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The Republics of the Former USSR: The Outlook for the Next Year

Special National Intelligence Estimate

This Special National Inielligence Estimate represents the views of the Director ot Central Intelligence with the odvica and assistance of the OS Intelligence Community.


Director of




The Republics of the Former USSR: The Outlook for the Next Year

Information available as of1 was used in lhe preparation of ibis Estimate.

The following intelligence organizations participated in thc preparation of this Estimate:

The Central Intelligence Agency

The Defense Intelligence Agency

The Nauonal Security Agency

The Bureau ol Intelligence and Research.

Department ol State

The Otoco ol Intelligence Suppon,

Department ot the Treasury

a*so paoidpaong:

The Deputy Crnef of Stall lor tntesagenoa.

Department ot the Army

The Director of Naval Intelligence,

Department of lhe Navy

Tho Assistant Chief ol Staff, intelligence.

Department of the Ak Force

The Dxector ot Intefcgence.

Headoyarters. Marine Corps

This Estimate wasor publication by the Notional foreign InicHigcneo Hoard.

-rt'ifaf Ol


Scope Note

The Republics of the Former USSR: The Outlook for the Next Year

This Estimate examines the key factors that will determinein the USSR (excluding the Baltic states) over thc next year and thc possible alternative outcomes. It focuses primarily on the question of interrepublic relations within andnion. Although many internal factors will be important determinants of the long-term course of political and economic development ofthe republics, this Estimate docs not attempt to assess internal republic issues in any detail. Such issues will become more important and will be the focus of much of our future estimative work.



Key Judgments

The USSR and iu Communist system ire dead. What ultimately replaces them will not be known wiihin the neat year, but several trends are evident:

there willigh level of instability.

economy will get much worse,old approach toward economic reform more necessary but politically riskier and harder to do.

and Ukraine will make credible attempts at applying democratic political principles at all levels of government and shifting toconomics; most olher republics probably will not.

turmoil will increase as nationalism grows and ethnic minorities resist the authority of newly dominant ethnic majorities.

Defense spending and military forces will be reduced, and republics will participate in collective defense decisions and eiercise greater authority over defense matters within their own borders.

Foreign policy will be increasingly fragmented, with the republics conducting their own bilateral relations and to some extent their own diplomacy in multilateral forums.

Yel'tsin will be thc most powerful national leader; Gorbachev will have only limited power to act independently and could not win an election without YePlsin's support.

The West wilt face increased pleas for economic assistance from individual republics as well as rrom Ihc central government, giving Western countries increased opportunity to promote economic and political reform, bui increasing requirements for close coordination of Western aid efforts.

Over the nextonlhs. the interplay of several variables will be critical to determining whether thc new system evolveselatively peaceful manner andemocratic direction. Three variables are especially


economy will be Ihc most critical variable. We do not believe that economic conditions this winter will lead to widespread starvation or massive social unrest. If economic hardships are significantly worse than wc eapect, however, govcrnmenli at all levels would lose popular support and authoritarian alternativescomc more attractive.

Russia is of paramouni importance not only to the fate of thc fragilestructures lhal are being built but also to the prospects for democracy and for the transformationarket economy. Continued progress by Russia in these areaselapse into authoritarianism, which is less likely during the next year, will decisively affect the course of reform in the other republics.

ff Ukraine chooses tbc path of independence without participating in astrong possibility at thisviabilityonfederation of other republics would be diminished significantly. This, development would increase the risk of ethnic conflict betweenand thc Russian minority in thc republic and of disputes with Russia over borders and control of military forces on Ukrainian territory.

Over the next year, we believe lhal three basic scenarios capture thc likely evolution of republic relationships:

Confederation: This scenario is thc preferred outcome of Gorbachev and Yel'tsin. There wouldeak central authority but close cooperation among the republics in the political, economic, and military spheres. Russia and Ukraine, at least, would lay the groundworkarket economy. Nuclear weapons would be controlled operationally by the center. Lines of authority would be relatively clear, and foreign governments could identify and deal with the appropriate levels of.government on different policy questions. This scenario would provide the West the advantage of greater predictability. It would also provide increased confidence that nuclear weapons would remain under centralized control, arms control would remain on track, economic assistance to the republics could be more effectively managed, and the democratization process would advance.

Loose Association: The process of political and economic reformbut several republics, including Ukraine, establish independence and participateoose common market. Allhough Russia and many of thc associated states try to coordinate foreign and military policy, the republics basically pursue independent policies in these areas. Ukraine and other non-Russian republics probably would agree to removal or elimination of strategic nuclear weapons on their territory. Somewould try to obtain some control over thc tactical nuclear weapons on their territories. The potential for divergent foreign and nalional security policies would increase, bul alt the key republics would pursue pro-Western foreign policies, and armed forces would be scaled back significantly. Follow-on arms control negotiations for even deeper cuts in nuclear and conventional forces would go forward, although perhaps

filHlf Ot-

more slowly thanon(edcralion scenario. Implementation and x'crificaiion of the START and Cl*ri treaties would be compUcatcd. The West would face competing demands for massive assistance, although some mechanism for coordination would exist.

Disintegration: Cooperation among the republics breaks down at all levels, and the last remnantsolitical center disappear. Nationalism becomes more virulent, and economic conditions become increasingly chaotic.esult, political stability erodes, and conditions are ripe for rightwing coups and authoritarian government in many republics,Russia and Ukraine. The disposition of nuclear weapons would be contentious, as some republics seek to assert operational control over nuclear weapons on their territory. There would be an increased risk of such weapons falling into terrorist hands and even of their use within the borders of the former USSR. The West probably would be unable to implement and verify arms control agreements. Republics would attempt to involve the West in interrepubtic disputes, while demands for Western aid would continue.

Reality is likely to be more complex than any of these scenarios, and elements of all three are likely to be encountered. In our view, it is likely that conditionstonths from now will most closely resemble the "loose association" scenario. Although thc economic situation is grave and the republics are having serious problems in reaching agreement on key economic issues, most understand that they cannot survive on their own. This awareness argues strongly for some kind of economic asscoation thai will move, however haltingly,ommon-market-type system.

Wc believe the "confederation"ess likely because of lhe unwillingness of many republics to cede some of their political sovereignty and poweronfederal governmeni. Ukraine will be the key: forces supporting independence with lorne form of cooperation are currently favored to win tbc December elections, bul iheir strength is erodingote for those favoring separatism is possible. Even if Ukraine is willing to workew union, difficulties over political and economicand burgeoning nationalism will make it difficuli for theto agreeonfederal political structure. Potentially the most explosive of ihese forces is unrest among Russian minorities in non-Russian republics.

Thc least likely scenario within lhe lime frame of this Estimate iseyond lhe year, however, this scenario becomes more likely if elected governments fail to stem the deterioration of economic conditions.

'jar rat

Table I

Implications of the Scenarios for Key National Security Issues


economic relations

weald cocr-dinte/factliiaie mill* nee.

Moil aid channeled io republic*.

requests for aid.

Republics more eager for aM to overcomeplight.

aid vital, bui republics lack means lo pay.

Iniernal itrifeat fa aid rfEcai


sharp eats in defense (ponding.

begin* setting up republic amy.

united miliury command.

Foreign policy

Arms oontrol

Control of nuclear weapons

Unified miliury command.

Most republic, eatabliih lanaU "national giarcrt.'

Foreign policies pre-


Central leadenprimary Inter-locaion with Wen.


irsves, bat rkubiUiy limited bccaaic of need for conscntus.

Pray-as (orSTART. CFE good.

Verification unlikely to be diimpied.

Readiness lomutual deepin foeeei; unilateral enu Jikdy.

Unified control iyi-tem retrains, butcacrcise joint conirolweapons stationed on iheir territory.

Unitary command re-uioed; iaereasinglyonirol.

Dtlcnc spending

Rcjmboa irnu on rigM

MoMieektocpandgraticn into regional/ io-ternauonal forums.

Ukrainian independtwe poses risks to START.


Negotiation) more com. phc*led: verification uncertain

Mon republics remain committed to doep force culi: Russia likely tomatece forces unilaterally.

Confederation members agree tokccpccntrabied


Ukraine attempts tocontroleapons

Most republic* begin K iup own armies.

Defense iprsdinE Hill limited by economic reali

Numerous foreign policies.

LilUeifany coordination.

Renegotiation of START. CFE required.

Ability to icaeh fuiure agreement! in doubt.

Willingness to make deep force cuts uncer-uin because of leniiom between republics

Centralired control imperiled.

Ukraine, caber republics ioiisi on retaining seme weapons.

Toe United States and other Western countries would have influence on developments across the former USSR in cither the "confederation" ot

loose association" scenario. Russia and most other republic governments will be highly receptive to Western advice on and technical assistance for internal and external reform in exchange for economic assistance. Western

-. western

influence would be thc most effective in those republics, especially Russia pushing for democratiration and marketirationf



If the situation moveddisintegration" scenario Western

opportunities to influence thc direction of change would diminishwith the growth of xenophobic nationalism and would be limited to those republics, if any, resisting the trend toward authoritarianism


Scope Note

Key Judgments Discussion

of the Coup

. Key Variables

Continuing Economic Disarray

Popular Mood

Rcpu b!ation

.Diminishing Role of the Center

Russia's Preeminence Ukraine Heads Toward

Alternative Scenarios

Loose Association

prospects for Scenarios


of Ibe Coup

The failed coup bas created Ihc most favorablefor political democracyarket economy in thc history of the former USSR. The mainobstacles to fundamental changes in the system have been severely weakened, and thc preconditions for self-determination of republics have been

Russia has eclipsed tlie central government as the most powerful entity in thc system, and Yel'tsin is now the country's most influential leader. At the same time, the abortive coup has accelerated the breakup of the union. Republic governments are attempting to assert supreme authority on their territories, but their political legiiimacy and their ability to rill the power vacuum left by thc weakened center varies widely. Most republics are participating in ongoingtoward political, economic, and military


Soviet Official Indicators of Economic Performance in First Halfs Compared

adult rill output


(icy Imil ovtput




EMw asa of ehanje are calculated trom ruble values

in prices Sewn claim are consunt.

from ruble values in current prices.

Calculated by dividing retail sales in correal price* by saki to

prices Sovieu claim ate cenitaoi.

Tbii table is Uadaulded.


The failure ofthe coup has not guaranteed the success of democratic change and marketization. Democratic norms and market relations will take many years, if not decades, to develop. In the short term, continued progress toward these goals will depend on develop-menrs in several key areas.

Continuing Economic Disarray Over thc course of this Esiimatc. the accelerated deterioration of economic performance will result in further sharp declines in output, greater financial instability, increasing unemployment, and growing problems in thc distribution of food and fuel.economic trends now in train will not permit early reversal of thc economic slide, regardless of lbc economic policies that arc undertaken.

In the first six months

droppedercent as output fell in most sectors of the economy, in some casesery rapid rate. We believe it could decline by approximatelyercent by thc end of thc year.

Widespread shortages affected not only suchgoods as food and medicine but also vital industrial inputs.

Projections for the combined central and republic budget deficit for the year climbed tooercent of GNP.

The inflation rate rapidly approached triple digits.

Foreign trade contracted sharply; imports droppedercent.

The Private Sector; Bright Spot oa the Horizon

In contrast to the rest of the economy, the private secior continues to exhibit encouraging signs of growth. During the first half1 the number of industrial enterprises leased from the state grew by overercent, and tht number of small-scale peasant farms climbed by more thanercentew restrictionslight toll onbut they stillonstatc sources providing services to these fledgling enterprises also grew during the first six months, with independentnd commercial bonks. The Soviets report that they have concluded moreJoint ventures that employ moreoviet citizens, although probably less than one-third areoperating.

While Ihc emergence of market-orientedcoopcralives, commodity exchanges, com' mercial banks, joint ventures,rowingencouraging, they ate still too weak and limited to compensate for thc negative effects on everyday life of the breakdown of the command economy.

The Problems af Divisi*eness. The coup has brought even greater disarray to policymaking, thus hindering restoration ofjnaxroeconomlc stability and rapid"Of structural reform. Political turmoil at the center and inside the individual republics makes it unlikelytrong consensus on economic policy will be reached.

Maintaining Interrepubltc Trade. Declining outputremium on reducing chokepoints inEconomic linkages arcof thcepublics plus the Baltic states rely on imports from each other for at leastercent of their national income. In addition, the IMF estimates thatoercent of industrial output consists of products for which there is only one manufacturer. Even foreign

TaWcUS i

Estimated Soviet Hard Currency Financing Requirements





short-term debt






af reserve



Includes net inflows from former soft currency partners,and asset earning*.

*Aiiumiiit1 that the SovieU will be able lo draw on existing official credit lines to meet general, bitance-of-paymenthis may not be thc caie, given that most credits are lied to eaportome credit lines arc tied up wilt Olher bureaucratic redtape, and many banks are unwilling to extend loans even with eireniive official guarantees.


trade flows depend on cooperaiion because key ports and pipelines are concentratedew republics.

Worsening Hard Currency Woes. The continuing contraction of imports will further diminish vital supplies. Large-scale debt restructuring orif not debt default, appears imminent. The USSR has yel lo service aboulillion in debiover the remainder of lhe year and already is more thanillion in arrears.


Monetary and Fiscal Instability. The collapse of Ihc ccnicr will noi nccccssarily lead lo lower eapenditureseduction in thc deficit Indeed, budget deficits of both ibe central andgewcrunenu. lack of constrain is on sew leading internally, and republican drives for their own curren-cie* will make it difficult to rein in lbc growth of the money supply.

Uncertain Pace ofolish-style shock approach is unlikely anywhere in thc short nmof its high costs in terms of unemployment and inflation. Moreover, pressures to reverse thc economic decline will push many republic policymakers towurd the use of administrative decrees rather thanreforms.

Siepped-Up Demilitarization. Military reductions will acccleraie. although most poliucal leaden and Ihe High Command wish tohaotic redaction. Defense industry procurement and reduction will be hit hard by budf el cutbacks and ihe rising prices of inputs.

Differing Impacts an Republics. Russia, thanks to iu vastest positioned io copei has leverage with tbe otber republics in trading for food and rnanufactured goods and in seeking foreign goods and ririancirig. On tho downside. Russia faces serious distribution problems, especially in getting food io cities in thc north. Far East, and tbc Urals. Despiie Russia's vast energyuel shortages are likelyesult of distribution and labor problems.

Elsewhere, lhc problems will vary:

Republic Imports as Percentage of Net Material Product,





Imprtu (tornrepublics

prices: the value of each republic'i imports is divided hy the value or iu mi iruicruf produci (national incomeeasure thai drffersGNP in cariuding dep.rcUi.oni tmuntn servkri

Only Kazakhstan. Azerbaijan, and TurkmenivaT'a cflfcisl

net energy exporters among ihc remainingMoldova. Armenia. Byelorussia, and Georgia would be particularly hard hit by supply disruption) and/or price hikes.

All republics face redactions in food supplies and other consumer goods as cross-border trade and foreign imports decline. Uzbekhuan aad Tajikistan are likely io suffer ihe most- At greatest risk in ali republic* arc pensioners, the poor, and largewho must rely on poorly stocked stale siores because Ihey cannoi afford to buy food ihroueh higher priced alternative channel*.


Table 4

Oil, Gas, and Coal Balances of Ibe Republics


Soviel Food Situation: Surplus or Deftcil of Selected Foods






Xei eipoetei Onet Importer

Neither import! nor ciportt bed uie il bis no renCing

capacityproduction equaU consumption.

Thii tabic ii Uncliuified



on official Soviet statistics for production and consumption of major food productsS. Pluses Indicate lhal area produces mere than sumcieni Quantities based on notorial consumptioninuses indicate an area produces less.

Includes butter.

Adjusted for feed use


Declining ouipui and lower budgets will cause unemployment in nil republics.extensive defense industries vulnerable to cuts in defense spending

While the economic news is mostly gloomy and many observers in and out of the former USSR fearin our_vicw, conditions are not likely to lead to widespread famine, epidemics, or numerous deaths from freezing While pockets of extreme economicmalnutrition could emerge,will be moreroblem lhan production. Absent development of adversarial relations among the republics, however, the food and fuel crises this winter should be manageable.

Popular Mood

Public euphoria over thc collapse of the centralized Communist stale has lent legiiimacy losome republic governments and bought Ihem some time to grapple with economic problems. Others, most noiably Geor-

gia and Azerbaijan, have been thrown into disarray because of public displeasure wiih their leaders*during the coup. legitimacy of somewill increase as elections arc held in several republics and localities ihis fall. This will probably be sufficient to susiain these governments polirjcally over tbe next year.

How long popular support for elected governments and democratic principles will endure under harsh economic conditions is highly uncertain. Voterfor Yel'tsin and other democrats, as well as popular opposition io lhctempled coup, were based largely on antipathy toward Communism Now thai democratically elected leaden are being held account-able for ihe economy, their public support will erode as conditions worsen. Poliucal forces arguing for auihoritarian solutions will gain increased suppori in

Russia during Ihe year, but not poliiical power.


Food Supplies: Between Feast aad Famine

The decline in Soviet food production this year is aggravating food shortages, and food supplies will diminish in the months ahead. Widespread famine appears unlikely, however,uch more serious breakdown in the economic system. On the supply side:

This year's estimated grain cropillion tons is downillion tons from last year bul is only aboutillion tons below the average harvest for the last decade.

Soviet data show that overall food production wis downercent in the first six months of the year, as compared with the same periodutput of potatoes and vegetables will be higher than lasl year, bul the production of meat and milk will be down for ihe second consecutive year.

Imports of substantial quantities of foodstuffs and feed continue despite the hard currency crunch.

Republics, cities, and enterprises have beenup bilateral barter agreements for food in exchange for consumer goods, energy, and raw materials.

Nevertheless, severe food shortages probably will develop in some localities, due largely toproblems:

The disintegration of authority and increasing republic autarky have left officials preoccupied with political solutions and requests far Western food assistance at the expense of the harvesting and handling of this year's farm production.

Widespread panic buying and hoarding ihe last two years have left wholesale and retailof food at their lowest levels In several years. Allhough this implies private slocks are up. they are unevenly distributed.

Hoarding is also occurring In the countryside and by various republics. Farms and localare refusing to sell grain because Ihey think prices may soon be raised or decontrolled.

Ukraine and several other republics have banned the export of harvested groin and otherat least until internal needs are met. Many republics have erected border customs posts io control the movement of goods.

readinessarket economy is even less ecrTain. Allhough opinion polls show risine support for marketizaiion, popular understanding of thisand willingness io endure the pain remain in doubi. It is very likely that large-scale publicions and work stoppages will occur if major market reform measures are pursued vigorously.

Theisdain for Communism has seriously weakened the party, but it has noi yet destroyed it. In pans or Central Asia and the Transcaucasus, where democratic movements arc weak. Communist Parly structures are being transformed into instruments of control under Ihe banner of nationalism. At lhc center

and in lhc Slavic republics. Communists will continue io lose their influence over policymaking, allhough in thc short term they may retain considerable influence over policy implementation.

Republic Cooperaiion

Despite ihe "independence fever" lhal has swepi the USSR," process recogoiixs the need lo maintain some linksechanism io facilitate continuingmcrrepublic cooperaiion

eferi io ihc agreement amongepublics plusat.lVrd ai ihe recent CongtcM of People's Dcpnlics, to aocepl the interim goxrnmemal structures and lo move toward cooper*.

on polilical. economic, and miliiary issoes

Table 6

Possible Ethnic Flashpoints Orcr (be Next Year

for SiiniGcant Violence

- - -

Ukrainian and Haitian



Rnttbn minorities io



Russians in Katalhnao


enclave of Nagorno-Katabikh

..clave of Nakliichivao'

Otvodiion to Azerbaijan government

to Georgian

Present fJurnaUiurdi*

Russian* In Crimea, eawern Ukraine

Poll, irU.Jine

tdigious tcniions

in Tataria


Iin unifiuiiqp movement

io Kaliningrad through Lithuania

also is requiredontain such explosive social snd political issues as lhe status and rights of ethnic minorities and lhe permanence of republic borders. Intcrethnic conflict is on the rise and will be aggravated significantly If the republics accelerate iheir unilateral moves toward independence The sorting out of relations between the republics will take most of the decade. Ivowever.

Dltnlnisliiug Rule of (be Center

Whatever cooperative arrangements emerge, lhe republics do not want toentral governmeni with independent power. Central institutions will be vehicles for coordinating inlerrtpublic cooperation and for reaching and carrying out collective decisions. Over the nexl year:

A central government will probablyoordinating role in tbe area of defense, with fcr-ublics acting collectivelytatestructure to determine defense policy. Republics will attempt to oversee Ihc activities of central forces within their borders. Some republics inch as Ukraine will establish territorial defense forces of their own.

A central government will probably continue to take the lead on broad foreign policy and nalional securily issues. The republics, especially Russia, will exerl greater influence on all mailers, and ihey will conduct their own policies loward countries and regions. They will also lake increasing responsibility for foreign economic relations. Mixed signals and contradictory policies ate sure to result.

center's economic rote will depend on the outcome of debate over lhe proposed economic union Mosl decisions on monetary policy, debt repayment, and other key questions probably will be coordinated, but ihere arc strong differences between and within republics over the powers of the center on these questions. Tbc center will be able to issue directives or impose an economic reform blueprint, but only as the agent of thc larger republics. However, enforcement of republic compliance with these directives will be problematical, given the compromise nature of the central structures.

Gorbachev's power has diminished greatly along with that of the center. He will probably play an important role during thc next year as facilitator of lheprocess and mediator of disputes between republics. His international suture alto makes ii likely he willonduit to the West. As long as


Competing Visions of Economic Union

Decree Of

cf moil formerFull memberi agreell treatyssociate members accept coordinated monetary, budget, and us

of cote foi met re-publics. Others may participate as partial membersustoms union.

community of foemei repoUHa aad tome Eastsuies. Members cboose full, associate, or observer statos.

foe union nut lei

citonal customs. Goal is fiee movemeni or seeds.and Labor. Economicarmonized

is one eiternal customs, free moremeoi ofco-

Is one eiternal customs, free movement ot goodi. and perhaps Ubor. Economic laws harmofliied.


it common currency. Memberi may introduce own euneeey by special agrcement.

is common currency for core states. Otber member* may have own by special



iu system for allLimited budget for center formed from members' dues.

coordinatetil policies. Fund some national programs.

encouraged loindependent iai policies Fund few activities for center.


coordinatednterim maintenance of

transition lo woild prices.


economic relations

debl serviced jointly, new debt Incurred individually orjofauty.

service foreign debt and receive new assistance Re-puttiesrj-Je.

may service debt alone or jointly. Each conducts trade.

siays aliened wiih Yel'tsin and ihc republics remain committed to workingommonframework, he will be viewedaluable player and will continue to have some influence on the course of events. Non-Russian republics may also considerotential counterweight to "rcPisin,erious split between the two would be likely io spell lhc end of whai remains of Gorbachev's power. Gorbachev could not win an eleclion for the presidencyew constitution is written without strong support from Yel'tsin and other key republic leaders.

Russia's Preerninencc

Russia is critical lo thc ouicomc of Ihe ongoing transformation. There can be no confederationRussia, and. without progress toward democracy in Russia, thc prospects foi its development in lhc remaining republics are significantly diminished.ealthy Russian economy, the prospects for economic recovery elsewhere are bleak.

Political trends in Russia favor fundamental change. Yel'tsin has done more than other republic leaders to strengthen democratic institutions, and his advisers and alliesecord of support for democracy and economic reform. Moreover, his popularity andstyle of leadership make bold action to propel live republic forward more likely in the next year.

The depth and durability of lhc Russian leadership's commitment to democracy and market principles has yci to be tested, however, and some importantremain:

Ycl'tsin's propensity to rule by decree has raised concerns among fellow democrats over his comenl io constitutional order and due process.

Although Ycl'lsin and most other leaders of the republic have broken with thc Communist Party, iheir centralizing instincts could die hard.


if Yeltsin leaves the Stent? In Russia

YeJ'uin's absence from Ihe Russian leadership

would resittl tn factional infightinglowing of reform measures thattrong leader to keep the public on

board. Russian Institutions have had lime to sink some roots, however, and the coup deepened the democratic direction of Russian policies. Anywould probably not change course but

would almosi certainly have greater difficultyonsensus and implementing reform throughout Russia.

Vice President Rutskoy would assume theuntil new elections are held. Who would win an election Is not clear. Si. Petersburg Mayor Sobchakistant second In most recent public opinion polls, bul his popularity would probably rise with Ytl tslm gone because of name recognition. Other officials such as Rutskoy.Russian Prime Minister Silayev. KGB Chief Bakaiin. Moscow Mayor Popov and Movement for Democratic Reform leader Alcksandr Yakovlev have registered in polls, bui alt lack Ycl'tsin's grassroots support.

In ihc Economy

The loss of Yel'lsin's guiding hand would slow current negotiations to preserve an economic union as well as Russia's own progress toward economic reform. It would alto make implementingmeasures much more politically risky. Without Ycl'tsin's commit men! to maintaining interrepub-lic economica singleand common tariffs and monetaryforceful advocates of autonomy within Russia would push for lhe republic's Independence.

Al lhc Center

Ycl'tsin's absence from Ihe political scene would probably raise Gorbachev'sthe only other leader with significani nationalwithout Yel'tsin behind him. he mayore difficult lime working oui agreements wiih other republic leaders. Ycl'tsin's cooperation with Gorbachev hasriving force behind progress on the union treaty. Without Yel'tsin. voices in the Russian governmentgo it alone" strategy may gain prominence andmay not have the same ability to Jawbone other republic leaders Into supporting some union

gtowtng assertiveness of "autonomous" teutons, particularly Taiarskaya, threatens thc governahilily and cohesiveness of thc Russian Republic. Their status has bee* problematic for Yel'tsin since (be beginning of the union treaty process. When local eleeiions occur in Russia, the leaders of these regions arc likely to grow even more assertive as they seek to satisfy iheir constituents. Some conflict with Yel'i-sin's appointed plenipotentiaries is certain. Localwill almosi certainly try loeakening of Yel'lsin's polilical position or thai of Russiais other republics.

Russian nationalism,ormidable force in republic poliucs, will grow over thc nexl year and would be funned by mistreatment of Russian minor-

iries in olher republics. Nationalist extremists aremall clement on ihc Russian polilical spectrum, bul their influence may grow markedly if public support for lhe current government erodes more than we anticipate. An increase in the polilical influence of antidemocratic Russian nationalism would heighten tbc fear in lhe other republics of resurgent Russian imperialism.

Ukraine Heads Toward Independence

The durabilily and effectivenessew union depends heavily on the role of Ukraine. Kravchuk and other Ukrainian leaders seem inclinedonfederation agreement, bul they are

under strong pressure fioin nationalist forces toindependence. Asecember presidential election and referendum on independence approach, Kravchuk will look for opportunities to demonstrate hjs commitment to protecting Ukrainian sovereignty, even'if it means publicly supporting withdrawal from'rxoceaa and going for complete

Ukraine is almost certain to approve tbe indepertdence resolution in December. We do not know bowthe break with Russia and other republics will be. If Kravchuk wins Ihc presidential election. Ukraine will probably agree lo al least associate statusonfederation andeasure of cooperation on economic and military issues. Abreak would probably occur if his opponent wins and would have serious ccnscquences:

A disruption of trade links between Ukraine and oiher republics wouldajor impact, Ukraine depends on Russia for imports of crude oil and other energy supplies. Russia and other republics depend heavily on Ukraine for food.

Opewsition to loial independence by Russians. Russified Ukrainians, and olher ethnic groups living in Ukraine woulderious threat lo political stability, raise border issues with Russia, spark violent incidenls. andinimum make bilateral cooperation more difficult

Disagreement over control of miliiary assets on Ukrainian territory probably would intensify. Ukraine would probably reverse ils position on

Removing nuclear weapons from ihc republic and demand ihat they be put under command and control of the Ukrainian miliiary. It would also take steps towardarge republicarmy, and demand lhal all union forces withdraw from the republic.

Three Alternative Scenarios

Thc large number eif variables could eventually lead to widely differing poliiical. economic, and military outcome, in the former USSR Wc believe threeloose association, and dis-

The Heated Presidential Rote in Ukraine

The presidential election scheduled/or Iin Ukraine haseated race between parliamentary chairman Leonidand his nationalist opponents. Kravchuk is currently Ihe frontrunncr. Although lainled by his Communist past and his perceived Indeci-siveness during the coup attempt, his strengthsonsensus builder and astute politician have kepi his posilion strong. Moreover, his vision of an independent Ukraine as partoose economic associationollective security arrangement probably appeals to the majority af the voters. Kravchuk wants to bridge regional differences between theeast and the nationalistic west. He could fall behind the nationalist momentum, however, and become vulnerableore charismatic, nationalist opponent

The leading challenger, endorsed by lhe nation-allsi organization Rukh. Is Vyacheslav Chomo-vil. He and other nationalist candidates suppori the goal of complete Independence within IS months. Chornovil has expressed reluctance to hand over to Russia nuclear weapons situated on Ukrainian territory. The increasing strength of anti-Communist, separatist sentiment since the coup has bolsteredrospects, but he and other nationalist candidates, such as Lev Lukyanenko, do not have as much support in the populous eastern and southern Ukraine.

integration -capture the range of possibilities over the next year or so. Elements of all three arc likelye encountered.


This scenario is thc preferred outcome of Gorbachev and Yel'tsin. Thc leading republics agree on andorkable framework for closeThc framework allows each republic lo set its

- iiocw.

of Confederation

' Agreements betweenepublic leaden and Gorbachev on economic union and economic reform.

Rapid movement toward/agreement onestablishing confederations political structures and power-sharing arrangements.

Nationalist elements in republics fall to press demands for independence, agree to abide by terms of confederation.

Yel'tsin and Gorbachev continue to cooperate.

problems do not Intensifyno large-scale labor unrest.

own basic polilical and economic course, bul il prc-videsoordinated approach lo monetary and financial policy, intcxrepubtte irade, debt repayment, foreign affairs, and defense. Lines of authority are clarified, and foreign governments can identify and deal with the appropriate level* of government on different policy questions. Republic governmentsstable through the food and fuel crises this winter, and democratic institutions and practices in Slavic areas ai least gain strength.

internal Implications. Economic. While tbe republics would suffer the consequences of economic trends evident before lhe abortive coup, lhe damage would be contained and the longer-term prospecis forand reforming the economy would improve;

Thc republics would not enact disruptive measures, such asxorbitant energy and commodity price hikes, and cancellation of contracts

Some control over the money supply would be ensured,ingle currency remaining ihe means of inlet republic exchange. If republicwerenion banking agreement would restrain (he printing of money.

' Coordination of fiscal policies could begin to arrest the growth of budget deficits. Agreement onand local lax contributions to ibe center would facilitate narrowing Ihe central budgetary gap.

Somepress ahead more vigorouslyarket economy, allhough Polish-style "shock therapy" would not be tried in ihe neat year.

Some old-style administrative approaches aimed at stibiliration. including state orders and wage and price controls, would remain, bul thc overallfor foreign investment and membership in international economic organizations would be

Political. This scenario would provide lhe bestfor polilical stability and, therefore, democratic change throughout thc confederal ion. Interrepublic cooperation would help prevent interethnic (ensions from escalating into violentithin orrepublics.

An agreement toonfederal polilicalwouldentral government lo continue to exist and do business with foreign governments, but the center would not dominate the republics. The sphere of central responsiblitics would be |really reduced, as would the central bares era cy and tbe power or the presidency. Tbe authority of these insiiiutions would be enhanced by popular elections.

Russia would be thc most powerful state in tbe confederation. All major policies of Ihe center would require Russia's concurrence, but die other republic members would try to use central structures to check Russian dominance.

Gorbachev, in alliance with Yel'tsin. wouldey player in Ihe negotiations on the economic andframework for interrepublic cooperation, at least until electrons are held, As head of (he interim government, he and his foreign ministry would remain thc chief interlocutors with foreign governments, bul he would not have lhc power to make major foreign policy deciiiOTt without the republics' concurrence

Military. Miliiary reform would accelerate. Under thisommon decisionmaking structure would alloweasonably coherent and controlled


Claim in.kpwocrr* but noi yet rtscognscd


reduction n* well benified command over tiralegic and general purpose forces would be retained, preserving the stability ofthe armed forces and providing the strongest guarantees for tbe security of nuclear weapons. The center would also retain operational conlrol of smaller air and naval forces and rapid reaction ground forces, backed up by republic-controlled reserves.

The republics probably would spend less of their own money in esiabhshing their own miliury forces. Al-iboueh the militarynified command would

have some influence in government circles, they would not be able lo protect the armed forces from drastic reductions.

Implications for the Witt. This scenario woulda more predictable path lo theew confederal union wouldajor miliury power, bui would be strongly committed to reducing the defense burden ihrough negotiations andeuls. The prospects would be good for ratifying lhe

CFE und START agreements, at would (he chancesuple menon and verification of arms conlrol agreements, would not be disrupted.

Tbc West inevitably would have to dealrolireration of foreign policiei as republics seek representation in international forums. Under this scenario, however, it is less likely that these foreign policies would work at cross-purposes.

The smaller threat of political instability and intcrre-public conflict under this scenario would reduce but not eliminate thc risks to Weslern engagement As economic performance continued to decline, at leasl in the short term, the outlook for Western trade and investment would remain poor. Debt default might be averted, bui larre-scale debt restructuring would be likely.

Wiih demands for aid increasing from all republics, Western governments would have lo channel most assisuncc directly tonion agreement,would facilitate inlerrepublic coordination in lhc allocation and distribution of assistance and make thc economic and political climate more favorable for foreign investment

Under this scenario, the republics would exert their independence in bilateral relations but would allow thc central foreign ministry to represent their interests in arms control and other multilateral republicThey would retain responsibility for framing tbc discussion of foreign policy questions in inlerrepublic bodies, for communicating Weslern proposals to those bodies, and for negotiating with Weslern partners. While Gorbachev.jerna ins president, his experience, inlernalional staturc.'and skills at persuasion would give him considerable influence in determining the outcome of collective decisions.

Loose Association

In this scenario. Ihc process of poliiical and economic reform continues, but severalihcir own way. The republics including some ihat have optedoose common market, but impierncntation of common economic policies is hmdeicd by the absence of stione poliiical lies among all lhc republics. Vary-

ladieatori af Loose Association:

Agreement is reached onoose economic union.

Russia, other republics, conclude series of bilateral agreements on economic andcooperation.

Strong vote for Ukrainian independence in

i December referendum leads to severing of ties to confederation.

defeats Kravchuk in presidential election.

ing degrees of political cooperation exist, however: several republics, most likely those of central Asia and possibly Byelorussia, agree to association with Russia. Although Russia and the associated states try to coordinate foreign and miliury policy, thc republics basically pursue independent policies in these areas.

Internal Implications. Economic. The republics would reach broad agreements covering fiscal and monetaryommon currency, and foreign debt repay-mem. Thc republics are unlikely, however, io reach consensus on lhe details needed to ctTeciively carry out all of the provisions of thc common market. Trade disruptions and shortages would intensify because of thc lack of strong enforcement mechanisms, tbcpace of economic reforms within each republic, and growing republic protectionism. Under theseicpublic administrative decrees aimed atwould increase; necessary, but unpopular, steps toward marketiration would slow.

Political. Russian dominance of any politicalwould heighten fears among other republicof Russian hegemonism. Even if Russia did not behave toward these reewbucseavy-handed fashion, fears of Russian domination would jeopardize thc long-ierin survival of this association. Thcof some republic leaders would become more


Figure 4

Republic Distribution of Soviet Strategic Offensive Forces

as they failed to halt their republics' economic slide. This would lead to increased popular discontent and pressures to adopt more authoritarian measures. Gorbachev's political role would be minimal.

Military Russia and thc associated republics could agree to smaller centrally commanded stiategic and general purpose forces, bui the non-Russian republics would eipand the "national guard" uniu under their control toussian-dominated army. Ukraine would press ahead with forming its own armed forces and would seek removal of central forces remaining in the republic. Ukrainian and olher non-Russian republic leaders probably would agree lo

removal or destruction of strategic weapons on their territory. Some republic leaden might insist oncontrol of the tactical nuclear arsenal on their tcrriioriesedge againsi Russian imperialism.

Implications for the West. Western governments would be dealing mostly with Russia and Ukraine as those republics tried to develop democraticand market economies. The other republics, however, would be sensitive to Western, Russian, or Ukrainian conduct Ihat suggested their interests could be ignored. Because the republics would insist on

-So/Of <M-

a significant portion of iheir own foreign affairs, there would be grcaier difficulty in negotiat-ing and ensuring compliance with internationalAt the same lime, most republics would be eager io expand,iheir contacts and cooperation wiih the Wesi. primarily for economic reasons. Therepublics would be even more eager forassistance given lhe difficully of negotiating effective mechanisms for interrepublic economicThey would also seek membership inand international organizations and pursue collective securily agreements.

Russia and its associates would adhere to arms conirol agreements and pursue follow-on negotiations aimed ai ensuring even deeper force cuts. Ukraine's decision to build up its own forces would endanger theand veri6cation of existing treaties.


Efforts loew confederation and an economic community Tail. Interrepublic cooperaiion is modest and bilateral. Animosities between republics rise sharply, and. as nationalismore virulent force, threats and counterihreais crop up over border disputes. Separatist movements in the republics gain popular strength, and thc integrity of lhe Russian Republic is undermined as some ethnic minorities pursue iheir independence. Republics assume control over economic resources and establish strict border and lariff controls, bul leaders cannot cope with mounling economic and polilical problems.authoritarian politicians and polilical parties gain strength. The potential for righlwing coups in key republics increases.

Internal Implications. Economic. The republics would be left io their own devices.hort time, Russian leaders would have ihc popular support and polilical will io attempt economic reforms, but serious food shortages exacerbated by barriers to1 interrepublic trade would soon erode their legitimacy. Otherleaders would be overwhelmed by economicand look outward for assistance. Central Asian republic* would look toward the Middle East for help. The success of efforts in Russia and lhe otherorienied republics would depend largely on the conclusion of Irade agreements with the West

Indicators of Disintegration:

Negotiations on political and economiccollapse.

Economic conditions deteriorate sharply;Incidents of food shortages, perhaps famine, provoke large-scale strikes.

Rivalries between republic leaders intensify sharply; threats and counterthreatsover treatment of national minorities within republics.

Sharp growth In popularity of authoritarian political parties/movements calling forof authoritarian regimes within republics.

and ihe other breakaway republics, but negotiations probably would be prolonged. The pressure of time would be intense, however, because of mounting economic chaos.

Political. The inability of the Russian leadership to hold lhc confederation together would encouragegroups within iu borders to assertcramble to seize control of critical economic resources. At ibe same time, Russianin other republics, fearing hostile treatment, would attempt to migrate or seek unification with Russia, thereby increasing lhe prospects for civil strife.

Xenophobic Russian nationalism would gaintrength as economic conditions worsened and as societal tensions increased. Leaders in thc lessoriented republics of Central Asia,by popular unrest and economic disorder, would quickly institute even more authoritarian mea-sures. Over lime, ihc fragmentation of the former USSRumber of independent republics, some

Go oro l


Figure 5

Comparative Nationalities, by Republic



9 I 9





Pousn 22 Jewtsfi 13 Ukrainian




Arm: (lian




Gorman 1 UaJr*



3 >






9 14

iw. Orlrtere Aguo IxGb tulioUil^Vr^iaiW

a bnM of Hie WIio C* (aMl in dnbmi? *rrt BrMM en# onnVc iroctc

Bminl "Wot


of (hern politically unstable and hostile toward one another, would increase (he likelihood of serious civil conflict

Miliiary. Russia would assume immediate control of the conventionaT and nuclear forces oo its territory and probably would try to do so over some assets in other republics. Non-Russian republics would move quickly to establish their own armed forces foragainst Russia, against one another, or against other states along their bcederi. Economic difficulties would limit their size and capabilities, however.would still be under sttortg pressure to coniinue to cut miliiary spending in an effort to overcome iu ecooomic problems

The risk of serious civil conflict would rise as lhc republics attempted to assert authority over military installations and units within Iheir territory. Many commanders and soldiers would have to decide to whomthey owed their allegiance; their willingness to submitew authority or lay down iheir arms would be an open question.

Thc disposition of nuclear weapons woulduch more contentious issue in (hit scenario. As each republic looked to its own security, some republics with nuclear weapons would seek to assert operational control over them, rather than turning them all over to Russia. Authoritarian political leaden,by central authority oroosewould view nuclear weaponseans of enhancing tbc status of ibeir republic in the eyes of thc world.

Theiliury intervention in politics would increase as political instability deepened. An alliance between miliiary leaders and nationalists would form that would threaten the constiluiional order.

Implications for tht West. Thc fragmentation of lhe former USSR would confront Ihc West with grave dangers because of the chaos and unpredictability of events within the republics. The disappearance of reliable central control over nuclear weapons in some

republics, as well as uncertainty over Iheir disposition, would increase Ihe prospect of nuclear weapons falling into terrorist hands. Tbe risk would mount of an accident involving such weapons within tbe former boundaries of tbe USSR or even their use inconflict, Use against thc oulside world would be much less likely. The danger that nuclear materials and expertise would find ibeir way to other states seeking to develop nuclear weapons would become greater.

Conflict within or between republics would poserisks for thc West because violence could easily spill across international boundaries. Long-quiescent border disputes probably would reappear, and the proliferation of republic armies would increase thc likelihood that states would seek to resolve such-disputes by force. Western countries and international organizations, such as the UN and CSCE, would be drawn into efforts to end such disputes given the possible stakes involved.

This scenario would make implementing and verifying arms control agreements, particularly CFE. virtually impossible. Thc West would confront numerousforeign policies rather Ihan one, and the willingness of many of the new states to enter into agreements in good faith would be questionable. Agreements on conventional forces in Europewould have to be renegotiated. It is doubtfuL moreover, that the former members of the USSR could reach an agreement on reallocation of forces to comply with the CFE force ceilings. The START agreement would also be endangered ir Ukraine, Byelorussia, or Kazakhstan attempted to retainover siraieEic nuclear weapons on their territory.

All the republics would call on the West to provide assistance lo ameliorate the great economic hardships, but most republics could not pay for il and many would have domestic policies that would discourage providing it. Strife within and between republics would complicate aid efforts.


Prospect* loi Scenarios

Reality ii likelye more complex than any of three scenario* we havehis Estimate Wc believe, however, that ihey capture the broad range of possibilities. In our view, it it likely that conditionsonths from now will most closely resemble the "loose association" scenario. Although thc economic situation ii grave and thc republics arc having serious problems in reaching agreement on key economic issues, most understand that they cannot survive on their own. This awareness argues strongly for some kind of economic association that will move, however haltingly,ommon market-type system.

Western help and expertise in laying tlie foundationsarket economy, building democratic political institutions, and reducing thc burden of defense.

Over the next year, thc possibilityatastrophic winter pose* the most serious threat to tbc successful transformation of tbc old system. Western foodtargeted at key population centers and cflec-tivcly distributed, would reduce thc danger thatanger over food shortages would destabilize democraticf widely visible, suchcould promote goodwill toward thc

believe the "confederation" scenario is less likely. Ukraine will be the key: forces supporting confedera-lion arc currently favored to win tbc December elections, but their strength may be eroding and an upset is possible. Even if Ukraine is willing to workew union, centrifugal forces maythe republics. Potentially the most explosive of these forces is unrest among thc Russian minorities living outside the Russianew center could offer little is thc way of incentives to gain republic support. Although many republic* would like toounterweight to Russia, ihey have no interest in buyingtrengthened center to get it.

Thc least likely scenario within lhc time frame of this Estimate isost republic govcra-menis have sufficient public support to sustainthrough the difficult months ahead, and they understand the need for conunucd cooperationher republics. Force* of reaction are too weak present and their political prospects over lhe next are poor unless an economic catastrophe occursthe next year, however, this scenario becomes more likely if elected governments fail to stem the deterioration of economic conditions.

Gelling ihe aid to where il is most needed, however, will not be an easy undertaking. Potentially serious shortage* this winter of food, fuel, and medicines arc scattered over large geographic areas.problems with communications,and storage, as well as bureaucraticand black-markeiecring. will hamper assistance effort*

Weslern policies that would alleviate economicand Increase hope for better times ahead could help slave off further poliiical fragmentation and instability. Theseoordinated deblpackage, new credits, accelerated step* toward IMF membership,uble stabilisation fund

Receptivity to Western influence is greater than ever before. Ccniral. republic, and even local leaden are eager for emergency economic assistance, and for


Figure 6

Tben lhe hM


Political 1

Dcmooaiic rrfounen in cnnlrol

Commilmtixi in lice cleclkim

Independence declared

Commit rrteni to human lot ta lepublic irtldenU

luura ut mar Ixl rctonrn Independent icfotm jMotram

Omntilmenl Ut indeprndrnr

raoneury ivnem

KuhIi'i pteeoup reformon hoW pending dimuMai oncenler-repuWic haanutiont butrrforra etaneiXv for ei ample. land rrlorm. an already -place.

PolxyrSexuritj Hunt

IndepcndcM foreign palsy

DecUratiori o( nuclear free lUlut

Declaration o( military neutrality

Seckioe mcmbr nlupgionat/ iincniiiKiiul noliei

i"Seriouieiliruc unreii

Si rone local uipaialiw

rno-cnw ntr. Current contlkf wih other


Milhlarv liiuo


Forming imn military

(Jairra lo miliiary irrtUllalaxn ontcrnaof)

* Several arcuoficikiuiuiiicii, bul Iheae arc local ired and do not Uneaten Kmv in

Uihiuc and territorial icniioni eual. bul io lar no duett claahra or eonfUcU.

" Inicrnat iiuooaon)}.

' At ihn pcaM,nall nath'mal euard

Figure 7

. Estonia





Food Situation in the Soviet Republics

Gioss value ol farm output per capitaercentage of national

C3 Less Uon7r mora

inksiwlaiw p*

'Based on cHleal Sown3 mWB

In either the "cc*fedcialion" ot the "loosescenarios, thc West would have influence on subsequent developments by focusing primarily on Russia and Ukraine. Russia would be thc principal player in decisionmaking for defense policy and arms

conirol It would have thc best chance among the republics of carrying out economic reform anddemocratization. The West could coax, but not compel. Ukraineore cooperative approach with Russia and other republics as well as toward more democratic processes in internal policies.over such issues as borders, minority rights.


economicnd military force* could bewith the help of Western "booc!

Jlbui. lo lhc eatem that Western Involvement facilitated cooperation, it could affect development* elsewhere.

Western influence would be most limited under thc "disinteeralion" scenario. If authoritarian regimes came to power in tlie republics, they would want Western economic assistance and cooperation, but they would resist^

demanding respect for human rights and democratic freedoms ll would be especially difficult to promote republic cooperation in working out commonAs nationalist sentiment grew stronger, anti-Western feelings would become more pronounced.

Original document.

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