The Heritage Foundation

Backgrounder #1314 on Russia

July 26, 1999

July 26, 1999 | Backgrounder on Russia

New Prime Minister's Visit Is an Opportunity to Improve U.S.-Russia Relations

On July 27, 1999, Russia's new Prime Minister, Sergei Stepashin, will visit Washington, D.C. Stepashin, who succeeds Evgeny Primakov, is a former Minister of the Interior and of Justice. Many in the Clinton Administration saw Stepashin's appointment by President Boris Yeltsin and Primakov's removal as an attempt to salvage Russia's relations with the West because Primakov had opposed, frequently and openly, the United States on many issues, including Iran, Iraq, and the war in Yugoslavia.1

U.S.-Russia relations throughout the conflict in Kosovo were at their lowest since the end of the Cold War. First, Russia and the United States bitterly disagreed over the intervention itself. Then Moscow equated a military move against Yugoslavian President Slobodan Milosevic with aggression against Russia. But the combination of Russia's financial crisis, talk of a ground offensive mounted by the members of the North Atlantic Treaty Organization (NATO), and possibly Milosevic's brutality prompted Russia to help to bring peace to Yugoslavia. Now, Russia has joined the NATO effort to police the peace process. Both the Kremlin and the White House feel pressure to show that they are serious about improving relations between Russia and the United States. Stepashin's visit offers them an opportunity to do so.

Because Stepashin, a pragmatist, is a political unknown in the United States, the upcoming visit will be his diplomatic debut. In addition to establishing smoother relations with the United States, Stepashin hopes to facilitate the release of a $4.5 billion loan announced by International Monetary Fund (IMF) Managing Director Michel Camdessus in March 1999.

For its part, the Clinton Administration has an ambitious agenda for the meeting with Stepashin. Issues include such strategic security concerns as negotiating the status of the 1972 Anti-Ballistic Missile (ABM) Treaty; Russia's spread of the technology to manufacture and deploy weapons of mass destruction (WMD), especially to Iran and China; and space and technological cooperation in the future.

To ensure closer relations with Russia under Prime Minister Stepashin, the Clinton Administration should:

  • Formulate a new framework for constructive relations with Russia.
    With Primakov as Foreign Minister (January 1996 to August 1998) and Prime Minister (August 1998 to May 1999), Russia retreated from the close partnership Presidents Yeltsin and Bill Clinton had worked to establish. Primakov's anti-American stance was evidence of the Cold War nostalgia afflicting many of the old Soviet foreign policy elite who remained in positions of power in Russia. Primakov also maintained a relationship with such ideological opponents of the United States as Saddam Hussein of Iraq, which made U.S.-Russia cooperation difficult on many fronts.

Primakov was fired because, among other things, President Yeltsin understands that Russia needs Western investment and technology more than the West needs Russia. Moscow will need the cooperation of the United States to move Russia's economy out of its current slide. At the meeting with Stepashin, the United States should build on Russia's cooperation in Bosnia and Kosovo to pursue initiatives in three broad areas: (1) economic development and the establishment of the rule of law in Russia to create conditions for increased private investment from the West; (2) an improvement in military cooperation by encouraging coordination on peacekeeping in Kosovo, better civilian-military relations, and the renewal of the NATO-based Partnership for Peace; and (3) cooperation on strategic concerns, including nonproliferation, moving beyond the ABM Treaty, and establishing a new framework for negotiations on missile defense.

  • Urge Russia to reduce and eventually eliminate its dependence on IMF credits.
    Russia's dependence on assistance from the IMF and Western countries places Russians more in debt and does not provide an incentive to reform its failing economy. Russia's inability to meet the requirements of previous IMF loans has led to frustration in the West and resentment within Russia, which undermines good relations. Instead of seeking additional assistance that would not improve Russia's desperate economic situation, the Stepashin government must pursue comprehensive reforms that encourage private foreign investment, which would provide a far better foundation for economic growth.

  • Demand an investigation of bilateral and multilateral financial aid programs from the West.
    According to some deputies in the State Duma and some officials of the Central Bank, bank officials have mishandled, and possibly even embezzled portions of, IMF and other loans to Russia.2 Even former Russian Prime Minister Viktor Chernomyrdin admits that some World Bank credits, such as the coal industry credit, have disappeared. Such allegations of multimillion-dollar corruption at the highest levels of government in Russia involving funds from the IMF and the World Bank undermine the hard-won trust of Western lenders and investors. Russia needs to expose the activities of the officials involved in such scandals as the FIMACO (Finance Investment Management Company) affair, in which the Central Bank siphoned hundreds of millions of dollars through an unknown offshore company to play Russia's highly lucrative short-term bond market. To begin the process of renewing confidence in Russia's market, Clinton Administration officials should ask Prime Minister Stepashin to release the results of the Central Bank audit recently conducted by PricewaterhouseCoopers.

  • Establish a comprehensive program of reforms.
    Russia needs to conduct an unprecedented crackdown on crime and corruption. As a former top law enforcement official, Stepashin knows how corrupt Russia's economy is and that little will change unless the government pursues reform. Western knowledge and experts could facilitate the process--a lesson demonstrated in the Czech Republic, Poland, Hungary, Bulgaria, and the Baltic States--but Russians must perform the bulk of the work. These reforms include strengthening the judicial system; introducing a currency board (provided ample hard currency reserves are available); reducing subsidies of industry and agriculture; passing a land code to encourage the development of construction; promoting private farming and agribusiness; reducing the pervasive barter system in unmarketable, noncompetitive goods; and downsizing the military.3

Although the Russians must perform the brunt of the work, the United States should offer technical advice and support from government and private-sector experts in business, nongovernmental organizations, professional associations, and academic institutions. The experience of pro-reform efforts in Novgorod the Great, Nizhny Novgorod, Samara, and Saratov indicates that such technical assistance should be focused on regions and driven by local beneficiaries' demands. U.S. institutions should be encouraged to sponsor Russian graduate students, young managers, and administrators to give them exposure to the workings of a free market. But Russians know best what they need. And it is the next generation of Russians, who grew up under Soviet President Mikhail Gorbachev's perestroika and Yeltsin's reforms, that offers the best hope for Russia's future.

  • Restore cooperation between NATO and Russia.
    After the war in Kosovo commenced, Russia suspended all its military-to-military contacts with NATO and its members. This is a negative development that needs to be reversed. The sensation-seeking dash by Russian paratroopers to the airport at Pristina in Kosovo after the peace agreement was announced is an example of the destabilizing actions that strained NATO-Russia relations. The only NATO-Russia cooperation under way today occurs within the framework of the Kosovo peacekeeping force (KFOR), which is proceeding quite well. Both NATO and Russian commanders in Kosovo have expressed satisfaction with the cooperation between their troops on the ground. The United States should offer not only to restore military-to-military contacts between NATO and Russia to the pre-Kosovo levels and return Russia's military representatives to NATO's headquarters in Brussels, Belgium, but also to build ties between NATO members and Russia's forces through military educational exchanges, joint rescue missions, and other confidence-building measures.

Expand joint U.S.-Russia cooperation on strategic arms and nonproliferation.
Russia proved itself a difficult partner on a number of strategic issues, including missile defense. Russia's State Duma has resisted ratification of the Strategic Arms Reduction Treaty II (START II) since 1993. To improve relations, the United States, and Russia should concentrate their efforts on resolving outstanding differences, including:

  1. Missile defense agreements.
    The ABM Treaty is a relic of the Cold War, signed and ratified by the Soviet Union and the United States. The treaty bars the United States from deploying a missile defense system for the protection of its national territory. Today, the possibility of missile attack no longer threatens just the two nuclear superpowers of the 1970s. Several countries, including Iran, Iraq, Pakistan, India, and North Korea--some of which are hostile to the United States--are working to develop nuclear weapons and ballistic missile programs.

    At the recent summit of the Group of Eight (G-8) industrial countries in Cologne Germany, Presidents Clinton and Yeltsin committed to holding negotiations on both the ABM Treaty and START III this fall. The joint statement is faulty; it assumes that Russia can seek modifications to the ABM Treaty as though it is a party to the treaty. The ABM Treaty, however, was concluded between the United States and the Soviet Union, which no longer exists. The diplomatic record demonstrates that Russia is not, and never has been, a party to the treaty. In fact, the ABM Treaty no longer is valid because no state, including Russia, is capable of fulfilling the obligations the treaty imposed on the Soviet Union. House Majority Leader Richard Armey (R-TX) and House Majority Whip Tom DeLay (R-TX) describe this problem with the joint Cologne statement in a June 28 letter to President Clinton.

    At the upcoming meeting with Stepashin, U.S. officials should announce two modifications to the Cologne joint statement: (1) that the topic of the negotiations should be cooperation during the transition period to the full deployment of missile defense systems, not modifying the ABM Treaty; and (2) that the forum for the negotiations should be the Defense and Space Talks. The Clinton Administration walked out of these talks in 1993. They should be revived as an appropriate forum for discussing deployment of ballistic missile defenses. Such talks could be opened to other states interested in missile defense.

    These modifications would allow Russia, which is not a party to the legally defunct ABM Treaty, to participate in the negotiations this fall.

  2. START III Talks.
    The logic of the original Strategic Arms Reduction Treaty, START I, is anchored in the Cold War reality of a bipolar world in which imposing equal ceilings for the number of nuclear warheads in an arsenal made sense. The proposed START III, however, would occur in a very different strategic environment. Russia's gross national product is $280 billion and falling; its military budget in 1998 is estimated around $4 billion. The country's nuclear deterrent is deteriorating. According to Russia's military and political leaders, the country will have difficulty sustaining even 1,000 nuclear weapons in 2010. It is in Russia's interest to have a manageable weapons reduction process in place. At the same time, new WMD programs in highly unstable countries, such as Iran, Iraq, and North Korea, put the lives of Americans at increased risk. These new threats could justify an asymmetric reduction of warheads, whereby the United States would require maintaining more than the 2,500 warheads envisaged in START III.4

    The United States should make it clear to Stepashin that the United States does not see Russia as a foe, and that the U.S. arsenal is not aimed primarily at deterring Russia. More likely determinants of the number of the U.S. strategic nuclear weapons are programs to develop ballistic missile technology in China, North Korea, and Iran, which are likely to pose a more immediate threat to U.S. territory and U.S. allies. The United States should adjust its strategic nuclear targeting policy to meet these multiple threats simultaneously, which would mean a relatively large U.S. arsenal is necessary.

  3. Russia's military doctrine.
    The United States should impress on Stepashin that it is aware Russia modified its military doctrine to reflect a greater reliance on both tactical and strategic nuclear weapons. U.S. officials should state clearly and unequivocally that the United States views this policy shift as unnecessarily destabilizing. They should encourage Stepashin to convince his countrymen that they have more to gain by seeking cooperation with other countries and less to gain by boosting Russia's nuclear posture.

  4. The sale of WMD technology to Iran.
    Despite numerous protests from the Clinton Administration, Russia's state agencies--such as the nuclear energy ministry Minatom, the International Space Agency, and the Energiya space technology company--continue to supply Iran with technologies to help it to build WMD, including modern rocket engines. Unless this technology transfer is brought to an immediate end, Iran will be capable of deploying its first nuclear-tipped missiles aimed at targets throughout the Middle East and Europe by 2001. The United States should be firm in obtaining full disclosure from Russia regarding all arms deals and technology transfer agreements with Iran. The Kremlin should cooperate in ensuring that all of Iran's nuclear, missile, chemical, and biological weapons programs cease.

  5. Cooperative threat reduction programs.
    To facilitate confidence-building measures, decision-makers in the United States and Russia should focus on such important issues as the dismantling of ballistic missiles and strategic bombers; the destruction of chemical weapon stockpiles; and the retooling of biological weapons production facilities for civilian use, including pharmaceutical and agricultural product development. Congress funds these Department of Defense and Energy programs through the Nunn-Lugar initiative. There are allegations that some of these funds have been used to support Russia's strategic weapons modernization and proliferation activities. The United States should work with Stepashin to include in these programs the destruction of nuclear warheads and accountability and transparency measures to ensure that U.S. taxpayer funds are not wasted.

CONCLUSION

Prime Minister Stepashin's Washington debut offers the United States an opportunity to improve relations with Russia by addressing substantive issues. Even in the aftermath of Kosovo, with surging anti-American sentiments in Russia, a lot could be achieved by developing a working relationship with a Prime Minister who is eager to restore Russia's good standing with the United States. The Clinton Administration needs to address important U.S. security concerns, such as national missile defense and nonproliferation, and develop strong relations with the Stepashin government. Moreover, the United States should seek effective measures to assist Russia's democratic movement in its difficult quest to build the rule of law, a full-fledged market economy, and a participatory democracy. Such tasks will require decades of economic and political stability.

The Russian delegation must leave Washington with the clear sense that the military operation in Yugoslavia was not directed against Russia, and that the United States continues to value good relations with Russia. But to achieve such relations, Russia must work with the United States to eliminate points of friction, such as its proliferation of WMD and its resistance to a missile defense system to protect Americans. Waiting until after upcoming presidential elections in both countries have changed the key players could prove costly to the economic, military, security and diplomatic dimensions of U.S.-Russia relations in the next century.

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

Endnotes

1. The main reason Primakov was removed as Prime Minister is internal. President Yeltsin wanted to eliminate a potential competitor, who was too close to the Communists and who was not personally loyal to Yeltsin and his family.

2. Ariel Cohen, Ph.D., "What Russia Must Do to Recover from Its Economic Crisis," Heritage Foundation Backgrounder No. 1296, June 18, 1999. On the failure of Western credits to bolster Russia's economy, see Cohen's "Reasons to Oppose New IMF Credits," Heritage Foundation Executive Memorandum No. 597, May 18, 1999, "Primakov's Washington Visit: Not the Time for More IMF Credits," Heritage Foundation Executive Memorandum No. 581, March 24, 1999, and "Russia's Meltdown: Anatomy of the IMF Failure," Heritage Foundation Backgrounder No. 1228, June 23, 1998; Ariel Cohen, Ph.D., and Brett D. Schaefer, "The IMF's $22.6 Billion Failure in Russia," Heritage Foundation Executive Memorandum No. 548, August 24, 1998, and "Russia Needs Immediate Reform, Not More IMF Loans," Heritage Foundation Executive Memorandum No. 533, June 10, 1998; and Ariel Cohen, Marshall I. Goldman, John P. Hardt, and Roger W. Robinson, Jr., "The Meaning of the Russian IMF Bailout," Heritage Foundation Lecture No. 626, October 23, 1998.

3. Cohen, "What Russia Must Do to Recover from Its Economic Crisis."

4. The author thanks Baker Spring, Senior Defense Policy Analyst at The Heritage Foundation, for his contribution to this paper on issues pertaining to the ABM Treaty and START III.

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

Related Issues: Russia