He is much more willing and able than his
predecessors to move beyond past positions on strate-
gic arms control issues in pursuit of this objective.
Already evident in his approach to INF and START,
we think it likely that this new flexibility will eventu-
ally promote initiatives that could offer a significant
reduction in the size and composition of Warsaw Pact
conventional forces facing NATO-in return for com-
pensating military or political gains for the USSR.
More innovations in Soviet arms control posi-
tions of the sort Gorbachev has already intro-
duced are likely if he believes they can help him
achieve constraints on SDI and other US de-
fense programs.
SNIE 11-9-86, assessing Gorba-
chev's approach toward the United
States for the remainder of the
Reagan administration
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39. Gorbachev wants to revitalize Soviet diplomacy
across the board:
- By advertising his domestic reforms and adopt-
ing a more flexible posture on arms control,
Gorbachev is attempting to undercut negative
images of Soviet intentions in Western Europe
and improve Moscow's ability to exploit differ-
ences within the Western Alliance.
Figure 3
USSR: Economic Aid Disbursements to
Selected LDCs, 1970-86
Communist LDCs and Third World Allies
Billion US $
0 Marxist clients
- He has given new priority to regions such as East
Communist LDCs
Asia and Latin America that the Soviets previ- Other
ously neglected. He wants to play a more asser- Vietnam
tive political role in regional trouble spots, espe- O Cuba
cially in the Middle East, where the USSR has 10.0
traditionally been odd man out.
- He is broadening Moscow's priorities in the
Third World, placing greater emphasis on ex-
panded ties to Western-oriented states that could
potentially provide more assistance to Moscow's
diplomatic or economic goals than its traditional
clients. We believe Moscow will place more
pressure on its clients to use Soviet aid judicious-
ly, in the hope the burden can be reduced. For
both political and economic reasons we believe
Gorbachev will be careful about taking on new
commitments without the expectation of clear 0 1970 75 80 81
strategic benefits for Soviet interests. But we see
no retreat from the geopolitical gains of the Third World Allies
1970s. We expect Gorbachev to continue com- Million US $
mitting substantial resources to key clients, and
indeed to "up the ante" if these regimes are Other Marxist
being challenged. (See figures 3 and 4 and annex Ethiopia
D, "Gorbachev and the Third World.") Nicaragua
40. Implications of "New Thinking." Under Gor- M Afghanistan
bachev, the Soviet leadership has begun to advance 1,000
new ideas to guide foreign policy. This "new thinking"
has several components:5 800
- Greater emphasis on political approaches and less
reliance on military power in achieving national
security goals.
- The need to show more flexibility in negotiations
with the West, particularly on arms control.
- The increasing "interdependence" of nations and
the importance of solving global problems (such
as the prevention of nuclear war, environmental
pollution, and economic development) that de- 0 1970 75
mand international cooperation.
41. "New thinking" has a substantial propaganda
component. It is intended to enhance the image of the
' Most of the specific components of "new thinking" have their
origins in the 1960-70 writings of prominent scholars in Moscow's
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Figure 4
Soviet Arms Deliveries to Clients
Fighting Insurgencies, 1977-87
Q Others a
Nicaragua
0 Angola
? Indochina
USSR in the eyes of foreign elites and assist the effort
to recreate a detente environment. Gorbachev wants
to further the impression that his leadership is em-
barked on fundamental new directions in foreign as
well as domestic affairs
42. But we believe the proponents of "new think-
ing" also have an internal audience in mind. These
concepts have been echoed in reports of private
remarks by Gorbachev and Foreign Minister Shevard-
nadze to Foreign Ministry officials touting the need
for more flexibility in Soviet negotiating positions.
They are designed to dilute the "two camp" mentality
that has characterized Soviet ideology in the interna-
tional arena. They do not remove the East-West
ideological conflict, but by describing a less polarized
international arena they rationalize the sharp depar-
tures from past Soviet positions that Gorbachev be-
lieves are needed to break out of foreign policy dead
ends, reshape foreign impressions of Soviet intentions,
and advance Soviet influence abroad. The "new thin-
king" concepts:
- Ready Soviet elites and the public for potentially
controversial agreements in arms control or other
national security issues.
- Justify a restructuring and restaffing of national
security organizations to reduce resistance to new
approaches.
- Provide support for a widening pattern of coop-
eration with international and regional economic
organizations and for an attempt to play a larger
role in the global economy.
- Sanction new approaches to countries, such as
Israel and Egypt, that will advance Moscow's
influence in the Third World.
- Facilitate new gestures toward traditional rivals
and independent actors in the Communist world,
such as China or Yugoslavia.
It is necessary to take a more realistic ap-
proach to international affairs. When planning
foreign policy we must make a more sober and
broader evaluation of the specific facts, rather
than viewing everything only from the point of
view of one's own interests. Because if every
country pursues only its own interests and is
incapable of meeting its partner halfway, of
seeking points of contact, and of cooperating
with that partner, then it will be difficult to
achieve any improvement in international
relations.
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Gorbachev, speaking to Foreign
Ministry officials in Moscow in
May 1986
The 27th CPSU Congress of course did not
disaffirm the evaluation of imperialism and its
policy, the reality of the historical confronta-
tion between the two systems, or the ideological
irreconcilability between socialism and capital-
ism. But what has now come to the fore in our
policy is not so much the ascertaining of diver-
gences as the search for points of contact in the
world that actually exists. There is no other
path to the salvation of mankind in the nuclear
and space age.
Foreign Minister Shevardnadze,
speaking at a conference of Soviet
Foreign Ministry officials in May
1987
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43. Accomplishments. By most conventional mea-
sures, Gorbachev has few tangible accomplishments to
show for his invigorated efforts on the foreign policy
front. The implications of "new thinking" remain a
matter of debate among Soviet officials and foreign
observers. Gorbachev has imparted new flexibility to
some arms control positions inherited from Brezhnev,
Andropov, and Chernenko-to the point of adopting
most US positions on INF. But on other issues the
promise of new flexibility has yet to be fulfilled.
44. In our view, Gorbachev's major accomplish-
ment lies elsewhere, in the progress he has made in
improving the Soviet image abroad-creating condi-
tions for more tangible progress toward Soviet objec-
tives in the years ahead. He has already better
positioned the Soviet Union to put Western diploma-
cy on the defensive and to increase Soviet influence
in areas where their role has long been minimal.
Gorbachev's vigorous and flexible diplomacy is in part
responsible for his success in this regard. But his
dramatic moves on the reform front at home have also
had a substantial impact. Opinion polls show substan-
tial shifts in public sentiment on the USSR in Western
Europe, and views among European elites have been
changing too as Gorbachev's moves on the reform
front have become more radical. While the Chinese
remain cautious about Soviet foreign policy, Gorba-
chev's domestic initiatives have led them to take more
seriously the possibility that significant steps will
ultimately be forthcoming in the bilateral relationship
Support and Opposition for Gorbachev's
Agenda
45. The Politics of Change. Historically, change of
the magnitude Gorbachev appears to want has been
successfully imposed-in Russia as well as the Soviet
Union-only by extremely autocratic leaders. Gorba-
chev does not have such power nor is he likely to get it.
He faces a protracted struggle against long odds to
bring his colleagues in the Politburo oligarchy with
46. Gorbachev has succeeded in selling the notion
that some change is necessary if the Soviet system is to
remain competitive in the long run. Old Guard leaders
of the Brezhnev era who were content to muddle
through have been swept aside. But there are clear
differences even within the Gorbachev coalition over
how much change is needed and how fast it should
come. Gorbachev and some of his closest colleagues
(Party Secretary Yakovlev, Foreign Minister Shevard-
nadze, and Premier Ryzhkov) are pushing a program
of broad political and economic change. They believe
It more modest approach will not effectively deal with
the precrisis situation inherited from the Brezhnev era.
This agenda appeals to the intelligentsia, younger
officials who stand to gain from the new opportunities
that change will bring, and those who see such change
as the only way to make the USSR competitive over
the long run.
47. A second group of leaders-which we believe
includes Party Secretary Ligachev, KGB Chairman
Chebrikov, and Brezhnev-era holdover Shcherbits-
kiy-want to slow the pace of change and restrict its
scope. They believe Gorbachev's reforms will unleash
decisionmaking processes and social forces that could
get out of hand and even threaten the party's hold on
power. They favor more traditional efforts to increase
political and social discipline and improve economic
performance through modest changes in the Stalinist
model. They are supported by older generation elites
in most of the major bureaucracies who believe such
radical reforms endanger them and their institutions.
48. Between these poles are the rest of the Politburo
and much of the Soviet elite. Gorbachev has had some
striking successes in getting this middle group to sign
on to the broad principles of his agenda. On specific
issues of implementation, however, this group splits-
with some more tolerant of political reform than
radical economic change, for instance, and others
favoring the opposite. The lack of consensus on the
particulars makes final resolution difficult.
49. Can He Do It? The measures that have been
approved have only begun a process of reform that
will take years if not decades. Progress will be uneven
at best and reverses along the way are probable. The
struggle in the Politburo over the pace of change has
become increasingly intense. Beginning in July, Liga-
chev and Chebrikov have become more outspoken in
defining limits to glasnost. Gorbachev's own recent
efforts to define limits to glasnost, as well as the more
balanced tone evident in his speech at the October
Revolution anniversary celebrations, suggest that he
has been forced to temper his call for change: The
demise of Moscow Party chief Yeltsin represents a
further setback to the reform effort. Conservative
opponents will be more emboldened in speaking out
against reform and fence sitters will be more inclined
to stay put. While these events do not endanger
Gorbachev's position, they are a threat to his agenda.
Gorbachev will be under pressure to find a way to
impart new momentum to his reform agenda; the
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Sources of Support and Opposition to Gorbachev's Agenda
Gorbachev has made substantial headway in over-
coming opposition from his colleagues on the Politburo.
Following major gains at the June 1987 plenum, he
should be able to count on a solid working majority for
most of his program. But he still faces powerful col-
leagues-such as "Second Secretary" Ligachev and
KGB Chairman Chebrikov-who want to slow the pace
of change
The senior levels of the economic bureaucracy stand
to lose the most if Gorbachev moves forcefully to
decentralize the system; many senior bureaucrats are
likely to impede the implementation of his program.
Even if sympathetic to the reforms, many of them are
poorly equipped-by training, experience, or psycho-
logical makeup-to function under the new conditions.
Gorbachev has made remarkable strides in removing
footdraggers, but he still has a long way to go to turn the
bureaucracy into an obedient instrument
We believe opposition from the senior levels of the
party apparatus is a critical problem for Gorbachev.
Regional party chiefs, who make up the core of the
Central Committee, have traditionally been the guard-
ians of orthodoxy in the Soviet system, and we suspect
that they are the source of the ideological opposition
that the Soviet leader has frequently alluded to. Many
regard his proposed reforms as a threat to their position
and the party's hold on power0
The national security bureaucracies are ambivalent
about Gorbachev's agenda. We believe most military
officials appreciate the close connection between a
strong defense and a healthy economy and in principle
support the revitalization program. But some fear that
his policies may lead to constraints on defense spending
and are unhappy with Gorbachev's arms control initia-
tives. They are almost certainly skeptical they will see
all the promised benefits in the long run. The KGB's
bureaucrats support Gorbachev's efforts to fight corrup-
tion and indiscipline, and their access to more accurate
information than most Soviet officials have about the
true state of affairs at home and abroad may make
them sympathetic to economic reform as well. But we
50. Beyond the battle in the Kremlin, Gorbachev
will have to traverse numerous other shoals that could
block his path and ultimately sink him as well as his
agenda:
- Beyond overt political opposition, Gorbachev's
greatest obstacle is sheer inertia. The old ways of
operating are deeply ingrained. Centuries of
centralized decisionmaking have produced a so-
ciety used to avoiding initiative and not sure how
to assume it. Most Soviets have yet to see the
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believe they are concerned about the potential for
instability at home and in Eastern Europe created by
Gorbachev's efforts to relax official strictures on politi-
cal debate and individual freedoms in the USSR. In the
event of serious domestic instability or escalating East-
West tensions, latent opponents of Gorbachev's pro-
grams in the KGB and the military could join forces
with sympathetic officials in the party apparatus,
presenting a powerful new threat to Gorbachev.=
Our reporting suggests that Gorbachev's leadership
generally draws passive approval from the Soviet popu-
lation. Yet, Soviet citizens have seen previous cam-
paigns for change come and go, and many remain
deeply skeptical that Gorbachev's campaign will pro-
duce more lasting results. Moreover, Gorbachev's ap-
parent willingness to tamper (by increasing the disparity
in wage rates between more and less productive work-
ers, and by reducing subsidies for basic necessities) with
the social contract they have come to expect gives large
segments of society good reason to be concerned about
the impact of Gorbachev's plans on their position,
especially when they have seen few tangible benefits.
Although he has made substantial headway in the
Politburo, persuading an essentially conservative and
apathetic population to get on board with the program
will be an even more formidable task
The intelligentsia are probably the only group that
comes close to giving Gorbachev wholehearted support.
Their support is critical to his effort to rejuvenate the
society and explore a wider range of options for solving
domestic problems, but they lack the political clout to
give Gorbachev much help if the tides begin to turn
against him
Generational differences are important in under-
standing Gorbachev's position. Some reporting suggests
that the post-war generation is significantly more sup-
portive of change in the USSR than its elders. More
junior members of the party and state apparatus,
frustrated by years of stagnation under Brezhnev, are
key sources of Gorbachev's support
impact of perestroika, and doubts persist that it is
here to stay.
- Gorbachev's effort to encourage a degree of
spontaneity in the political system promises a
protracted period of heightened political tensions
that will test the limits of party control.
- There is a risk that decentralizing reforms will set
loose centrifugal forces in the Soviet empire,
triggering unrest among national minorities or
other disgruntled social groups serious enough to
undercut Gorbachev's push for reform.
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- We see a significant chance for instability in
Eastern Europe that appears to threaten the
Soviet hold and hence undermines support for
Gorbachev at home.
- Implementing Gorbachev's economic program is
likely to bring some economic disruption before
it begins to show any significant positive effects.
It is by no means certain that the near-term
returns will be sufficiently impressive to allow
him to claim success or provide enough momen-
tum to continue with his long-term program.
Failure to effectively manage relations with the
West could also complicate Gorbachev's position,
giving support to those who oppose his more
flexible diplomacy and national security policies.
51. We judge that his removal is very unlikely for
the next two to three years. But, given the risks
inherent in his program, Gorbachev will remain vul-
nerable to a political challenge in the years ahead
despite the further progress we expect him to make in
the near term in moving more supporters into the
leadership. His political survival will depend on a
combination of political skill (not getting too far out in
front of his colleagues), effective management of the
difficulties reform will inevitably cause, and luck.
The USSR Through the 1990s: Future Scenarios
52. We believe that current political and economic
conditions in the Soviet Union have created an envi-
ronment in which substantial change is possible over
the next decade. Given the formidable political and
economic obstacles that will have to be overcome, the
likely ebbs and flows of the reform process, and the
susceptibility to the outcome of unforeseen events, we
cannot predict with confidence just how much change
will occur. But we believe we understand the options
being debated and the trade-offs the leadership is
likely to face well enough to predict the probable
direction of change and possible scenarios:
- We believe the most likely outcome is a selective
rejuvenation of the existing system. In this
scenario we would see more competent leader-
ship and some new policy directions that could
bring about important changes in some sectors of
Soviet political and economic life. But Gorba-
chev's effort to go beyond this to significantly
reform the Soviet system would dissipate well
short of his objectives. We believe Gorbachev's
conservative opponents would like to limit
change to essentially this scenario.
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- The chances of more fundamental change are far
more debatable. We believe there is only a small
chance (perhaps less than one in three) that
Gorbachev will succeed in going beyond rejuve-
nation to institutionalize glasnost and alter the
fundamentals of the Stalinist command economy,
producing what we call systemic reform. This
scenario would also include the policy changes
associated with rejuvenation. This scenario could
have a significant impact over the long term on
Soviet capabilities, policies, and behavior-and on
the interests of the United States and the West.
Given its potential implications, we assess in detail
what such a scenario could look like, the risks
inherent in it for the USSR, and how we would
detect progress in this direction.
- Even less likely than systemic reform, in our
view, is a return to a more authoritarian neo-
Stalinism scenario that would feature recentral-
ization rather than decentralization of political
and economic decision making. There remains a
certain reservoir of support in the elite and
society for such a course and its prospects could
increase if Gorbachev's effort to push for system-
ic reform fails dramatically, producing severe
disruptions in the economy or triggering signifi-
cant unrest at home or in Eastern Europe. But
we believe the odds will remain remote.
- At the other end of the spectrum, we believe the
odds of a turn toward democratic socialism,
featuring a more radical push for a market
economy and a pluralistic society than systemic
reform, will remain virtually nil under any
circumstances
It is far from certain that the Soviet citizen
can be educated to a higher level, urged to
exercise his own initiative, given increasing
opportunities for comparisons with other coun-
tries, and encouraged to expect a significant
improvement in his living standard, and at the
same time submit without question to a leader-
ship which incessantly proclaims, and frequent-
ly exercises, the right to make all important
decisions for him. Eventually it may turn out
that the benevolent totalitarianism which Sta-
lin's successors seek to achieve is an impossible
contradiction and that the forces released in the
search for it will require the leadership to revert
to earlier patterns of control or to permit an
evolution in some new direction.
NIE 11-4-57, assessing the longer
term outlook for change in the Soviet
Union following Khrushchev's con-
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Rejuvenation of the Existing System
53. Under a rejuvenation scenario, we would not
expect to see any significant decentralization of eco-
nomic decision making or change in the character of
the political system. But the more orthodox elements
of Gorbachev's drive to improve the system would
probably be continued. Thus, this scenario would not
feature any fundamental institutional changes, but
neither would it be a complete return to Brezhnevism:
- Politically, we would expect to see a continuing
rejuvenation of the party, and government elite.
An ongoing turnover of the leadership would
produce a relatively pragmatic policy
orientation.
- Elements of "democratization" and glasnost
would remain in place. The regime would speak
more openly of Soviet problems and continue to
experiment with multicandidate elections and
other political reforms Gorbachev has begun to
press. But we believe in this scenario the leader-
ship would stop well short of the potentially risky
steps that would be required to give these re-
forms real content. The public discussion of
controversial issues-such as Stalin's purges, col-
lectivization of agriculture, and market social-
ism-would remain carefully controlled. The
party would block any significant expansion of
political participation and its role in the system
would remain essentially unchanged.
- Economically, we would probably see some im-
portant policy initiatives. A modest cutback in
the bloated central bureaucracy, a reduction in
state subsidies for basic necessities such as food
and housing, and efforts to increase differentia-
tion in wages between workers who perform well
and those who don't would be possible. There is
widespread leadership support for increased in-
vestment, the quality control program and other
policies associated with the industrial moderniza-
tion program, and these policies are probably
here to stay. But the leadership would block a
radical overhaul of the planning and manage-
ment mechanism. There would be no decentral-
ization of price-setting authority and resources
would continue to be allocated mainly by com-
mand, through central plans. While the June
plenum blueprint for reform would remain on
the books, the dominance of the central minis-
tries in running the economy would be largely
unaffected. In this scenario, ideological opposi-
tion and bureaucratic redtape would probably
prevent any significant expansion of private and
cooperative enterprises in agriculture and the
consumer sector.
- We do not believe that in this scenario there
would be any significant change in the way the
regime now handles political dissent or human
rights. While there could well be some dramatic
gestures designed to serve foreign policy goals,
the repressive apparatus would remain in place.
54. The near-term impact of a rejuvenation scenar-
io might well be economically more favorable, and
politically more advantageous for Gorbachev, than the
results of an assertive push for systemic reform. Some
of the disruptive consequences of efforts to loosen the
reins of central control or introduce market elements
into the economy could be avoided. We would expect
Moscow to be able to sustain modest growth rates and
perhaps to achieve some improvements in the quality
of industrial production
55. While sufficient to avert a near-term crisis,
however, we do not believe that a strategy of rejuve-
nation would meet the political, social, and economic
objectives that Gorbachev has set for himself:
- There could be some improvement in the econo-
my's ability to innovate, but the overall techno-
logical gap between the Soviet Union and the
West would continue to widen.
- The economic and social policies associated with
this scenario would not address the growing
societal tensions in the USSR that he inherited.
- Economic growth would be insufficient to signif-
icantly ease the defense burden, making it diffi-
cult to simultaneously meet the demands of the
military, investment, and consumption. F__~ 25X1
Systemic Reform
56. There are clear limits to how far the process of
change will go, even in a successful systemic reform
scenario. We see no support in the Gorbachev leader-
ship for a truly pluralistic political system or a market
economy. The basic feature of the Soviet regime-the
Communist Party's monopoly on the levers of political
and economic power-would remain unchallenged.
But we believe that in this scenario we could see a
substantially different system by the end of the 1990s,
one that would radically scale back the center's in-
volvement in the micromanagement of daily political
and economic life while preserving its strategic con-
trol. The effort to introduce change of this scale could
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produce serious economic dislocations and the pros-
pect of political instability at home and in Eastern
Europe. But if the regime could successfully manage
these risks, this scenario could produce significant
progress toward Gorbachev's ambitious goals by the
end of the century.
57. Political System. The effort to loosen the
tentacles of state control is the leading edge of Gorba-
chev's reform effort. It is a necessary condition for any
fundamental change in other areas, and we believe
that reform in this arena is likely to be the most
profound. In this scenario, we believe we would see a
political culture more tolerant of diversity, an expand-
ed arena of political debate, and a measure of in-
creased popular participation in political institutions.
A further, but still limited, relaxation of controls over
information and debate would be a necessary ingredi-
ent, and in this sense we believe glasnost would
become a permanent feature of the Soviet political
landscape. We could see a significant expansion of
participation in the regional and central Soviets, but
we would expect any such change in the party appara-
tus (the real focus of power) to be limited primarily to
the lower levels. Legal reform is a central component
of the reform agenda, and the Soviet citizen would be
likely to benefit from a less repressive and less arbi-
trary system of justice. Nevertheless, the state would
continue to limit political dissent.
58. In the near term, Gorbachev's efforts to create
an expanded arena of political participation would be
likely to heighten tensions in the system, as the leaders
and the led both test the new boundaries of legitimate
dissent. Chinese authorities, who have been pushing
reform longer and proceeded further than the USSR,
have already slowed the pace of change in the face of
political instability fueled by the process. Accelerated
activity in the USSR by a variety of independent
environmental, nationality, and historical preserva-
tion groups suggests that Soviet authorities will in-
creasingly face the same dilemma. The regime will
find it increasingly difficult to reconcile the limits it
has placed on dissenting views with the more open
climate it is trying to create. Ultimately, however, if
the regime can successfully negotiate these shoals, we
judge that the reforms Gorbachev has spawned could
make substantial inroads into political alienation in the
Soviet Union, expanding the average citizen's sense of
participation in the system, diverting some dissent
back into official channels, and reducing the flow of
market arrangements that Gorbachev is pushing is
uncertain. Radical decentralization would in our view
be most evident in agriculture and the consumer
sector, where reform could have a relatively rapid
impact and where the experimental ground has al-
ready been plowed in other Communist countries. We
believe that in this scenario there could be a substan-
tial expansion of private enterprise or, more likely, the
role played by small, member-run cooperative organi-
zations operating relatively independently of the state.
Price setting in this sector could be substantially
deregulated, local entrepreneurs allowed to deal di-
rectly with consumers and suppliers, and the involve-
ment of central planning organs sharply curtailed to
the management of overall economic indicators. The
supply of food and basic consumer goods could show
marked improvement early in the 1990s, if the re-
forms in this sector are pursued vigorously and weath-
er conditions permit.
60. Fundamental reforms in the industrial economy
will be more difficult to achieve and therefore not
likely to proceed as far as in the consumer sector, with
results slower to materialize as well. Nevertheless,
changes here are essential to Gorbachev's fundamental
goal (accelerating the pace of technological innovation)
and we believe he will aggressively push the more
radical elements of the June plenum reform blueprint
over the next several years. The leadership could
create by the late 1990s a management mechanism in
the industrial sector that substantially curtails the role
of central organs, provides a more flexible price-
setting structure, and responds more effectively to
customer demands
61. We and the Soviets are uncertain of the impact
of the new management mechanism planned for the
industrial sector. Some of the measures called for by
the June 19871 plenum-such as partially decentraliz-
ing the pricing and supply system, paring back the
central ministries, forcing enterprises to compete for
customers, and allowing unsuccessful enterprises to
fail-could create serious bottlenecks and disruptions
in the near term. In our view, industrial performance
could deteriorate rather than improve for at least the
next several years. Nevertheless, we believe there is a
good chance that these reforms could by the mid-
1990s begin to make progress toward the goals Gorba-
chev has set. While the growth rates that Gorbachev
has called for are unattainable, in our view, some
acceleration would be likely. More important than an
improvement in growth rates per se, the mix of
national output would probably consist of higher
quality and higher technology products. We see little
prospect for substantial progress in this century
emigres and defectors to the West.
59. The Economy. Given the complexities in-
volved, the ultimate shape of the hybrid plan-and-
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toward Gorbachev's ultimate goal of closing the
technological gap with the West. At best, the Soviets
might narrow the gap in selected areas. But this
scenario, in our judgment, provides the best chance
for the Soviets to strengthen their industrial base and
improve their abilities to compete in the economic
and military arenas over the long term
62. Soviet Society. The social policies associated
with Gorbachev's reforms attack what many Soviet
officials and citizens consider to be the main accom-
plishments of the Soviet regime. They would increase
the disparity in incomes among different elements of
the work force and fuel unemployment and job
insecurity. Movement in this direction may be just as
disruptive to the social fabric as Gorbachev's economic
reforms would be to economic performance. Gorba-
chev's reforms would probably intensify social tensions
and encourage more frequent acts of open defiance:
- The loosening of political controls and decentral-
ization of the economy could also aggravate
latent centrifugal forces in the Soviet empire,
encouraging the USSR's national minorities to
press their grievances more aggressively. We see
little chance that there would be national unrest
sufficiently serious to threaten the regime, but a
good chance that there could be tensions that
cast doubt on Gorbachev's program and slow the
push for change.
If the reform program produced substantial improve-
ments in the lot of the Soviet consumer and in
economic performance, however, the ultimate effect
over time could be a stronger social fabric and a
population more accepting of the system. =
63. Impact on Eastern Europe and the Soviet
Empire. Systemic reforms in our view are almost
certain to add to the potential for instability in the
Soviet empire. Whether Gorbachev intends it or not,
domestic opponents of traditional regimes will be
(indeed, to some extent already are) emboldened by
the relaxed restraints on political expression to push
their agendas more forcefully. Proponents of change
will attempt to press for more political pluralism,
economic decentralization, cultural autonomy, and
individual freedoms than the party will be inclined to
allow. Reporting on the impact of Gorbachev's re-
forms in Eastern Europe and among Moscow's Third
World allies makes clear that tensions are already on
the rise, and that client leaders-from Cuba's Castro
to East Germany's Honecker-are worried and op-
posed. Further complicating the picture are greater
Soviet demands on the East European countries to
contribute to Moscow's industrial modernization effort
through CEMA programs that limit economic re-
sources available for their own needs.
64. Unrest in Eastern Europe, in our view, poses
the greatest foreign threat to the reform impulse in
the Soviet Union and even to Gorbachev's position.
We believe there is a significant risk that reform in
Moscow will produce pressures for change in Eastern
Europe-already troubled by economic and societal
problems-that these regimes cannot handle. Another
Soviet crackdown in the Bloc could strengthen the
arguments of conservative opponents of change at
home and create a political climate conducive to
retrenchment.
65. Over the longer term, the Soviets in this scenar-
io would provide more room for their allies to pursue
internal reforms suited to local conditions (a position
clearly staked out by Gorbachev in his November 1987
speech to foreign Communist leaders in Moscow) and
even to expand relations with the West. But we believe
the Soviets will place clear limits on the process and do
what is necessary to maintain the integrity of the Bloc.
66. This scenario would feature a leadership that
emphasizes strong central institutions, greater disci-
pline, and simple solutions-in effect a return to a
more authoritarian leadership style that many asso-
ciate with the Stalin era. Such an approach would
emphasize recentralization of political and economic
controls, greater ideological orthodoxy, and more ag-
gressive suppression of dissent.
Any talk about how now everybody is a boss is
pure demagogy. One person must answer for
everything. This is the only way you can de-
mand what is necessary from him. Then there
will be order and discipline.
A secretary of the party organiza-
tion at a Moscow factory, com-
menting on Gorbachev's proposal
that workers elect their own fac-
tory managers (2 September 1987
Moskovskaya Pravda)
67. We believe this course would bring the USSR
few benefits in the long run:
- It would not solve any of the systemic problems
that have led to a decline in economic growth
and a low level of technological innovation.
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Strong-arm methods worked when the goal was
to boost production regardless of cost in an era of
seemingly unlimited resources, but they will be
of limited use when the objective is a sharp boost
in efficiency in a resource-constrained
environment.
- To fund any military buildup, such a leadership
would be compelled to resort to draconian tactics
at home, further raising the burden of defense.
- This scenario would be accompanied by an
increase in the influence of Russian nationalist
elements in the elite. Nationality tensions would
certainly grow.
68. The Gorbachev Factor. Gorbachev is not alone
in pushing for far-reaching change: he serves as a
spokesman for a range of elements in the elite and
society determined to overcome the USSR's backward-
ness. But Gorbachev himself is the catalyst in the
current ferment: he has tied his political fortunes to a
fundamental improvement in the performance of the
economy and society and the thorough-going reforms
he believes must precede it. He will press ahead
relentlessly with the implementation of his program,
making tactical adjustments and accepting delays
when necessary to preserve his ultimate objectives. If
Gorbachev stays at the helm, the prospect of signifi-
cant progress toward systemic reform must be taken
seriously. If he dies in office or is removed, we believe
the odds that the leadership will stop short of such
fundamental change increase substantially.
Indicators of Systemic Reform:
How Will We Know?
69. Systemic reform, if it is to be successful, is
likely to be a protracted, incremental process. The
formulation of a program of comprehensive reforms
has only just begun. Implemention of those reforms is
likely to take years, and even more time will be
necessary to assess the results. While these factors
inhibit our ability to predict the outcome, there are a
number of specific political and policy indicators we
will be able to track to monitor the progress of the
effort. Failure to see continuing movement along these
fronts-not to mention retreat-would be a sure sign
that the push for reform was in trouble.
70. Political Strength of the Reformers. Resis-
tance to structural change has been aided by the
continuing strength of conservatives in the Central
What if Gorbachev Goes?
The impact of Gorbachev's departure from the scene
would depend on how and when it happens. In any
foreseeable circumstances, however, we would expect a
showdown between proponents of radical change in the
Politburo and adherents to a more cautious course:
- If he dies in office. Although his power has been
significantly eroded, "Second Secretary" Liga-
chev remains for now the most likely choice.
Gorbachev allies Lev Zaykov or Aleksandr Yakov-
lev would have an outside chance, especially if
their mentor is martyred in a successful assassina-
tion attempt. We believe Ligachev shares Gorba-
chev's determination to rejuvenate the system, but
does not fully back the more radical elements of
his program. A Ligachev-led leadership would
scale back Gorbachev's assault on the command
economy and existing political institutions. Were a
Gorbachev ally to succeed him, the regime's com-
mitment to reform would remain but the pace of
change would still be likely to slow.
- If he is ousted. Ligachev would be the most likely
choice as a successor. In the near term the pace of
change would slow sharply. But Gorbachev's
forced removal would be likely to introduce an
extended period of political instability. We believe
the chances of another change of leadership,
bringing a reform-minded member of the Politbu-
ro back to power, would remain substantial. (c NF)
We believe the chances that a like-minded reformer
would replace Gorbachev will increase the longer he
stays in office. Ligachev is now 66; time will increasing-
ly diminish his prospects. Gorbachev is in a good
position to promote additional supporters to full voting
membership in the Politburo in the months and years
ahead and to remove remaining Brezhnev-era hold-
overs, increasing the odds that a successor leadership
would push ahead aggressively with a program of
comprehensive reforms.
Committee, the lingering presence of Brezhnev-era
holdovers in the Politburo, and Gorbachev's slow
progress in advancing the more outspoken advocates of
change:
- If Gorbachev can advance other supporters to
full Politburo membership, it will substantially
advance the prospects for systemic reform. His
failure to make progress in this regard would
indicate that his program has stalled.
- A critical indicator will be Gorbachev's ability to
alter the political complexion of the Central
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Committee-the core of his resistance, according
to most accounts-at the extraordinary party
conference scheduled for next June. He was able
to turn over about 40 percent of the body at the
last party congress. If he can replace another 20
percent or so at the conference (without waiting
for the next regularly scheduled congress in
1991), a figure that seems to be in reach, Gorba-
chev could ensure a body less inclined to water
down his program.
71. Political Reform. Glasnost is a key component
of the reform process and a sensitive indicator of
which way the political winds are blowing. If the
opponents of glasnost, who have become more active
in 1987, were to succeed in scaling back criticism of
current shortcomings or the increasingly radical eco-
nomic reform debate in the Soviet press, it would be a
sure sign that the momentum for change is flagging.
On the other hand, if glasnost continues to move more
forcefully into heretofore sensitive areas (such as the
treatment of party history, the Stalin question, and
Soviet foreign and defense policy) and to further
expand the flow of information (releasing more accu-
rate and complete economic and census data, provid-
ing a fuller account of defense activities, sanctioning
private or cooperative publishers independent of the
state) it would be a good sign that reform is continuing
to advance:
- An early tipoff might be the contents of a new
"law on the press" that reportedly will be ap-
proved soon.
- Another indicator would be a decision to move
more decisively to rehabilitate prominent victims
of Stalin's purges.
72. Other steps that would indicate institutionaliza-
tion of a measure of diversity in the political system
include:
- Legislation strengthening multicandidate elec-
tions for party and state positions by ensuring
that candidates can be nominated from the floor
(not just by the party bosses); this allows compet-
ing candidates to articulate distinct policy plat-
forms, and that institutionalizes secret balloting.
- Greater tolerance of grassroots political organiza-
tions and the creation of official channels for
government action on initiatives issuing from
those organizations.
- The regime's response to the already increasing
frequency of public demonstrations of dissent
will be a sensitive indicator of the momentum for
reform. Indications of greater tolerance toward
public demonstrations would indicate that Gor-
bachev is able to protect his stake in keeping
open channels of debate and even dissent. C
73. Economic Reform. How the regime imple-
ments the reform blueprint approved by the June
1987 plenum will be the acid test of how far decen-
tralization has gone:
- A move from administered prices to some mech-
anism for making prices responsive to supply and
demand is the key indicator. Significant steps to
implement the promises of the plenum to allow
enterprises to engage freely in buying and selling
any production beyond that allotted to the state
and to negotiate their own prices would indicate
that such a shift is under way. To be effective,
the number of goods on which the state continues
to set prices will have to shrink substantially, and
the limits that the center is allowed to place on
prices negotiated among enterprises will have to
be minimal.
- The rate at which the relative proportion of state
orders in enterprise output declines.
- Solid evidence that the economic authority of the
ministries and the regional party first secretaries
has been sharply curtailed.
- The extent to which state enterprises are forced
to compete with one another for business. To be
effective, the state will have to allow the least
efficient enterprises to fail.
- In agriculture, widespread introduction of the
family and other group contracts, combined with
more substantial movement toward decentral-
ized planning of production.
- Effective implementation of recent legislation
sanctioning an expanded role for private entre-
preneurs and cooperative enterprises operating
independently of the state.
74. Human Rights. The Gorbachev regime has
released a number of prominent political prisoners and
allowed a modest expansion of emigration, but so far
the legislative basis for political repression remains
intact. Any serious reform effort will entail action on
reported plans for changes in the legislative code and
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evidence that Soviet authorities are doing a better job
than in the past of abiding by the code:
- Action on reported plans to repeal from the
Russian Republic criminal code of Article 70
("anti-Soviet agitation and propaganda") and Ar-
ticle 190-1 ("circulation of knowingly false fabri-
cations which defame the Soviet state and social
system"), provisions which have been used to
incarcerate political prisoners.
- Eased limitations on emigration as well as domes-
tic and foreign travel.
- Followthrough on rumored plans to substantially
cut back the political police function and staffing
of the KGB, while more precisely delineating the
agency's domestic role.
- An assertion of independence by the judiciary
and official recognition of such independence.
One sign of authentic independence would be
seeing a case go against the government-and the
decision carried out.
Implications for the West
75. Given its superpower ambitions, military pow-
er, and ideological predilections, the USSR will re-
main the West's principal adversary whether Gorba-
chev is successful in introducing systemic reforms or
not. But we believe rejuvenation of the existing
system and systemic reform would differ in important
respects in their impact on Western interests over the
longer term and in the nature of the Soviet challenge.
Rejuvenation of the Existing System
76. If the reform process goes no further than
rejuvenation, Soviet policies toward the West will
remain largely unaffected and the Soviet system
unchanged.
77. Competitive Capabilities. While the USSR
would remain a formidable military threat, we do not
believe a rejuvenation scenario would provide Moscow
the wherewithal to significantly improve its competi-
tive capabilities vis-a-vis in the West in the economic
and military arenas over the longer term. We would
continue to see a more adroit foreign policy, but
conservative pressures forcing a retreat from systemic
reform at home would also be likely to limit bold
innovations in diplomacy, undercutting Soviet efforts
to improve the image of Soviet intentions and lessen-
ing the diplomatic challenge to Western interests.
78. Prospects for Policy Change. Rejuvenation
would be likely to bring less change in traditional
Soviet foreign policies and internal institutions than a
systemic reform scenario:
- We would expect little change in internal repres-
sion or in the boundaries of political dissent.
- The military establishment would be better insu-
lated from change than under a systemic reform
scenario. The intrusion of glasnost into military
affairs would be sharply limited. The economy
would generate sufficient resources to fund a
continuing growth in military programs, albeit
not without forcing the leadership to make diffi-
cult choices that could undermine the effort to
increase investment in the economy or provide
improvements in the standard of living.
- Traditional approaches to East-West issues would
remain largely intact. We would be less likely to
see major departures in arms control diplomacy
or negotiations leading to significant reductions
in Soviet conventional or strategic forces than
under a systemic reform scenario. Soviet eco-
nomic ties to the West could expand somewhat in
this scenario, but there would be no significant
change in the barriers that seal off the Soviet
economy from the world market.
- In the Third World we believe the Soviets would
continue to rely on military power as their
primary means of influence. We would see little
change in the nature of East-West competition in
the region.
- We believe they would rely on traditional instru-
ments of control in Eastern Europe, minimizing
the possibilities for the growth of pluralism and
the opportunities for US diplomacy.
Systemic Reform
79. Gorbachev's objective in pushing for systemic
reform is to improve Moscow's abilities to compete
with the West in the global power arena. A successful
systemic reform effort, in our view, would in the long
run produce technological and productivity gains and
allow him to make real progress toward that objec-
tive. It is also the only scenario, however, that would
be likely to bring more than cosmetic changes in the
substance of Soviet internal, defense, and foreign
policies. The East-West relationship would remain
strongly adversarial. Military competition would con-
tinue, but Moscow would be likely to rely more than in
the past on political instruments to achieve its objec-
tives.
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80. Competitive Capabilities. Given the slow rate
at which we expect change to occur, we believe that
successful systemic reform would produce only mod-
est improvements in Moscow's ability to compete in
the economic arena in this century. Although we do
not believe that the Soviets would make such progress
in improving their abilities to innovate and assimilate
advanced technologies, Soviet defense industries
would nevertheless benefit more under systemic re-
form than under any other scenario
81. On the political front, the perception abroad of
continuing movement in Moscow toward systemic
change at home and more flexible foreign policies
would combine to make Moscow an increasingly
formidable competitor:
- Systemic reform would provide a more credible
backdrop for Soviet diplomacy, public relations,
and propaganda than a rejuvenation scenario
alone could offer, forcing the United States and
the West to reexamine traditional strategies for
containing Soviet influence. Management of the
NATO Alliance would be complicated as shifting
perceptions of Soviet intentions weakened the
glue that has held the Alliance together and put
the Soviets in a better position to capitalize on
differences among its members. It would proba-
bly encourage a leftward drift in West European
politics. It could also encourage the Chinese to
move toward a more equidistant strategic posture
between the USSR and the United States.
- Reform could ultimately strengthen Moscow's
hand in the Third World. It would be likely to
provoke new sources of strain in Moscow's rela-
tions with some of its traditional, conservative-
minded allies. But a reform-minded Soviet Union
would have the inclination as well as enhanced
capabilities for expanding relations with non-
aligned and pro-Western countries in regions that
have up to now been relatively immune to Soviet
influence
Militarist and anti-Soviet forces are clearly
concerned lest the interest among the people
and political quarters of the West in what is
happening in the Soviet Union today and the
growing understanding of its foreign policy
erase the artificially created "image of the
enemy"-an image which they have been ex-
ploiting unabashedly for scores of years.
Gorbachev, speaking during a trip
to Murmansk in October 1987
82. Prospects for Policy Change. At the same
time, we believe that systemic reform would be likely
to induce controlled but significant movement in
Soviet policies and institutions in a direction that
Western policymakers have pressed for, creating new
opportunities for Western diplomacy:
- The Internal Dimension. We believe that
movement toward a more open political and
economic system, expanded political participa-
tion, and an easing of restrictions on political
dissent and individual rights would be necessary
components of systemic reform. The West would
have improved opportunities for getting its mes-
sage directly to a wider cross-section of the elite
and the population.
- The Defense Dimension. The more open and
less regimented political system would open for-
eign and defense issues to greater public scrutiny.
In a systemic reform environment the leadership
would have an incentive to constrain the growth
of defense spending through the 1990s. We
believe the leadership would take a harder look
than in the past at proposed defense programs,
requiring defense managers to make more effi-
cient use of resources. Whether Soviet defense
spending in fact goes up or down by the late
1990s depends in part on leadership decisions on
future weapons programs as well as on factors
not completely under their control-such as
Western defense programs and the state of the
East-West relationship.6
- Policy Toward the West. Proponents of system-
ic reform in the Soviet leadership want to weak-
en the hold of the "two-camp" mentality that has
fueled rigid anti-Western foreign policies, re-
duced foreign policy flexibility, strengthened
anti-Soviet suspicions in the West, and inhibited
Moscow's ability to play a larger international
role. They would not end the competition, risk
the relative gains they have made over the past
20 years, accept an inferior military position, or
draw back from pursuit of a global superpower
status. Soviet leaders would fund a robust mili-
tary R & D program and push ahead to modern-
ize their strategic and conventional forces. But
we believe they would be more likely than their
6 The Director, Defense Intelligence Agency, believes that under
the systemic reform scenario, improvements in economic perfor-
mance would be likely to provide enough resources by the late
1990s for military expenditures to grow without the constraints
likely during the next five-year plan
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conservative counterparts to invigorate arms con-
trol negotiations and expand economic inter-
change with the outside world in the pursuit of
their domestic and foreign policy goals. We
believe systemic reform would create conditions
for negotiations leading to potentially sizable
reductions in Soviet conventional and strategic
forces opposite NATO and China. There could
be significant changes in Moscow's foreign eco-
nomic strategy, including a more rapid expansion
of trade with the West.
- Policy Toward the Third World. East-West
relations in the Third World would remain
strongly competitive. There would be no retreat
from Moscow's determination to expand its
influence. But we believe a reform leadership
would place more emphasis on political and
diplomatic approaches to regional issues. The
Soviets might be more cooperative in some areas
(such as the Middle East) as they seek to expand
their political role and legitimize their presence.
- Policy Toward Eastern Europe. Even if Mos-
cow does not attempt to impose it, we believe
systemic reform in the USSR would be conta-
gious in the Eastern Bloc. A measure of increased
pluralism would allow Bloc states to pursue
indigenous approaches to political and economic
reform and open up new opportunities for US
diplomacy
Neo-Stalinism
83. We believe a neo-Stalinist leadership would be
strongly influenced by xenophobic Russian nationalist
elements in the Sovet elite. They would introduce
more repressive policies at home and assume a more
rigidly anti-Western posture abroad. We do not be-
lieve the policies of a neo-Stalinist leadership would
produce any real improvements in the economic
performance, the technological base, or the Soviet's
long-term competitive position vis-a-vis the West.
The Impact of US Policy
84. We believe that the fate of reform will be
sensitive to the state of East-West relations. The
proponents of reforms that attempt to introduce mar-
ket forces and political diversity into the Soviet system
are more likely to be able to advance their cause in a
climate of reduced tensions. We believe that a sharp
deterioration of the international climate would
strengthen conservative elements in the regime and
could conceivably derail the reform process, especially
if it coincided with severe disruption produced by
fundamental reforms. We also believe that Gorba-
chev's effort to direct a larger proportion of resources
into industrial modernization depends in part on his
ability to manage perceptions of the foreign threat,
and hence on his ability to achieve arms control
arrangements that constrain Western defense pro-
grams. In this sense, we believe Gorbachev's relative
success can be affected by the Western response to his
policie
85. Western policies can have an effect in a general
sense. We believe the prospect of Western assistance
was instrumental in expanding the flow of emigration
in the 1970s. A resurgent US economic and military
buildup, on the other hand, was a key ingredient in
creating the sense of crisis in Moscow that brought a
reform-minded leadership to power in the 1980s.
While the push for reform is not immune to outside
influence, we cannot confidently predict the impact in
Moscow of Western policies specifically designed to
affect the process
86. We believe Gorbachev's success, and the fate of
reform, will largely rest on the outcome of power
struggles, political debates and economic and social
developments inside the USSR and Eastern Europe
that are subject only indirectly to influence from
outside.
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ANNEX B
Gorbachev as a Leader
Mikhail Gorbachev is the most formidable Soviet
leader the United States has faced since the death of
Stalin. He is strongly committed to his vision of
radically improving the efficiency and productivity of
the USSR and thus increasing Soviet influence world-
wide. While his prospects for success are uncertain, his
determination is not. (c NF)
Personality. Gorbachev's forceful personality ac-
counts in large measure for his successes to date:
- He is highly self-confident.
- He is an articulate and persuasive communicator.
In his travels at home and abroad, he relishes
face-to-face dialogue and spontaneous exchanges
with the press.
- He is intellectually and emotionally disciplined.
He is willing to show emotions publicly, but does
not lose control or appear to be reckless or
impulsive
Leadership. Gorbachev is determined to lead the
USSR, not simply serve as head of the Politburo.
Unlike the consensus-building Brezhnev, Gorbachev
moves out in front of Party colleagues in his efforts to
promote change. He is willing to experiment and take
risks to breathe new life into the Soviet system. Unlike
Khrushchev, however, his willingness to take risks is
tempered by a careful calculation of the potential
consequences of his acts. He will push his goals
relentlessly, while demonstrating extraordinary tacti-
cal flexibility.
View of the United States. Gorbachev's view of
the United States is more sophisticated than that of
previous Soviet leaders. He is especially sensitive to the
importance of public opinion in democracies. Never-
theless, he also harbors narrow perceptions about the
United States, speaking simplistically of the power of
the US "military-industrial complex" over the Presi-
dent and Congress. We believe Gorbachev's under-
standing of the United States is evolving beyond such
stereotypes, however, as he profits from repeated
personal interactions with US political and business
leaders.
Future Behavior. Gorbachev is highly confident of
the USSR's potential and of his own ability to lead. If
he perceives that his restructuring program is not
meeting his expectations, we believe he will persist
and indeed escalate his efforts. When his changes stir
controversy and political turmoil, Gorbachev will com-
promise on what he sees as secondary issues and alter
his tactics but persist in pursuit of his goals. We believe
he recognizes he is pursuing a potentially dangerous
course but is determined to try-even at the risk of
failure-rather than accept the status quo.
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ANNEX C
Gorbachev and Ideology
Soviet policymakers have always been careful to
have their actions solidly grounded in party ideology.
Throughout Soviet history, fundamental changes in
domestic and foreign policy have been accompanied
by corresponding ideological adjustments. This phe-
nomenon can be seen in the struggle for reform in
Gorbachev's USSR. Opponents of the reforms claim
that they violate fundamental ideological principles,
while Gorbachev and his allies are making a major
effort to undermine those claims by redefining ideo-
logical principles to lay the groundwork for their
reforms.
The rapid rise of an outspoken reformer and close
ally, Aleksandr Yakovlev, has been a key of Gorba-
chev's effort to change the ideological climate. In
recent months, Yakovlev has taken the lead in pushing
for a more flexible approach to ideological issues, and
his promotion in June to full membership in the
Politburo puts him in a position to replace the more
conventionally minded Yegor Ligachev as the regime's
top spokesman on ideology
Overcoming the Ideology of Stagnation. To
smooth the way for reform, Gorbachev and Yakovlev
are proposing a more flexible "Leninist" view of
ideology which modifies and even disregards princi-
ples which no longer conform to the nature of the
times. In an article published in the May 1987 issue of
the party's authoritative ideological journal, Kommun-
ist, Yakovlev identified the absence of adequate ideo-
logical support for the "nascent and upcoming" re-
forms as one of the major obstacles to their success.
Gorbachev and Yakovlev have thoroughly criticized
past regimes for failing to update ideology to keep
pace with the country's development and for allowing
it to harden into rigid dogma. Gorbachev told the
January 1987 Central Committee Plenum that "the
theoretical concepts of socialism remained at the level
of the 1930s and 1940s, when society had been
tackling entirely different tasks." This stagnation in
ideology, Gorbachev continued, prevented past leaders
from perceiving the need for change and the danger
presented by the growth of "crisis phenomena" in
society.
Liberating Social Science Research. Remarks by
Gorbachev and Yakovlev suggest that the new ap-
proach to ideology could have a major impact on the
social sciences in the USSR, freeing them to delve
more deeply into the realities of Soviet life. Gorbachev
complained to the January plenum that the ideological
dogmatism of the past had left no room for objective
scientific research:
(The) motive forces and contradictions and
the actual condition of society did not become
the subject of in-depth scientific research ...
vigorous debates and creative ideas disappeared
from theory and social sciences, while authori-
tarian evaluations and opinions became un-
questionable truths.
In his Kommunist article, Yakovlev described the
heavy toll he claims ideological dogmatism has taken
on economic policy:
- The attitude that private plots and self-employ-
ment are "alien" to socialism deprived the econ-
omy of significant potential resources.
- The mythologizing of the centralized form of
management fettered enterprise and initiative
and engendered bureaucratization.
brake on economic growth.
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ANNEX D
Gorbachev and the Third World
Public Pronouncements and Academic Debate.
Gorbachev has devoted relatively little public attention
to the Third World, focusing primarily on arms control,
East-West relations, and domestic concerns. Third
World issues received less attention at the 27th CPSU
Congress in 1986 than they did at the two preceeding
congresses and the new CPSU program has little of the
optimism-and promises of support for the "national
liberation movement"-found in its 1961 predecessor.
This lower level of public attention to Third World
concerns has led Fidel Castro and other Soviet allies to
remind Moscow of its "internationalist duties" to its
Third World friends.
A lively debate on numerous Third World questions
has continued in the Soviet academic and political
literature under Gorbachev. Many Soviet scholars and
political figures have expressed relatively pessimistic
views of the prospects for Third World states to advance
to socialism and acknowledged that Soviet actions in the
Third World over the past several years have complicat-
ed relations with the United States. The Soviets recog-
nize that changing conditions in the Third World-the
end of the colonial era, the emergence of regional
military powers, the complexity of Third World politi-
cal and economic problems-will make it more difficult
for them to expand their influence using the instruments
they have relied on in the past, notably arms transfers
and support for national liberation movements.
The Gorbachev Agenda. Moscow's more sober view
of the Third World under Gorbachev does not, in our
view, point toward a Soviet retreat, but toward a policy
that takes into account the realities of the developing
world as the Soviets understand them. These realities
may include limits on the prospects for pro-Soviet
revolutionary change but they also open a variety of
new political and economic opportunities for the USSR.
Over the next few years, we see the USSR pursuing a
wide range of policies in the Third World using a varied
and, in many cases, more sophisticated set of policy
instruments
Some of these policies reflect continuity with pre-
Gorbachev patterns:
- The Soviets will provide continued, and if neces-
sary, increased support to embattled clients such as
Angola, a situation Moscow probably sees as a test
of its resolve in the face of "US neoglobalism."
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- Moscow will promote leftist change in the Third
World, though it will do so carefully, in order to
avoid provoking the United States and damaging
its effort to create the image of a responsible
superpower. The USSR will probably limit open
support for revolutionary "armed struggle" to
relatively safe situations such as Chile and South
Africa-where a direct superpower confronta-
tion is unlikely-but it will keep its options open
in other countries by maintaining covert contacts
with antiregime groups both directly and
through surrogates. Moscow will not forgo ex-
ploiting opportunities in countries where a shift
toward the Soviet Bloc would significantly disad-
vantage the West. Moscow will probably be
reluctant, however, to take on new "basket cases"
as clients.
But we also expect increasing emphasis on new
approaches:
-A more assertive effort to gain influence by
playing a role in the settlement of regional
conflicts. In pursuit of this objective the Gorba-
chev regime will be more willing to go against
the wishes of its traditional clients and to support
negotiated solutions. But we do not believe they
will make concessions that would threaten the
hold of their key clients.
- Trying to break out of the diplomatic rigidity of
the late Brezhnev era by improving ties to key
regional players such as Egypt, Israel, Zimbabwe,
and China.
- A more concerted effort to expand political and
economic relations with neutral and pro-Western
states, especially relatively wealthy ones such as
the ASEAN countries and those in regions such as
Latin America and the South Pacific where
Moscow has had little or no presence.
- A more tough-minded policy toward its tradi-
tional clients. The Soviets will attempt to main-
tain good relations with countries such as Syria,
Libya, Angola, Vietnam, Ethiopia, and Nicara-
gua. But we will see stronger pressure from
Moscow for improved performance and greater
willingness to cross swords on regional and inter-
national issues when it serves Soviet interests.
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