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The New Independent States

The overarching U.S. goal in the New Independent States (NIS) is to assure the successful transition of these states toward open-market democracies. Although U.S. interests in this region are less vital than they were 10 years ago, Russia, Ukraine, and the other Soviet successor states remain of great strategic importance. If their transition occurs as the United States hopes, a vast region of great economic and geopolitical potential will join the community of core states in promoting shared goals, values, and objectives. If, however, it does not, the resultant instability could give rise to new threats that will distract the core states and impinge on their health and security. Since the demise of the Soviet Union, the United States and its allies have therefore made major diplomatic efforts and expended significant resources in the region.

U.S. Interests

The U.S. long-term interest in the NIS is in their development from transition to core states, rather than a decline to rogue or failed states. By 2008, Russia is not likely to have emerged as a peer competitor to the United States. If transition falters during this time, however, one or more of the NIS may concentrate its limited resources and energies on rogue activities. If transition fails, one or more of these states may become sufficiently unstable to cause multiple unpredictable security problems.

In considering U.S. interests, and therefore strategy toward the NIS, Russia and Ukraine clearly represent the most important challenges. They share many attributes: they have come furthest on the path toward reform, each has a complex history in relation to the other, and both present important security concerns for the United States. Much of this chapter therefore focuses on issues especially relevant to Russia and Ukraine.

The second group consists of the Caucasus and the energy-rich Central Asian states, which also have many common characteristics, complicated and intertwined histories, and shared security issues. Although core states' interests in this group are not now vital, the importance of these interests will grow as these states develop their energy resources. Countries as diverse as China, Iran, Turkey, Russia, and the United States have invested in the region, becoming involved in complex relationships, based on both competition and cooperation, whose key dimensions and dynamics will become apparent in the next decade.

Belarus also could pose a security challenge. Political and economic trends there have been a tremendous disappointment. Belarus verges on failing and has the ability to export instability beyond its borders to the Baltic States, Poland, Ukraine, and Russia. There is little reason to believe that Belarus has achieved a sustainable equilibrium and many reasons to believe that in the next decade it will face serious political and economic stresses affecting both its stability and the interests of the core.

Control and Reduce Weapons

Since the collapse of the Soviet Union, the primary security threat has been and remains the control and reduction of weapons of mass destruction (WMD). Progress toward resolution of this problem has been significant, although there is still much to be done. Remaining issues include the following:

Develop Stability

Internal stability in the New Independent States has direct ramifications for the security interests of the core states. It would imply a successful transition to open-market democracies, that is, the expansion of core states. Instability in the new independent states would raise the possibility of numerous security problems, from proliferation to armed conflict. In the worst case, strategic nuclear weapons may again become tools of diplomacy.

Given its size and arsenal of WMD, Russia's stability is obviously important. The stability of Ukraine is also critical, but for reasons less straightforward. Ukraine's geographic, cultural, and economic proximity to Central Europe makes it the "keystone" of the arch between Europe and Eurasia as well as an important link between the core states in Europe and the Soviet successor states. Further, Ukraine may prove an important center of political and economic gravity independent of Russia and, with a successful transition, may influence events and export stability and reform to smaller states in the region.

Finally, regional stability implies respect for sovereignty and boundaries, with no state pursuing its perceived interests by threatening another.

Promote Integration

Integration into the political, economic, and security systems espoused by the core states serves two broad purposes. Domestically, integration with the West promotes stability by supporting the development of efficient markets and reliable social and political institutions. Internationally, it encourages transparency on a variety of bilateral and multilateral issues, including security. In the long term, integration with the West helps redefine existing interests and reveals new ones shared with the core states. Among these are proliferation, human rights, and the sovereignty of neighboring states. In essence, integration encourages the development of transition states into core states.

Create New Markets

Given the potential size of the economic space the NIS represent, their existing energy and raw materials reserves, and their potential manufacturing and financial power, those new markets will be increasingly important to core states. Secure and dependable access to energy resources in the region will further promote stability and foster cooperation with the core states in the long run.

Secretary William Cohen in Kiev, Ukraine

Current Trends

The situation in and among the New Independent States is complex and dynamic. Change is the only constant. Discerning the medium-term outlook is difficult, but several trends are already identifiable.

Reduction of WMD

Although there are forces impeding arms control efforts in Russia, they are outweighed by the momentum generated by recent arms control achievements. Since the collapse of the Soviet Union, Russia and the United States have collaborated to make Kazakhstan, Ukraine, and Belarus free of nuclear weapons. The START I treaty has entered into force, and its implementation is ahead of schedule. Russian and U.S. strategic weapons have been detargeted. The Nuclear Non-Proliferation Treaty (NPT) was extended indefinitely in May 1995, and the Comprehensive Test Ban Treaty was signed by both countries in September 1996. In September 1997, Vice President Al Gore negotiated an agreement with Russia to convert its last three plutonium-producing plants to facilities that generate uranium for civilian uses.

The most important next step in arms control is START II. If implemented, START II will define the basic parameters of arms control efforts for the next 10 years. In January 1996, the U.S. Senate ratified the treaty, but ratification in the Russian Duma has been stalled owing to concerns about the military and economic ramifications of implementation. To address these concerns, in September 1997, the United States and Russia reached important agreements on refining the ABM Treaty, theater missile defense, and issues concerning implementation of START II. They also outlined ways to begin negotiations on START III. Russian President Boris Yeltsin committed his government to working with the Duma to achieve ratification, but the outcome remains far from certain. How the United States would respond to either further Russian delay in ratification or a failure to ratify could be an important issue in the near term.

Russian opponents to START II focus on the following arguments. First, START II hits at Russia's only remaining strength, its land-based ICBMs. It bans all land-based ICBMs with multiple, independently targeted reentry vehicles (MIRVs), the backbone of Russia's strategic arsenal. The United States, in contrast, has many more submarine-based missiles, which are not banned by the treaty. Fully implemented, START II would leave Russia with approximately 3,000 warheads deployed. The United States would have approximately 3,500. More important to the Russians is the fact that because of technical considerations and the terms of the treaty, the United States might be able to upload and breakout of the treaty limits much faster than Russia. Finally, many in the Duma feel that the Russian government has not done enough to factor the impact of START II reductions into its overall defense and force structure planning. The Duma will need strong evidence from the government that it has adequately dealt with these issues.

A second important Russian argument is based on a disagreement about the economics of the treaty. Many Duma members focus on the short-run costs of implementing the treaty rather than the longer term advantage that START II saves both sides money. One of the agreements reached between Presidents Clinton and Yeltsin in September 1997 was to extend the implementation period of the treaty from 2003 to 2007 to lower the average annual cost of implementation, although the total cost, of course, increases.

Although far from certain, a two-phase approach to these problems is likely to evolve over the next 10 years. First, eventual Duma ratification of START II is likely, though it may be delayed. The political pressure on the Duma from the Russian government and from the core states will be tremendous. The economic pressure will also become increasingly clear as more and more Russians come to understand that implementing START II makes economic sense. Moreover, from a strategic perspective, the reasons for ratification are also compelling. Many of Russia's SS-18 and SS-24 missiles are nearing retirement age and replacing them would be expensive and controversial. It is almost a given that the overall levels of Russia's warheads and missiles will drop to below START II targets on their own, unless the Russians field an expensive new system. In sum, logic suggests that it is better for Russia to ratify START II and thereby commit the United States to the cuts as well.

START III represents the second major phase in arms control efforts for the next decade. The major contours of the Treaty were agreed to by Presidents Clinton and Yeltsin at the Helsinki summit in March 1997. The initial parameters of START III are to reduce warhead levels to 2,0002,500.

Russian progress in other areas of arms control has not been so impressive and is less likely in the near future. In particular, the government's ability to adequately control WMD and related technologies and personnel has raised questions. The precarious economic situation of the Russian defense establishment is widely known. Production and storage enterprises for nuclear, chemical, and biological weapons continue to engage in activities that contradict various nonproliferation regimes, including both the chemical and biological weapons conventions. Until and unless the Russian government can reimpose order and accountability on its defense industries, such problems and questions will persist.

Arms control issues in the other NIS are of less concern, even though specific problems do exist. In particular in Kazakhstan and Belarus, lingering biological research and development activities may not be in compliance with the BWC. The challenge will be to engage these and other countries in the region in efforts to correct and prevent future proliferation transgressions. Yet control of the flow of technologies, expertise, and personnel relevant to WMD will continue to be a problem, especially for Ukraine, Belarus, and Kazakhstan because of the breakdown of control systems and ongoing restructuring of the economies.

Uneven and Uncertain Transition

Russia, Ukraine, and most of the other New Independent States have made progress in their transition from the Soviet socialist system, but where these countries are headed remains unclear. This question is of enormous importance to the core states. Should their transition falter, the emergence of new failed or rogue states would affect U.S. interests and present new security challenges.

Of all the NIS, Russia has gone furthest toward reform. It has stabilized its currency, privatized approximately 70 percent of its economy, and created a fledgling and promising capital market. It has held several rounds of democratic elections, and the fate of reform no longer appears to depend on any one person. There is no credible way for Russia to fall back on the Soviet model: the question now is what kind of capitalism Russia will create.

Ukraine has been slower to reform than Russia but has achieved some of the same successes. Like Russia, it has tamed inflation and, in the process, successfully introduced its own currency. Although its privatization programs have been less successful than those of Russia, slightly more than half of its economy now is in private hands. Ukraine has made noticeable progress in developing key democratic institutions.

Despite these successes, the transition of Russia and Ukraine to core states is still far from certain. Three fundamental dynamics conspire to imperil this process to core states in the next decade:

*The first is the battle for political and economic primacy among advocates of reform. In the late 1980s and early 1990s, the debate in the former Soviet Union was about whether, rather than how, to reform. Now that the reformers have become established as the leading political force, they are divided into small groups that compete to set the agenda. The competition can be ruthless; unlike political competition in the core states, there are few rules in the competition for political primacy in the New Independent States. Contract murder seems to have sometimes become an option. The resulting policies are designed by and in the interests of a narrow group of extremely powerful actors.

*The relationship between center and periphery presents a second worrying dynamic. One example of center-periphery tensions is the war in Chechnya. It has had a chilling effect on other Russian regions, as well as on neighboring countries, and shook the core states' confidence in the Russian government. Tens of thousands died in the Chechen conflict. Although the problem is far more severe in Russia, with its multiethnic republics and oblasts spread over 10 time zones, than for Ukraine, Kiev's relations with its regions are also problematic. In Ukraine, Crimea continues to stand out as a regional problem, in part because it has an important influence on Ukraine's relationship with Russia.

*The third dynamic threatening to the transition in Russia and Ukraine is the fluid relationship among actors in business, government, and organized crime. Crime and corruption undermine confidence in the state and ultimately weaken legitimate leaders' ability to govern. Organized crime from Russia, Ukraine, and the NIS generally has broadened to take on global proportions. Drug smuggling, money laundering, and arms trafficking by Russian organized crime groups are growing problems with wide impact and have received increased attention at senior government levels in Russia, the United States, and other core states. The strength and influence of these groups will undoubtedly grow as they amass wealth, employ new technologies, and expand their networks.

Russia and Ukraine suffer from wide and growing wealth gaps that are creating a resentful underclass. Entrepreneurs uncertain of the long run seek short-term rents rather than investing in long-range projects. Center-periphery relationships are tense and unsustainable. Crime and corruption undermine reform and reformers, as well as the legitimacy of the state.

MI-35 HIND attack helicopter

Russia has two assets working in its favor. In the short run, oil and gas will attract Western investment, bringing capital, technology, and management expertise to Russia. Already economic giants, Russian oil and gas companies will only become stronger than most other sectors of the economy. The challenge will be to transfer capital, technology, and expertise to other industries, so that the Russian economy can develop and the export of manufactured goods as well as natural resources can increase.

Russia's longer term asset is precisely the long term. Its demographic complexion is changing in important ways. Most significant, by the 2008 presidential elections, an entire generation of voters will not remember the Soviet Union or socialism. Recent public opinion polls show decisively that younger Russians are much less consumed by issues of Russian nationalism and competition with the West. In contrast, Western liberal ideals resonate with this younger population better than with older Russians.

Ukraine does not have the energy resources Russia has and cannot therefore rely on that sector for economic recovery. Instead, Ukraine will be challenged to push further and faster toward real marketization and integration with the emerging markets in Central Europe. These markets, which are increasingly tied to the core states of Western Europe, could prove an important source of economic dynamism for Ukraine. Before that can happen, however, Ukraine will need to make serious progress in consolidating achieved reforms, dealing effectively with its illegal and underground economies, and increasing openness and transparency. Sound fiscal and monetary policy will be key, as will liberalization of the energy and agro-industrial sectors. Like Russia, Ukraine's youth is Western oriented and sees its futures as increasingly tied to the core states of Europe.

Growing Integration

The extent to which Russia and Ukraine have been integrated into regional and global institutions is impressive. Both countries have joined numerous political and economic institutions, including the Council of Europe, and Russia is a member of the Paris Club and "The Eight." Both have yet to meet the criteria for accession to the European Union (EU) or the World Trade Organization (WTO), although in the next decade one or both countries might join these world bodies.

The region has gained valuable experience from working with security organizations and institutions such as the Organization on Security and Cooperation in Europe (OSCE), International Atomic Energy Agency (IAEA), and Partnership for Peace (PfP). Bilateral and multilateral military exercises with core states have contributed to the understanding by the transition countries of core state military principles, strategies, and objectives as well as improving transparency on both sides.

The most important security institution linking the NIS to the core states is NATO. In July 1997 in Madrid, the leaders of NATO's member states took a historic step by agreeing to extend invitations to three Central European countries to join NATO--Poland, the Czech Republic, and Hungary. NATO signed important documents with Russia and with Ukraine that expanded and formalized relations between these countries and the organization. The NATO-Russia Permanent Joint Council and the NATO-Ukraine Commission provide for the further development and integration of these counties with the European security system.

Ukraine in particular has taken advantage of these opportunities, stating unequivocally that it wishes further integration into the Atlantic security system up to and including membership in NATO. Ukraine has been a key participant in and benefactor of the PfP program. Although Russia remains opposed to enlargement of NATO for states of the former Soviet Union, it will have to understand that its interests, too, will best be served by working with, rather than against, the core states.

On a bilateral basis, the United States has engaged the NIS in important security-related initiatives. One prominent example is support for the Central Asian Combined Peacekeeping Battalion, or CENTRASBAT. This initiative on the part of Kazakhstan, Uzbekistan, and Kyrgyzstan to cooperate and develop their peacekeeping capabilities to UN standards is an important step in the political-military development of Central Asia. The United States has supported this effort and encouraged Russia to play a responsible role. In September 1997, CENTRASBAT concluded its first peacekeeping exercises with U.S. and Russian military officials in attendance. Initiatives of this type are likely to promote further cooperation and integration and could well develop their own momentum in the coming decade.

Limited New Markets

The NIS are unlikely to achieve their full potential as trading partners with the core states in the next decade. Russia has begun to show signs of recovery: its 1997 GDP may have grown by as much as 1.5 percent. Services, mostly financial, are becoming a larger factor in the overall economy, and industries such as telecommunications are performing strongly. Ukraine has been slower to reform and is very likely to face a number of financial crises in 1998. It should move now to make progress on its transition. Russia and perhaps Ukraine are likely to continue to develop their markets and to open them to global competition, but even so, the challenges of economic restructuring are large enough to require two to three decades.

                                                                                                            Uzbeki troops

Serious reform efforts will need to be made on a number of fronts where Russia and Ukraine are only beginning to address them, and most of the other NIS have yet to grapple with them. The first front is property rights, especially those for foreign direct investors. Without clear and secure property rights, the NIS will not attract foreign direct investment in the quantity needed for economic recovery. A second front is integration into the EU and WTO. Russia and Ukraine are still far from accession to either body, mostly because their economies and policies do not meet accession criteria.

Most other NIS are quite further behind Russia and even Ukraine. There are pockets of economic stability and even recovery from time to time in places such as Georgia and Uzbekistan, but often these are false signals and are not associated with the types of fundamental economic reform that will sustain growth and stability in the longer term. Even in many of these countries, however, the benefits from marketization and privatization are becoming apparent, and some of the governments are beginning to turn their focus to real reform. In sum, the prospects are good for slow progress in the development of new markets in the NIS. Progress will be uneven, however, and success is far from certain.


Shaping the Strategic Environment

The primary objective of U.S. military diplomacy in the near term will be to reduce the threat posed by the proliferation of WMD and related technologies and information. A second objective will be to shape Russian strategies to promote security cooperation and integration with the core states. Last, the core states can contribute to the stability in and around the NIS by working with their military establishments on military reform and civil-military relations in a sustained, coherent way.

Although engaging all the NIS is an important goal, the main focus of U.S. shaping factors in the former Soviet Union will be Russia and Ukraine. U.S. objectives and strategies toward these countries will overlap considerably, but in two areas Russia may pose the more difficult or complex problem. The first concerns questions about Russia's ability to control WMD and related technologies. Ukraine has far fewer such technologies and therefore presents a lesser, and less complicated, problem. The second area concerns alignment: Ukraine has stated its desire to become a full member of Europe, even to join NATO, whereas Russia views NATO's enlargement as a major political flashpoint.


After the collapse of the Soviet Union, only the four "nuclear" states--Russia, Kazakhstan, Belarus, and Ukraine--were the focus of U.S. proliferation programs. Following successes there and progress on the part of other NIS, in March 1997, seven states in the Caucasus and Central Asia became eligible for support under the Nunn-Lugar program. Although these countries, along with Kazakhstan, Belarus, and Ukraine, present important proliferation challenges, the main challenge remains Russia (although much of the discussion regarding Russia also applies in other cases).

In shaping Russia's proliferation agenda, the core states will need to work in concert to:

The United States has already initiated a broad agenda to engage Russia on proliferation issues and has achieved notable successes. In large measure, the future agenda will build on what is happening now.

Improving Russia's understanding of the threat of weapons proliferation will be the responsibility of all core states working together, even though the United States will inevitably play the leading role. Many in the West assume that the logic of arguments for nonproliferation will be as compelling in Russia as elsewhere. This is not a safe assumption. The gap between the United States and Russia on the issue of the Iranian nuclear reactor is only the most obvious example.

NIS proliferation has two dimensions. The first is that "official" proliferation results from legitimate activities and policies of a government, of which Russian support for the Iranian reactor is one example. The second is that "unofficial" proliferation occurs illegally and is not the result of official policy. Both dimensions will challenge core states' interests over the next 10 years, and any comprehensive plan will need to address them.

BTR in Sakotici, Bosnia-Herzegovina

Several aspects of the proliferation agenda concerning Russia are worth consideration for the medium-term future. Two focus on "unofficial" proliferation. The decentralization of political and economic decisionmaking in Russia permits and argues for a broad discussion of the problem of proliferation. In Russia and to a lessser extent Ukraine, two interrelated groups deserve special attention. One consists of responsible officials at the defense plants, labs, design bureaus, and facilities that produce or store weapons and produce related technologies and information. They and their organizations often operate on the edge of bankruptcy and face constant financial and economic stress in trying to maintain production of military hardware and restructure to meet the demands of the new market environment. Economic stress prompted some of them to take advantage of the market for weapons and related technologies through sales outside formal channels for arms trade. Increasing efforts to address this source of the problem more resolutely thus makes good sense.

The other key group consists of the new "business-political elite" who have profited from Russia's reforms and its ties to outside markets, have a vested interest in the stability and prosperity of the NIS, and understand the importance of integration with the core states to these objectives. They also hold increasing power and influence over politics and policy in the NIS and should prove useful interlocutors on issues of proliferation. Because they know very little about the economic, political, and security consequences of proliferation, this group represents an important target for engagement and education on these issues.

Another aspect of furthering the nonproliferation agenda is cooperation with Russia, Ukraine, and other NIS countries in relevant intelligence activities, though this tactic admittedly carries some risks. Serious questions concerning the knowledge of key NIS officials about proliferation problems persist. Sharing information and intelligence will reduce these questions and lead these officials to deal with issues head on.

Reducing threats of proliferation is a strong focus of current U.S. policy. The United States should continue efforts such as the Nunn-Lugar program and highlight the positive sum outcome it produces. A major initiative to expand efforts in this area would be to encourage other core states to increase their contributions and activities.

82nd Airborne, CENTRAZBAT '97

Encouraging Cooperation

A significant number of bilateral and multilateral military initiatives are under way to encourage security cooperation and increase transparency with the NIS. These efforts have so far met with varying degrees of success, but the general trend has been very positive. In the coming years, it will be imperative to maintain and further these contacts because doing so will give the United States tremendous opportunities to lessen potential challenges. Depending on the level of NIS engagement in cooperative activities, these initiatives will afford the United States influence in the development of the structure, composition, and disposition of the militaries of the NIS.

Another important benefit of these initiatives is to demonstrate U.S. and core state interest in the region and to display our military capabilities constructively. Any regional actor that questions the core's interests or abilities will have few doubts after witnessing our sustained involvement at serious levels of engagement and the superiority of personnel, equipment, and organization. Although staged exercises are important, real security operations, including NIS militaries (IFOR and SFOR are excellent examples), are best for these purposes, because they demonstrate real U.S. interests and capabilities in the region.

U.S. military efforts have generally been planned, prepared, and conducted under the aegis of NATO's PfP program, though the United States has impressive bilateral military-to-military programs as well. Since its inception at the January 1994 NATO Summit, PfP exercises, conferences, and other events have worked to increase stability, diminish threats to peace, and build strengthened relationships by promoting the spirit of practical cooperation.

The PfP program provides a strong foundation on which the United States can build relations with NIS countries in the medium and long terms. NATO's objectives for this program include increasing transparency in national defense planning and budgeting processes, ensuring democratic control of the military, maintaining the capability and readiness to contribute to operations under UN or OSCE auspices, and developing interoperability with NATO members over the long term. The PfP program is also an excellent way to encourage the core states to work on such problems together. Progress will be gradual but noticeable, and success in the PfP program will link the NIS militaries to those of core states in important ways.

                                                                                                            CENTRAZBAT '97

Beyond the PfP, the United States and other core states will find it advantageous to themselves to continue bilateral programs of assistance with the NIS in order to further encourage the shaping of the NIS militaries. The United States, for example, sponsors exercises and activities "in the spirit of PfP," such as support for the BALTBAT and CENTRASBAT peacekeeping activities. Other core states should ideally participate bilaterally with the NIS militaries to make it clear that they have their own independent interests in the region and are more than passive participants in NATO's agenda.

Currently, the Caucasus and Central Asian regions are stressed by recurrent instability and conflict. For this reason especially it is important that U.S. programs designed to engage the militaries of the region do so not only bilaterally but also multilaterally. By bringing the militaries of the region together in a constructive way the United States will be promoting better regional understanding and more stable relations. CENTRASBAT is a major example of such a program. Washington has not taken this approach in the Caucasus but should find ways to engage the countries multilaterally there as well.

Finally, the core states should be aware of opportunities to use other transition states as collaborators or even surrogates in shaping exercises. By sharing their experience, for example, with the Central European militaries, the NIS militaries may gain important insights into NIS needs and paths toward reform.

Russian BTR-70 amphibious assault vehicle

Civil-Military Relations

A fundamental component of a stable, successful democracy is solid civil-military relations generally and effective civilian control of the military in particular. The core states have done much to achieve these objectives in Central and Eastern Europe, with positive results. A similar agenda can be applied in the NIS, although progress there may be slower because of a greater resistance to change.

The militaries of the core states should take every opportunity to engage all three branches of power--executive, legislative, and judicial--on issues of civil-military relations. These include, for example, budgeting and military reform, of special interest to the Duma, which has extremely limited information or experience in such issues. Establishing a civilian-controlled ministry of defense is primarily the responsibility of the executive branch. Media relations and public affairs are also issues of great value to the military. NIS militaries have little expertise on these areas but a great need to develop it. Core states have much to offer, at least by way of example.

Since the end of the Cold War, the United States and other core states have undertaken serious reviews of their own defense and security doctrines, operations, and organizations. In the United States such reviews include:

Versions of these and similar exercises might be successfully transplanted to the NIS, where defense planning and strategy in the post-Cold War environment have been slow to develop.

In sum, civil-military relations in the NIS need reform. Whether the issue is chain of command, parliamentary oversight, budgetary transparency, or the development of competent civilian defense managers, work is needed. The militaries of the core states have a great deal of relevant experience, expertise, and interest in seeing that progress is made on these fronts. More quickly reforming militaries in Central Europe also have a great deal of relevant experience to share with the NIS, and integrating them into core efforts would be both an excellent way to help them to meet their responsibilities as emerging core states and an efficient way to address the needs of the NIS militaries.


The next decade will present important opportunities and challenges for the NIS and their relations with the core states. In Russia the economic depression appears to have bottomed out, and at least some sectors of the economy are beginning to grow. Moscow is taking important steps to open its economy through reforms designed to meet the accession criteria of the WTO and is doing more to work with the EU on issues that will facilitate trade and investment. Despite these successes, Russia's relations with the core states, especially in the security arena, will require sustained engagement and attention in the next 10 years. Much of the thinking in Moscow on Russia's place and role in the world still focuses on Russia as a counterbalance to the West. Within this framework it is difficult for Russia and the United States to reach agreement on complex issues such as Iran's nuclear program, Iraq's threats to security in the Gulf, or the future of European security.

The core states' best strategy for Russia in the next 10 years is sustained cooperative engagement. The most important vehicle through which to pursue these types of initiatives is the new NATO-Russia Permanent Joint Council (PJC). This body must not become a forum for argument and discord. To the contrary, its primary purpose should be to foster cooperation and understanding on issues where Russia and the core states have shared interests. Although many of these interests will be international in scope (regional security, proliferation, etc.), the PJC should also serve as a body that advocates and supports Russia's badly needed military reforms. One of the most important things the United States and other NATO members can do is to encourage and support Russia to initiate ideas and projects within the PJC framework. If Russia takes the lead more frequently, it will feel more a subject of European security and less of an object, more of a contributor to the process and less of a consumer of core states' initiatives.

Ukraine will also continue to be a focus of core state attention in the coming decade. Its transition to an open-market democracy is not as developed as Russia's, but it has made important progress. There is reason to believe that in the very short term the economic crisis and international engagement will motivate leaders in Kiev to intensify and accelerate their reforms. If successful, these reforms will enhance Ukraine's international position and strengthen its relations with the core states. An additional challenge for Ukraine is the modernization of its armed forces. In its current financial situation, these reforms will prove exceptionally challenging. But in many respects the largest challenges to military reform in Ukraine are not financial. Instead, Ukrainian leaders must exert the political will necessary to follow through on the early progress they have already made. Through bilateral programs with the U.S. Department of Defense and through the PfP program, the Ukrainian armed forces have been exposed to modern military practices, management, policies, and capabilities. Particularly among some of the junior and midlevel officers, there are signs that the examples have taken hold. Like Russia, Ukraine should focus its efforts on using its new partnership with NATO to initiate ideas for cooperative programs, especially those that will encourage and undergird Ukraine's military reforms. Finally, it is important for the core states to work with Ukraine to develop serious bilateral relationships outside of the Commonwealth of Independent States. Although Russia and the other successor states will continue to be important political, economic, and security partners for Ukraine, these relationships need to be supplemented by strengthened relationships with countries like Poland, the Czech Republic, Estonia, and Romania. Initiatives designed to support the developments of these relationships will not only help anchor Ukraine in East-Central Europe, but they will give these other transition countries opportunities to play important roles within the broader European security system.

In the Caucasus and Central Asia, the security challenges to the core states are less immediate, but important opportunities to support healthy interstate relations within the region and to avoid the development of new security risks exist and should be exploited. For the next 10 years the economics, politics, and security of energy resources and transportation routes will define the region's development and, largely, its relations with Russia and the core states. By 2010, it is possible that the Caspian region may emerge as the fourth- or fifth-largest energy producing region in the world. It is in the interest of core states that countries within the region are stable internally and that their relations are built on politically and commercially sound footings. Moreover, it is necessary that the countries in the region are well integrated into the global economic and energy markets.

In the short term, the chief consumers of Caspian energy will be in Europe and the Mediterranean. Ukraine and other NIS countries will also be important markets, depending on how well their reforms go. The core states should move jointly to encourage the cooperative development of the energy resources of the region. This means strong support of market and democratic reforms, including a focus on conflict avoidance and resolution. A second priority should be fostering constructive relations with key countries such as China, Pakistan, and India, who are likely to be important consumers of Caspian energy in the longer term. Turkey will have an important role to play in terms of Caspian energy consumption and transport, as well as regional security, and should therefore factor significantly into policies toward the region.

The processes of transition to core states in the NIS are complex and often unpredictable. The United States and its allies must not shrink from the challenges but seize every opportunity to engage the NIS and support their development into long-term partners with many shared political, economic, and security interests. Serious investments in the security and stability of these new countries will pay important dividends over the next decade. The task is tremendous, however, and no one country can shoulder the burden alone. The task will require sustained cooperation among all the core states, a process that has the added benefit of strengthening relations among them as well.

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