THE SOVIET CHALLENGE TO U.S. SECURITY INTERESTS (NIE 11/4-82)

Created: 8/10/1982

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CIA HISTORICAL REVIEW PROGRAM RELEASEAS SANITIZED

The Soviet Challenge to US Security Interests

National Intelligence Est.male

THE SOVIET CHALLENGE TO US SECURITY INTERESTS

PREFACE

T.iis Estimate analyzes those aspects of Soviet foreign and security policyave significant consequences for US national security. As such, it is not Intendedomprehensive review of Soviet global involvement and regional policies. Rather, it seeks to explore the perceptions and likely assessments of the Soviet leadership with respect to Soviet-American interaction both in specific regions and in the bilateral realm. It also describes the means and instrumentalities by which Moscow has sought to implement its policies.

A specific purpose of lhe Estimate is to integrate recent work done within the Intelligence Community in an effort toore comprehensive assessment of Soviet policies over the next three to five years In particular, it offers judgments on the implications for Soviet policy options of the impending Soviet political succession, thcof declining economic performance, and tbe impact ofheavy defense expenditures.

CONTENTS

Page

PREFACE

KEY

I The Nature ol US Soviet

Perceptions of US Vulnerabilities and

II Thc Nature of Ihe Soviel

Soviet Miliiary

II. Force Projection. Proxies, and Military Activities in lhe Third

Mea-iures" and

III. Becional

and NortlhMat

C South and ScAithweat

D The Middle

F Central and South

IV Policy Optioni and Policy

A. The Stralegic

B Deleme Economic Trade

C The Political Succession and Foreign Policy Option* .

v

KEY JUDGMENTS

The Soviel challenge to US security interests is rooted in Moscow's conception of its relationship with the United States as fundamentally adversary. This concept, lascd on ideological antagonism andrivalry, governs Soviet behavior and also shapes Soviet perceptions of US policies toward Moscow. Its most dramatic manifestation is growing Soviet military power and capabilities which form the cutting edge of Moscow's persistent efforts to extend its global presence and influence at lhc expense of the United States and thc West.

Although Soviel leaders regard military power as the USSR's principal currency as an international actor, they also view thc East-West relationshipore encompassing struggle involving political, economic, social, and ideologicaltotality which the Soviets characterize as "the correlation of forces" Soviet leaden profess confidence that this correlation is "changing in favor of socialism" and Soviet policy, in turn, has sought to further this transition through the exploitationariety of means including military and economic aid. lhe use of proxies, covert activities, and tbe political alignment of thc USSR with regimes or revolutionary movements opposed to US policies.

The Soviels believe that they enjoy some strategic advantages over the United Stales and view their current overall position as supporting the conduct of an assertive foreign policy and the expansion of Soviet influence abroad However, they do not believe that they currently enjoy decisive strategic advantages over the? United States and do notajor confrontation They have an abiding respect for US military capabilities and are confronted themselves with the dilemmas of declining economic performance and the increasing burden of defense spending for the economyhole. They are unlikely to initiate miliiary hostilities in an area of crucial importance to the United Stales like lhc Persian Culf. However, they will seizeoffered by instability in the Third World lo enhance their geopolitical influence and also to divert t'S attention from areas of direct US-Soviet interaction, even in situations where the USSR has little prospect of making significant gains for itself Moreover, tbcy may increasingly expect that the burden of avoiding potential confrontation, particularly in areas contiguous to (he USSR, should shift to the United States. The Soviets' perception of theit own opportunities is reinforcedense of US frustrations and geopolitical vulnerabilities, partic-

ularly in the Third World, where US regional equities appear to Moscow lo be increasingly threatened by political radicalism and economic nationalism.

SU

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The adventew US administration, openly critical of the premises of detente and'avowedly intent on increasing US military might, has noi changed this basic perception bui has raised Soviel concernseinvigorated US effort to counteract Sovietand exploit underlying Soviet economic and geopoliticalHowever, the Soviets view Washington's ability to heighten the economic and military costs of the East-West competition to Moscow as ibject to competing US domestic economic priorities and tohc part of US allies lo incur lhe costs of increased defense ipendilures, deferred economic opportunities, or increased tensions ith Moscow. West European uneaseerceived lack of US commitment to arms control and US allies' resistance toward US restrictive policies on East-West economic relalions are viewed by lhc Sovieis as presenting opportunities to provoke divisions between the United Stales and ils principal allies.

In their current efforts to exploit these perceived divisions, the Sovieis have been especially active in lhe clandestine realm. They have been engagedange of "activencluding theof forged documents intended to embarrass the United Slates and the covert financing of aciivities by some elements of the "peace movement" in Westernthose groups either closely associated with indigenous Communisl parties or anti-American in orientation

The balance of strategic intercontinental nuclear forcesritical index for Moscow's assessment of relative military power between the Uniled Slates and lhe USSR. The Soviets believe that in lhe present US-Soviet strategic relationship each side possesses sufficient capabilities to devastate tin; other after absorbing an attack. Soviet leaders state lhat nuclear war with lhc United Stales wouldatastrophe lhat must be avoided if possible and lhat they do not regardonflict as inevitable. Nevertheless, they regard nuclear waronlinuing possibility and have not accepted mutual vulnerabilityesirable or permanent basis for lhe US-Soviel strategic relationship. Although willing to negotiate restraints on force improvements and deployment when il serves iheir interests, ihey prefer possession of superior capabilities to fight anduclear war wiih the Uniled Stales, and have been working lo improve their chances of prevailing shouldonflictenet in their strategic thinking appears to be that the

better prepared the USSR is to fight in various contingencies, the more likely it is that potential enemies will be deterred from initiating attacks on the Soviet Union and its allies, and will be hesitant to counter Soviet political and military actions.

The sustained expansion and modernization of Soviet general purposeconventional and theaterthe broader aspects of Moscow's military challenge to the United States and its allies. The persistent Soviet effort to upgrade these forcesMoscow's intention of dominating the regional military balances in Central Europe and along the Sino-Soviet frontier. Moreover, Moscow's military salient in Afghanistan and the Soviet military presence in Ethiopia and South Yemen underscore the vulnerability of pro-Western Arab regimes to potential Soviet military action and the implicit threat to Western oil supplies.

In many respects, the Third World is seen by Moscow as. .the Achilles heel of the West, where the radicali/ation of postcolonial elites and the anti-US orientation of many "nonaligned" states have created tempting opportunities for the USSR to insinuate itself through offers of military and technical assistance The USSR has developed only limited forces for operations beyond the Eurasian periphery, bul modest improvements in Soviet airlift and amphibious capabilities enhance Soviet options for dealing with Third World contingencies in the future. In addilion, the Soviels have been willing on occasion lo use naval deployments lo signify their political support for clients and friendly regimes, or lo demonstrate Soviet interestegional conflict. The Soviets also hope to capitalize on opportunilics to gain access lo facilities for naval aircraft and ships

Moscow's presence in lhe Third World is furthered by means of arms sales and military advisers. Arms sales do noi necessarily translate direclly into political leverage but theyeystone of Soviet entree into lhe Third World and an important source of hard currency income to Moscow. The apparatus for administering arms sales and military Iraining programs is highly centralized and. by drawing on existing large stockpiles, the Soviets possess an impressive capability to respond rapidly to the needs of clients or friendly regimes.

Another significant trend in Soviet Third World involvement is the continuing use of Cuban and East European proxies and olhertogether wiih covert Soviet involvement in supporting insurgent groups and the military advcniures ol client or dependent regimes. For the Soviets, the proxy relationship minimizes lhc level of direct Soviet involvement while achieving Soviet aims and projecting lhc ideological

image of "socialist solidarity" with the recipient regimes. Covert Soviet military support for clients allows Moscow the defense of "plausible denial" of Soviet involvement, as in Moscow's support for Cuban activities in Central America. Along with these efforts the Soviets also are involved with allied or friendly governments orLibya, certain Palestinian groups, South Yemen, Syria, andwhich in turn directly or indirectly aid the subversive or terrorist activitiesroad spectrum of violent revolutionaries-Increasing foreign debt obligations and hard currency shortages could affect thc level of Moscow's commitment to client regimes in the Third World. Even under present conditions, the hard currency crunch probably will make the Soviets reluctant to provide other clients with economic aid as extensive as that provided to Cuba or Vietnam. Soviet military assistance, however, probably will not be seriously affected and arms sales are unlikely to be affected. The net result is that Moscow will be more dependent on military aid as an entree of influence in the Third World.

The Soviets, nevertheless, recognize that even in areas where they have substantial political or military investments, ihey remainto US and Western economic and diplomatic leverage, and that their ability to project military power into lhe Thirdthe important exception of the immediate periphery of theinferior lo that of the United Slates. They have suffered dramatic failures in thein (heir expulsion from Egypt inthey view current US initiatives, such as the attempt lo broker political settlements in southern Africa and the Middle Easi, as threatening to erode Soviel influence. Regional hostilities, moreover, often present the Sovieis with difficult policy choices

Over the next three to five years, Soviet policies will be motivatedesire lo build upon the Soviel Union's slatuslobal superpower. Soviet policies, however, will also be determined by leadership anxieties about anpotentially more hostile-international environment, lhe consequences of an ongoing political succession, and declining economic growth. The Soviets viewerious problem lhe prospectutual arms buildup with the United Stales which threatens to lax Soviet economic icsotirceseriod of domestic poliiical uncertainty. On tlie olher hand, thc heightened military challenge lhal llie United States poses io ihe USSR, specifically in terms of strategic nuclear programs planned for the latter half of lhe lOSOs. is an ominous development from lhc Soviet perspective. But. in

Moscow's assessment, US plans could be curtailedesult of domestic political and international factors affecting US policymakers.

It is doubtful, however, that Soviet leaderswindow of opportunity" stemming from an overweening confidence in present Soviet nuclear forces relative to future prospects From the perspective of the Soviet leadership, there will remain important deterrents to major military actions that directly threaten vital US national interests. These include the dangersirect conflict with the United States that could escalate lo global proportions, doubts about the reliability of some of their East European allies, and an awareness of the greater Western capacity to support an expanded defense effort. These concerns do noi preclude action abroad, but they act as constraints on military actions in which the riskirect US-Soviet confrontation is clear.

Slrategic nuclear arms negotiations are likely toentral Soviet priority evenost-Brezhnev regime. Moscow will continue to see the strategic nuclear arms control processeans of restraining US military programs, moderating US political attitudes, and reducing the possibilityS technological breakthrough that might jeopardize Moscow's slrategic nuclear status. But any US decision to go beyond the putative SALT restrictions wouldimilar move by the Soviets. Some Soviet options, however, areas an eventual failure to dismantle older missile submarines and land-based missiles as new ones are deployed. The Soviets mighl therefore undertake such measures eithereans to pressure the Uniied Slates lo refrain from certain weapons deployments or to induce Washington to resume the strategic arms dialogue within the general framework of previous strategic arms agreements.

Despite declining economic growth, we have seen no evidenceeduction in Soviet defense spending Indeed, on the basis of observed militarynumber of weapon systems in production,developmenl programs, and trends in capital expansion in the defenseexpect that Soviet defense spending willto grow at alwut its historical raleear al leastuch continued growth in defense spending could well lead lo declines in living standards Per capita consumption probably would continue to grow marginally for lhe next few years, bul bv mid-decade would almost certainly be in decline.

Although absolute cuts in defense spcnduin are highly unlikely, declining economic growlh will turlher intensify competition for resources, compelling Soviet leaders ti> weigh the effect of constant

increases in defense spending on lhe overall development of the

economy.

The Soviets believe that, without strong West European support, the United States would have little leverage to affect future Soviet economic choices. Although the Soviets would prefer to expand trade with the United Slates, particularly to achieve access to US credits and technology, they assess US attitudes toward such expansion asunacceptable political linkages. Past experience undoubtedly has contributed to this assessment, and expanded trade with Western Europe is probably seen by Moscow as an acceptable substitute. The Soviets are likely lo look increasingly to Western Europe and Japan as sources of trade and technology, dependent upon the willingness of Western bankers and governments lo extend long-term credits to Moscow. Jn addilion, the Soviets view security and trade divergences between the United States and other NATO members as maior opportunities to undermine NATO's cohesionilitary alliance and to negate thc possibility that live United States might involve its NATO allies in supporiore extended Western defense role beyond Europe.

The specific foreign policy optionsuccessor leadership will be conditioned not only by the level of East-Wesi tensions but by the prevailing consensus within the new leadership. Fairly radical policy adiuslments cannoi be excluded as new leaders review existingew leadership, for instance, may attempt "breakthrough" policies toward Western Europe or China, designed primarily to undercut the US geopolitical posture. Moscow's principal assets in these instances would be the unique ability to offer greater intercourse between East and West Germany in Europe and. with China, to offer significant concessions on contentious military and border issues.

On the negative side, Moscow is probably concerned about thc potential for renewed social and political turbulence in Eastern Europe. Thc economic conditions that engendered the political crisis in Poland0 are present to varying but significant degrees in the olher Warsaw Pact states. Increasing foreign debt obligations, diminishing hard currency reserves, and delerioraiing economic performance throughout Eastern Europe will worsen these conditionsonsequence will be confronted with lhe dilemma of weighing lhe increasing burden of economic subsidization of the East European economiesolitical reluctance lo accept greater economic reform. The result couldecurring pallern of Soviet repression and intervention.

The Soviels are probably also pessimistic about thc prospectsignificant moderation of US-Soviet tensions over the next several years, particularly in light of planned US weapons programs androlonged redefinition of lhe terms of the strategic arms dialogue. But, even in the event of an improved climate of US-Soviettlie fundamentally antagonistic nature of US-Soviet interaction will persist because of conflicting political and international goals. Limited accommodations in the areas of arms control or other bilateral issues are possible,ore encompassing accord on bilateral relations or geopolitical behavior is precluded by fundamentallyattitudes toward what constitutes desirable political or social change in the international order. Moreover, factors that go beyond tangible or measurableas ideological convictioningering sense of insecurity and of hostilewellontrasting confidence and sense of achievement in the USSK'sas global superpower, collectively will tend to reinforce Moscow's commitment to sustain the global dimensions of Soviet policy.

Despite uncertainties, the Soviets probably anticipate that they will be able to take advantage of trends in international politics, particularly in thc Third World, to create opportunities for the enhancement of Moscow's geopolitical stature. The persistence of regional rivalries,disorder, and the political undercurrents of anti-Americanism are viewed by Moscow as developments lhat will pose continuing dilemmas for US policy and, conversely, relatively low-risk opportunities for Soviet exploitation of regional instabilities- Active Soviet efforts to exploit such instabilities are particularly likely in thoseas southern Africa, the Middle East, and CentralUS policy is closely identified with regionally isolated or politically unpopularasic Soviet objective, consequently, will be to frustrate US diplomatic and political attempts to resolve regional disputes in the Third World. In Third World regimes that experience successful economic growth,the Soviels will be poorly equipped to offset the economic benefits to such regimes of closer association with the industrialized West.

As the Soviet leadership moves furthereriod of political succession. Soviet policies will become less predictable. The poteniial confluence of greater Soviel military power, increased regionalmore assertive US policies, and the potential for expanded US military capabilities in theoulduccessor Soviel leadership increasingly willing to exploit opportunilies in what il perceives as low-cost. low-risk areas This altitude, in turn, could increase the possibilities ol miscalculation and unpremeditated US-Soviet confrontations, most likely in the Third World.

DISCUSSION

The Nature of US-Soviet Relations A. Current Trends'

After several years of progressive deterioration, the US-Soviet relationship appears lo haveew juncture. The decline in bilateral relations has its roots not onlyonflict of interests and policies butonflict of perceptions and assumptions. From Ihe US perspective, moreover, the critical element in the changing fortunes of the relationship with Moscow has been the persistent effort by the Soviet Union to increase its global power and influence. This effort has been based largelyustained military buildup, supplemented by the use of proxy forces in the Third World. It has involved attempts to enhance Soviet influence by arms sales and support foi leftistmovements, diplomatic and clandestine efforts to discredit US regional policies: and the directon military force to resolve political dilemmas closer to home, as demonstrated by Moscow's Invasion of Afglianistan and its complicitv in the miliury crackdown in Poland.

Tlie evolving pattern of Soviet policies suggests not only increased Soviet confidence in the overall global power position of the USSH relative lo tlse Uniledconfidence expressed in Sovietas "the changing correlation of forces in favoroviet perception of continuim: opportunities lo exploit and to foster regional tensions and instabilities to thc detriment of thc United States. At thc same lime, Soviet international behaviorin pail. Moscow's determination to resist and to counteract what il sec*enascent US effort to contain, if not to reverse. Soviet military and polilu-al gains of the past decade.

Moscow's emergencelobaleen based principally on thc persistent investment in ami expansion of Soviet military foices. In the critical realm of strategic nuclear lorces, thc Soviets probabh

'iimaioSwirl colicic* ot' Ih" nest thice lo live irtit

now credit themselves with aggregate nuclearat least equal to those of the United States and, in someuch as the ability to threaten hardened bnd-based missile silos of the other side, withSoviet theater nuclear forces also have been improved Mgnif leant Iby lheof the MIRVednd thc Backfire bomber Coupled with the eiparmoo of Soviet intercontinentalhe Soviet* have thus accentuated regional theater nudeai asymmetries opposite China andEurope The Soviets in turn have sought to exploit resurgent West European concerns about aof the US strategic nuclcai deterrent from the defense of Western Kuiupn

In the conventional realm, too. the Sovieis have significantly upgrade'! their forces and equipment opposite NATO and Chinaonsequence of their invasion of Afghanistan, haveew threat to the security of US and Wesiern interests in the Persian Culf and Southweu Asia In addition, the Soviets have continued In modernire their naval and airborne forces, andended the reach of iheir general purpose force*

Thc momentum ofililaiy effort and its extended involvement in lhc Third World have abo been accompanied, lor mint nf thc past decade,erception ol thc United States as constrained from direct military intervention in the Third World not only by the trauma uf Vietnam but by an inability toomestic poliiical consensus on foreign policy in general and East-West tolulions in particular.the Third World ha* been seen by Moscow a* Ihe Achilies heel of the West, where political and economic inslabahly seemed endemic and where the radKaliution of postcolontal elite* and the emergence of "national liberation" rnovrmenr* have created lemplinc oppor turn ties for the USSH lo insinuate itself through offers ol military and technical aid

he Sovieis believe that tlicv enjoy some stiategic advantage* ovri the Uniled States and view their current overall position as suppoiting lhe conduct ol anloreign policy and the expansion nf Soviet

SSCJIEt

influence abroad. However, they do not believe that they currently enjoy decisive stralegic advantages over the United States and do notajorThey have an abiding respect for US militaiy capabilities and are confronted themselves with thc dilemmas of declining economic performance and the increasing burden of defense spending forhole. They are unlikely to initiate military hostilities in an area of crucial Importance to lhe United States like the Persian Culf. However, they will seize opportunities offered by instability in the Third World to enhance their geopolitical influence and also to divert US attention from areas of direct US-Soviet interaction, even in situations where the USSR has little prospect of making significant gains for Itself. Moreover, thev may increasingly expect that the burden of avoiding potential confrontation,in areas contiguous to the USSR, should shift to the United States Thc Soviets' perception of their own opportunities is reinforcedense of USand geopolitical vulnerabilities, particularly in the Third World, where US regional equities appear to Moscow to be increasingly threatened by political radicalism and economic nationalism.

ince early in the Carter administration, Soviet analysts have been increasingly preoccupied wllh what they saw as growing divisions within the US ad mi nisi rat ion and the US body politic at large over Ihe conduct of policy toward lhe USSR. The failure ol tlie Vienna summil into leadeversal of what Moscow saw as lhe more ominous trends in USbv what il regarded as aconfrontation over thc Sovicl brigade inled Ihe Soviets la conclude lhat lhe "anhdetente" forces had achieved dominance in US policy circles Thus, thc stagnation of SALT II. the evolving US-Chinese rapprochement. US attempts to leinvigorale NATO, and Washington's efforts to enhance itsand political presence in the Persian Culf and elsewhere, have all been seen by Moscow as panore profound shift in US policy aimed al countering Soviet influence and power. The adventew US administration, openly critical of the piemises of detente and avowedly intent on increasing US military mighl. has further heightened Soviet concerns about the potential consequences of increased L'S-Soviet tensions.

8 Soviet military expenditures over the lust two decades demonstrate remarkable upward momentum.

The Soviets have many weapon programs Inlhat were conceived and planned Independently of US weapon decisions to support their overallNevertheless, the Soviets do respond to and attempt to counter specific US weapon developmenl programs, often well in advance ot* the rest lira) Ion of those programi The magnitude of US efforts to reverse ihe trend in altering thc militaiy dimension of Ihe US-Soviet relationship, however. Isuable from the Soviet perspective The eitent lo whichS programs are actually Implemented will he an imporliinl factor for Moscow In determining its own fuluie moves

conjunction with US plans toew generation of nuclear missiles in Westernsome of which will be capable of striking deep into lhe European USSRinimum oftrategic weapons developments are seen astoredible US "first strike" threat againsi Soviet military targets Moreover, new US iiritem.MX. the Triderri/DS SI HM. and air- and sea-launcbed csutseseen by Ihe Soviets noi only as attempts to exploit existing Soviet deficiencies In low-level air defense andwarfare but as developments that might offset what Moscow regards as those elements of the strategic equation favoring the USSR The Uniied Slates is also seen as moving to enhance (he global mobility and flexibility oi its general purposea development which lhe Chief of tbe Soviet General Staff. Marshal Ogarkov. has labeled as evidenceS intention lolobal conventional war capability, based on an ability to control "geographical escalation' of any future conflict wiih the USSR Such Soviet statements, notwithstanding then self-evidnn propaganda intent, highlight Soviet concerns about thc direction of US miliiary programs, and theperception thai US military options will be enhanced during the

concerns about what it perceives asassertive trend in US policy are accentuated byof ds own vulnerabilities, stemming bothcompeting priorities of Soviet loreign pohcyihe increasing economic costs of

Continuing resistance to thc Soviet occupation of Afghanistan, togethereneral pattern of rcnioii.ll instability throughout Souihwot Ana.

heightened historical concerns in the USSH about the stability of its southernwhile tyingorce ofoviet troopslow but steady war of attrition in defense of the Soviet-installed regime In Kabul.

The crisis in Poland and the increasedof the East European regimes on trade and credits from the West have once againfor Moscow the specter of political ferment and ideological revbionism througlioul Eastern Europe.

In addition, continuing Sino-Soviet animosity, which has resulted in thc deployment of roughlyillion Soviet troops along the frontier, has reinforcedense of encirclement by hostile forces.

he Sovieis also recognize lhat even in areas where Ihey have substantial political and military investments their continued access is not guaranteed. The most dramatic exampleoviet lailure in thb regard was the expulsion of Soviet military advisers from Egyptue to Moscow's inability oi unwillingness to satbfy the broader political andneeds of its erstwhile ally. Similarly, the Soviets sec current US efforts toeace settlement in thc Middle East and toegotiated settlement in Namibia as potentially leading lo the erosion of Soviel mlluencc in both of these areas

oscow's economic outlookurtherfactor for Soviet leaders,articular reason for concerncinvigorated US arms effort From lhc accession to power of the current leadership in tlsentil the, the Soviet economy achieved relatively high rates of growth, averagingear in spite of perennial problems in agriculture, and resultingignilicar.tlv increased but still relatively low standard of livmc (or thc Soviel consumer. Al the same time, defensewas sustained at an average annual grosvth rule ofercent,airly constanterceni ol Soviet GNP10 In elfeci. therefore, the regime was able lo achieve its goal* of increasing the production of both guns .mil butter During the latter half of, however, industrial growth began to slow ai labor and capital productivity fell This, coupled with three successive harvests, has restricted GNP growth to less than 1

percent annuallyoviet economicwill continue to mount in the face of slowing growth ol labor and capital inputs, less accessible and hence more cosily energy and raw material supplies, and potential energy shortfalls. In, slower economic growth will present Ihe Soviet leadership with increasingly tough and politically painful choices in resource allocation and economic management. Annual increments to CNP. furthermore, will be too small simultaneously lo meet mounting investment requirements, to maintain growth in defense spending at Ihe rates of thc past, and to raise the standard of living

he Sovicls have been relying on East-West trade and technology transfer to provide partial relief Irom the tightening squeeze lhat military programs place on economic resources. Legal and illegalol military-related technology have saved thc Soviets time and resources in designing and producing new sveapons and military support systems, andgoods have eased thc burden ol defense spending by alleviating strains in the civilian economythrough trade the Soviets have been obtaining goods and technology to enhance expansion of civilian economic output and thus give llie economy more breathing room.

hile The Soviel need for Western goods and tcchnologv is rising, however. Moscow's hard currency earnings arc likely lo decline:

Not only will the volume ol oil exports gradually fall, but soft oil markets mav svcll keep real oil prices from increasing for several years

Cas exports will grosv substantially if lhe pipeline To Western Europe is built, but will al best only offset decreases in oil exnorl earnings

Hard currency earnings from arms sales are unlikely to increase much, because Third World el. en is will be less able to pav

from gold sales are allcclcd by fludua-

r- sv.iritl ct-. win., main .t' -I

exports suffer from production problems or an inability to compete in Weslern markets

k'tile prospects for hard currency earnings mean that any attempt loubstantialcase in imports svould quickly push up harddebt Using credit lo maintain lhe current level of

SECpi

SEC/ET

wouldoubling of Ibe Soviel debtesultingoubling of lhe debt service ratioevel which would cause concern in Western financial markets. Thc Soviets havebeen concerned about their debt service ratio and creditworthiness and ihey could ameliorate their credit crunch somewhat through gold sales, barter trade, or some diversion of oil exports from Eastern Europe to Western markets.

Ji. Soviel Perceptions of US Vulnerabilities and Weaknesses

he Soviets nevertheless view Washington's ability to raise lhe economic and military costs of lhe East-West competition for Moscow as being subject Iu competing US domestic economic priorities and lo reluctance on the part of US allies to incur the costs of increased defense expenditures, deferred economic opportunities, or increased tensions with Moscow. Soviet press commentary has focused heavily on thc "peace movement" in Western Europe (which has been encouraged by thc Soviet Union both openly and covcrllv) arid more recently on the nuclear freeze movement in the United States itself, professing to see Ihese phenomena as increasing thc pressures onto resume lite slrategic arms dialogue and lo restrain planned weaponsn addition, some Soviet analysts have argued privately that economic and polilical problems willurtailment of lhc more threatening dimensions of the US arms effort.

rowing unease within Western Europe over the perceived lack of US commitment tontml ami US allies' resistance toward US restrictive policies on East-West economic relations are viewed by the Soviels as presenting opportunities to provoke divisions between the United Stales and ils principal allies In particular, thcus lar of US efforts to dissuade Ils Wesl European allies Irom participation in lhe Yamal gas pipeline project, has encouraged thc Soviets in lheir assumption that, notwithstanding the salience of lhe INE question in Soviet-West EuropeanUS-West European differences can be exploited lo Soviet advantage In like manner, the pipeline dcjl has probably encouraged Sovicl hopes thai USsanctions will remain largely ineffective so loni:

: Yu< oVijili mi Sovsrf rfforli lo manipuliie ttw leaer nwv-tuieni inIM2 fhe Peart Hotemenl Iniys; mm Wand ll

a* Western Europe and Japan remain available sources of Western lechnology and industrial goods.

While anxious not to jeopardize the prospects foresnscilalionS-Sovict strategic arms agreement orurther erosion in US-Westrelations, lhe Soviets have also sought loIheii determination to continue to be recognizedoequal superpower by the United States, and lo compete politically and militarily with an assertive United Slates. Top Soviel leaders, including President Brezhnev and Defense Minister Ustinov, havelhal lhe USSR will match any US military buildup Such remarks, notwithstanding theirvalue, are meant as serious statements of Soviel intent Moreover, these statements have becomemore explicit references lo Ihc opportunity costs of increased defense spending for the Soviel economyhole They suggest, in luni. lhat Moscow is anxious about the decisions that It feels compelled to make to counter projected US programs

Soviet attempts lo improve tlie atmospherics of its relations with Boiling, highlighted by President Brezhnev's call in2 for an endecade of hostility, is also part of Moscow's counlerstrategv Although the Soviets probably have little expectation of an immediate breakthrough In Sino-Soviet relations, their intention at this stage Is to exacerbate US-Chinese,nd lo preempt "hat lhe Soviets regard as an effort bv Washington to reinforce lhe US military presence in East and Northeast Asia, centered around lapaTiesc rearmament and greater Slno-US militarythreat that Moscow has labeled Ihc "Washingloii-Bciiing'Tokyo axis'

In many respects, however, the Third World looms as the testing ground for Soviet efforts to blunt what Moscow sees as resurgent US global activism. The Soviets continue lo support the expartsionisl ambitions of regimes such as Libya and Vietnam, and to arm ami fimil insurgent movements such as SWAPO and the Palestine Liberation Organi?.alion. Thc Soviets also have ionubt to iiiuraliali' ihcnitcivo with the anti-4mcric.ui regime in Iran, arid the invasion of -Vlghtini-slan raises ihc ixvsibilih of luither Sovietiel ion lo setiirr; icciomil advantages elsewhere in Soulhu'Cst Asia

21 Another (rouble-some indication of lhe direction

America. Here. lite Soviets have deepened their political and military mpport for thc self-styled Marxist retime In Nicaragua, and are continuing to underwrite Cuban-supported insurgents in CIThe SovieU have increased the levels of their miliUry deliveries to Cuba Itself, including theshipment of advanced aircraft, which have raised questions about the Soviet interpretation of2 US Soviet understanding prohibiting theof certain types of offensive weaponry there Furthermore, thc SovieU appear to have raisedIhe specter of Soviet medium-range missile deployments lo Cuba, In the form of Presidentrworiouncemeiit that the USSR would put the Uniled States In an "analogous position" if NATO proceeded lo Implement Ils plans to upgrade its theater nuclear arsenal Although Brezhnev'swas most piobably Intended more to stir up US anxieties than to signal Moscow's intentionove. II waseliberate escalation of verbal tensions between the superpowers.

many uf those actions are. in essence,of previous trends in Soviet policy, theyMoscow's determination to contest aUS global strategy by exploiting whal itas US regional vulnerabilities and. moreby challenging US interests even in areasUS security concern

II. The Noture of the Soviet Chollenge A. The Soviel Miliiary Buildup

military buildup under Brezhnevthe enhancement of key elementsmilitary powei such as lhe expansion offorces and continued heavy emphasis onICBM* In addition, Soviel developmentscontinued deployment of the Backfireand significant improvement of Sovielnuclear systems, highlighted by thcofIRVrxlobileby llie introduction of newtactical ballisln missiles IV Soviet, have aboinsustained effort lo enhance Iheand flexibility of thrir generallot use in either nuclear or nonnuclearin Europe and along the Sow-Sovietthese oVvetomenti have somewhattbe Soviets capabilities lor protecting theu

mllilary forces into more distant regions. This is particularly evident in lhe expanded capabilities of the Soviet Navy and the incremental modernization of Soviet airlift and airborne farces Although the Soviets have not developed forces specifically for overseas operations, thev are clearly interested in developing the capability to project forcesodest scale into the Third World, both lo deter US military action against Soviet pro ilea and clients, and to assure the favorable lesolutkm of regional conflict

Figure I

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Sonet Ship-Days In Distant Waters, by Region.

LJ hdhOmra Hi Indian Ovon

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SEflREI

Stralegic Nuclearbc balance oJ strategic nucleai forces Iscritical Index for Moscow's assessment of relative military power between the United Stales and the USSR.1 the USSR further improved the Writing power and survivability of its stralegic mtcrcortfinental and intermediate-rangeoffensive lorces. made progress in overcoming some of the weaknesses of Ils strategic defenses, and Improved its supporting command, conirol. andsystems.

> Thc Soviets believe thai in tbe preseni US-Sovtet strategic rcUtionshlp each side possesses Urate gle nuclear capabilities lhat could devastate ibe other after absorbing an altack. Soviet leaders state lhat nucleai war with thc United Slates wouldlas-lioplte that must bef possible and lhat Ihey do not regardonflict as inevitable.(hey view nuclear warcntinuirxg possibility and have not accepted mutual vulnerability asdesirable, or permanent bans for the US-Soviet male gic relationship. They have been willing to negotiate restiamls on force improvements and deployments, when it selves their interests. They prefer possession of superior capabilities to fight anduclear war with lhe United Stales, and have been working lo improve iheir chances of prevailing shouldonflictenel in their strategic thinking appears lo be that lhe belter prepared lhe USSR is to lighl in various contingencies, the moie likely II Is that potential enemies will bo deterred from initiating atlacks on the Soviel Union and ils allies and will be hesitant to counter Soviet political and military actions

he Soviet* haveigorous weapon devflopmenl program They have

Extensive research and development programsv4iinil technologies such as directed etiergs weapons and iionacioustical antisubmarinetechniques

Several new or modified land-based ICBM pro grams,obile system, in advanced sluges of pieflighl dcvclopmrnl

A new strategic bomber alio enlerlrig thc flightMage

oviet Cavabihun jot Smieew Sueleo' Oi/iitf.olumeath Ititw

SJJ*

ew class of ballistic missilethe Typhoon, which will enhance theand survivability of lhe Soviet sea-based strategic force

Been modernizing their existing antiballistic(ABM) system around Moscow' since

Together wllh existing options, such as increasing. Ihc number of warheads on heavy ICBMs. the Soviets probably believe that thev are well positioned to compete strategically with the United Stateson-SALT environment, at least over thc next three to live years

he Soviets nonetheless have hedged against thc inherent uncertainties of thc stralegic armsthrough par Udon in an anus control dialogue with the United Slates. They have remained within the limits imposed byABM Trealy and Interim Agreement) and most of lhe pecwruons of lhe unratified SALT II Trealy. hoping to induce similar restraint on the part of Washington. The Soviets have not increased iheir strategic delivery vehicles beyond ihe number eitant when SALT II was signed, but ncithri have they reduced to the aggregate foice levels called for in SALT II They value the stralegic arms dialogue because

Itorum for attempting to limn more threatening US systems while preserving areas of Soviet strategic advantage

Ileasure of stability and predict-ilnliii on an otherwise unregulated strategic aims competition

It accords lo the Soviet Union the sytiilwlic stalure and prestigeoequal superlong with the United States

Tlic very eiistence of tlie strategic arms dialogue is viewedontributing factor to anphere in the Uniied Stales that is critical olUS strategic weapons programs and gene rain lc-mpimrtneof increased defense spending

In addition, lhe Soviets probably hope to use lhe bilateral dialogue on strategic arms loilivcr-geui srvuritsof the United Stales ami ii* priiHtpiil iilliw.

cnernl PUtTOil Forces. Thc sustained ex-(Mttnon and modernization of Soviet general purposetvnl)onal and theater nuclei.*ine broader aspccls ofiliiaryto Use United States and its allies In the coft.riiiinrul area, then-pjt.Jrd Iheir already large ground and cactical air forces and introduced modem systems, some of them equal to or Miperioi to those of NATO The Warsaw Pact's military potential,ffected by it* pohtsval eoisessofi Pact performance on the field of ould be heavily Influenced by the altitude* -liicneuol the non-Soviet armies, which have iveii jvuened nuiuroth combat and support, set aiemodern lhan ihose of tlie USSH Moreihe solidailly and enllumastn tluil they would nhilni in lumbal against NATO, under MMre luoblemaik

se Soviets also maintain large lorceshina Since lhe, the number ol gnmiid

fnrce diviiioii*he Sino-Soviet border hasand total ground force manpower has more than tripled to0 men

hc persistent Soviet effort to upgrade general purpuic fortes demonstrates Moscow's -mention uf dominating the critical regional militaryentral Europe and along the Sino-Soviet frontierotiylsination of quantitative andorce impingement* The effort to improseommainl. control, and combat capabilities of Soviet I'.ne* abo appears lo be aimed al increasingliititvlfective control over ihemKitcntial iwith NATO escalating from coo*en tiuul to theater nuclear warfare In addition, the Soviet* have sought loommand stiintiire ilu! svmild allow them to conduct mullllhi-alcr operalions and lo mini mire the needrawdown ol lure* orugmf leant dcgiadation ol logistic support in one theater to support combat opei..liuns tn

"1

u

he breadth of Soviet general purpose lorce activiiirs also testifies to tbe eomplenty of tbe geopo-liticat threat environment as seen fiom Moscow, which is accentuated by historical Soviet concernswc-tiiculer war in Europe and the Far Easi These concerns in lurneeo-gnilion thatoperations agamst NATO and majorgainsi China would present foimidable logisticunci lhal transpoitalron syslerns wouldo sustain forces in both thralers Severeo be encountered if lhe Send*imultaneous militaryurope and the Middle East.

B. Force Projection. Proxies, and Militory Activities in the Third World

he USSR has developed limited forces for military operations beyond the Eurasian periphery Thc Sovietsizable permanent naval pros-ence in the Mediterranean and the Indian Ocean, and regularly deploy small naval groups lo West African waters and lhe South China Sea. They have access to air and naval facilities in all of these areas, as well as in Cuba The only Soviet ground lorce unit outside of the Warsaw Pad. Mongolia, and Afghanistan is the Soviet biigade in Cuba On the other hand, the Soviets have demonstrated an improved capability to transport and sustain, in lhe absence of effective local opposition, proxy Intervention forces In Angola and Ethiopia Similarly, the Soviets have been willing on occasion lo use naval deployments lo signify their political support for clients and friendly regimes, or lo demonstrate Soviet interestegional conflict (See chart on "Tiends In Soviet OutNaval Deploymentshe Soviels also hope to capitalize upon opportunities to gain access to facilities for naval aircraft and ships

he Soviets also realize direct militaryfrom their presence in the Third World. Thevargeapabilityr.tihe UnitedarofT faculty and regular patrols by Soviet reconnaissance aircraft along the US coast The Soviets also conduct regular aerial reconnaissance and naval patrols from host bases in South Yemen. Ethiopia. Vietnam, and Angola Over the past two yean, the Soviet, have alto made use of port facilities in Aden and shore facilities at Ethiopia's Dahlak Island in the Red Sea to help sustain (heir naval presence in the Indian Ocean

II Arms sales and associated training and advisory jiackatsctam instrument of Sovicl policy in the Thud World (See appended table on "Soviet Arm* Sales lu Thud World Countrieshile such aid does noi Met warily translate directly into political Imer-Jitr. it usually is the key.lone of Soviet relations wllhCs and with revolutionary and insurgent group* lile SWAPO and the PLO The apparatus for admims iciiug these programs is highly centralized and mcases can be very icspunsive Deliveries can bt accelerated by drawing on stockpiles or even piithnit

I Figure 4

from active Soviet units Ttaliiinic amiare virtually always tied to arms la lev and currently thrie are mote0 Soviet tnihlsr* advisers and technicians throughout thc Third World (Sec appended table on "Soviet Military Technicians in Selected Third World1 "J

SS Soviet arms deliveries to the Third World conattern that began3 when aims sales became an nii|ioitant souice ol hard currency lor the Soviets TI*ainsarger volume ol weapon* sold and an SO<pciceiil rise in ruble prices for military hardware. Aside from political considerations. Soviet weapons, even at the higher prices DO*ave been accepted because Moscow isand able to deliver quickly large quantities ol

modern military hardware. Ucspllc Soviet interest in garnering hard currency from arms sales, Motcow remaimases where il perceives poliiical advantage, lo make major corieessiorn. such asrepayment periods and payment in soltns. combined with their apparentj'Iows the Soviets lo continue to depict arm* transfers and training a*f wltdants with the Third World

.lb Another trend in Soviet Third Worldhe continuing use of proxies arid otlier interrnedurics. together with covert Sonet involve merit in supporting insurgent groups and in aiding tlie militjis ventures nl client or dependenthile the Soviets mil iheir allies arc jointly involved

I

SEGJftT

urc 5

Id several Third Wotld Mutes, the proxy relalionship applies most directly to sotnl venture* In Angola and

Ethiopia. In both of ihese countries, the Soviets supply most ol Ihc "capons, materiel, and logistic support for Cuban comorces. Thc Soviets transported lhe Cuban intervention forces into Angola and Ethiopia, and Moscow ilsoll maintainsiliiaryin each of these stales For the Soviets, the proxy relationship minimizes the level of direct Sovietwhile achieving Soviet aims and ptoircltng the image of "socialist solidarity" with thc recipient regimes The Soviets have transshipped weapons to Nicaiagit* via Cuba and have also been involved in covert military suppori lor revolutionaryentral America andmall contingent of Soviet military technicians is also known In have serviced Lihvan miliiary equipment in Chad lolluwini-the Lihsau intervention in that country in0 Along with thev efforts the Soviets ate involved with allied or Inendly governmentsrtain I'lileslutiaii groups. South Yemen, Syria, andin turn directly or indirectly aid lhc subversive i* lerrorist aetiv ilicsroad spectrum of violent revolutionaries

1

C. "Active MeosoreV' ond Dipiomocy

heretrong linkage between Sovietactivitiesroad range of pseudo-official and covert activities thai the Soviets themselves refer lo as "active measures" Overall coordination ol these measures Ii the responsibility of thc Inlernationul Department of the CPSU Central Committee- Soviel intelligent? personnel are the principal executors of So< iei "activelthough we believe th.it on occasion other official and quasi-official lues abroad are involved in such activities Weestimate that approximately one-third of Soviel diplomatic personnel abroad are staff officers of the Committee for Stale Security (KCB) or the Mam Intelligence Directorale of thc Soviet General Stall tCRUI

'A "Adue measures'" are in large pail designed tn (oint>lenlent Soviet diplomatic overtures andb os Theihread that runs through alltrv* measures'igh degree of itsanipulationc, either to disguise Soviet imnlvi-ini'til or tu conceal lhc real purpose behind ao actum inoviet ciliren is overtly involved Such activrfies range from llie anti-neulron-bomh campaign

forgeries seeking lo embarrass lhc US and Western governments; from the manipulation of donl groups such as the World Peace Council to lhe operation of clandestine radio stations such as the National Voice of Iran

e believe that the USSR's use of propaganda and covert action to advance its foreign policy goals in the international arena has increased in recent years The Soviets see their relations ivith the Uniteds havingewbefore lhe invasion of Afghanistan and the advent of the presentIn analyzing the increased use of propaganda and "activee must also take Into account tlic importance Moscow attributes to the "ideological struggle" in world politics. This struggle Is waged not only through propaganda, but also with psychological warfare and subversion. Including the full range of "active measures."

III. Regionol Policies A. Europe

ver thc next three to five years, Soviet polity toward Western Europe will assign high prioritytopping NATO modernization and maintaining access to technology and credits, while attempting to sharper, differences between thc United States and its alliance partners. The Soviels view security arid tradebetween the United Stales and other NATO members as major opportunities lo undcrminr. NATO's cohesionilitary alliance and to negate the possibility that thc United States mightATO Allies in supportore extendeddt-lcnic role beyond Europe Through adroitcovert action, and intense propaganda, the Soviets hope, in effect, lo immobilize NATO's ability loonsensus on defense policy issues and lo encourage neutulist and pacifist sentiment throughout UVmcmi Europe

II. Military powci serves as Ihe loundalipn ol Soviet policy in Europe, both East and Wesi Tlie thrciii nf military intcrvcnlion was thc critic! Iht nf Soviet influence throughout the crisis in Poland, -mu i; was lhe decisivempelling the Polishoward iho imposition of martial law in Decern bet i'JMI Similarly, the changing dynamics of lln- KVt West military balance innotably Mm-cow's extensive deployments of fhent-im-di-

alr-rangc ballistic missile--have accent oa ted lhedebate within NATO over the respective requirements of Alliance arms control and defense strategies.

NATO's planned deploymentsewof intermediate-range nuclear missiles In response to Moscow's buildup is the most important issue for the future of Soviet policy loward Western Europe Moscow's massive anti NATO modcf nlzatiooreflects both concern about the militaryof NATO's planned deployments and athat the implementation of NATO's decision wouldonvincing reaffirmation of US political and military leadership within Ihe Atlantic Alliance.

Moscow's effort lo block NATO's plans has been waged primarily in Ihe diplomatic and propaganda realms Diplomatically, they have sought to engage West European governmentsialogue on trade and regional security Issues, while emphasizing that future ties to the East will be Jeopardized if NATO's modernirationmplemented In addition the Sovrets have conducted an extensive covert action campaign aimed at manipulating public opinion in thoseas lheaie seen as mot vulnerable to domestic pressures lo break ranks with NATO's decision.

he Soviets recogntre lhal West Cermany is ihr key to NATO's prospective deployments, and ihey have been particularly active In seeking In influence ihc domestic debate there Tlic initial Soviet offeievel nf Soviet Intermediate-rangend bomber deployments, should NATO lorgo rlepinvmenls ol its own, was made by President Brezhnevpeech in East Berlin Inhb offer was accompaniedrezhnev announccmeni that the I'SSfl would "unilateralh" reduce its militaryin East Germany0 men Soviet actisi lies have aho included intensive political lobbying ia inna-estarJishcd informal channels to the WestChjnceilen and io senior leaders of the nihnc Social Democratic Parts, At the sameiKsurs lo be funding Ihe anlmucleai aetisjlic*he West Ci-rrnan Communis! Parly through East German inii-rriK'dlanesumber of forgedj-rt and documents concerning NATOo emharian bolh Bonn and Washington hsw lieeit flojted in Wesl German ptess circles,nvi.'i agents

Figure 6

Soviel President Brezhnev and Wesl German Chancellor Schmidt During State Visit to Bonn,1

In their effort to discredit ihe United States and NATO, the Soviets will continue lo exploit anlinucleai and neutralist sentiment throughout Western Europe. Thcy abo see US actions ot pronouncement* on the neutron bomb and limited nuclear Ursjeting options as further opportunities lo inflame suspicions in some segment* ol West European publics lhat thr United States is seeking to limit any nuclear conflict to Euwpe

The Soviets view trade with Weslern Europe as having intrinsic economic importance andeans of increasing the distance between the United States and ib principal allies Western Europe accounted for mote thanercent of total Soviet hard currency trade1 In addition, sinceas relied heavily on European commerce toted Western trade imtrictions against il and lo enhance its influence in Western Europe al US expense The Soviets have used West European Interest* in expanding East-West commerce to substantially add lo frictions between Europe and the Uniled Stales over US economic sanction* related to Afghanistan and Poland Moscow believes lhal strensrtbened economic lies with Western Europe will further hmil LS ability to obtain unified Western restraints on important goods and technologyMoscow almost certainly eipecllarger Wesl European slake in liade with the Fast will aid ils efforts to increase US-West European differences ovei noncconoiinc luiies

he Soviet* view lhe planned natural gasfrom Siberia lo Western Europe as tbe corner*!one of East-West trade inndayor test of US and Soviet influence inhe protectadly needed source of revenue and an opportunity to move Weslern Europe away from the United States. Tlse Soviets see tho West German and French agreement! lo purchase gasajor step toward reducing US ability to restrict East-West trade Moscow probably expects lhat substantially increased ga*along with other long-term deab suchiberian coal gasification proieel -will increase the Wesl European reluctance lo koln in possible future US sanctions und exacerbate US-West European differences. The Soviets probably alsothat their greater role in most West European economies will enhance iheir potential to influence West European decision* on nontrade issues

Soviet trade with Western Europe willayor source of goods and technology increasingly importanttrained Soviet economy and to the costly military programs that it supports. Imports of civilian goods and technologysuch as Large diameter pipe and machinereduced industrialbottlenecks and increased efficiency in importantiving thc economy more breathing loom As the economy's performance continues to worsen, and as Western weapons capabilities advance, Moscow will continue lo assign fop priority to trade with Europe in acquiring foreign goods and technology in selectedh as advancedand machine tool*

Tlse USSR's growing economic involvement with Wcstei nby the gas pipeline pionct will enhance its potential to influence Weil European decisionmaking The West Europeanon Soviet gas may reachercent of total gas reiiuirementsncludingoercent in those countries actually buying the ga* This would, however mmtitutcercent of total West

'iLvtiiH-i'-itii deliver as much asQO0av ill,'iil ml iir li-ileni to Wot erahcne deliint conne .iiniiii pi nxffhfyb/d. -ill earniujltye earl.tem ciediu luve beenediu will llmnce liiiporii ofoiiimleJv ET hillim hi otoc and eoninnseni. mostly from Wesicin* Ormnvnr*1signed eonlrier*uichise gas. ind In Is. ilie Ni-ihi-iliiids. Relciom. and Aiiuilj .ictixlina

SECffET

SECBfJ

energy consumption Allhough thebelieve lhal ihey can minimi re the irnpacloviel gats cutoff Moscow piobably could cause some economic disruption in selected industries and regions by they halting gas deliveries al certain times, such as wintereriod of major economic growth The Soviets probably would not bluntlyas cutoff, but ibey could feign technical diffu ultles in gas deliveries lo remind the Europeans of theti vulnerability. The USSn will probably also derive some influence through Its importancearket for key West European industries plagued by unemployment, such ai West Or mm steel

ul Moscow's roleaw materials supplier and tod provider will not give it unlimited leverage. Although individual counlries' dependence on Soviet gas will be high, the pipeline system will pot permit Moscow to interrupt gas deliveries to one country without aflccting some or all of the others. Moreover, lhe Soviets themselves will be highly dependent on Western Europe for hard currency earnings and for some goods and lechncaogv. Cat cutoffs wouldest European lurn lo alternativeloss of revenue The Soviets will also remain dependent mi Western Europe lor much of the large-diameter pipe essential to growth of domestic gas production, thc key to their own energy'uch constraints on Soviet use of economic leverage could increase as the USSRon building up its economic relations with Western Europe

ne Smieis mint also be concerned aboul tcun-tcrcurrenls hindering attainment of then European

policies;

military crackdown in Poland temporarily reduced the inhraaaty of the anlinudearin Wi-siem Europe and has resulted in grimier West European reluctance to extend new

credits Ui Eastern Europe ami the Soviet Union

In lhe wake of martial taw in Poland aho.ud :nn i- on Security and Cooperaiion in Eu-MgaO and it* human rights provisions in particular have iifm.'ii loolilu.il embarrassment lor the Soviet Lnimi and ils allies

TU' Smiet* Uill appear lo be concerned lhal lhe Initcd Stales mas be able In sustain thcTOin favor ol actual INF deploy-

ments by the Alliance, notwithstanding Soviet efforts in lhe ongoing US-Soviet negotiations to forestall if not avert NATO deployments

- The Soviels have luten surprised by the US endorsement of thc West European-favored "zerohereby NATO would forgo INF deployments if the Soviets dismantled their exist -ing INF missiles. Soviet claims of an existing INF balance have been treated with profound skepti-enm by the West European press and bv West European governments

fi2 Full INK deployment hy NATO would be likely tooviet counter move, ostensibly designed to put US territory in what Soviet President tVerhnev lias called "an analogoushile the image of Soviet missile depiuymenls in Cuba Is immediatelyed up byhreat thc Soviel leaders would res It re lhal any effort to reverse the outcome of2 Cuban missile crisis would run an eilremclv high riskireil US-Soviet confrontation. Moreover, the SovieU have other military options short of thc deploy menl of ttuclcar weapons In Cuba that would at least partially offset NATO's deployments without running lhe riskirect confrontation with Washinglnti Such moves could include thc deployment ol Soviet long-iarace sea-launched cruise missiles, an increase in the number of Soviet ICBM or SLBM launchers, or an increase in lhe number ol warheads per missile on Soviel ICBMs Short of "analogous" measures, lhe Soviets could deploy morer shorter range Soviet mmilr and aircraft sisterns opposite Western Europe

Motal erosion of NATO's consensu* on INF oV-plos ments would be regarded by Moscowriticalefeat While the Soviets would not respond by offering new concession! ihey would probably maintain the appearance of existingwhile redoubling their efforts lo enlist West Euntpi-aiiori for Soviet positions on lhe Confer erne on Disarmament in Europen MBFR or on ii'iuoiul nuclear-free rones. The Soviets would be IlkeK Id (ednulilc their propaganda and "peace" camiuicn. (ruling to provoke furtherATO and to prompt an "agonizing icappraiv.il in WndiiiMltiui over the US commitment lo Wmleiuefense

hould ibe Soviets lail to alter vgnificamU NATO's posiiioii on the INF issue prior tu Mttgaj

deployment, (hey may seek tn focus more directly on i'v--iating ItmilS on lhc scope of future deployments by NATO. For example, (he Soviets mlnh) be willing to accept limits on their existing intormediate-runge nuclear force, possibly including lhen return forreduction in lhe scope of NATO's planned deployment* In so doing, however, ihey aie not llkaly toumerical equality that lotally Ignores French and British nuclear systems. In lhe near lerm thc Sovieis are most likely to continue to push hard for an agreement "in principle" that an INF balance exists, while carefully assessing the politicalof Washington's NATO allies to actualof NATO's modern (ration plain

B. Cost ond Northeast Asia

SS Soviel policy throughout the Far East Lsthe product of continued Sino Soviet hostility but is fuitlier defined by Moscow's related obiectis'cs of impeding Sino-US relations, countering US military activities in the Western Pacific, and inhibiting greater integration ol Japan Into US delensc strategy in North-cast Asia. In pursuit of their Interesthe SovieU continue to invest heavily in expanding their military presence in the Far Hast Recently, the Soviets base intensified their political and diplomatic activities lo exploit what thev see as pcrsislent fnctsons in US-Chinev reUlions over Taiwan and potentialbetween the Uniled Stales and Japan stemming from trade problems, disagreements over economic sane tuns against the USSR, and Japanese reluctance to accelerate defense spending

oscow's miliiary activities lo (he region have centeredajor buildup of Soviet ground forces, principally along the Sum Soviet frontier. The deploymentoastal division and air defense units to the islands immediately north of Japan sJgnah Moscow's detcrninalionaintain conlrol over these "northernhe Soviets have also modestly expanded and modcrmred their Pacific Fleet and since9 thev have increased deployment* of slii|i* and aircraft to ihc Indian Ocean andew naval presence in Southeast Asian waters and Vietnam. In addition,hird of thr sovietoice is cai'ilile oi striking China, japan, and other Far Eastern targets

hc Soviets new China's improved rctalHins ss'ith both the United Stales and Japanerious

security problem, raising the possibility thai the USSR might have to fight all three countriesonflict in the Far Mast More immediately. Ihc USSH fears this trilateral rapcinxbcment portends active US andaid In thc modernization of Chinese armed forces

he Korean situation, especially thebehavior ofong isomplicating factor in Soviet Far Eastern polks Because renewed fighting between North and South could become the catalystroader conflict involving (he United Stales and the USSR, the Soviets wouldapid cessalioii of major hoslilitio* between thc two Koreas to be in Moscow's besthe Soviet* probably would provide some materiel support to (he North bui would conclude that the risks attending direct combat suppori would far outweigh the possible benefits unless the North were in danger of lotal collapse

enewal ot lighting between China andwould lead lo increased Soviet suppori ofWe would expect the Soviet reaction to be similar to that after the Chinese attackn initial propaganda campaignubstantial increase in materiel aidanoi, which could be tied to increased use of Vietnamese military facilities. If the conflict were eomg badly for Vietnam, limited Soviet military aition against China would be po*xiblc

he Soviet Far Eastern position is furtherhi Moscow'* limited diplomatic and political llexibilitvis lis principal antagonists Thedo not even have diplomatic relatiom wiih Soulh Korea. Territorial disputes with both China and japanaior obstacle to any dramatic improvement in Soviet relations with either country Moreover, (he Si no-Sovietispute and Soviet occupation of Japan's "northern teiritonei" are Intimately linked: for Moscow lo concede on one would implicitly openisue of tlie other Finally Moscow's regional military buildup, together with the Soviel invasion of Alghanutan andupport for the Vsetrameie invasion of Kampuchea, has furthernapan, arid the ASEAN countries

til Tlie Soviets have neverlhelrss sought to mute (he political impact of their invasion of Afghanistan and tu exploit US differences with (span and Chinaeries of lecen; diplomatic initialise* In

SE/ftFr

ortheast Asia

President Brezhnev and Soviet Premier Tlkhonov calledroadening ol the dialogue on disputed issues with both China and Japan Brcihncv. inprofanedregional dialogue on mditarybuilding measures Soviet propaganda has sought lo supplement these initiative* bv emphastiing Moscow's desiieoderation of tensions and the expansion of hade Soviet overturns, however, arc unlikely to make significant headway. In fact, these efforts have linen hindered in some ASFAN states by recent exposures of KCB operations.

e see htlle likelihood that thc Soviet Wader-ship will reverse Ibe momentum of Moscow's military effort in thest Indeed. Soviet concerns wiih Sine-American ties and with the potential upgrading

Figure 8

of Japan'sie rise Force have piobably already been factored Into Soviet defense planning.adical change in Chinese attitude* would be likely lo produce incentives for Moscow seriously toeconciliation of differences with China.

C. South and Southwest Asio

oscow's decision to invade Afghanistan was in manyatershed in US-Soviet relations The Soviels presumablyemporary setback in bilateral relationships, but were clearly surprised bv the intensity of the US reaction particularly the grain rrnhaigo The Soviets also appear to haveIhe miliury cost of their Intervention, expecting neither thc accelerated decline of the Afghan Army

not lhe protracted war of attritionined resistance fnrce

oscow's inability to consolidate the Soviet position in Afghanistan has led to changes inmet hodsodest increase in troop levels Since1 the Soviets have engagedimited augmentation of their forces there, bringing the total Soviet force level to. The Soviets appear reluctant to deploy Ihe considerably laigei force needed touick end to the resistance and to seal off Insurgent movemenis from Iran and Pakistan

he Soviels have sought to alleviate theirproblems within Afghanistan bv trying to end Pakistan's role in aiding the insurgents The effort has involved both pressure and blandishment The main blandishments have been continued Soviet economic aidakistan and Ihe promise of Afghanistan's recognition of Pakistan's version of their disputed border. The pressures have involved diplomaticas well as increased support for some of Presidentomestic opponents. There have been infrequent raids against Afghan insurgent positions in Pakistan by the Soviets and Afghans While Ihe most likely course of Soviet action will remain diplomatic pressure,increased aid to Zla's domestic npponenlsoviel oplio" We cannot ruleimitedinto northwestern Pakistan lo destroy insurgent bases. But any increase in Suvici military activity in this area could complicate Soviet relations with India.

he maintenance of good iclallorts with Indiain one ol Moscow's primary goab in South Asia. Moscow will continue to offer sophisticated weapons to India al concessionary rates in an effort toarming of relation* between New Delhi and the Wet. and ihe LSSH is likely to remain India's largest foreign weapons supplier Nevertheless, in recent inn India hasajor arms deal wiih

the French, and has taken laitlcul step* to improve relations with Pakistan. China, and the United Slates. Thc2 visit of Soviet Defense Minister Ustinov io New Delhi failed lo block lhe French dead.

he overall volalihty of the region will coniinue to create opportunities and dilemmas for Moscow. The Soviets have been seeking to improve their relations wiih Iran while sustaining Iraqi dependence on Soviet arms supplies Soviet options will he stronglyhy events within Iran, and lianlan actions within the Persian Culf region. The Soviets clearly lookost-Khomeini regime for more significant opportunities to improve their position in Iran, but ihey also appreciate lhat political evolution in Iran is highly ur.pi edict* ble

o long as the situation in Iran remainsstable, Moscow almost cenainly will adhere lo thcas followed since the revolution- socking lo improve ecotvomle und miliiary ties, hoping lo forge an arms sale relationship with Tehran, nnd encouiag-ing the Khonwuni regime's anti-US orientationwill seek the best possible relations with Tehran and will advise lhe Tudeh (Com mu rust] Party lo do the tame tut Medina ting Soviet use of "active mea sares" in order lo avoid damaging relations with the regime and risking severe repression cf Tudeh Al ibe same lime Moscow will seek lo strengthen the position of Tudeh

bfl Should lhe polilical situation in Iran detenoinle dramatically, producing internal chaos and possible fragmentation the Soviels probably would undertake large-waleanie lo leftist and pro-Soviet Iranian elements weking to manipulate events touos orar with attendant disruption in the Soviet-Iranian border areas could lead MmcoH lo opt lor limited military intervention at leal in li-ne areasS military Inciir-siou mln li.ni or thc threat ofove couldwirl iinlll.iiv response or preemptive Intel vent ion

StrC

Figure 9

Middle East-South Asia

D, Tho Middle East

Thc Middle East ri'main* Ihc most volatile area of US-Soviet regional interaction with the greatest potentialirect confrontation between Moscow and Washington Notwlttotanding US success Inthe Camp David agreement. Soviet entree into the region is ensured by the polarization of the Arab states over tbc Camp David process itself, continued US military support for Tel Aviv, tbe cernslence of tbe Palestinian problem, aod recurrent hostilitiesIsrael and its Arab neighbors. Despite Moscow's extensive miliiary and political commitments lo Egypt's regional rivaU. Libya and Syria, tlse Soviets will continue lo seek improved relations with Egypt because of its gcostratcgic posilion and historical role in |he Arab world.

Ultimately Moscow's Influence throughout the Middle East is heavily dependent on ils ties to the radical Arab regimes of Syria, Libya, and Soulh Yemen, in addition to lhe Palestine Liberation Organization These relationships in turn are sustained primarily by lhe Soviet arms umbilical and advisory presence.

oscow's ability to supply arms and military advisers to clients, however, contrasts sharply with the himutf Soviet diplomatic options throughout the Middle East Moscow's primaryhai lhe United Slates might still be able toiddle li*:; -rUl--rn- thai wi lid cimir

Figure 10

11 li

Snviei President Brezhnev and Libyan Chief of State Qntlhafi In Moscow,1

isolate the Soviet Union In the region, riot withstanding the Israeli aciion in Lebanon. Thisased on thc recognition that only Washington has the diplo-matte credlbilily and influence to nestotiate simuha-neosisly wiih Israel and llie principal Arab parties toward any potential pence arrangement. OtherSoviet liabilities are the paucity of Soviet economic aid and thc region's economic links to the West, the dependence on military assistance to sustain Soviet influence in the region, and the ideological antipathy of Islam toward Cornmuniun

o preserve Soviet diplomatic equities in Ihe region. President Brezhnev In1 outlined Ihe Soviet Middle East pence plan, centeredroad international conlerenee of all interestedincluding the United Stales and lhe USSR The Soviet plan has not been well received, however, even by Moscow's closestas Syria and thepally because it explicitly recognizes Israeli right to exist More active Soviet efforts have been directed alroader coalition among radical anti-US Arab regimes The Soviets played an indirect and behind-the-scenes role in the formation of (he tripartite security pact among Libya. Ethiopia, and South Yemen, sutned Inlthough Soviet hopesroader alliance including Syria, the PLO. and Algeria have not been realized. The Soviets are nevertheless encouraged hy the deepening hostility between Iran and tlse pro-Western Arab stales of the Persian Culfonsequence, the Soviets may seek to encourage evolving ties between Iran. Libya, and Syriaa means of countering US influence with rnoderatr Arab and Culf Bates, and possiblyIra man Soviet relationi as well

ecent Soviet pulley In the Middle East hascharacterized by Moscow's attempt to wooas lotdan and Saudi Arabia The Sovietsbetween these regimes and

Washington attempting in particular to capitalize on frustrationAmman and Riyadh over the lack of progress on lhe Palestinian issue and thru sense of vulnerability lo Israeli military action The Soviets have concluded an important sale of mobile all sle-lense equipment tufirst ever to thaiS refusal to supplyap on* Tlie Suvtets have continued their private lotibsing for the etiaWrsbment of chploautic rebtions with Satsdl Aralsiaimited Soviet arms diem,eii miivtcdis lobbying ef foil

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Thc Israeli invasion of Lebanon huSoviet policy in the region. Over the long run, the SovieU may benefit from increased awperation between radical and moderatencreased Syrian dependence on the USSR,ossible weniening of Egyptian political Unks to the United States. In the near term, however, the Lebanese crisis has ledolitical and military setback for major Soviet clienu, Soviet diplomatic isolation from the keyand Arab accusations of Soviel perfidy. Syrian inability successfully to utilize Soviel militarycould lead some Third World states to question the effectiveness of Soviet arms and training programs. Above all. the Soviets are faced with lhe prospect of US lorce deployment to monitor any politicalwhile Moscow remains on the sidelines

he Soviet* will continue to politick hard against US diplomatic initiatives lhal exclude Moscow or any moderation of Aiab-lsrae.lt tensions thaito diminish Soviet influence in Ihe Middle East Thc Soviets clearly do not wish to encourage Arab-Israeli hostilities lhat mightS-Soviet crisis On Ihe other hand. Moscowontinued poUrtration uf polilical "pinion within the Arab camp over the dispute with Israel and US peace initiative* as Ihe best means of ensuring the dependence of radical Arab regimes on Soviet arms and diplomatic support Tbe task of Soviei policy, therefore. Is lo frustrate US efforts lo moderate lhe Arab-Israeli dispute without provoking another Middle East conflict The Inherent difficully in this pursuit increases the dangers of miscalculation wiih respect to Moscow's ability lo constrain iu Arab clients militarily In like manner, it increases lha pmsibahty of an unwanted regionalescalatingS-Sen-set confrontation

E. Africo

oscow's growing African Involvement reflects bolh opportunism and Ihe longer lerm objective of channeling the political currents of postcolonialin an anli-Western dliectlmi MoreSoviet goals in Africa are served by theof Mincow's slrategic military presence in the form nf ait and naval deplovmenU off West Africa and in the Indian Ocean

s in lhe case of its Middle East involvement. Moscow's influence inn large part depend-enl on arms sales and military aid Politically, the

Soviets benefit by supporting bbek nationalistmovements and by exploiting opposition to South Africa. The principal weakness of Soviet policy in Africa remains iu relative lack of diplomatic orlleiibility in contrast lo the United States and the West Soviet involvement in Africa is character-lied by Ihe dependence of Moscow's principal clients. Angola and Ethiopia, on the direct presence of Soviet. Cuban, and East European military personnel to sustain the regimes of those countries against internal armed opposition. Without Soviet and Soviet proxy

Figure 11

Pravda Cartoon Showsropping "Made in USA" Bombs on Lebanon

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support, ihr regimes would either Jail or their pro-Soviet character would he substantially changed

policy in thc Horn ol Africa hasthe Ethiopian-Somali conflict and theneed for Soviet military aid lo meetThe Soviets have welcomedto undermine Somalia and Sudan as countersincreased US military presence In thethe Soviets may see renewed fighting alongborder as pushing Somalia closerUniled States, thev have nonetheless publiclyEthiopia, claiming that the conflict reflectsSomali opposition to tho Siad regime and itsto the United States

Africa is the principal focus ofinteraction, centered aiound lhe problemIndependence and the conflict betweenpublic of South Africa and the "Frontline"stales The Soviets remain deeply suspiciousUS- and Weslern-sponsored initiative to fosteruf an independent Namibiaroader regional settlementi mis opposed to linking any settlementwtth the withdrawal of Cuban forcesa step which Moscow believes couldtn lhe emergencero-Weslernin Angola

he noticeable increase in Soviel propaganda alleging US South African "collusion" and "shared objectives" is aimed at diminishing Washington'scredibility as an obsective broker in Namibia Soviet propaganda linking Ihc United States to thr abortive coup in Seychelles, as well as to lhe Soulh African-backed insurgencies hi Angola and Morarti biquc. serves lo reinforce the image of US-South African collaboration

oscow had made its most seilousefforts on issues lhat directly impinge on key actors in the Namibia talks Forlsinforon operation alleging US training of Angolan resistance lorces in Zaire was clearly inlended to raise doubts in Luanda aboutust worthiness and to recinphasiie Angola's dcpeiMience on Soviet military assistance Soviet inspired diunforrrsalion also mav have conttibuird lo the pet iodic strains in US-Zatnbt an relations. Moscow probably hopes thatears ol alleged IIS involvement in subversion will

translatereater skepticism of US negotiation efforts in Namibia

aving clearly expressed Ihcli reservations about lhe US and Western initiative and iheir position on the Cuban troop issue, the Soviets will closely monitor how the Frontline States, particularly Angola, and SWAPO proceed from here. Even If lhe Soviets find the evolving settlement tolerable, tbey willseek to fuel tensions and suspicions to ensure that the final accord is reached in an atnsosphcie of antagonism ami distrust rather lhan reconciliation The Soviets would hope that. In such an environment, the Namibian Government would turn to the USSR for support.

St If the present US initialise collapses, or is indefinitely dragged out. tbe Soviets will be quick to remind the black Africans that their warnings and suspicions were justified. US "hyprwrisy" andwith South Africa will be highlighted in major propaganda campaigns aimed at further discrediting US Intentions In lhe Third World. Moscow may push for United Nations unctions, hoping lo force the United States into the difficult position of voting for or against Soulh Africa

uccessful settlement would enhance the United Stales' and the West's standing in black Alis long as South Afiica remains under minority white rule, however. Moscow will Isave an issue to exploit Given black African expectations that thein particular lhe Unitedthe leverage to force change in South Africa. Moscow will be ableontinue to cite US collusion with Pretoria Moreover, the failureamibian set lieither lo lead to regional economic and political development, or lo end Pretoria's aggressive behavior io the region, would provide the Sovietsew eipporturoty to reassert their influence.

F. Cenlrol ond Soulh America 1

oviet activity and interest in Latin America have Increased signillcantly In the pasl few years, and in the aftermath of lhe battle for the Falklands the Soviets and their Cuban allies will be probing for new opportunities oscow has moved more

mxtf dnailnJ atveaaant ml SovSrt rasttcinW muniAt Snarl Palkcitt and ArrMnei mAmerica and the CanUtwi. Jul* IWS2.

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13

Nicaraguan Leader Daniel Ortega in Moscow,2

aggressively lo exploit opportunities presented byCorchange In Central America ami lhe Caribbean and bv lheof La Iin Amen can slates to ileal with Ihe USSR and its allies The Soviet Union has helped lo consolidateegime* in Nicaragua ami Crenada. has providedtiiiousli proxies and other lliirdto rrvolultonanes ehcwheie in Latin America, and has intensified itsevelop late-table political and economic tie* with such countries as Argentina, Brazil, and Mexico

ulsaentral ink in Soviet relationslni America not onlyependent client serving Humnterest. iridependeiit actor iiifiWiiring Soviel policies ami tactics. I'niil Castrn's vigomus suppnil of Nicaraguan icvolullonar ies. for eiample. wasuban initiative, and lhe Sal id miictoryarked impact on Soviet attitudes and pnliciev Soviel leaders came to share

ssessment lhat tlie prospects for the success of revolutionary forces in Central America were brighter than they had earlier calculated. Moreover, the Soviet* appear lo assume lhat direct military intervention by the United Stales in support of threatenedwould onlyroader tide of arili-Americanism and revolutionary ferment throughout latin Americahole Abo. the Soviets may doubt that Washington would be able loomcslic consensu* in favor of miliiary intervention in Central America

evertheless, the Soviets probably believe that further Soviet and Cuban support of revolutionary activity in Central America could precipilate US miliiary action againstevent the Soviets clearly wish to avoid. Thus. Soviet policy in Central America is to promote the fortune* of thc revolution-iiry left whileore extensive or direct coanmitmeni lhat mightS military counter move. This clement of flexibility in Soviet policy is reflected in lhe nature of Moscow's response lo the Reagan admintstration's heightenedlo stability in El Salvador.

hile encouraged about lhe prospects for the revolutionary lefl in Central America, the Soviets do no! wish lo leopaidire evolving economic and political ties more broadly throughout Latin Americaore assertive or opportunistic involvement in ihe region In Argentina. Brunt, and Peru. Moscow's policy has aimed largely al cultivating positive siale-lu-slate relations This approach has etnphaured trade etpaiisiort and readiness to sell military hardware

is becoming an important Soviet trading

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Tlie Sovietsubstantial arms supply rela-tioriship with Peru

Argentinaaior exporter of grain and beef lo ihr- LSSR ami. in the wake of the Falkland Island' diipute. could conceivably become an

ilupoid'i ol Sm ict arms

hr Soviets further recognire that with theptioii of Cuba. Latin America remains rcitttt rlv peripheral to Soviet gc-strategic concerni Moscow therefore can afford lo be patient ami temporise in itv support for thc radical left Even in Nicaragua, where Moscow clearly unite* toencourjeef lhe current regime thc S'imi-Iv hate been careful noi In become involvrd

SEOREI

an entangling commitment The SovieU havebolh economic and mlhlarv aid to Nicaragua but appear lo be wary olreater economic burden in the near term

Bl To support Latin American revolutionary movemeiiU while dbtancing lhe USSR from what would be seen as especially provocative acts, the Soviets are relying eitensively on the use of proxies and other third parlies. Within lhe region. Cuba has recenily been joined by Nicaragua in playing this instrumental role. Nicaragua malnlaim training camps for Latin American Insurgents and actsunnel for transporting eiternally supplied arms into El Salvador.esserArms and olher support arc shipped from orumber of countries. Otber actors encouraged by Moscow include most prom mentis the PLO, bulVietnam, and several East European countries have also participated Latin Americans are lent for paramilitary and political training to sites In Cuba, the Middle East. Libya. Eastern Europe, as well ai lhe USSR

IV. Policy Options and Policy Dilemmas A. The Strategic Outlook

he pohev environment (or the Sovietover the nest three to five yean will heprimarily by the interplay between an ongoing political succession, continuing slowdown in economic growth. and anpotentially moreenvironment Declining economic growthfurther Intensify competition for resources and will imse increasingly acute policy dilemmas for the Soviel leadership Policy divergences over aof economic and international Issues could entail significant comeqvenccs for Ihe conduct of Soviet loreign policy Nevertheless, no Soviet leader is likely to open himself lo the charge of undercutting national security needs as defined by the military establishment, through advocating absolute cuts In the defense hodgel during an interregnum Funhermoce. Soviel leaders olill be confronted with the problems olialogue with theiradversarysackgroundutual arms buildup, the threat of lechnologica] surprise,istrust on both sides engendered by lhe collapse of the attempt ai limited political accommodation duiing Ihc previous decade

hc Soviels viewerious problem Ihe prospectung-term mutual arms buildup which threatens to tax Soviet ecortctfnic resourceseriod of domestic polilical uncertainly. Themiliiary challenge that lhc United States poses to lhe USSR, specifically In lerms of Strategic nuclear pitvrams planned for the latter half of, is an ominous developmenl for the Soviets But. in Moscow's view, the realization of US plans will be strongly dependent on dornestic political and international factors affecting US policvmaking. In any event, lhc acciimiibled miliury assets of Moscow's militaryover lhe past two decadesource of Soviet confidence

I is doubtful however, that Soviet leaderswindow of opportunity" based on any overweening confidence in present Soviet strategic nuclear forces relative to future prospects From the perspective of the present and probable future Soviet leadership, there will remain important deterrents to malor military act lorn These include the dangersirect conflict with the Uniied States lhat could escalate to glottal proportions, concern about theof some Easi European allies, and an awareness of the greater Western capacily to support an eirund-cd defense effort. These coocerre do not preclude action abroad bul ihey act as constraints on military actions that could leadirect US-Soiiel confrontation.

tralegic nucleai aims negotiation* are Itkch loentral Soviet priority even in aHiv regime. Moscow will continue io see tlie stralegic ntisclear arms control processean* nl moderating brnader US political attitudes tow ard the USSI1 ami of reducing lhe posstbililyS lechno-logical breakthrough lhat might jeopardize Moscow's strategic nuclear status Allhough anxious about lhe potential technological dimensions ofreim-igoratrd strategic arms competition, immediate costareactor in tlie Sovietgiven declining eionomic perforrnance Spending fnr strategic nuclear fotces constitutesS peic titie Soviel defense budget and even an intensified effottori-SALT environmentiliispropc-rtionate increase in thb ansount In addition, stralegic nucleai force requirement! arr les* labor intensive than other miliiary services, and Ihe high Ircliiiotoiiv production resources devoted to

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nuclear systems are less easily transferable to civilian purposes.

A more compelling economic Inorntive to arms control talks, however, could be the cost avoidance benefits. In the absence of an arms control agreement to channel and limit US weapons developments.could see Itself as locked into spending even larger sums on developing new sysiems andreater number of them- Such concerns, particularly if they were reinforced by the feeling that the United States was siscccssfully reversing the overall military trends of thc Last decade, could, in turn, add to thc impetus for strategic arms control agreementsthe more threatening US systems The Soviet offer toap on Typhoon submarinein exchange for Trident constraints si anof the lype of limited accommodation the Soviets could accept. Such an accommodation woulda reduction In Trident capability which their own defenses could address only at great cost and in the indefinite future *

II the Soviets should cooHude that there is no pros pert in the near term for an advantageous resultenewed strategic arms dialogue withthen they may decide to ignore SALT constraints Among the earlicsl indications that thev had decided to do so would be (he failure lo dismantle older systems as new ones are deployed, the telling of ICBMs with more reentry vehicles lhan permitted under SALT II limits, and the testing oi mote than one new type of (CUM Moreover, they an- well positioned for potential force ripaittion and could increase the number of MIBVed ICBMs, continue SSBN produc lion without any dismantlement of older missile launching submarines, increase Backfire production, and test and deploy new strategic systems Some of those actions, such as the failure tu dismantle older missile submarines and land-based missiles inwith lhe putative SALT restrictions, are revers ible The Soviets might undertake such measures to pressure the Uniled Stales either lo lefiain from certain weaiams deployments or to induce Washington In resume the strategic arms dialogue within lhc sseneral framework of previous strategic arms agree nH-iitN

sVmlrr! liiseuuioofvewi"'Mleglc3 March IUH2

efense-Economic Trade-Off*

The Soviets recognize thai military power is their principal foreign policy asset and that conlinucd high levels of dofeau Inveslrncni are necessary lo sustain the present dimensions of Moscow's global role. Despite declining economic growth, we have seen no evidenceeduction in Soviet defense spending. On the basis of observed militarynumber of weapon systems in production, weapons development programs, and trends In capital expansion in thc defenseexpect that Soviet defense spending will continue to grow at about its historical raleear at least5

We climate, on the other band, that annual Soviet economic growth will beercent in the, and will remain near lhc 1level throughh Five-Year. If defense spending Is to continue increasing atercent per year, the defense share of CNPwill be at leastercent by mid-decade If these trends are not changed inh Five-Year Plan, thc defense share of CNP could approachercenthis level of military spending would drastically reduce llie ability of the Soviet leadership to allocate additional resources lo Investment and consumption Under these conditions, continued growth in deleiis* spending at its historical rate could lead to declines in living standards. Per capitaprobably would conltnue to grow marginally fnr tbe next few years, hut. by mid-decade, would almost certainly be in decline

is likely that the Soviets' perceptions olpredicarnent are leu pessimistic thanWestern analssts. thus reducing lhe likelihoodeconomic reforms Thii might partlyfor example, thebn failsadequately the declining ability of thelo nfliet slow labor growth with moreTlie opportunities for growth fromcapital for labor will be limited by lhcdecline in capital productivity as well as bvto sink most ot the investment incrementpruiects, particularly In thcthc return from which Is long deferredsuggests lhat by mid decade lhe Sovietsa laigcr defense burden than theyand piessuieslowdown incould increase.

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ecause military progiams require Ions leadeduction in tbc rate of growth of defense spending would probably have little impact on Soviel miliiary capabilities during tlm decade. Sovietthat will be in the field tfuoughill consist primarily of systems alirady deployed a* well a* those now entering production and in the late stages of development.

he foreign policy payoffs of high military spending might engender Politburo deliberations of even larger allocation* to defense. Such increases in military spending might be managed by the selective acceleration uf individual Soviel weapons programs, but (lie social costs would be high. To the extent that any plan revisions increased invest menl in defenseInvestment in tome civilian sectors would suffer Cut* in the consumer sector, however, could Iiave two unpalatable consequences- thev would worsen already poor prospects fot improving labor productivity, and ihey might increase worker discontent. Moscow is counting heavily on large gain> in labor productivity to meet lhe economy's output goals. Indeed, the plan directives currently stipulate lhalercent of lhe growth in Industry and all of the growth In agriculture must come through increases in productivity. Without some improve men* in consumer welfare, cfiances of generating lhe productivity gains implied In ihe lllh Five-Year Piatt will be much reduced.

C. The Politico! Succession ond Foreign Po&cy Oplioni

he economic dilemma outlined above will serve as thc ciitical backdrop lo lhe decisions taken bv lbe post-Bre.;'incv leadership on domestic policy and will influence foreign policy choices asaioi Issue conflooting the fuiure Soviet leadership will thus be how In sustain high levels of defense spending wllhout Imposing severe cutbacks on consumeroi reducing tlie rate of industrial modernization and renovation In spile of tha decliningale, ihc Brerhncv regime has opted to sustain Ihe rate ofefense spending and, aided by high levels nf inveslmenl in agriculture, lo continue In seel marginal improveirients in cr-nsumer welfare

successor leadership may be inclinedihese pi ion tics, particularly the highinvcstmmlcommitment. .

idctiiilitd with Brezhnev personally. Although abso-

Figurc 16

Soviet Leaders at Funeral of Mikhail Suslov2

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lute cuts tn defense spending are highly unlikely, declining ccoriornic growth will further Intensifyfot resources, compelling Soviet leaders to weigh the effect of constant increases in defense spending on the overall development of the economy

MS Soviet leaders are likely lo seek greaterwith Westernthe United Stales if political conditions arelieve economic ptei-surri at home.ove also might be seen by luhirc Soviet leaders as having the political virtue of increasing Smirt-Wett European political interaction fx-sibb ui LS espense.no major increases in live price of Mt. gas, or gold, or any signalkant eipairsion in Soviet aimsincrease in imports beyond1 level wouldid .'i 'vtn.row sscc ii illimi lo miK foriign flrbt The level of debt, in turn, would be iiHitni'eiitihe willingness ol Western bankeo and governments to extend furlher long-termit Mi-.ii-

l* Sovicts believe that without strong West rjitupean support lhe United Stales would have llllle ii-wjn loSoviet econocnic choices Tho untmiMtel any US instigated elfort to embargo ot

millet thc flow of technology or food to the USSR can be circumvented by turning lo Western Europe,or alternative grain suppliers such as Canada and Argentina

ncreased debt and hard currency shortages could affect tbc level of Moscow's economic commit merits to client regimes in the Third World. Even under present protections, the hard currency crunch proluhly will make tho Soviets reluclant to provide other clients with economic aid as extensive at that provided to Cuba or Vietnam As in Eastern Europe.lready cutting back on subsidizedof cointnodities that can be diverted to Western markets, such as oil. or goods for which tbe Soviets must pay hard currency to import, notablyproducts. Soviet military assistance, probably will not In* seriously affected and arms sales arc unlikely to be affected at all. Arms aid will not increase Ihe strain oo Soviet domestic economic resources as directly as deliveries of important commodities and industrial goods Moscow is likely to be even rnore active in seeking new purchasers of Soviet arms and seeking hard currency as payment from existing clients The net result, therefore, is that Moscow will be uven more dependent than at present on military salesever of influence in Third World regimes

Rival factions or claimants to leadership In lheera are Uels loetermination to maintain and expand Moscow's global presence This determination could be reinforcedossible tendenct on the partounger generation of Soviet leaders to eiuute the growth uf Soviel military power with Ihe gross th of Soviet global power and influence Supporting such thinking, moreover, are factors that go beyondeasurable indexes, factors such at ideologicalingering sense of iroecuri-ty and of Imsjiie encirclement,ontrastingnci sense of achievement in the USSR's erru'iyeneclolm! iiincrpnsier. Collectively these will lend to relnlorce lhcleadershipstu si lit am the global dimensions of Soviet polics

m ds- fie rata polity options nf aIrealerslapU- omtlnioiied not only by tlse level ofsmut Iml hy the prevailing consensut nilu-loreign policy commit merits In pastessions, mine lairly radical imlics dcparliiirs were in lacl umlrrliikcn. The post-Stalin leaders, fnr insiance moved quickly loend the Korean

war. Within thc first mouths of its tenure, the post-Khrushchev collective sought ro mend (albeitthe political breach with China and made the decision to increase sharply Soviet assistance to North Vietnam If precedentuide,osl-BcerJinev regime could explore options relative to the USSR's more pressing foreign policy dilemmas

he Soviets are probably pessimistic about tbe longer term prospectsoderation of US-Soviet tensions, particularly in light of planned US strategic weapons deployments and military programsfor the latter half ofui even In lhe event of an improved ckmaie of US-Soviet relations the fundamernal antagonistic nature of US-Sovietsvill persist because of the two sides' conflict trig political and international goats. Moreover, thc Soviet perception of underlying US hoslitlly toward the USSR, combined wiih the persistence of broader East-West problems, will result in continued Soviet efforts to undermine and discredit US policies

A post-Brezhnev regime could examine new possibilities for accommodation with Beijing. In the hope of undenS global strategy predicated on Sinn Soviet bosfilily Butove would be contingent on prior improvement in the Sino Soviet poliiical dialogue, and Moscow would have lo offer significant concessions on contentious military and border issurs

Western Europe looms as another area of intensified maneuveringuccessor regime for significant geopolitical advantage over Washington Tlie prize in this instance would be lhe erosion of NATOinimum, the provoking of serious divisions wirl'in lhe core of lhc US alliance structure Tlie principal sources of Soviet leverage in this regard would be Moscow's potential ability to ease fear* in Wcstein Europe that the region mightiK-liMiground, and to offer greater Intercourse between Fait and West Ceinunv

otent jl Soviet (lexibilltv toward Western Eh rnpe. lie*evii would be compromised bv an outbreak uf ufvevM'il uvial and political turbulence In Eastern Europe The economic conditions thai engendered (he political crisis in Poland0 arc ptcseni tu varyingeant degrees in the otlicr slates ofast European empire Increasing loreign debt uhligxlioiiv. diminishing hard currency reserves jid dcli-rmi.itlint economic performance will worsen

ihese conditions Moreover. Soviet policymakers will be conftonled with the dilemma of weighinc the increasing burden of ocoriomic subsidization of thc East European economicsolitical reluctance to ullow greater economic reform

rarnatK unanticipated change* in theenvironment couldrofound Impact on future Soviet policyollapse of the Saudi monarchy, for etample. could usher in anregime, precipitating the expulsion of the United Stales and potentially dividing US inlerests in the Persian Culf from (hose of Europe and Japan.the outcome of Irani revolution and the Iran-Iraq war might also create significant opportunity or dangers from Moscow's perspective, raising the possi-bililvurther Soviet military incursion intoAsia or the Persian Culf region

espite uncertainties, the Soviets probably an-ticipate that they will be able to take advantage of trend) in international politics, particularly in the Third World, to create opportunities for thcof Moscow's geopolitical stature The likely persislence of regional rivalries, economic disorder.

and the political undercurrents of anti-Arncricanism ate probably viewed bv Moscow as developments that will pose continuing dilemmas for US policy and, conversely, relatively low-iisk oppottumtirs for Soviet exploitation nf regional instabilities Active Sonetto exploit such Instabilities arc particularly likely in thoseas southern Africa, the Middle East, and CentralUS policy is closely Identified with regionally isolated orelated Soviet obiectivr will be tu frustrate US diplomatic and political attempts toregional disputes in the Third World

s the Soviet leadership nsoves furthereriod of political succcsstoo. Soviet polities willless piedictable. The poteniial confluence of greater Soviet military power, increased regionalmore assertive USnd the potential for expanded US military capabilities in theoulduccessor Soviet leadership increasingly willing to eiptoM current opportunities in what it perreives as low-cost, low-risk areas Ihis attitude, in (urn. could increase lhe possibilities of miscalculation and unprernediUted US-Soviet confrontations, most likely in the Third World

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DISSEMINATION NO'tCC

wai diiwrtiinaied by the Directorate ol Intrlligrnte. Ihii copy it lor Ihe

intoand uie ol ihe rtcipienr ond ol pertoni under hii or her jurba'ktioo red-to-

l*ow bom. Addilranol eiteniiaf da*enw>oi>OA moy be owthoriied by ihe foUowing oflicioh within Ihesf reipectix 0epo>im*Mi:

it. Director ol Intrligrnce ond Heieoreh. tor Iho Dcpc iment ol Stole b. Oifecror. Ocfente Inrelligcnce Agency, lor lhe Of Ike of ibe Secretary ol Oefenie and ergonilotion af lhe Joint Cbicli ol Stall

t. AI illicit Chief of Stall 'or rnleHigener, lor Ihr Orpanmenl of lhe Kim*

d Oeecro* a* Hanoi InltOiacnce. lo- ihel Ihe

e. Aitiiianl Chief ol Sia'l.lorDeparlmeni o* rhe Ai fore*

I. Director ol Inuiligence. lor rliodqwar'r'i, Marme Corpt

rpwry Auiitanr Secretary tar InternationalAnalytii, 'or lheaf Enrrgy

b.irector, FBI. lor tbe federal Bureou ol ln>ciligaiion i. Direclor of NSA. lor the Nolional Secv-ily Agency

pecie! Aiirtionl le the Secretary lor Nonond Seemly.the Oeporin-ml o' the Treasury

Ihe Oepuiy Director ol Inreflioene*Orportmenl or Agency

Ihii document moy be retained, or deilroyrd by burning in occo'doncc wiih applicable lecurily regulations, orIo the Di/ecicote ol IniclKginr.*,

When 'hit documentieo-oeled ovctcei. th* ovrrieatmay relarfi ilariod not in eeccti ol one year. At the end of ihu pood, ih* documenr ihouid be orirrorcd or returned to the forward-rig agency, or per minion inowtdl rhe forwardinglo reloin il in2

The title of thii document when uied leporaiefy from <he left ii vnctotiified.

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