06 September 1991 - 08 September 1991

The Soviet Union: Developments and Trends in Domestic Affairs and International Relations

Chair: Sir Julian Bullard GCMG

The coup that failed in Moscow in mid-August precipitated such a bewildering series of developments that at one time it seemed possible that Ditchley might have managed for once to achieve a conference that was too timely to be useful; and that pressure of events might lead to numerous withdrawals. However, we suffered few cancellations and while it was of course impossible to forecast how things would turn out in the Union of Sovereign States (USS, the provisional name by which it was agreed that the former Soviet Union would be described), it was possible to have a very useful discussion of various scenarios and of Western objectives and policies.

Perhaps the first conclusion was the importance of close coordination between the countries of the West, including in this political, not geographical, term, Japan and other like-minded nations: uncoordinated or competitive initiatives would be wasteful and possibly damaging. Machinery for coordination existed in the OECD, the G7 or NATO, as appropriate.

Secondly, it was generally agreed that while we should encourage respect for human rights and the growth of democratic institutions in the USS, in several of which authoritarian, largely unregenerate Communist regimes still held power, we had to recognise that it was for the peoples of the USS to shape their own institutions, that democratic under-pinning was largely lacking and that democracy, in the face of nationalism and grave economic problems, was not always the easiest or most effective form of government. The West’s fundamental interest was to see the USS pass through the current transitional stage, from empire through de-colonisation to a new confederation, alliance or loose economic area, peacefully, with control of the Soviet military machine, especially its nuclear forces, retained in reliable hands. Thus moves towards the concentration of these nuclear forces, both strategic and tactical, in the territory of the Russian Federation, which might well emerge as the successor state to the Soviet Union, were to be welcomed, the sooner the better; and in the window of opportunity offered, while the central authority under Gorbachev still retained some influence and the republics professed readiness to cooperate, the West, primarily of course the US, should move quickly to negotiate substantial reductions in nuclear weapons, especially the least stable, tactical, categories, even though the process of destruction might take several years to complete; and an effort should be made to obtain adherence by the others to the Non-Proliferation Treaty (but would that raise issues of recognition - see below?). The position of French and British nuclear forces would need to be considered.

A related question was the future of Soviet conventional forces. The general view was that a smaller central military force (army, navy and air force) would be retained, perhaps on a professional, all-volunteer basis, though the question of funding and control would become more intractable as the central authority lost influence and the position of Gorbachev became less and less relevant. Some suggested that an alliance modelled on NATO might prove a suitable vehicle to handle defence cooperation. Conversion of the defence industry was a priority. The independent or autonomous elements of the USS would, it was assumed, all want their own national guards, both for reasons of national pride, but also out of genuine concern over borders and the ambitions of their dominating neighbour Russia. Some however discounted fears of a revived Russian imperialism, arguing that on the contrary, many Russians would be glad to shed some of the more troublesome regions of the old Soviet Union, including perhaps, for a price, the Kuriles.

There was much discussion of the future of the constituent elements of the USS and of Western attitudes towards them. All accepted that for historical reasons the Baltic States on the one hand, and Byelo-Russia and the Ukraine, both already members of the United Nations, on the other, could be distinguished from the rest - recognition of their independence had already been conceded. Some argued that there was no benefit and some disadvantage in not according prompt recognition to the other republics, including admission to the UN, a question which could become pressing in the coming session of the General Assembly, if that is what they wanted, as Georgia and Moldova had already indicated. Others argued forcibly, and cogently, that there was a case for going slowly on this issue: the precedent of rushing to recognise the independence of any territory that claimed it, regardless of circumstances, was dangerous: decisions should not be rushed and procedural arrangements should be found to allow things to develop in slower time - managed inertia it was suggested should be the watchword, with the accent on managed. This difference of view was not resolved, but the weight of the argument appeared to be in favour of hastening slowly, which would not preclude the establishment of links with the individual republics, falling short of formal recognition. Indeed the importance of such links, in the political, economic and cultural fields, was strongly emphasised as part of a process of mutual education, with the accent on the responsibilities that statehood carries (in the Conference on Security and Cooperation in Europe (CSCE), for example, where perhaps observer status might be accorded to the “European” republics) and in such areas as democracy, human rights and the market economy, while the West for its part needed to learn more about the republics. The CSCE, the European Community and the UN were all mentioned as possible channels for such liaison. In general, it was suggested that the perimeter republics would increasingly look to their neighbours across the old Soviet borders, to Iran and Turkey, for example, and, in the West to Europe.

In the economic field, there was agreement that the Soviet economy was in collapse: the reforms legislated under Gorbachev had run into opposition at several levels; and they had not taken effect except in so far as they had achieved the dismantlement of the centralised planned economy, based on the exchange of quantities and the management of supply, without effecting the introduction of an economy based on the management of demand and supply through price. It was possible to under-estimate the ingenuity of managers and the degree of liaison between them, but in general the economy had broken down and the problems were exacerbated by the appalling state of the distribution system and the infra-structure generally. Clearly there was a need for technical training, particularly in such areas as business management and accountancy, but even that would cost money. Moreover, massive investment was needed in the railways, roads, the energy industries, telecommunications, clearing up pollution and (in self-preservation) the disposal of nuclear waste and the safety of nuclear power. Private investment would not tackle these areas and would only be forthcoming if guarantees were available. The debt problem loomed (and a moratorium was on the cards), quite apart from the political problem of sharing out responsibility for it among the republics. The Economic Commission for Europe, which existed and included the Soviet Union and the countries of Eastern Europe as equal members, not suppliants, might be a suitable body, though some new institution might be free of the bureaucracy of an established organisation.

Two scenarios were considered: a single currency for the USS with no tariff barriers, and a proliferation of currencies and the erection of barriers. Economic sense dictated a large measure of cooperation among the republics, but nationalism and politics would pull in the opposite direction. The general view was that unfortunately the centripetal forces might not prove strong enough to counter the centrifugal, though they might gain force after the first heady dash for independence. The experience of the post-war European Payments Union might be useful in tackling a proliferation of currencies and partial convertibility.

There was discussion of emergency aid. The first thing was to establish the need. Statistics and information were unreliable. There was much hoarding, and, in any case, there was little danger of famine on the scale of Africa. The danger that austerity might provoke popular unrest and de-rail the political and economic transition was however recognised. The priority was to set up machinery which could be put quickly into motion once need had been established, including arrangements for distribution right down to the consumer, with full donor verification. It was important too not to disrupt the domestic market. The Soviet army might even be cooped (and diverted into becoming competing commercial enterprises) if - a big if - measures to prevent stocks disappearing into the black market could be devised. (Corruption in the system generally was seen as a big problem: Western firms should not pander to it.) Again, in all this effort, there was a paramount need for the West to coordinate its responses.

Finally, and this was implicit throughout, in the face of a totally new situation and a process of decolonisation of an unprecedented kind and scale, there was a need for leadership, imagination and vision.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Sir Julian Bullard GCMG
Pro-Chancellor and Chairman of Council, Birmingham University


Sir Antony Acland GCMG GCVO
Provost of Eton College

Professor Ronald Amann
Pro-Vice-Chancellor, University of Birmingham

Mr Luqman Arnold
Partner responsible for the USSR and central Europe, Credit Suisse First Boston Ltd, London

Sir Bryan Cartledge KCMG
Principal, Linacre College, Oxford

Mr Daniel Franklin
Europe Editor, The Economist

Dr Jonathan Haslam
Senior Research Fellow (Politics), King's College, Cambridge

Mr Michael Kaser KSG
Director, Institute of Russian, Soviet and Eastern European Studies and Reader in Economics, University of Oxford; Professorial Fellow of St Antony’s College, Oxford

Mr David Logan
Minister and Deputy Head of Mission, British Embassy, Moscow

Mr Roderic M J Lyne
Head of Soviet Department, Foreign and Commonwealth Office

Professor Michael MccGwire
Global Security Programme, Cambridge

Mr Quentin Peel
Bonn Correspondent, (previously Moscow Correspondent), The Financial Times

Professor Richard Pollock
Professor of Russian Studies, University of Manchester; Adviser and Interpreter to HM Government; participant in UK-USSR technological working groups; Specialist Adviser to House of Commons Select Committees in fields concerned with UK-USSR relations

Dr Gwyn Prins
Director, Global Security Programme, Faculty of Social and Political Sciences, Cambridge University; Fellow, Emmanuel College, Cambridge

Mr George Robertson MP
Member of Parliament (Labour), Hamilton; Opposition Spokesman on Foreign and Commonwealth Affairs; Principal Opposition Spokesman on European Affairs; Member, Council, British Atlantic Committee, Governing Body, Great Britain East Europe Centre, Council, Royal Institute of International Affairs

Mr Jon Snow
Television journalist; Presenter, Channel Four News

Mr Edward Belobaba
Founding Director, Canada-USSR Business Council and International Trade Partner, Gowling, Strathy & Henderson (Toronto, Ottawa, Moscow and Prague); Lead counsel to Canadian and American companies in Soviet joint ventures and East-West business transactions; Adjunct Professor, Soviet Trade Law, Osgoode Hall Law School, York University, Toronto

Mr Aage Nielsen
Business Area Manager, USSR, PA Consulting Group, (Rebuild Marketing Management A/S, Copenhagen), specialising in the Soviet economy and internal affairs and working with and visiting 76 USSR companies in USSR during past three years

Mme Marie Mendras
Research Fellow, National Foundation of Political Science (CNRS), Paris

Dr Gábor T Rittersporn
Senior Research Fellow, Institut du Monde Soviétique, CNRS, Paris.

Herr Hans Stark

Institut Français des Relations Internationales

Professor Dr Michael Stürmer
Director, Institute for International Politics and Security, Ebenhausen

Mr Yoshihisa Kuroda
Member of Japanese Foreign Service; Japanese Alternate Director, European Bank for Reconstruction and Development with a special interest in the Soviet Union

Dr Stephan Kux
Lecturer, University of Zurich, Switzerland

Mr N Leonard Alderson
Chairman of the Board and Chief Executive Officer, Cargill International SA, Geneva

Dr Jeremy R Azrael
Researcher and writer on Soviet affairs with RAND Corporation

Dr Marshall I Goldman
Associate Director, Russian Research Center, Harvard University, Class of 1919 Professor of Economics, Wellesley College, Massachusetts

Ambassador Arthur A Hartman
Retired as Ambassador to Soviet Union (1981-87)

Mr Robert G Kaiser
The Washington Post: Managing Editor

Professor Gail W Lapidus
Professor of Political Science, University of California at Berkeley, and Chair of the Berkeley-Stanford Program in Soviet Studies; Academic Advisory Board, Institute for East West Security Studies, New York; Council on Foreign Relations, New York; author.

Dr Robert Legvold
Director, and Professor of Political Science, W Averell Harriman Institute for Advanced Studies of the Soviet Union, Columbia University

Ambassador Jack F Matlock Jr
Harriman Institute, New York

Professor Martha Brill Olcott
Professor of Political Science, Colgate University, Hamilton, New York

Professor Richard Pipes
Member, Faculty of Harvard University; Fellow, American Academy of Arts and Sciences; Frank B Baird Professor of History; Member, Executive Committee on the Committee on the Present Danger; author; Member: Council on Foreign Relations, Heritage Foundation, Hudson Institute.

Mr David Young
Managing Director, Oxford Analytica Ltd