CHAPTER TWO

Russia


The U.S. approach to Russia in the 1990s has been aimed at building a better U.S.-Russian security relationship. To achieve this end, the two countries have focused on reforming the Russian political and economic systems and reducing the chance that nuclear weapons from the former Soviet Union's arsenal might fall into the wrong hands. Despite successes, the U.S. and its allies still hedge against the potential that Russia will become a military threat that, in the theater of the Russian periphery, is a peer with Western forces.

Such caution is well founded. Russia's security position has been deteriorating on its southern flank. At the same time, Moscow is concerned about the impact of NATO expansion. These issues are likely to dominate Russia's security concerns through the beginning of the twenty-first century.

Background and Trends

Political Backlash without Economic Conversion

The future of political reform in Russia remains in question. Although President Boris Yeltsin won the 1996 presidential elections as a "reform" candidate, the history of his presidency has been a mixture of democracy and authoritarianism. Additionally, since the election, he has adopted many of the statist ideas of his anti-reform opponents and brought many of those opponents into his government.

Moreover, many Russian pro-reform observers are concerned that President Yeltsin could die or become disabled in office, throwing Russia into a succession crisis. Under law, Viktor Chernomyrdin, as Prime Minister, would become president, but would have to hold new presidential elections in 3 months. If this happens, an anti-reform or slow-reform candidate could win the election since a large percentage of the general Russian population still supports strong state involvement in the social and economic aspects of daily life. Public support of state involvement is attested to by, among other things, the fact that the Communist Party candidate for president, Gennadii Zyuganov, received 40 percent of the vote.

Chernomyrdin could also postpone another presidential election by declaring a state of emergency--which might be fully justified under the circumstances--and remaining president for an indefinite time. Moreover, Chernomyrdin, himself, is a "go-slow reformer" who would probably drag out the process of privatizing industries presently owned by the Russian government. Either way--with Yeltsin or Chernomyrdin as president, or someone from the major opposition parties--political (and economic) reform in Russia is likely to proceed at a much slower pace than advocated by the West just a few years ago.

Ethnic Groups in the Caucasus

Russian President Boris Yeltsin has proclaimed on more than one occasion that, during the 1996 election campaign, he became fully aware of the price the Russian people have had to pay as a result of his economic policies of the previous five years. While he has repeatedly stated that he will continue economic reform, he has promised to ensure that future hardships caused by reform measures are offset by government welfare and employment programs. Prime Minister Viktor Chernomyrdin indicated he was prepared to cover the promises--including many to pay salary backlogs--by raising taxes.

President Yeltsin and Prime Minister Chernomyrdin have both indicated that they intend to maintain--and increase if necessary--the government's role in the Russian economy. In essence, they have pledged to pursue a "market economy--Russian style." Western analysts often refer to this as the "muddling-through scenario," designed more to prevent social upheaval than to enact systemic economic change. If in fact the government's role is increased, such a move would be counter to the approach the International Monetary Fund (IMF) has tried to get the Russian government to pursue for five years.

Even though increased government control may be the worst approach economically--except for an outright return to central planning--it is likely to be the route Russia follows in the foreseeable future. It is also not dissimilar to the approach Russia took in the early to mid-1990s. Since 1992, privatization--a primary pillar of the IMF's program for Russia--has proceeded very slowly. As a consequence, the government remains the paymaster for a large percentage of the Russian population. Moreover, basic issues of property ownership have not been resolved because much of the Russian population still fears the results of a decreased government role in everyday life.

But the biggest problem with these slow and inconsistent Russian economic policies is that they have allowed corruption to become an even greater aspect of Russian life than it was under the Soviets. Government properties, including government-owned facilities, have been illegally converted for private use on a large scale; tax evasion has been estimated to deny the government almost 50 percent of its expected revenue; and it is reported that high-level officials routinely accept bribes that divert more money from the government's accounts.

It is expected that Russia will continue to have a mixed economy that allows some of the population to make comparatively large amounts of money, while the rest relies on the government for considerably smaller incomes. Salaries and operating funds paid by the government will continue to be late. And raw materials and natural resources will continue to account for most of Russia's exports, while consumer goods and food products will account for a major portion of its imports.

In short, based on the contrasting results of the December 1995 Duma election and the July 1996 presidential election, it is likely that into the twenty-first century, Russia will continue to endure a political backlash without achieving meaningful economic change--especially in the area of military defense industry.

CIS Resistance to Russian "Great Power"

One of Russia's key national-defense interests is preventing foreign-power influence in the security issues of the Commonwealth of Independent States (CIS). This concern was reflected in the 1996 presidential message on Russia's security concept that was sent to the upper chamber of the Russian parliament. For example, regarding Central Asia, it asserted: "The situation in the region is characterized by a fierce struggle for dominance and influence between China, Turkey, Iran, Pakistan, (and even Afghanistan), Saudi Arabia, the United States, and the NATO countries (particularly Germany)." As a consequence, Russia has been trying since 1992 to establish security relations with the other countries of the CIS region to bind them to Moscow.

Those who advocate the restoration of Russia as a great power have suggested various approaches based on the idea of reinstating a union, possibly the Soviet Union itself. Their methods range from persuading the other countries of the CIS to hold (and pass) referenda that would reestablish the USSR to using force to bring the countries back into a union. None of the proposals is reasonable. In fact, talk of such proposals during the Russian presidential campaign of 1996 alarmed most countries of the CIS and hurt the cause of great-power restorationists outside of Russia.

Since the dissolution of the Soviet Union in December 1991, Russia has struggled to maintain exclusive influence over security matters in the CIS region. Policymakers in Moscow have considered several approaches: trying to gain exclusive influence over the security decisions of other CIS states but not involving themselves in any other aspect of the countries' political dominion; assuming command of military forces but permitting political autonomy; and taking control of all aspects of the neighbors' political life--as advocated by the most extreme great-power restorationists. No single approach has been decided upon. Moreover, all of the proposals have drawbacks for Russia and face resistance in most of the CIS countries.

Indeed, most of the countries of the CIS do not want to return to life under Moscow's political control. They accept, for the most part, that they must maintain economic--or even some security--ties with Russia, but they are determined to maintain sufficient say over their own affairs to be considered sovereign by the international community. Ukraine has been the most adamant on this matter, consistently pursuing a plan in which it would have no permanent security commitments to either the West or the East, but would move from one to the other as required to shift the balance of power. The commitment not to surrender sovereignty can also be seen in bilateral agreements signed with Russia, such as the Russian-Armenian and Russian-Georgian treaties. Even in those treaties that permit Russian forces to be based in another CIS country, indigenous personnel are allowed to join the Russian forces; in some cases, such as on the Tajikistan-Afghanistan border, indigenous personnel (Tajiks) are reported to form the majority of the Russian forces.

The determination of CIS countries to remain free of total Russian domination can be seen best in the CIS security treaties that have (and have not) been signed. Such security treaties lack substance and have been signed by a limited number of CIS partners. Ukraine, for example, has refused to sign the two most significant CIS defense documents: the CIS Security Agreement and the Joint Air Defense Agreement.

Since the founding of the CIS in December 1991, Russia's co-founders have been leery of the commonwealth's becoming a military control mechanism similar to the Warsaw Treaty Organization. Individual CIS decisions have allowed Russia to establish a military presence in some CIS countries (such as Tajikistan and Georgia), but the decisions have also limited Russia's charters (border security and peacekeeping) and have allowed other CIS countries to determine their own degree of participation.

The other CIS countries reaffirmed their opposition to Russian great power during the Russian presidential campaign, when they signed a document at a meeting of the CIS heads of state that opposed candidate Gennadii Zyuganov. Most political leaders of the CIS have been careful not to comment on the internal politics of others, but in this instance they went out of their way to go on record as opposing the Russian presidential candidate most closely associated with the idea of reestablishing the old Soviet Union.

Maintenance of Good Relations with All World Powers

Since the dissolution of the USSR, Russia has sought to prevent any rift between itself and the major world powers. It will likely pursue this goal into the foreseeable future, despite an increased emphasis on the belief that Russia must reestablish itself as a "great power." The two ideas are not mutually exclusive, but their coexistence depends upon Russian diplomacy and Western agreement that a regionally strong Russia is important to Eurasian stability--and not evidence of Moscow's return to the confrontational philosophy of the Soviet years.

Russian foreign policy (under Andrei Kozyrev) embraced the premise that the country's future security depended on Russia's full acceptance into the international security and economic systems established by the West. During the mid-1990s, however, a change in Moscow's outlook made Russia's leaders less willing to comply with Western demands but still determined to enter the international order dominated by the major Western powers. At that time, Moscow acknowledged that Russia must accept full responsibility for its future development and must not become exclusively aligned with any single center of global power.

Consequently, Russia is pursuing good relations with all the centers of world power--including its immediate neighbor, China--through multilateral and bilateral agreements. Russia is signing multiple commercial and defense agreements with China, including a series of agreements to clear up the border disagreements that have plagued Russian-Chinese relations for a hundred years. At the same time, it is seeking membership in exclusively Western organizations, such as the Group of Seven and the European Union.

Ethnic Russians Outside Russia

This approach would seem to indicate Moscow recognizes that Russia will not regain the status of a superpower in the near future, and that it was unrealistic for Kozyrev to expect the West to reserve Russia's place at the table of world powers while the country was transforming itself into a modern political and economic state. Further, Russian leaders anticipate an increase in China's international power and role that not only could threaten Russia's sovereignty over its eastern regions, but could replace the importance of Russia in Western foreign policy considerations. Russia is simply hedging its bets during a time of world transition.

Russia's approach--branded "equal-distance" by some security officials--does not mean that Moscow considers all major powers to be equally important. It considers the United States to be the premier power in the immediate post-Cold War period, having unmatched global influence. Correspondingly, the United States is also the target of most of Moscow's suspicions that foreign powers are attempting to diminish further Russia's global influence, especially within the area of the former Soviet Union.

China, which is considered to be an important rising power for the next century, is also viewed as a direct threat to Moscow's sphere of control--within Russia itself. Security specialists in Moscow anticipate that China could economically--and politically--dominate the Russian Far East as waves of Chinese migrate into the area and large numbers of ethnic Russians leave. Unlike its suspicion of U.S. actions, however, Moscow's dire assessment of Chinese migration is that it is an inevitable process. Consequently, Russia's ongoing negotiations with the Chinese to settle historic disputes are, in large part, an effort to establish mutual trust and open channels of communication in anticipation of the time when events in the Far East pit one country's interests against the other's.

Germany is the third major power of concern to Moscow. It is not only viewed as a major economic power in its own right but as the key to the economic center of Western Europe. Moscow does not seem to believe that Germany will present a separate military challenge to Russia in the foreseeable future, but that assessment is based on the assumption that the United States will retain military forces on the European continent. Moscow, however, does view Germany as one of the two major forces behind NATO enlargement (the U.S. being the other). As a result, many Russian security specialists believe that, given its own reins, Germany would turn Western Europe into a military force against which Russia would have to prepare to fight. While this scenario probably will not play out in the near future, it reflects Moscow's ability to make sober security assessments even when it depends on a particular country for substantial economic assistance. Owing to Germany's strength, Moscow believes that the U.S. influence in Europe is essential, and that Russia must establish its economic importance and reestablish its military prowess.

In all, over the next ten to fifteen years, Russia can be expected to attempt to increase bilateral and multilateral economic and defense ties with all the major world powers, but in such a manner that Russian ties with any one power will not upset relations with the others. With the exception of the former Soviet states, Russian leaders probably consider it against their country's interests to enter into defense alliances that might be interpreted by others as forming a new military bloc.

Deterioration of the Armed Forces

Since the late 1980s, the Russian (and formerly Soviet) conventional armed forces have been steadily deteriorating. Numerous troop redeployments, constant changes in command structure, promotion of incompetent senior officers, large-scale and forcewide corruption, infrequent training, excessive equipment downtime, draft evasion, ghost employees, and nonpayment of wages have caused a large number of Russian conventional units to be unprepared for combat, incapable of functioning as units even at the tactical level.

The debacle during the first use of forces in the Russian republic of Chechnya is the best-known manifestation of the Russian military's ineptness. However, there have been many other cases, such as the initial deployment of Russian forces into South Ossetia, when the General Staff had to scrounge sub-units from throughout the Russian forces simply to put together a task force able to carry out its assignment. Furthermore, only a few large tactical units (battalion and regimental size) of the Russian Army are capable of performing as a unified force.

Although multiple factors have contributed to force deterioration, as noted above, the military leadership must take some of the blame for the poor state of the Russian armed forces. For example, military leaders opposed every effort to downsize the Army inherited from the Soviet Union to a force whose size is appropriate for the missions it is likely to execute during the late 1990s. The military leadership is trying to maintain a conventional force reported by some to be approximately ninety maneuver divisions when Russia's GDP is only 35 percent of the former Soviet Union's. That is far beyond the size Russia requires in its new role as a regional power.

The Russian military leadership has steadfastly ignored the security need for a military reform program that downsizes the conventional force structure and upgrades training. As a consequence, the funding authorized for conventional forces during the mid-1990s has been spread among too many requirements, supporting none of them in a satisfactory manner.

Reports of problems in the conventional forces typically have included such observations as:

Ethnic Composition of the Baltics

In particular, the military leadership has opposed any imposition of glasnost on the force-development process. It has exerted great control over defense law-making in the Russian legislature, limiting the legislature's attempts at oversight. Budgets submitted to the legislature have consisted of summary entries for the major categories, and no effort has been made to justify requested funds based on threat and risk assessments. (Even General Aleksandr Lebed's startling call to reduce Russia's maneuver forces to fifteen active duty and fifteen reserve divisions was reportedly made without a threat and risk assessment.) Instead, the General Staff has listed all possible threats that could arise (regardless of probability) and sought funding that is clearly disproportionate to what the Russian economy can afford--the initial request for 1996 amounted to 3050 percent of the anticipated government expenditures.

The tight-lipped approach of the military hurts its efforts to obtain the budget it wants. Because the Ministry of Defense's budget request is so general and is not tied to prioritized threats and capability assessments, the Russian government and the Duma have cut the request, arguing that it sought a percent of the GDP that threatened Russia's economic programs. Discussions on security needs have been avoided, however, and ironically, the Ministry of Defense has been free to spend as it chooses whatever funds come its way. Corruption is reportedly widespread within the ministry, and Russian security has suffered greatly.

It is possible that, in the future, the Ministry of Defense under General Rodionov will submit more detailed line-item budget requests based on prioritized threat assessments. But if those assessments inflate threats to justify a conventional army the size of that inherited from the Soviet Union, it is likely that the ministry will still not receive the funding it seeks. Stories about soldiers starving to death or serving in combat without proper winter clothing, and of soldier labor and equipment being sold off, will continue to make news, while force readiness deteriorates.

The situation is different when it comes to the Russian Strategic Defense Forces. It appears that these forces have continued to receive close to full funding since the fall of the Soviet Union. In light of the deterioration of the conventional forces, some Russian security specialists seem to believe that the strategic nuclear force is the only arm of the military left for deterrence. While such "nuclearization" of Russian thinking should concern the West, there is cause for some optimism because Russia's executive branch appears to be pursuing the provisions of the START I arms-control agreement. The success of (still ongoing) U.S. efforts to transfer nuclear weapons to Russia from Ukraine, Kazakhstan, and Belarus is another bright spot in U.S.-Russian security relations.

Potential Flashpoints

The regions on Russia's borders that have the most potential to become locations for military conflicts with Russia are listed below in the order of their importance to the United States.

Baltics

There are several issues that could lead to conflict in the Baltic states: historical animosities; border disputes--especially between Estonia and Russia; perceived injustices to ethnic minorities--most notably Russian; disagreements over the disposition of troops; and disagreements over military transit rights. Additionally, because Russia considers the region to be of importance to its security, Moscow would probably react militarily if foreign military forces perceived hostile to Russia were stationed in the region.

The Baltic problem having the most potential for developing into a conflict is the treatment of the Russian minority--especially in Estonia and Latvia. Thirty percent of Estonia's population is ethnic Russian and generally concentrated in the eastern part of the state. Thirty-four percent of Latvia's population is ethnic Russian and concentrated in the country's largest cities. Both states are concerned that they would lose their cultural identity if their citizenship laws were relaxed, allowing the resident ethnic Russians to have full political rights.

Consequently, tension exists in the two states as Estonia and Latvia resist extending rights and benefits to their Russian minorities; and the ethnic Russians, calling Tallinn and Riga's policies "apartheid" seek political support from Moscow. It is possible that future strife between the Russian minorities and either the Estonian or Latvian government could result in street fighting or even civil war. In such an event, Moscow could be expected to intervene on the side of the Russian minority, providing either military support or Russian forces.

Another issue that could develop into conflict is that of Russian access to Kaliningrad. Kaliningrad is Russian territory, but has no land routes connecting it to the rest of Russia. Short-term agreements have allowed Russia to transit Belarus and Lithuania to Kaliningrad; and Russia will need to have such agreements in the future. However, since much of the Russian material crossing this route is military, Lithuania has raised objections to a treaty extension. Lithuania has also attempted to tie further agreements to its efforts to enter NATO--an explosive issue in itself for Moscow. The ultra-nationalistic nature of politics in Kaliningrad makes an already strained situation regarding future transit rights even worse. A military confrontation over the issue, therefore, is entirely possible.

The explosive potential of the Baltic states is also in large measure due to Russia's apparently conditional acceptance of their sovereignty. Russia supports the independence of the three Baltic states for two reasons: diplomatically, the states are important to the West, and Russia's opposition to the states' independence would set back Moscow's relations with the West; and militarily, Moscow probably believes it can re-conquer the states with little preparation. The states in themselves do not threaten Russia's security. However, their independence does substantially reduce the naval facilities available to Russia in case of war. The ports in the St. Petersburg area are limited and could easily be blockaded by an enemy power, such as NATO. Kaliningrad is also isolated and possibly not supportable in wartime from Russia proper, and it is also subject to an enemy blockade. Therefore, Kaliningrad is not seen by the Russian military as significantly adding to Russia's naval correlation of forces in the Baltic Sea.

Russia would need the Baltic ports in wartime--if for no other reason than to deny their use to an enemy power. Consequently, it can be assumed that the Russian General Staff would plan on gaining them back through military actions at the start of any conflict with the West--even during a crisis period preceding the outbreak of large-scale war.

A western foreign military force in the Baltics during peacetime would be considered by the Russian military to be a threat to Russia. It would be seen as an aggressive strategic deployment of forces in peacetime that has only one purpose--to support future land and naval offensive operations against Russia.

Ukraine

Though problems in Ukraine could bring about a major conflict with Russia, such problems appear to be much more controllable those those in the Caucasus and Central Asia. Tensions would most likely arise in eastern Ukraine, in the Crimea, and over the issue of control and support facility arrangements for the Ukrainian and Russian Black Sea-based fleets.

Speculation about problems centers on the local ethnic Russian population in the eastern Ukraine and Crimea. Some people fear that ethnic Russians' discontent with economic deprivations and perceived (or real) discrimination could lead them to rebel against the central government in Kiev, turning to Moscow for help. At that point, it is speculated, Moscow might respond with force against the only other country of the former Soviet Union that has a major military force of its own.

Ethnic Russians and Ukrainians in Ukraine

The political and economic situation in Ukraine certainly makes such scenarios seem plausible. Kiev was slow to lay out economic reform programs and quick to sidetrack them when faced with social unrest. Eastern Ukraine--where the most ethnic Russians reside--has suffered most by the breakup of the Soviet command economy and prospered little under economic reform. There are sound economic reasons for the economic hardships in eastern Ukraine (industrial obsolescence and economically inviable mining). Political factions who oppose an independent Ukraine have used the economic deprivations of the east to promote political unrest and strong support for re-unification with Russia.

Similarly, on the surface, the situation in the Crimea might lead one to conclude that Russia would become militarily involved in what is legally an Ukrainian internal matter. The majority of the peninsula's population is ethnically Russian. Further, the Russian population believes it rightfully should be a part of Russia and that the government in Kiev does not act in the interests of the majority Russian population in the Crimea. Local suspicions of Kiev's bad faith are further fueled by the fact that the government in Kiev is the only entity of the former Soviet Union to support resettlement of Crimean Tatars in northern Crimea. Further, the new Ukrainian Constitution, adopted in June 1996 despite the fact that wording of key sections was still in dispute, is unlikely to resolve differences since it requires Kiev's approval of Crimea's constitution. As a consequence, it is likely that the ethnic Russian population's distrust of the central government will continue to fuel social unrest.

The problem with such scenarios is that they assume the government in Moscow places more value on gaining control over the two economically depressed regions than it does with maintaining good relations with Kiev. Just the opposite is likely to be true. It is unlikely that Moscow would seek to gain control over the area of eastern Ukraine which would present Moscow with even more economic and ethnic problems with which it would have to deal. In fact, in past incidences in which residents of the two regions sought Moscow's support, while the Russian legislature supported the ethnic Russians, the leaders in the Kremlim ignored their pleas.

Likewise, cooperation between Kiev and Moscow can be expected to continue to defuse crises that occur in the protracted and bitter negotiations over the former Soviet Black Sea Fleet. Acrimonious relations over--and within--the fleet itself have been primarily fostered by naval leaders and nationalistic politicians within the legislative branches of the two governments. For their part, the presidents of the two countries have shown no interest in entering a conflict over the division of the fleet's assets.

Most importantly, the main difference between the issues in Ukraine and the CIS regions to the east is that both Kiev and Moscow want to avoid the escalation of problems--a situation that is likely to persist unless an ultra-nationalist like Zhirinovsky were to come to power in Russia. There are several military reasons alone why both countries would want to prevent problems escalating to the point of conflict. For its part, Moscow cannot be sure that it could achieve a clear-cut military victory in a conflict with Ukraine. Russia has a larger conventional force structure, but many of its forces are at cadre strength; and, in the conflict in Chechnya--which has involved the largest contingency of Russian forces in combat since Afghanistan--the Russian forces have not performed well against an enemy that has much less combat potential than does the Ukrainian military. Although Ukraine's military suffers from most of the same problems that plague the Russian military, Kiev does have a force of modern Soviet equipment that is larger than any other country in Europe except Russia itself. Moreover, Moscow cannot be sure that the West would not back Kiev in some way in a Russian-Ukrainian conflict.

The bottom line is that the presidents of both countries are aware that a military conflict--of any scale--between the two countries is not in their immediate or long-term interests. Consequently, they could be expected to work together to defuse an internal Ukrainian rebellion or seek a solution that would be recognized by international law.

The Caucasus

In contrast to Mikhail Gorbachev's approach of limiting Soviet military actions in the Caucasus, the Russian approach since early 1992 has been one of steady involvement. Though its force deployments are never overwhelming, Moscow has employed Russian forces and provided military hardware in several parts of the region. Russian troops have been sent as peacekeepers to South Ossetia and Abkhazia in Georgia; Russian equipment was reportedly supplied to the Abkhazians at the beginning of their war for independence against Georgia; and the Russian decision to turn over Soviet military equipment to Armenia and Azerbaijan has been portrayed by Baku as an attempt to influence the tide of the war over Nagorno-Karabakh. In addition, Russia has deployed troops along the CIS's external borders in the southern part of the Caucasus and signed agreements to keep Russian military units in Georgia (a move that may benefit Tbilisi more than Moscow). Moreover, Russian troops have been employed in the Caucasus regions in southern Russia--most notably in Chechnya, but also in North Ossetia and Ingushetia.

This military involvement, however, has not brought the stability to the region that Moscow desires. The greater Caucasus region is, in fact, extremely unstable and has the potential to become even more so. That is due primarily to three factors: increased interest in the region from countries outside the borders of the former Soviet Union, such as Turkey and Iran; the potential profits from controlling the transport of Caspian Sea oil across the region; and Russia's military weakness, as demonstrated in the Chechen war.

In fact, the greater Caucasus region--because of developments in the Chechen war--is the major "hot spot" with which Moscow must deal. Many in Moscow believe that support for the Chechen rebels has come from Muslim countries (though not necessarily from Muslim governments), including Turkey, Iran, Pakistan, Saudi Arabia, Libya, and Jordan. Additionally, the rebels' base of support has reportedly expanded into the southern regions of Russia itself, where the rebels are said to receive medical care and enjoy rest and relaxation facilities. In its effort to stop the Chechen forces, Russia has conducted cross-border operations into Azerbaijan and Georgia, attacking supply lines that lead to southern Russian provinces, such as Dagestan and Kabardino-Balkar. Moreover, the war has spread to Russia itself, which has suffered the seizure of a hospital in Budennovsk in 1995 and several aircraft highjackings.

Instability in the Caucasus is heightened by contention between Russia and its southern neighbors over how Caspian Sea oil will be transported to market. In October 1995, one of the consortiums (Azerbaijan International Operating Company) took a major step toward resolving the issue when it announced preliminary plans to exploit the Azeri oil fields by sending oil through two different pipelines in the lands of the former Soviet Union. The decision included the following provisions: By the end of 1996, oil is to be pumped through an existing pipeline that crosses Russian territory and runs from Azerbaijan to the Russian city of Novorossiisk on the Black Sea. This pipeline, which runs underground through the Chechen capital city of Grozny, is being upgraded. At a later date, oil will be pumped through a second pipeline that crosses Azerbaijan and Georgia, arriving at the Georgian port of Batumi. An old pipeline along this route is to be rehabilitated or rebuilt.

The consortium's decision gives Russia the major role in transporting Caspian Sea oil for the immediate future. During that time, Russia will most likely try to make the construction of a second pipeline look unattractive. Conversely, the Caucasus states will have an incentive to keep Moscow occupied with wars within Russia's borders (like that in Chechnya) to ensure that Moscow does not have the resources to cause trouble in their states, and to detract from the desirability of the Russian route.

Lastly, the aforementioned deterioration in the Russian military force raises the possibility that Muslim countries might be able to make inroads into the area of the former Soviet Union, even into Russia itself, through the Caucasus.

Central Asia

Radical Muslim dominance of Central Asia would be seen as a major security threat by Moscow and would lead to a renewed emphasis on rebuilding the Russian military and associated economic infrastructure. The spread of radical Muslim regimes would raise the specter of Russian borders being pushed back not just in kilometers, but in centuries, through southern Kazakhstan and into the southern regions of Russia itself, west to the Black Sea.

While most of the regimes in Central Asia are secular in nature, contact with Muslim countries such as Turkey, Iran (particularly by Turkmenistan and Uzbekistan), and others is increasing. Moves such as the 1996 completion of a railway linking Turkmenistan and Iran are unsettling to Russian leaders.

Further, militant factions in Afghanistan have been supporting the Muslim opposition forces in Tajikistan against a weakening and unpopular government. The civil war in Tajikistan could easily turn against the government, bringing to power a regime that would have ties to Muslim radicals outside the CIS. Moscow's support of the Tajik government has been limited both militarily and diplomatically. While Russia has supplied some of the troops defending the Tajik-Afghan border, it has remained essentially neutral toward the internal political struggle. Nevertheless, the establishment of an Afghan-supported Muslim government in Dushanbe would be seen by Moscow as a major step toward replacing Russian influence throughout the Central Asian region with that of a hostile religious force.

U.S. Interests and Approach

Net Assessment

Moscow will be preoccupied with its internal economical and political turmoil and, to a lesser extent, with maintaining its domination of the former Soviet Union. This will be made more difficult by the deterioration of the Russian armed forces since 1991 and steadfast resistance from the new states in the Commonwealth of Independent States. The ongoing fighting between Russian forces and the Chechen rebels has shown Russia's military weakness and will likely encourage Muslim extremists to support more military actions against Russia throughout the Caucasus (including on Russian territory) and in Central Asia

Central Asia

Difficulties between Russia and the Baltic states present a particular problem for the West. All the countries involved are important to the West. Moreover, both the Baltic states and Russia tend to view the West's position on the various issues that could result in conflict as indicators of western long-term intentions regarding their countries. On the other hand, the potential for flashpoints developing within Ukraine that could pit Moscow and Kiev against each other are low since the Russian and Ukrainian leadership appear determined not to be pushed into conflicts.

Although the prospects do not appear to be high, the possibility that the Russian government will become ultranationalistic cannot be dismissed. If this happens, Moscow will be more inclined to rely on military means to protect what it perceives as its security interests in the Near Abroad. If the leadership placed top priority on the task and if the economy supported such an effort, the Russian conventional forces might be revitalized within as little as five years, and they could be modernized within ten to fifteen years. At the same time, even compliance with START II will leave Russia with a strategic nuclear force that could threaten the United States.

Moreover, political turmoil will continue in parts of the former Soviet Union over the next decade. That increases the prospects for U.S. military involvement. It is conceivable that the U.S. military may become involved in some former Soviet republics as part of an international peace operations effort. On the other hand, if Russia is under the control of ultranationalists, the U.S. might provide assistance to those opposing Russian forces and could possibly be involved in armed conflict with Russian forces along Russia's periphery. While such a scenario is unlikely for the next decade, it would be prudent for U.S. military planners to begin to consider the prospect of limited conflict with Russia as a potential theater peer.

U.S. Interests

Reducing the Military Threat to the United States or Its Allies

For the foreseeable future, Russia will retain the capability to inflict unacceptable damage on the U.S. through use of its nuclear arsenal. Reducing the threat from this nuclear arsenal will remain the principal U.S. interest vis-a-vis Russia. This threat is a function both of Russia's capabilities and its intentions.

A Russia hostile to the West and possessing a powerful conventional military would force the United States and its allies to again devote excessive defense resources and diplomatic attention to Moscow, limiting the West's ability to focus on other important international problems.

On a related point, the U.S. has an interest in ensuring that no government hostile to the U.S.--such as Iran, which has a major interest in the Caucasus--gains significant influence in the region. If this were to happen, instability would increase and take on a distinctly anti-American nature.

Peace and Stability in the Former Soviet Union

The boundaries of the CIS touch a large number of countries that are important to the United States and that have important and historical interests in the region. Regional instability increases the chances of friction between these border countries and CIS countries--and among the CIS countries themselves. Conflicts of any type within the CIS or along its borders will adversely affect United States' economic and security interests in the region and create a diplomatic quagmire involving allies and other countries of major concern. It is important that Russia acts in concert with the other former Soviet Republics to ensure the region's stability.

Market Access

The U.S. has an interest in ensuring that American businesses have fair access to the markets of those regions, especially the oil reserves. The oil reserves of the Caspian Sea alone are estimated to rival those of the Middle East. If American businesses do not have access to the region's reserves, the United States' security will suffer--as will its ability to influence the political and economic developments in the region.

Long-term Democratic Reform

In the long term, the success of democratic reforms--particularly in Russia and Ukraine--will enhance U.S. security. In turn, the establishment of democratic values will profoundly reduce the chances of conflict. Democratic reforms offer the best long-term answer to the aggressive nationalism and ethnic hatreds unleashed at the end of the Cold War.

U.S. Approach

Since the demise of the Soviet Union, Washington has assumed that Russia would remain the major actor in that region and a strategic nuclear power comparable to the United States. Consequently, the U.S. has encouraged Russia to pursue the stabilizing aspects of a modern society--a democratic government, a market economy, demilitarization of the economy, reduction of conventional and nuclear forces to a level sufficient for defense, and enhancement of the security surrounding nuclear weapons and materials.

The United States, along with the major states of the Western world, has encouraged democratic reform in Russia and supported Russia's attempt to establish a market economy through bilateral and international loans and technical-assistance programs. It established the Nunn-Lugar program, which has successfully stopped nuclear proliferation and will significantly decrease nuclear accidents, as well as other government-to-government and privately financed programs intended to assist Russia in its transformation. The United States has also been a major supporter of IMF loan programs for Russia.

The U.S. has advocated the reduction and re-orientation of NATO's defense planning away from the scenario of countering the old-style Soviet attack on Western Europe. U.S. sponsorship of the Partnership for Peace (PFP) program has been aimed at expanding the security enjoyed by NATO members into the countries and regions formerly under the domination of the Soviet Union. Russia's participation in the PFP program has been considered important to Europe's security as a whole and to Russia itself. Consequently, the United States has steadfastly encouraged and welcomed Russian participation in the program.

Similarly, the United States has encouraged Moscow to build a new, cooperative relationship with the rest of Europe through a special relationship with NATO and participation in the peace process in Bosnia. The U.S. and its NATO allies have reduced troop levels, established new alliance goals, and reorganized the NATO command structure, in large part to show the West's good will towards Russia. And the U.S. has bilaterally, and as part of the NATO alliance, routinely consulted with Moscow to ensure that European security will be enhanced at every turn.

These measures have all been intended to enhance the security of the United States, its European allies, and the former members of the Warsaw Treaty Organization, including Russia itself. They have not explicitly addressed the security threat that has started to arise in the southern region of the former Soviet Union, although they have implicitly assumed that Russia would remain a military power capable of dominating the security affairs in the region of the former Soviet Union (except in Ukraine). However, Russia's inability in the mid-1990s to develop, train, and maintain its conventional forces--best shown by its inept military performance in Chechnya--has resulted in force deterioration to the point that regional security may be endangered because Russia no longer dominates the area of the former Soviet Union. A regional security vacuum may be developing at the same time that the oil resources of the Caspian Sea appear to be exploitable by states other than Russia. That, in turn, confronts the United States and other major world powers with the need to consider options for maintaining stability in the most volatile regions of the former Soviet Union--Central Asia, and, more important, the Caucasus.

It will be difficult for the West to persuade Russian security specialists that NATO expansion presents no military threat to Russia. Over the longer term, the challenge will be to persuade Russia to cooperate with NATO. That could present the West with an opportunity to achieve some of its goals regarding Russia that appear to be slipping beyond reach. However, such cooperation will be difficult unless the Russian government establishes comprehensive and effective civilian control over its armed forces, as well as a rational force-development program that sizes the Russian military according to the most likely threat and in a cost-effective manner.

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