The Heritage Foundation

Backgrounder #1217

August 26, 1998

August 26, 1998 | Backgrounder on

U.S.-Russian Relations at the Moscow Summit:  Time to FaceReality

On September 1-2, 1998, Presidents Bill Clinton and Boris Yeltsin will conduct a summit meeting in Moscow. Both presidents will arrive weakened: Bill Clinton by domestic scandal, Boris Yeltsin by his country's abysmal economic performance. Russia itself is weaker than ever; the severity of the current economic crisis threatens both Russia's political stability and the survival of Yeltsin's regime. Yeltsin, moreover, on August 23 dismissed his entire cabinet and reappointed as Prime Minister Viktor Chernomyrdin, whom he had sacked unceremoniously just five months ago. Both presidents are lame ducks: Neither is eligible to seek re-election, and both face hostile legislatures. Both, therefore, are likely to seek opportunities to boost their prestige at home.

Clinton's One-Sided Russia Policy
President Clinton and his close advisors maintain that Russia, although in the grip of "temporary" economic difficulties, is a great power and that the U.S.-Russia relationship overall constitutes an Administration success story. They point to the series of elections: parliamentary in 1995, presidential in 1996, and local in 1996-1997; to the reasonably free media; and to the program that put over 70 percent of Russia's productive assets in private hands. These are indeed important milestones for Russia. The whole picture, however, is more complex--even bleak--and the Clinton Administration refuses to face this reality.

Russia is a fundamentally weak state and has yet to recover--either economically or socially--from the collapse of the Soviet empire. It lacks consensus on the most basic aspects of its character and structure. It also is in the middle of a severe financial crisis which threatens its social and political stability and may cause fundamental changes in the political system. Finally, the ascendancy of Foreign Minister Yevgenii Primakov has exacerbated the anti-Western tilt of Moscow's foreign policy, leading Russia consistently to flout important U.S. security concerns.

This trend toward anti-Americanism is all the more disturbing because Clinton's pro-Russia policy was supposed to prevent it. Anti-Americanism is rampant in Russian politics and the State Duma. It is the main obstacle to ratification of the START II arms control agreement. It is also an obstacle to the U.S.-Russian cooperation which Clinton claims is so important.

At previous summits Yeltsin, Chernomyrdin, and other Russian officials repeatedly promised to stop the nuclear and ballistic missile technology transfer to Iran. Despite these promises, the flow of technology to Iran has continued. Moreover, Primakov vouched for Saddam Hussein's good behavior in November 1997 and negotiated a deal to allow unrestricted access by United Nations weapons inspectors in Iraq. The result was Baghdad's rejection of cooperation with the U.N. in August 1998-with Moscow's acquiescence. On August 21, Yeltsin lashed out at the U.S. attacks on terrorist targets in Afghanistan and Sudan--hardly a friendly gesture a week before the summit and only one month after receiving crucial U.S. support for a $22 billion international bailout package orchestrated by the International Monetary Fund (IMF).

Despite Russia's economic chaos and foreign policy affronts to the United States, President Clinton continues to support Yeltsin, both politically and financially, in the belief that by doing so, the U.S. can ensure a successful transition to democracy in Russia, prevent hard-liners from returning to power, and facilitate Russia's integration into the Western community of nations. Unfortunately, this policy seems to be faltering. Russia is pursuing an anti-Western foreign policy, yet Yeltsin is attacked by the opposition for being too pro-American. All the while, anti-Americanism is on the rise in Russian politics.

Needed: An Alternative Policy
Important American interests are at stake at the summit. These include the survival of democracy and free markets beyond the Yeltsin presidency and remedying the economic crisis. But while Russia's economic woes should take priority at the summit, an ambitious bilateral foreign policy agenda also needs to be carefully addressed to secure U.S. interests. President Clinton should work with Boris Yeltsin and his advisors on finally getting Russia's economic house in order, resolving the START II impasse, and addressing a host of important regional issues. The Kremlin must understand that America cannot be taken for granted.

The Economic Crisis, the Failed IMF Bailout, and Devaluation of the Ruble

The most urgent issue on the agenda will be Russia's financial meltdown, which poses the greatest danger to the country's integrity since the dissolution of the Supreme Soviet (parliament) by Boris Yeltsin in 1993. On August 17, Russia devalued its currency by 34 percent and Prime Minister Sergei Kiriyenko announced a 90-day moratorium on domestic and foreign debt payments. The $22 billion IMF-led bailout, announced only last July 20, was aimed at preventing just such a scenario.

The Russian economy is suffering from the Yeltsin administration's inability to restructure the economy, attract foreign investment, promote domestic growth, prevent capital flight, cut the size of the national government, curb government spending, and collect sufficient revenue.

As devaluation whips up inflation and increases the price of imported consumer goods and foodstuffs, the government is falling further behind in its salary payments to the military, teachers, doctors and nurses, and industrial workers. Many private-sector companies also are in arrears to their workers and suppliers. Public discontent is mounting. Miners' strikes have paralyzed important railroads, and the communists are calling for a general strike in October. Foreign debt service payments will mushroom toward the end of the year to $2 billion a month, and the debt payoff moratorium may be prolonged.

Russia's economic woes cannot be resolved by more foreign borrowing. IMF loans, in fact, have prevented other countries, such as Mexico, Korea, and Indonesia, from undertaking the painful reforms necessary to get their economies running again. Now that the ruble has been devalued and IMF credits are being delivered, it is time for Russia to stop asking for more funds and begin to implement much-needed reforms. The U.S. approach should be that internal reform of the Russian economy must be a prerequisite to any further international assistance.

At the summit, President Clinton should:

  • Inform President Yeltsin that the United States will not support additional IMF loans. The poor performance of the Russian government and the flawed nature of the IMF's lending decisions make further credits counterproductive.

  • Urge Russian leaders to step up long-overdue economic reforms, which have been under discussion with foreign lenders since 1992. It is in the interest of businesses and consumers alike that Russia finally revitalize its economy and resume economic growth.

  • Offer U.S. technical advice and support for the Russian government in the areas of financial and budgetary management, land privatization, and legal reform.

  • Propose bringing 15,000 Russian graduate students to the best U.S. business schools and universities for training in such areas as economics, business and financial management, marketing, and accounting. Training should be for one year and should lead to an MA or MBA degree; students would be required to return to Russia upon completion of their studies. The cost of this training should be paid from funds already borrowed by Russia from the IMF and the World Bank. Similar training did much in the past to help developing economies in Singapore, Taiwan, and elsewhere.

The Survival of Democracy and the Free Market

The Clinton Administration has focused on its relations with Boris Yeltsin to the exclusion of other Russian political forces, even those which are democratic. The U.S. policy of supporting Yeltsin is seen by many among the Russian elites as partisan. This may damage U.S.-Russian relations in the long term; it already is hurting the Yeltsin administration, which is depicted by the opposition as excessively pro-Western.

As the political crisis in Moscow escalates, the Clinton Administration should use the summit to open channels of communication to other powerful politicians, primarily Moscow Mayor Yurii Luzhkov, Krasnoyarsk Governor General Alexander Lebed, and Yabloko party leader Grigory Yavlinsky. Contacts with alternative political forces should signal to Russians that the United States is listening to and establishing a dialogue with different voices in the country. Supporting democracy in Russia also means supporting political pluralism.

At the summit, President Clinton should:

  • Invite leaders of political parties, prominent politicians, and potential presidential candidates to a private discussion of U.S.-Russian relations, possibly followed by a dinner. At the meeting, Clinton should emphasize that the United States values its relations with Russia and its elected leadership--both now and in the future. For this relationship to continue and flourish, Russia's political actors must observe the rule of law and the democratic process and work to foster individual freedom, private property, and free markets. Whom the Russian people elect as president in the year 2000 is their business--not America's. This same message should be communicated, with respect, to Yeltsin.

  • Give a speech to the Russian people that stresses the long-term interest of the United States in constructive and friendly relations with Russia and highlights the basic progress Russia has made in achieving democracy, private property, civil society, and free markets.

  • Pledge to continue democracy-building and rule-of-law programs, educational and professional exchanges, and international broadcasting to Russia.

The Proliferation of Nuclear and Missile Technology

Since the collapse of the Soviet Union, the proliferation of weapons of mass destruction--both governmental and illicit--has become Russia's gravest security threat to the United States. Russia is selling advanced missile technology to Iran and is supplying nuclear reactors, ostensibly for peaceful purposes. This dangerous cooperation with a country that clearly desires to become a military nuclear power threatens American energy security in the Middle East as well as U.S. allies such as Israel and Saudi Arabia. Despite numerous remonstrations by President Clinton and Vice President Albert Gore, and despite promises by President Yeltsin to stop the flow of technology, Russian firms have continued their lucrative, deadly trade unchecked.

If this is not stopped, Iran will be capable of deploying its first nuclear-tipped missiles aimed at targets in the Middle East and Europe by the year 2001. In addition, despite President Yeltsin's 1994 promise to Bill Clinton to stop further conventional arms supplies to Iran, Russia has signed a $4 billion agreement to provide the Iranian military with modern weapons. Although Russia's military-industrial complex desperately needs cash, that is not the only reason that Russia is building up Iran's military might. Strengthening Tehran is part of the anti-American strategy known as the Primakov Doctrine, which is aimed at creating a Eurasian counterbalance to the Euro-Atlantic zone.

Washington needs to act now to stop this dangerous development. The U.S. government has an obligation to help prevent further Russian support for Iran's rearmament. Washington needs to impose a price on the Moscow-Tehran relationship, which is endangering Russian-American ties, U.S. investments in the Middle East, and the stability and economic prosperity of the West. Russia's reckless policy in Iran could endanger all the achievements of its integration into the G-7.

The United States should press the Kremlin to cooperate in ensuring that Iran's nuclear, missile, chemical, and biological programs are suspended. President Clinton should end his opposition to H.R. 2709, the Iran Missile Proliferation Sanctions Act, which he vetoed on June 23, 1998. This measure would allow the imposition of economic sanctions on foreign companies and government agencies that assist Iran's ballistic missile program. He also should implement sanctions measures in the recently passed Senate Concurrent Resolution 48 and in Executive Order 12938 on the Proliferation of Weapons of Mass Destruction. The United States should also be prepared to suspend U.S. funding for Russia's participation in the development of the international space station.

At the summit, President Clinton should:

  • Demand that Moscow recall all its military and technical experts from Iran.

  • Call for full disclosure of all present and past cooperation between Russia and Iran, including programs aimed at developing ballistic missiles and weapons of mass destruction and the technologies needed to produce them. Disclosure should include the names of scientists on both sides, technical documentation, and the location of research and testing facilities.

  • Inform Russia that if it does not cooperate, the U.S. will vigorously impose sanctions passed by the U.S. Congress against Russian companies that send weapons materials and technologies to Iran.

Arms Control1

A number of important items on the arms control agenda should be addressed during the summit. These include resolving the question of the legal standing of the 1972 Anti-Ballistic Missile (ABM) Treaty, ratification of the 1993 Strategic Arms Reduction Treaty II (START II), the entry into force of the 1996 Comprehensive Nuclear Test Ban Treaty (CTBT), and shoring up the 1968 Non-Proliferation Treaty (NPT) in the aftermath of nuclear tests by India and Pakistan.

The ABM Treaty

The Clinton Administration supports the outdated 1972 Anti-Ballistic Missile Treaty, which perpetuates Robert S. McNamara's illogical policy of mutual assured destruction (MAD). The primary goal of U.S. policy should be to protect America from the clear, present, and growing danger of a ballistic missile attack. The ABM Treaty barred both the United States and the Soviet Union from deploying national missile defense systems; the Russians have such a system around Moscow, but the U.S. remains defenseless. It is now clear that the ABM Treaty lapsed when the Soviet Union collapsed in 1991. Neither Russia nor any combination of states can fulfill the obligations of the Soviet Union under the Treaty.

To achieve the essential goal of defending America against missile attack, the United States should abandon its adherence to the ABM Treaty and work with Russia and other states on the cooperative development of ballistic missile defense.

At the summit, if he followed such a policy, President Clinton would:

  • Announce to President Yeltsin that the U.S. considers the ABM Treaty no longer binding.

  • State that, as a result, the U.S. will not send a delegation to the combined meeting of the ABM Treaty's implementing body (the Standing Consultative Commission, or SCC) and five-year review conference under the treaty, scheduled for September.

  • Notify President Yeltsin that the agreements signed in September 1997 to amend the ABM Treaty are no longer appropriate because they lack a legal context and the U.S. considers them null and void.

  • Announce that the U.S. is prepared to seek a cooperative approach to deploying missile defenses by reviving the Defense and Space Talks and expanding them to include states in addition to Russia that wish to discuss missile defense issues. The Clinton Administration walked out of these talks in 1993. With the ABM Treaty no longer binding, this is the best available forum for discussion of missile defense issues.

Strategic Arms Reduction Treaty (START II)

The Russia Duma has refused to take up the question of ratifying START II, signed by Presidents George Bush and Boris Yeltsin in January 1993. START II would reduce U.S. and Russian deployed strategic offensive nuclear arsenals to no more than 3,500 deliverable warheads on each side. The Senate consented to U.S. ratification in 1996. President Clinton should reiterate his oft-stated desire for Russia to ratify START II.

This will be a difficult point for President Clinton to make, however, because he had promised not to attend this summit until after the Duma had approved the treaty. His decision to attend the summit, despite the lack of action by the Duma, has sent an unintended message that START II ratification is no longer important to him.

In order to restore his credibility, therefore, President Clinton should:

  • Announce that he will request supplemental funds from Congress to keep U.S. strategic nuclear forces at the START level (somewhat more than 6,000 warheads) for the foreseeable future. This will present the Kremlin with a dilemma: whether to maintain a costly parity with the U.S. or unilaterally scale down its arsenal. As Russia's nuclear force is projected to deteriorate to only 1,000 warheads by the year 2010, reluctance to sign START II will only exacerbate Russia's disadvantage. Further, President Clinton can make it clear to the Russians that there will be no START III negotiations until after START II is ratified.

Comprehensive Nuclear Test Ban Treaty (CTBT)

The Comprehensive Nuclear Test Ban Treaty was drafted to ban the explosive testing of nuclear weapons. The United States has signed but not yet ratified this treaty. In May and June of this year, first India and then Pakistan undertook a series of such tests. Under the terms of the CTBT, both India and Pakistan must ratify the treaty for it to enter into force. Their nuclear tests, however, render their participation meaningless.

At the summit, President Clinton should:

  • Propose to President Yeltsin that they issue a joint statement at the summit declaring that both states will no longer seek the entry into force of the CTBT.

  • Point out to President Yeltsin that the tests by India and Pakistan mean that the U.S. moratorium on nuclear testing no longer applies and that the United States will resume testing in the near future. He should expect Yeltsin to make a similar statement to him during the course of the summit.

Non-Proliferation Treaty (NPT)

Following the series of nuclear tests conducted by India and Pakistan earlier this year, the question has arisen whether these two countries should become acknowledged nuclear powers. Under the NPT, this would require amending the treaty to designate India and Pakistan, and perhaps other states, as weapons states. The NPT, which seeks to limit the spread of nuclear weapons, designates five states (the United States, China, France, Great Britain, and Russia) as weapons states.

At the summit, President Clinton should:

  • Seek a joint statement that commits both the United States and Russia to limiting the number of nuclear weapons states under the NPT to the five states now designated by the treaty. This would leave India and Pakistan outside the NPT regime, as neither state has ratified it. The joint statement would seek to ensure that non-weapons states are not rewarded for testing nuclear weapons by admission to the nuclear club. The joint statement also should express the long-term hope that both India and Pakistan will see that their interests lie in joining the NPT as non-weapon states and rolling back their nuclear programs in much the same fashion as South Africa did earlier this decade.

Iraq2

Saddam Hussein continues to flout U.N. Security Council Resolutions with virtual impunity. Equally troubling, his diplomatic courtship of Russia, France, and China has provided Iraq with powerful advocates on the U.N. Security Council. Iraq has provided Moscow with a beachhead to influence events in the Middle East. Past behavior indicates that as long as Primakov is Russia's foreign minister, Moscow will continue to oppose U.S. policies at every turn, exploiting its relationship with Iraq to thwart U.S. initiatives.

President Clinton and Secretary of State Madeleine Albright have given Primakov ample opportunity to restrain Saddam. Primakov has failed to do so. It is time to explain to Moscow that the era of Russian sphere-of-influence power games in the Middle East has come to an end, and that Russia's dire economic situation does not allow it the luxury of behaving like a great power with global ambitions. Attempts to bolster old Soviet clients from the Cold War era, such as
Muammar Qadhafi of Libya, Hafez al-Assad of Syria, or Saddam Hussein, should be regarded as conflicting with vital U.S. interests in the region. It is time to convince Russia to cooperate in containing Saddam and eventually removing him from power.

At the summit, President Clinton should:

  • Inform Russia that the United States strenuously opposes Moscow's efforts to protect Saddam in the U.N. Security Council. If Russia is serious about having a constructive and long-term relationship with the United States, it must cooperate fully with the United States and back efforts aimed at defanging Saddam's weapons-of-mass-destruction programs.

  • Inform Russia that the United States considers normal relations with Iraq impossible as long as Saddam's regime remains in power.

  • Warn Moscow that the United States will vigorously oppose any attempts (covert or otherwise) to boost Saddam's political fortunes and demand the Russia cease all negotiations for military and economic cooperation with Iraq.

Kosovo and Bosnia3

Russia continues to provide Slobodan Milosevic with diplomatic cover and support, despite the Serbian dictator's heavy-handed oppression in Kosovo, the southern province of Serbia whose population is 90 percent ethnic Albanian. At the same time, however, Moscow has cooperated extensively with NATO peacekeepers in Bosnia and should be encouraged to continue doing so. The international community is beginning to view Milosevic as part of the problem of long-term Balkan instability rather than as a solution to the problem. This change of opinion will have dramatic implications for U.S. policy. The United States should be leading the effort to neutralize Milosevic and bolster alternatives to his continued rule. Russian cooperation in the Balkans will go a long way toward fostering NATO-Russian ties and addressing Moscow's insecurity regarding the North Atlantic alliance.

At the summit, President Clinton should:

  • Commend Russia for participating in the Bosnia peace process.

  • Request Russian cooperation in securing Milosevic's agreement to grant Kosovo a greater measure of political autonomy as a way to defuse the ongoing crisis in Serbia.

  • Inform Russia that, based on consultations by U.S. diplomats with the warring parties in Bosnia, Washington does not believe that applying greater pressure on Milosevic concerning Kosovo will cause the Bosnia peace accords to unravel.

  • Reinforce the understanding that attaining a self-sustaining peace in Bosnia is in Russia's national interest. For Bosnia and Kosovo to spiral out of the control would aggravate the security situation in Europe. Secessionist and ethnic separatist movements could threaten Russian territorial integrity, as the experience of Chechnya has shown.

The Silk Road and Caspian Sea Oil

The Caucasus has emerged as a pivotal geostrategic area in the post-Cold War world where the interests of the United States, Europe, Russia, Iran, Turkey, and the broader Islamic world intersect. It stands to play a strategic role in developing the Silk Road--the cross-continental trade route between the East and Central Asia, and Europe and the Middle East. In particular, major oil and gas pipelines will cross the Caucasus, bringing the abundant energy resources of the Caspian Sea and Kazakhstan to global markets. Revenues from the oil and gas reserves and future investments in the region are estimated in the hundreds of billions of dollars. Development is just starting and will continue into the next millennium.

U.S. interests in the Caucasus include assuring the independence and territorial integrity of Georgia, Armenia, and Azerbaijan; preventing a re-emergence of Russian imperialism; keeping Iran and Islamic fundamentalism in check; and assuring access to energy resources.

Moscow has supported Abkhaz separatists against the central government in Georgia and Karabakh Armenians against Azerbaijan. Influential hard-liners in Moscow believe that instability in the Caucasus will enhance Russia's power in the region. Russia has supplied over $1 billion worth of heavy weapons clandestinely to Armenia. The Northern Caucasus is a caldron of ethnic hostilities which could explode, impeding both peace in the region and the transport of oil from the Caspian.

It is in the interest of the United States that American oil and gas companies be able to establish oil and gas pipelines in a western direction to the Black Sea and Mediterranean, instead of north (to Russia) and south (to Iran). If Washington fails to make this happen, American interests in the region will suffer immeasurably. Key U.S. allies, such as Turkey and Israel, which also have energy and security interests in the region, will be out left in the cold, while anti-Western elements in Russia and Iran will be emboldened.

At the summit, President Clinton should:

  • Clarify that support of ethnic separatism in the South Caucasus against the sovereignty of Georgia and Azerbaijan will undermine U.S.-Russian relations. U.S. assistance to Russia is incompatible with Moscow's destabilizing policies in the Caucasus.

  • Confirm that Russian oil and gas companies are welcome to cooperate with U.S. oil companies and continue to participate in international consortia to develop oil and gas fields and pipelines in the region.

Cyprus4

The delivery of Russian S-300 missiles to the Greek-populated Republic of Cyprus, scheduled for November, threatens to trigger an armed clash between NATO allies Greece and Turkey. Such a conflict could have catastrophic consequences for the future of NATO and for the peace and stability of the Eastern Mediterranean, something which anti-Western members of the Russian foreign policy elite may think is in Russia's interest. While the United States should not oppose the principle of Russia selling conventional arms to foreign markets (American companies are engaged in the same activity), President Clinton should emphasize that the arms sales in this particular case are destabilizing.

At the summit, President Clinton should:

  • Recommend strongly that Russia postpone, delay, or cancel the S-300 sale to Cyprus. If necessary, the quota for the U.S. purchase of Russian uranium should be increased to compensate Russia for the lost revenue.

Conclusion

The relationship between the United States and Russia is extremely important to both countries. It should be managed with a firm hand and a clear eye. With Russia increasingly unstable because of its economic crisis and Boris Yeltsin's surprise firing of his cabinet, President Clinton faces a diplomatic balancing act at the coming summit in Moscow: On one hand, he needs to reassure President Yeltsin and the Russian political elite of U.S. friendship and support, but on the other, he must stand firm in defending U.S. interests from the Caspian Sea, Iran, and Kosovo to arms control issues.

President Clinton needs to foster a Russian economic revival based on clearly defined property rights, the rule of law, low taxes, an improved work ethic, and innovation--not more IMF bailouts. He also needs to articulate America's desire for continuing Russian progress toward democracy, private property, and a free market, and reach out to Russian political circles beyond Yeltsin.

Most of all, however, the Clinton Administration must recognize that its one-sided Russia policy has not worked. At the Moscow summit, both countries must face this overriding reality.

--Dr. Ariel Cohen is Senior Policy Analyst in Russian and Eurasian Studies in The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation.

 

Endnotes

1. The author wishes to thank Baker Spring, Senior Policy Analyst in The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation, for the comprehensive discussion of this topic.

2. The author wishes to thank James Anderson, Ph.D., Defense and National Security Analyst in The Kathryn and Shelby Cullom Davis International Studies Center, for the discussion of this topic.

3. The author wishes to thank James Anderson, Ph.D., Defense and National Security Analyst in the Kathryn and Shelby Cullom Davis International Studies Center, for the discussion of this topic.

4. The author wishes to thank James Anderson, Ph.D., Defense and National Security Analyst in the Kathryn and Shelby Cullom Davis International Studies Center, for the discussion of this topic.

About the Author

Ariel Cohen, Ph.D. Visiting Fellow in Russian and Eurasian Studies and International Energy Policy in the Douglas and Sarah Allison Center for Foreign and National Security Policy, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation
Douglas and Sarah Allison Center for Foreign and National Security Policy