West’s chance to shape 21st Cent. Russia

Press, 15 October 1982, Page 16

West’s chance to shape 21st Cent. Russia

From “The Economist,” London

What sort of Russia do we want to be living with by the year 2000, and what can we do to bring it about? Until both halves of the Atlantic alliance face up to that big question, none of the angry little questions that Americans and west Europeans are hurling at each other in 1982 can be given a proper answer. How to end the quarrel over the Siberian gas pipeline: how far western Europe needs to rely on American nuclear weapons for its protection; how to respond to the formal execution this weekend of Poland's Solidarity: all these things have to be slotted into the broader issue of how to make the Soviet Union a more coexistable place for the twenty-first century. For most people, a coexistable Russia means a Russia that will no longer try to impose its will on the people of other countries for either ideological reasons or nationalist ones. It makes no difference to occupied Afghans and squashed Poles whether their fate descends on them in the name of Marx or of Mother Russia. What most people have not yet grasped is that two things are happening — or rather not happening — inside Russia in 1982 which provide a rare chance to coax late-Brezhnev Russia towards post-Brezhnev coexistability. The Soviet Union has an unsolved leadership problem wrapped up in an unsolved economic problem. Its unsolved economic problem is the fact that its long-declining growth rate has now reached a point where, allowing for the distortions of Soviet statistics, it is hovering close to zero. The usual Soviet answer to economic difficulty — to throw even more investment and even more bureaucrats at it — no longer works. A different approach is needed.,

Russia’s unsolved leadership problem is the fact that the long dotage of 75-year-old Mr Leonid Brezhnev — given a 5050 chance of surviving another two years, on the latest American medico-intelligence guess — has not yet thrown up a successor who can be helped by the West to recognise what that different approach will have to be. The two main present contenders for the Brezhnev succession are Mr Yuri Andropov and Mr Konstantine Chernenko. Of this unappealing pair, the less attractive is Mr Chernenko. He appears to be Mr Brezhnev’s own preference, presumably so as to carry on Mr Brezhnev’s combination of immobility at home and ideo-logical-cum-nationalist heavyhandedness abroad. The alternative, Mr Andropov, would be no break-through to liberal enlightenment. This recently promoted ex-secret-policeman presided over the crushing of Russia’s dissidents in the late 19705, and probably ordered this year’s closing down of the automatic telephone lines that provided a tiny earhole into Russia. Yet Mr Andropov, not being Mr Brezhnev’s chosen yes-man, may be readier than Mr Chernenko to look at new ideas for rescuing the economy. He may have both the intelligence to recognise what is wrong with the present economic system, and the will to change it. Even Mr Andropov’s reputation as a hard-noser in secret-police matters could, in a curious way, be a help: he is likelier to get his politburo colleagues’ blessing for a policy of economic reform if they reckon he can be trusted not to let economic change spill over into political change. Since there is no liberal internationalist on the Moscow scene, the best bet for the west is to wish the ailing Mr Brezh-

nev long life — because a sluggish Brezhnev means a sluggish Soviet foreign policy — and then hope he is followed by an intelligent conservative of the Andropov sort, who decides to get to grips with Russia’s economy. This is where the West can help itself, and in the long run help Russia too.

The core of the Soviet economic problem is revealed in one statistic. The number of new workers joining the labour force each year — about 2 million until fairly recently, while the post-1945 baby-boom was still coming to working age — is dropping to an average of less than 1 million in the 1980 s. With fewer new workers, the only way to get the economy growing faster is a lot more output per worker. Higher productivity will not be achieved by more investment alone, because the Soviet record in getting more output out of more investment is dismal.

The only alternative is a much more flexible system of economic management —

more decision-making power for managers, more incentives for industrial workers and collective farmers, more rewards for success, more penalties for failure. The time is past when the Soviet economy could be made to work by a mixture of patriotic exhortation and brute fear.

The Brezhnev years have given the Soviet citizen no share in political power, but they have accustomed him to an easing of the old Stalinist terror. The “command” economy no longer jumps to orders shouted from above. The Soviet worker has to be given reasons of self-interest for working better. He wants to consume more of what he makes.

This failing power of the whip is the West’s opportunity. It is true that imports account for only a few per cent of Russia’s national income. It is also true that Russia can labo-

riously and expensively make for itself some (but not all) of the things it now imports from the West. Nevertheless, those few per cent matter. When every new Soviet investment decision is a painful choice between squeezing the defence budget and squeezing .the consumer, and when the consumer is getting as hard to squeeze as the generals have always been, every new subsidised import from the West provides the Soviet Government with a cushion for its defence budget and an excuse to put off yet again the day when it will have to reform the way it runs the economy. A continuation of the present habits of East-West trade will make it likelier that Mr Brezhnev’s successor is a Chernenko who keeps on trundling down the same old Brezhnev tramlines. A change in those habits will make it likelier that he is an Andropov who risks reform. From now on the West should decide to conduct its economic relationship with Russia as part of its wider political relationship with that country. This does not mean “cutting off trade with Russia.” Where trade brings equal benefit to both sides, it should continue. Where it brings a one-sided benefit to Russia — which happens whenever Russia gets subsidised western exports or subsidised western credits — it should not continue.

The hopeful old idea that trade of any sort is a good thing because it makes for peace was long ago proved miserably false. The two great wars of this century began between countries that traded massively with each other. The 19705, which saw the great expansion of credits for the communist world, also saw the expansion of communist military power into Africa and the Middle East. The fallacy should not be prolonged for Russia's benefit.

The message for Mr Andropov is that peace makes for trade, not the other way round. If he accepts a policy of genuine coexistence, he will need to spend less on Russia's armed forces, and the West will trade with him on generous terms.

The incentive-based reform the Soviet economy needs will then be much easier to finance. If he carries on with an Angola - Afghanistan - and - Poland sort of policy, he will not only have to keep’ military spending up at 13-14 per cent of gross national product (and perhaps increase it as the West coun-ter-arms) but he will also have to make do with a strippeddown. strict-mutual-benefit-only trading relationship with the West.

That would mean ordering the Soviet people to tighten their belts yet another notch, probably by a risky return to near-Stalinist methods of discipline. The chances are rear sonably good that Mr Andropov will prefer to have his leadership go down in the Soviet history books as a period of revitalisation at home and peace abroad.

In a well-ordered Western alliance, the allies would months ago have been earnestly debating long-term objectives like this, instead of squabbling over the Siberian pipeline and the size of the squeak to be uttered about Solidarity’s suppression. Of course, the Western alliance is no better ordered than a collection of free nations ever is. The Europeans accuse the Americans of jerkiness, of shifting policy to each change in the international wind. The Americans accuse the Europeans of inertness, of failing to respond to evident challenges. There is some truth in both complaints.

The aim now should be to use the shock of the EuroAmerican row to pull both sides into seeing their shared

long-range interest and working out a shared long-range policy towards Russia. It is probably too late to reverse the decision over the Siberian gas pipeline. It would have been better if most of Western-Europe had not chosen to make itself dependent on Russia for a worrying amount of its future energy consumption, thereby providing Russia with a large annual hard-cur-rency income, but the planning for alternatives was not done in time; the contracts with Russia have been signed; the Americans woke up to their dislike of the idea too late.

The pipeline, or at any rate its first section, will probably go ahead. The Reagan administration should accept this, and call off its sanctions on the companies helping to build the pipe-line — provided the Europeans join in a sensible long-term economic policy towards Russia.

The kernel of this policy would be an agreement that, so long as Soviet foreign policy stays unsoftened, the West will do nothing that directly or indirectly strengthens the Soviet military machine or helps the Soviet Government to slide out of its own hard economic choices.

At a minimum, this means tightening the controls on hightechnology exports to Russia (the present dog-eared list of forbidden exports includes things where Russia’s technology long ago caught up with the West's, and omits other things the West has invented since the list was last amended) and firmly declining to subsidise any future exports to Russia, or the credits with which Russia is helped to buy them. That last item will involve inventing a lynx-eyed supervising body to discover exactly who is providing how much subsidised credit to Russia, since this has so far been cunningly concealed in murk.