THE SOVIET CHANLLENGE TO US SECURITY INTERESTS

Created: 7/11/1982

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THE SOVIET CHALLENGE TO US SECURITY INTERESTS

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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL INTELLIGENCE.

THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS. The following intelligence orgoniiottont participated in the preparation of tho

The Centrol Intelligence Agency, the Defense Intelligence Agency, the Notional Security Agency, ond the intelligence organ.lotion of the Department ol Stole

Aho Participating:

The Auntorrt Chief of Staff for Inteli genre. Deportment of the Army Tha Director of Novo* Intelligence. Department of the Navy The Awiitont Chief of Staff, hletgonce. Department of the Air Fcce The Director of Intelligence, Heodavo'teri. Marine Carpi

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PREFACE

This Estimate analyzes those aspects of Soviet foreign and security policy that have significant exsnsequences for US national security. As such, it is not intended)omprehensive review of Soviet global involvement and regional policies. Rather, it seeks to explore ihe perceptions and likely assessments of the Soviet leadership wilh 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 the Estimate Is to integrate recent work done within the Intelligence Community in an effort toore comprehensive assessment of Soviet policies over the neit three lo five years. In particular, it offers judgments on the implications for Soviet policy options of the impending Soviet political succession, theof declining economic performance, and the impact ofheavy defense expenditures.

CONTENTS

KEY JUDGMENTS

DISCUSSION

L The Nature of US-Soviet Relations

A. Current

B. Soviet Perceptions of US Vulnerabilities and Weaknesses.

II

The Nature of the Soviet Challenge

A The Soviet Military Buildup

B Force Protection. Prmies. and Military Activities tn the Third"Active Measures" and Diplornacr

egional

and Northeast Asia

C South and South-est Am.

D The Middle East

E.

F Central and South

IV. Policy Options and Policy Dilemmas

Strategic

Trade-Offi

C The Political Succession and Foreign Policy Options

1

12

38

19

20

36

sep

KEY JUDGMENTS

The Soviet challenge to US security interests is rooted in Moscow's conception of Its relationship with the United States as fundamentally adversary. This concept, based 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 the expense of the United States and the West.

Although Soviet leaders regard military power as the USSR's principal currency as an international actor, they also view the East-West relationshipore encompassing struggle involving political, economic, social, and ideologicaltotality which the Soviets characterize as "the correlation ofoviet leaders 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. the use of proxies, covert activities, and the political alignment of the USSR with regimes or revolutionary movements opposed to US policies.

The Soviets believe that they enjoy some strategic advantages over the United States 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 military hostilities in an area of crucial importance to the United States like the Persian Culf However, they will seizeoffered 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, particularly In areas contiguous to the USSR, should shift to the United States. The Soviets" perception of their own opportunities is reinforcedense of US frustrations and geopolitical vulnerabilities,

ularly in (he Third World, where US regional equities appear to Moscow to be incrca-Mngly threatened by political radicalism and economic nationalism.

The adventew US administration, openly critical of (he premises of detente and avowedly intent on increasing US military might, has not changed this basic perception but has raised Soviet concernseinvigorated US effort to counteract Sovietund 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 subject to competing US domestic economic priorities and to reluctance on the part of US allies to incur the casts of increased defense eipenditures. deferred economic opportunities, or increased tensions with Moscow. West European uneaseerceived lack of US commitment to arms control and US allies' resistance toward US restrictive policies on East-West economic relations are viewed by the Soviets as presenting opportunities to provoke divisions between the United States and its principal allies.

In their current efforts to exploit these perceived divisions, the Soviets have been especially active in the clandestine realm. They have been engagedange of "activencluding throf forged documents Intended to embarrass the Uniled Stales and the covert financing of activities by some elements of the "peace movement" in Westernpa rticularly those groups either closely associated with indigenous Communist parties or anti-American in orientation.

The balance of strategic intercontinental nuclear forcesritical index for Moscow's assessment of relative military power between the United States and the USSR. The Soviets believe that in tbe present US-Soviet strategic relationship each side possesses sufficient capabilities to devastate the other after absorbing an attack Soviet leaders state thai nuclear war wilh the United States wouldatastrophe that must be avoided if possible and that they do not regardonflict as inevitable Nevertheless, they regard nuclear warontinuing possibility and have not accepted mutual vulnerabilityesirable or permanent basis for the US-Soviet strategic relationship Although willing to negotiate restraints on force improvements and deployments when it serves their Interests, they prefer possession of superior capabilities to fight anduclear war wiih the United States, and have been working to improve their chances of prevailing shouldonfliclenet in iheir strategic thinking appears lo be that the

better prepared ihe 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 lo 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 radicalization 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, but modest improvements In Soviet airlift and amphibious capabilities enhance Soviet options for dealing with Third World contingencies in the future. In addition, the Soviets have been willing on occasion to use naval deployments to signify their political support for clients and friendly regimes, or to demonstrate Soviei interestegional conflict. The Soviets also hope to capitalize on opportunities to gain access to facilities for naval aircraft and ships

Moscow's presence in the Third World is furthered by means of arms sales and military advisers. Arms sales do not necessarily translate directly into political leverage but theyeystone of Soviet entree into the Third World and an important source of hard currency income to Moscow. The apparatus for administering arms sales and military training 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 othertogether with covert Soviet involvement in supporting insurgent groups and the military adventures of client or dependent regimes. For the Soviets, the proxy relationship minimizes the level of direct Soviet involvement while achieving Soviet aims and projecting the ideological

image of "socialisl 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 the 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 olher 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. Tbe net result is that Moscow will be more dependent on military aid as an entree of influence in the Third World.

Thr Soviets, nevertheless, recognize tliat even in areas where they have substantial political or military investments, they remainto US and Western economic and diplomalic leverage, and that iheir ability to project military power into the Thirdthe important exception of the immediate periphery of theinferior to that of the United States. They have suffered dramatic failures in thein their expulsion from Egypt inthey view current US initiatives, such as the attempt to broker political settlements in southern Africa and the Middle East, as threatening to erode Soviet influence Regional hostilities, moreover, often present the Soviets with difficult policy choices.

Over the next three to five years. Soviet policies will be motivatedesire lo build upon the Soviet Union's statuslobal superpower. Soviet policies, however, will also be determined by leadership anxieties about anpotentially moreinternational environment, the consequences of an ongoing political succession, and declining economic growth. The Soviets viewerious problem the prospectutual arms buildup with the United States which threatens to tax Sovici economic resourceseriod of domestic political uncertainty. On tbe other hand, the heightened military challenge that the United States poses to the USSR, specifically in terms of strategic nuclear programs planned for the latter half of, is an ominous development from the 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 to 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 not preclude action abroad, but they act as constraints on mililary actions in which the riskirect US-Soviet confrontation is clear.

Strategic 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 strategic nuclear status. Out 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 might therefore undertake such measures eithereans to pressure the United States to 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,development programs, and trends in capital expansion in the defenseexpect that Soviet defense spending willto grow at about its historical rateear at least5 Such continued growth in defense spending could well lead to declines in living standards. Per capita consumption probably would continue to grow marginally for the next few years, but by mid-decade would almost certainly be in decline.

Although absolute cuts in defense spending are highly unlikely, declining economic growth will further intensify competition for resources, compelling Soviet leaders to weigh the effect of constant

increases in defense spending on ihe 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 wilh the United States, 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 to look increasingly to Western Europe and Japan as sources of trade and technology, dependent upon the willingness of Western bankers and governments to extend long-term credits to Moscow In addition, the Soviets view security and trade divergences between the United States and other NATO members as major opportunities to undermine NATO's cohesionilitary alliance and to negate the possibility that the United States might involve its NATO allies in supportore extended Western defense role beyond Europe.

pecific foreign policy optionsuccessor leadership will be conditioned not only by the level of East-West tensions but by the prevailing consensus within the new leadership Fairly radical policy adjustments cannot 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 ihe potential for renewed social and political turbulence in Eastern Europe. The economic conditions that engendered the political crisis in Poland0 are present to varying but significant degrees in the other Warsaw Pact states Increasing foreign debt obligations, diminishing hard currency reserves, and deteriorating economic performance throughout Eastern Europe will worsen these conditions.onsequence will be confronted with the dilemma of weighing the increasing burden of economic subsidization of the East European economiesolitical reluctance to accept greater economic reform. The result couldecurring pattern of Soviet repression and intervention.

The Soviets are probably also pessimistic about the prospectsignificant moderation of US-Soviet tensions over the next several years, particularly in light of planned US weapons programs androlonged redefinition of the terms of the strategic arms dialogue. But. even in the event of an improved climate of US-Sovietthe fundamentally antagonistic nature of US-Soviet Interaction will persist because of conflicting political and international goals. Limited accommodations in tbe 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 hostilewellontrastine confidence and sense of achievement in the USSR'sas global superpower, collectively will tend lo reinforce Moscow's commitment to sustain the global dimensions of Soviet policy.

Despite uncertainties, the Soviets probably anticipate lhat they will be able to take advantage of trends in international politics, particularly in the 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 Soviets 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 potential confluence of greater Soviet military power, increased regionalmore assertive US policies, and the potential for expanded US military capabilities in theoulduccessor Soviet leadership increasingly willing to exploit opportunities in what it perceives as low-cost. low-risk areas. This attitude, in turn, could increase the possibilities of miscalculation and unpremeditated US-Soviet confrontations, most likely in the Third World.

SE^ET

DISCUSSION

The Nature of US-Soviet Relation* A. Currinl Trend*1

After several year* of progressist detcriiwation, the US-SovsH reUtionship appears to, hed arunelmc The decline in bilateral relation* has its toots not onisonflict of interest! and policies butonflict of perceptions and assumptions From the US perspective, moreover, the critical element in the charging fortunes of the relationship with Moscow has been the persistent effort bv the Soviet Union lo increase ils global power and influence This effort has been based largelyustained military buildup, supplemented by the use of peon forces in the Third World. It has involved attempts to enhance Soviet influence bv arms sale* and support for 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 Afghanistan and Its complicity in the military crackdown in Poland.

The evolving pattern of Soviet policies suggests not only increased Soviet confidence in the overall global power position of the USSR relative to the Unitedconfidence expressed in Sovietas "the changing correlation of forces In favoroviet perception of continuing opportunities lo exploit and to foster regional tensions and instabilities to the detriment nf the United States Al the same lime. Soviet international behaviorin part. Moscow's determination to resist and to counteractee*enascent US effort to contain, if not to reverse. Soviet military and political gains of Ihe past decade.

oscow's emergencelobal superpower has been based principally on the persistent Investment In and expansion of Soviet military forces In the critical realm of strategic nuclear forces, the Soviets probably

' Thu Entrust* assesses Sonet polKSn over the noil three to five rears.

rdit themselves with aggregate nuclearat least equal lo those of the United States and. in some respect', such as the ability to threaten hardened land-bated missile silos of the other side, withSoviet theater nuclear forces aho have been improvedby theof Ihe MIRVednd ihe Backfire bomber Coupled with the expansion of Soviet intercontinental forces, the Soviet* have thus accentuated regional theater nuclear asymmetries opposite China andrope Tlie Soviets In lum have sought to exploit resurgent West European concerns about uof the US strategic nuclear deterrent from the defense ol Western Europe.

4 In the conventional realm, loo. the Soviets have significantly upgraded their forces and equipment opposite NATO and China and.onsequence of their invasion of Afghanistan, haveew threat to the security of US and Western interesti in the Persian Culf and Southwest Asia In addition, Ihe Soviets have continued to modernize their naval und aliborne forces, and have extended thr reach of Iheir general purpose forces

3 The momentum of Moscow's military effort and ils extended involvement in the Third World have also been accompanied, for mast of tbe past decade,erception of the United States as constrained from direct military intervention in the Third World not only by the trauma of Vietnam bul by an inability toomestic political consensus on foreign policy in general and Fast-West relation* in particularthe Third World ha* been seen by Moscow as the Achilles heel of the West, where political and economic Instability seemed endemic and where the rad icu Ilia lion of postcolonial elites and the emergence of "national liberation" movement* have created tempting opportunities for the USSR to insinuate itself through offer* of military and technical aid

6 The Soviets believe that they enjoy some strategic advantages over the United States *nd view their current overall position as supporting the conductmrrlue foreign policy and the expanuon of Soviet

^fjfien

abroad However, ihev do noi believe thai they currently enjoy decisive strategic advantages over ihe United States and do notajorThey have an abiding respect for US military capabilities and are confronted themselves with Ihe dilemmas of declining economic performance and the increasing burden of defense spending forhose. They arr unlikely to Initiate military hostilities in an area of crucial importance to Ihr United States hke the Persian Gulf. However, they will scire opportunities offered by instability in the Third World to enhance their geopolitical influence and also lo 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, they may increasingly expect that the burden of avoiding potential confronlation,in areas contiguous to the USSR, should shift to the United Stair* The Soviets' perception of their own opportunities it reinforcedense of USand geopolitical vulnerabilities, particularly In ihe Third World, where US regional equities appear to Moscow to be increasingly threatened by political radicalism and economic nationaium

7 Since early In the Carter administration, Soviet analvsts have been increasingly preoccupied with what they saw as growing divisions within the US administration and the US body politic at Urge over the conduct of policy toward ihe USSR The failure of tlie Vienna summit9 to lead loreversal of what Moscow saw as the more ominous trends in USby what It regarded as aconfronlation over ihe Soviet brigade in Cuba-led the Soviet! to conclude that the "antidelenlr" forces had achieved dominance in US policy circles Thus, tbe stagnation of SALT II. the evolving US-Chlncse rapprochement. US attempt! to reinvigorate NATO, and Washington's efforts to enhance itsand political presence in tbe Persian Culf and elsewhere, have all been seen by Moscow as partore profound shift in US policy aimed at countering Soviet Influence and power The adventew US administration, openly critical of the premise* of detente and avowedly intent on increasing US military might, has further heightened Soviet concerns about the potential consequence* of increased US-Soviet tensions

oviet military expenditures over Ihe last two decades demonstrate remarkable upward momentum

The Soviets have many weapon proaiams inthat 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 developmentften well in advance of the realization of those programs- The magnitude of US efforts to reverse the trend in altering the mililary dimension ofi-viet relationship, however, isritical variable from the Soviet perspective. The extent to which planned US programs are actually implemented will be an important factor for Moscow in determining its own future move*

n conjunction with US plans ioew generation of nuclear missile* in Westernsome of which will be capable of striking deep into ihe European USSRinimum of warningUS slralegic weapon* developments are seen aitoredible US 'fust strike" threat against Soviet military targets Moreover, new US slralegicMX. theUM, snd air- and sea-launched cruiseseen by the Soviet- noi only a* attempt* io exploit existing Soviet deficiencies In low-level air defense andwarfare but as developments that might offset what Moscow regards as those element* of the slralegic equation favoring ihe USSR. The United States I* also seen as moving to enhance the global mobility and flexibility of ils general purposea development which the Chief of the Soviet General Staff, Marshal Ogarkov, has labeled as evidenceS intention tolobal conventional war capability, based on an ability to control "geographical escalation- of any future conflict with tbe USSR. Such Soviet statements, notwithstanding their self-evident propaganda intent, highlight Soviet conoemi about the direction of US military programs, and (lie corre-spondina perception that US military option* will be enhanced during the

oscow's concerns about what it perceive*ore assertive trend in US policy arr accentuatedense of itslnerabUities, stemming both from the competing priorities of Soviet foreign policy and from the increasing economic costs of Moscow's

Continuing resistance to the Soviet occupation of Afghanistan, togethereneral pattern of regional instability throughout Southwest Asia,

SPWET

has heightened historical concerns in the USSR about tbe stability- of its southernwhile tyingorce ofoviet iroopslow 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 revisionism throughout Eastern Europe.

In addition, continuing Sino-Soviet animosity, which has resultedhe deployment of roughlyillion Soviet troop* along the frontier, has reinforced Moscow's sense oi cncuelerncnt by-hostile forces.

Tbe Soviets abo rrcogniic thai even in areas where they hate substantial political and military investments their continued access is not guaranteed The mostmpleoviet failure In this regard was ihe expulsion of Soviet military advisers from Egyptue to Moscow's inability or unwillingness to satisfy llie broader political undneeds of its erstwhile ally. Similarly, the Soviets see current US efforts toeace settlement in the Middle East arid loegotiated settlement in Namibia as potentially leading to (be erosion of Soviet influence in both of these areas

Moscow's economic outlookurtherfactor for Soviet Waders,articular reason for concerneinviioraled US arms effort. From the accession to power of the current leadership in thentil tbe, the Soviet economy achieved relatively high rales of growth, averagingear In spite of perennial problems in agriculture, and resultingignificantly increased but still relatively low standard of living for tbe Soviet consumer. At the same time, defensewas sustained al an average annual growth rate ofercent,airly constantoercent of Soviet GNP1n effect, therefore, ihe regime was able to achieve its goals of increasing the production of both guns and butter During tbe latter half of, however, industrial growth began to slow as labor and capital productivity fell This, coupled with three successive bad harvests, has restricted CNF growth to lessercent annuallyoviet economicwill continue to mount in the face of slowing growth o( labor and capital inputs, less accessible and hence more costly energy and raw material supplies, and potential energy shortfalls. In, slower economic growth will present the Soviet leadership with increasingly tough and politically painful chokes in resource allocation and economic management. Annual Increments to CNP, furthermore, will be too small simultaneously lo meet mounting investment requirements, to maintain Rrowth in defense spending at the rates of the past, and to raise the standard of living

The Soviets have been relying on East-West trade and technology transfer to provide partial relief from tbe tightening squeeze that mililary programs place on economic resources Legal and illegalof military-related technology have saved the Soviets time and resources in designing and producing new weapons and military support systems, andgoods have eased the burden of defense spending by alleviating (trains in the civilian economy.through trade the Soviets have been obtaining goods and technology to enhance expansion of civilian economic output and thus give tlie economy more breathing room

White the Soviet need for Western goods and technology is ruing, however, Moscow's hard currency earnings ate likely to decline:

Not only wiD the volume of oil eiports gradually fall, but soft oil markets may well keep real od prices from irvcreaslng for several years

Gas eiports will grow substantially if the pipeline to Western Europe is buih. but will at best only offset decreases In oil export earnings

Hard currency earnings Irom arms sales arc unlikely lo increase much, because Third World clients will be lew able lo pay.

Earnings from gold sales are affected byin the world price, while many other eiports suffer from production problems or an inability to compete In Western markets.

leak prospects for hard csnrency earnings mean that any attempt toubstantialIn imports would quickly push up harddebt. Using credit to maintain the current level of

Import) wouldoubling of the Soviet debtesultingoubling of the debt service ratioevel which would cause concern in Western financial market* The Sovieti havebeen concerned about their debt service ratio and credit worthiness and they could ameliorate their credit crunch somewhat through gold sales, barter trade, or some diversion of oil exports from Eastern Europe lo Western markets.

B. Soviei Perceptions of US Vutneeobltitiei ond Weokrvaites

he Soviets nevertheless view Washington's ability to raise the economic and military exists of ihe East-West competition for Moscow as being subject lo competing US domestic economic priorities and to reluctance on the part of US allies lo incur ihe costs of increased defense expenditures, deferred economic opportunities, or increased tensions with Moscow Soviet press commentary has focused heavily on the "peace movement" in Western Europe (which has been encouraged by Ihe Soviet Union both openly and covertly) and more recently on the nuclear fieeie movement in the United States Itself, professing lo ore these phenomena as increasing the presiures nnlo resume the strategic arms dialogue and lo restrain planned weapons programs! In addition, some Soviet analysts neve argued privately lhat economic and political problems willurtailment of ihe more threatening dimensions of the US arms effort

rowing unease within Western Europe over the perceived lack of US commitment to arms control and US allies' resistance toward US restrictive policies on Luil-Wrsl economic relations are viewed by the Soviets at presenting opportunities lo provoke divisions between the United Stales and Its principal allies In particular, Ihc failure ihus far of US efforts to dissuade its West European allies from participation in the Yamal gas pipeline protect, has encouraged the Soviets In iheir assumption that, notwithstanding the salience of the INF question inuropeanUS-West European differences can be eiploiled to Soviet advantage In like manner, the pipeline deal has probably encouraged Soviet hopes thai USsanctions will remain largely Ineffective so long

Fnr drluIs on Soviet efforts to msnlUjUi* thrn Western Europe see, FAr fence Mccemrnr Wrirem Europe.0

as Western Europe and japan remain available sources of Western technology and Industrial goods

While anxious not to jeopardize lhc prospects foresuscitationS-Soviel strategic arms agreemenl orurther ctoilon In US-Westrelations, the Soviets have also sought toIheir determination In continue lo be recognizedoequal superpower by the United Stales, and to compete politically and militarily with an assertive United States Top Soviet leaders. Including President Brezhnev and Defense Minister Ustinov, havethai the USSR will match any US military buildup Such remarks, notwithstanding theirvalue, ore meant as serious sUtements of Soviet intent Moreover, these statements have becomemore explicit references to the opportunity costs of increased defense spending for the Soviet economyhole They suggest, in turn, that Moscow ii anxious about the decisions that it feels compelled to make to counter protected US

Soviet attempts to improve the atmospherics of its relations with Boljitig, hiahltghtcd by President Brezhnev's-call inor an endecade of hostility, is also pari of Moscow's counterstralr-sjy. Although the Soviets probably* have little expectation of an immediate breakthrough in Sum-Soviet relations, their intention at ihis stage Is to exacerbate US-Chinese frictions and lo preempt what the Soviets regard as an effort by Washington lo reinforce tlie US military presence in Easl and Northeast Asia, cenlered around Japanese rearmament and greater Sino-US militarythreat that Moscow has labeledaslnngton-Bemng-Tokyo athv"

n many respects, however, the Third World looms as tbe testing ground for Soviei efforts to blunt what Moscow sees as resurgent US global activism The Soviets continue to support the expansionist ambitions of regimes such as Ubya and Vietnam, and to arm and fund insurgent movements such as SWAPO and the Palestine Liberation Organization The Soviets also have sought to ingratiate themselves with the anti-American regime In Iran, and the Invasion ofraises the possibility of further Soviet military action to secure regional advantages elsewhere in Southwest Asia

nother troublesome Indication of the direction of Soviet policies is thr pattern of Soviet activities In

Central America, Here, the Soviets have deepened iheir political and military support for tbe self-styled MariM regime tn Nicaragua, and are continuing to underwrite Cuban-supported insurgents in El Saba-dor The Soviet) have Increased tbe levels of their military deliveries to Cuba itself, including theshipment of advanced aircraft, which have raised Question* about the Soviet tnteTpretation of2 US-Soviet understanding prohibiting theof certain types of offensive weaponry there. Furthermore, the Soviets appear to have raisedtbe specter of Soviet medium-range missile deployments to Cuba, in the form of Presidentronouncement that the USSR would put the United Slates in an "analogous position" if NATO proceeded to implement ils plans to upgrade its theater nuclear arsenal Although Brezhnev'swaa most probably intended more to stir up US anxieties than to signal Moscow's intentionove, it waseliberate escalation of verbal tensions between the superpowers.

many of these actions are, in essence,of previous trends in Soviet polity, tbrvMoscow's determination to contest aUS global strategy by exploiting what itas US regional vulnerabilities and, moreby challenging US inierests even in areasUS security concern.

II. Th* Nature of the Soviet Challenge A. The Soviet MJilory Buildup

military buildup under Brezhnevthe enhancement of key elementsmilitaryas the expansion offorces and continued heavy emphasis onICBMs In addition. Soviet development!continued deployment of the Backfireand significant improvement of Sovietnuclear systems, highlighted by theofIRVedobileby the Introduction of newtactical ballistic missiles. The Soviets haveustained effort lo enhance theand flexibility of their generalfoe use In either nuclear or noonucleatin Europe and along the Sino-Sovietthese developments have somewhatthe Soviets' capabilities for protectingforces Into more distant regions This is particularly evident in the expanded capabilities of tbe Soviet Navy and the incremental rnodernization of Soviet airlift and airborne forces Although tbe Soviets have noi developed forces specifically for overseas operations, they are clearly interested in developing (be capability to protect forces onmodest scale into ibe Third World, both to deter US military action against Soviet proxies and clients, and to assure the favorable resolution of regional conflict

Figure I

Sovicin Distant Waters. by

Nuclrarhe balancenuclear forcesritical index forof relalive military power betweenStates and the USSH1 the USSRthe striking power and survivability ofmtercootirsrnUl and intermediate-raneeoffensive forces, made progress inof the weaknesses of its strategic defenses,Its supporting command, control, andsystems

Soviets believe that in tbe presentstrategic relationship each sideuclear capabilities that could devastate thealisorbing an attack Soviet leaders stalewar with the United States would be athai must be avoided if possible and thainot regardonflict as inevitablethey view nuclear warontinuinghave not accepted mutual vulnerability asor permanent basis for the US-Sovietrelationship. They have been willing toon force Improvements andft serves their interests They prefer possessioncapabilities to fight anduclearthe United States, and have been workingtheir chances of prevailing shouldenet in their strategicto be that the betler prepared the USSR Isin various contingencies, the more llkelv it isenemies will be deterred fromon the Soviet Union and its allies and willto counter Soviet pobtical and

he Soviets haveigorous weapon development program They have:

'erailed ditcuaton see NIEcarf Capahikttn for Sfnugu Suctter Conflict,olume It.3

Extensive research and development programs In advanced technologies such as directed energy weapons and nonaccousfical antisubmarinetechniques

Several new or modified land-basedobile system, in advanced stages of pteflight development.

A new strategic bomber also entering lhc flight lesl stage

ew class of ballistic missilethe Typhoon, which will enhance theand survivability of the Soviet sea-based strategic lore*.

Been modernizing their existing antlballistic(ABM) system around Moscow since

Together with exist ins options, such as increasing the number of warheads on heavy ICBMs, the Soviets probably believe thai they are well positioned lo compete itrategically with the United Staleson-SALT environment, at least over tbe neat three lo five years

lie Soviets nonetlspless have hedged against the inherent uncertainties of the strategic armsthrough participation in an arms control dialogue with the United States They have remained within the limits imposed byBM Treaty and Interim Agreement) and mosl of the provisions of the unratified SALTreaty, hoping to Induce similar restraint on the part of Washington. The Soviets have not increased their strategic delivery vehicles beyond the number extant when SALT II was signed, but neither have they reduced lo the aggregate force levels called for in SALThey value the strategic arms dialogue because:

Itorum for attempting to limit more threatening US systems while preseising arras of Soviet strategic advantage

Iteasure uf stability andon an otherwise unregulated strategic arms corn petition

ll accords to the Soviei Union ihe symbolic stature and prestigeoequal superpower along with the United States.

The very existence of the strategic arms dialogue is viewedontributing factor to anin the United States that is critical of new US strategic weapons programs and generally less supportive of Increased defense spending.

In addition, the Soviets probably hope to use the bilateral dialogue on strategic arms to exploitsecurity concerns of the United Stales and its principal allies

Figure 2

GeweraJ Fwpemhe sustained ei-parulon and modrrruzatioo of Soviet general purpoteconventional and theaterthe broader aspect* of Mcacm-'s militaryto the United State* and it* allies In the conventional area, the Soviet* have,. ga> panded their already large ground and tactical air forces and Introduced modern systems, some of them eciual to or superior to those of NATO The Warsaw Pact's mililary potential, however, is affected by It* political cohesion Pact performance on the field of battle would be heavily influenced by the attitudes and effectiveness of the non-Soviet armies, which have been assigned major roles in both combat and support, yet are less modern than those of the USSR. More important, the solidarity and enlhusiasm that they would exhibit in combat against NATO, under *ome scenarios, are problematic

he Soviet* aho maintain large forces opposite China Since the, the number of ground force division* along the Sino-Soviet border hasand total ground force manpower has mote than Inpled toen.

he persiitent Soviet effort to upgrade general purpose forces demonstrate* Moscow's Intention of dominating the critical regional military balances in central Europe and along the Sino-Soviet frontierombination of quantitative and qualitative force improvements. The effort to improve the overall command, control, and combat capabilities of Soviet forces also appears lo be aimed at increasing Moscow's ability to exercise effective control over themotential conflict with NATO escalating fromlo theater nuclear warfare. In addition, the Soviets have sought toommand structure lhat would allow them to conduct muhitheater opera (ion* and to minimize the needrawdown of force*ignificant degradation of logistic support In one theater to support combat oper-tioru in another

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hr hrradth of Soviet general purpOM force activities abo leslifies io the complexity of Ihethreat environment as seen fromhich is accentuated by historical Soviet concernswo-theater war in Europe and the Far East These concerns in turnecognition lhat simulta-neous operations against NATO and major operations against China would present formidable logisticand that transportation syslemi would bestrained to sustain forces in both theaters Severe problems would also be encountered if the Soviets were engaged in simultaneous military operations in Europe and llir Middle East.

B Force Protection, Proxies, ond Military Act.vities in the Third World

he USSR has developed hmited forces for military operations beyond ihe Eurasian periphery The Sovietsliahle permanent navalIn the Mediterranean and ihe Indian Ocean, and regularly deploy small naval groups to West African waters and the South China Sea They have access lo air and naval facilities in all of these areas, as well as In Cube. The only Soviet ground force unit outside of the Warsaw Pact. Mongolia, and Afghanistan is tbe Soviet brigade in Cuba. On the other hand, the Soviets have demonstrated an improved capability to transport and sustain, In the absence of effective local opposition, proxy Intervention force* In Angola and Ethiopia. Similarly, the Soviets have been willing on occasion lo use naval deployments to signify their political support for clients and friendly regimes, or to demonstrate Soviet interestegional conflict. (See chart on "Trends in Soviet Out-of-Arca Naval Deploymentshe Soviets abo hope to capitalize upon opportunities to gain access to facilities for naval aircraft and ships

The Soviets also realize direct militaryfrom their presence in the Third World Theyarge intelligence-gat beting capability in Cuba directed against the United States.ajor SICINT facility and regular patrols by Soviet reconnaissance aircraft along the US coast The Soviets abo conduct regular aerial reconnaissance and naval patrolt from host bases in South Yemen. Ethiopia. Vietnam, and Angola. Over the past two years, the Soviets have also made use of port facilities in Aden and shore facilities at Ethiopia's Dahlak Island In the Red Sea lo help sustain iheir naval presence In Ihe Indian Ocean.

Arms sales and associated training and advbory packagesajor instrument of Soviet policy In the Third World. (See appended lable on "Soviet Arms Sales to Third Worldhile such aid does not necessarily translate directly into politicalit usually is the keystone of Soviet relalions with the LDC* and with revolutionary and insurgent groups bite SWAPO and the PLO The apparatus forthese programs is highly centralized and in specific cases can be very responsive. Deliveries can be accelerated by drawing on stockpiles or even pulling

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Figure 4

ttom active Soviet uniu Training and maintr-nance are virtually always tied to arms sales, and currently there are more0 Soviet military advrseri and technician* throughout the Third World (See appended table on "Soviet Military Technicians in Selected Third World Countries,

oviet arms deliveries to the Third Worlda pattern that beian3 when arms sales became an important source of hard currency for the Soviets. Theainiarger volume of weapons sold and an SO-percent rise in ruble prices for military hardware. Aside from political cc4isideralions, Soviet weapons, even at the higher prices now charged, have been accepted because Moscow tsand able to deliver quickly large quantities of modern military hardware. Despite Soviet interest In garnering hard currency from arms sales. Moscow remain* willing, in caves where it perceives political advantage, to make major concessions, such asrepayment periods and payment in toftThis, combined wtth their apparentallows the Soviets to continue to depict arms transfers and training as manifestations of solidarity with the Third World

nother trend in Soviet Third Worldn the continuing use of proxies and other intermediaries, together with covert SovietIn supporting insurgent groups and in aiding tbe military ventures of client or dependent rcgimes. Whlle the Soviets and their allies are Windy involved

several Third World slates, theelationship applies most directly to joint ventures in Angola and Ethiopia- In both of these countries, the Soviets supply most of the weapons, materiel, and logistic support for Cuban combathe Soviets transported the Cuban intervention forces Into Angola and Ethiopia, and Moscow itself maintainsilitaryin each of these states For the Soviets, the proxy relationship minimizes Ihe level of direct Sovietwhile achieving Soviet aims and protecting the image of "socialist solidarity" with the recipient regimes The Soviets have transshipped weapons to Nicaragua via Cuba and have aho been Involved In covert mililary support for revolutionary activities In Central America andmall contingent of Soviet military technicians Is also known to have serviced Libyan military equipment in Chad following the Libyan intervention In lhat country in0 Alone with these efforts- the Soviets are involved with allied or friendly governments orLibya, certain Palestinian groups. South Yemen Syria, andIn lum directly or indirectly aid the subversive or terrorist activitiesroad spectrum of violent revolutionaries.

C. "Active Measures" ond Diplomacy

heretrong linkage between SovietflctlvillMroad range of pseudo-official and covert activities lhat the Soviets themselves refer to as "activeverall coordination of these measures is the responsibility of thr International Department of'M Central Committee. Soviet intelligence personnel are the principal executors of Soviet "activelthough we believe that on occasion other official and quasi-officialabroad are in.olved In such activities VVeestimate that approximately one third of Soviet diplomatic personnel abroad ate staff officers of the Committee for State Securityr the Mam Intelligence Directorate of the Soviet General Staff ICBUJ

Active measures" are tn large part designed to complement Soviet diplomatic overtures andThe common thread that runs through allmeasures"igh degree of manipulation and misrepresentation, either to disguise Sovietor to conceal the real mirpose behind an activity inoviet citizen It overllv Involved- Such activities range from ihe anil-neutron-bomb campaign

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forgeries seeking to embarrass ihr US and Western governments, from the manipulation ol front groups such as the World Peace Council to the operation of clandestine radio stations such as the National Voice of Iran.

e believe that the USSR's use ol propaganda and covert action to advance its foreign policy goals in the international arena has increased in recent years The Soviets see their reUtiona svith the Untied States as havingewbefore the invasion of Afghanistan and thr advent of ihe presentIn analyzing the Increased use of propaganda and "activee must also take into account the Importance Moscow attributes to ihe "Ideological struggle" in world politics This struggle Is waged not only through propaganda, hut also with psychological warfare and subversion, Including the full range of "active measures."

egiorsol Policitn A. Europe

Over the neit three to five years, Soviet poises toward Western Europe will assign high prions to stopping NATO modernization and maintaining access to technology and credits, while attempting to sharpen differences between the United States and its alliance partners. The Soviets view security and tradebetween the United States and other NATO members as major opportunities to undermine NATO's cohesionilitary alliance and to negate the possibility that the United States might involve its NATO Allies In supportore extended Western defense role beyond Europe Through adroitcoven action, and intense propaganda, the Soviets hope, in effect, lo immobilize NATO's ability toonsensus on defense policy issues and to encourage neutralist and pacifist sentiment throughout Western Europe

ilitary power serves as the foundation of Soviet policy in Europe, both East and West The threat of military intervention was the critical lever of Soviet influence throughout the crisis in Poland, and it was the decisive factor in Impelling the Polish regime toward the imposition of martial law inimilarly, the changing dynamics of ibe East-West mililary balance innotablyextensive deployments of tbcallisticaccentuated thedebate 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 toward Western Europe. Moscow's massive anti-NATO modernizationreflects both concern about tbe militaryof NATO's planned deploymentsecog-nilion that the Implementation of NATO's decision wouldonvincing reaffirmation of US political and military leadership within the Atlantic Alliance

Moscow's effort to block NATO'* plans has been waged primarily' in the diplomatic and propaganda realms. Diplomatically, they have sought to engage West European governmentsialogue on trade and regional security issues, while emphasizing that future tics to Ihe East will be jeopardized if NATO's modernization decision is implemented. In addition the Soviets have conducted an extensive covert action campaign aimed at manipulating public opinion in thoseas theare seen as most vulnerable to domestic pressures to break ranks with NATO's decision.

The Soviets recognize thai West Germany is the key to NATO's prospective deployments, and they have been particularly active In seeking to influence the domestic debate there. Tbe initial Soviet offer to reduce the level of Soviet intermediate-range missile and bomber deployments, should NATO forgoof its own, was made by President Brezhnevpeech In East Berlin inhis offer was accompaniedrezhnev announcement that the USSR would "unilaterally" reduce its mililaryin East Cermany0 men. Soviethave also included intensive political lobbying In long-established informal channels to the West Cer-man Chancellery and to senior leaders of the ruling Social Democratic Party. At tbe same time. Moscow appears to be funding the antinuclear activities of the West German Communist Party through East German intermediaries.umber of forged let-ten and documents concerning NATO affairs,to embarrass both Bonn and Washington, have been floated in West German press circles, apparendy by Soviet agents

In iheir effort lo discredit the United States and NATO, the Sovieti will continue lo exploit ontinucleor and neutralist sentiment throughout Western Europe They also see US actions or pronouncerrients on the neutron bomb and limited nuclear targeting options as further opportunities to inflame suspicions in some segment! of West European publics thai the United Stales is seeking to limit ant nuclear conflict to Europe

The Soviets view Irade with Western Europe as having intrinsic economic Importance andeans of increasing the distance between Ihe United States and its principal allies Western Europe accounted for more thanercent of total Soviei hard currency trade1 In addition, linee iheas relied heavily on European commerce lo undercut US-Initiated Western trade restrictions against it and to enhance ill influence In Western Europe at US expense The Soviets have used West European Interests in eipandmg East-West commerce to substantially add to frictions between Europe and the United Slates over US economic sanctions related to Afghanistan and Poland Moscow believes that strengthened economic lies with Western Europe will further limit US ability to obtain unified Western restraints on important goods and technology.Moscow almost certainly expectsarger West European Hake In trade with ihe East will aid ils efforts to increase US-West European differences over noneconomic Issues.

he Soviets view the planned natural gasfrom Siberia lo Western Europe as the cornerstone oftrade inndajor test of US and Soviet influence In Europe" The protectadly needed source of revenue and an opportunity lo move Western Europe away from ihe United Slate* The Soviets see the West German and French agreements to purchase gasajor step towmd redwing US ability to restrict East-West trade. Moscow probably expects that substantially Increased gasalong with other long-term deals suchiberian coal gasificationincrease the West European reluctance lo join in possible future US sanctions and exacerbate US-West European differences. The Soviets probably ahothat their greater role in roost West European economies will enhance their potential lo influence Wesl European decisions on nontrade Issues

Soviet node wilh Western Europe willajor source of goods and technology Inereaiingly importanttrained Soviet economy and lo the costly military programs thai ll supports Imports of Civilian goods andas large-diameter pipe and machinereduced Industrialboltlenecks and increased efficiency In important industries, giving the economy more breathing room. As the economy's performance continues to worsen, and as Western weapons capabilities advance. Moscow will continue to assign top priority to Irade with Europe In acquiring foreign goods and technology in selected areas, luch as advanced microclcclionlci and machine tooly

The USSR's growing economic involvement with Westernby the gas pipelineenhance Its potential lo influence West European decisionmaking Tbe West Europeanon Soviet gas may reachercent of total got requirementsncludingoercent In those countries actually buying the gas This would, however, constituteerceni of total West

'Oft km pipeline could deliver ai muchay) oil eauivalreil lo Western Europe. Those deliveries, plus eiMlrifl tn riporu of. Hill ramillion annually in theestern credit- have been repaid Those credos will finance fmporuillico in pipe and equipment, mostly from Western Europe. Wnt Germany and France have lapied contracts to pair-hueand llalv. the Netherlands. fSdarurn, and Austria arc voce latin*

European energy consumption. Although thebelieve that they can minimize the Impactoviet gas cutoff, Moscow probably could cause some economic disruption in selected industries and regions by they halting gas deliveries at certain times, such as wintereriod of maior economic growth The Soviets probably would not hiunth/as cutoff, but they could feign technical difficulties in gas deliveries to remind the Europeans of their vulnerability. The USSR will probably also derive some Influence through its importancearket for key West European industries plagued by unemptoymeni. such as West German steel

oleaw materials supplier and job provider will not give it unlimited leverage Although individual countries" dependence on Soviet gas will be high, the pipeline system will not permit Moscow to Interrupt gas deliveries to one country without affecting some or all of the others Moreover, the Soviets themselves will be highly dependent on Western Europe for hard currency earnings and for some goods and technology Gas cutoffs wouldest European turn to alternativeloss of revenue. The Soviets will abo remain dependent on Western Europe for much of the Urge-diameter pipe essentia] to growth of domestic gas production, the key to their own energy planning through. Such constraints on Soviet use of economic leverage could increase as the USSRon building up its economic relations with Western Europe

The Soviets must also be concerned about coun-tercurrents hindering alUinrnent of iheir European policies

The military crackdown In Poland temporarily reduced ihe intensity of the antinuclearin Western Europe and hm resulted In greater Writ European reluctance to extend new credits to Eastern Europe and the Soviet Union

In the wake of martial law in Poland also, the Conference on Security and Cooperation Inand Ils human rights provisions in particular have proved toolitical embarrassment for the Soviet Union and its allies

The Soviets still appear to be concerned that the United Stales may be able to sustain the fragile NATO consensus in favor of actual INFby Ihe Alliance, notwithstanding Soviet efforts in the ongoing US-Soviet negotiations to forestall if not avert NATO deployments

The Soviets have been surprised by the US endorsement of the West European-favored "zerohereby NATO would forgo INF deployments if the Soviets dismantled theirINF missiles. Soviet claims of an existing INF balance have been treated with profoundby the West European press and by West European governments.

ull INF deistoyment by NATO would be hkely tooviet countermove oxtensrblv designed lo put US territory in what Soviet President Brezhnev has called "an analogoushile the image of Soviet missile deployments In Cuba is immediately conjured up byhreat, the Sovici leaders would realize that any effort to reverse ihe outcome of2 Cuban missile crisis would run an extremely high riskirect US-Soviet confronlation Moreover, the Soviets have other military options short of iheof nuclear weapons in Cuba that would at least partially offset NATO's deployments without running the riskirect confrontation with Washington-Such moves could include the deployment of Soviet long-range sea-launched cruise missiles, an increase in Ihe number of Soviet ICBM or SUMr an increase in tbe number of warheadt per missile on Soviet ICBMs Short of "analogous" measures, the Soviets could deploy morer shorter range Soviet missile and aircraft systems opposite Western Europe

otal erosion of NATO's consensus on INF deployments would be regarded by Moscowritical US defeat While the Soviets would not respond by offering new concessions, tbey would probably maintain the appearance of rustingwhile redoubling their efforts to enlist West European support for Soviet positions on theon Disarmament In Europeon MBFR. or on regional nuclear-free zones. The Soviets would be likely to redouble their propaganda and "peace" campaign, hoping to provoke further dissension in NATO and to prompt an "agonizing reappraisal" in Washington over the US commitment to Western Europe's defense

hould tlie Soviets fail to alter significantly NATO's position on the INF Issue prior to actual

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they may seek to locus more directly on nesotiating limits on the scope of future deployments by NATO. For example, the Soviets might be willing lo accept limits on their existing intermediate-range nuclear force, possibly including then returneduction in the scope of NATO's planned deployments. In so doing, however, they are nol likely toumerical equality that totally ignores French and British nuclear systems. In the near term the Soviets arc 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 modernization plans

B. East and Northeast Asia

Soviet policy throughout the Far East isthe product of continued Sino-Soviet hostility but is further defined by Moscow's related objectives of impeding Sino-US relations, countering US military activities in the Western Pacific, and inhibiting greater Integration of Japan into US defense strategy inAsia. In pursuit of their Interests, the Soviets continue to invest heavily in expanding their military presence in ihe Far East. Recently, the Soviets have intensified their political and diplomatic activities to exploit what they see as persistent frictions in US-Chinese relations over Taiwan and potentialbetween ihe United States and Japan stemming from trade problems, disagreements over economic sanctions against ihe USSR, and Japanese reluctance to accelerate defense spending.

Moscow's military activities in the region have centeredajor buildup of Soviet ground forces, principally along the Sino-Soviet frontier. The deploymentoastal division and air defense units to the islands immediately north of Japan signals Moscow's determination lo maintain control over these "northernhe Soviets have also modestly expanded and modernized their Pacific Fleet and since9 they have Increased deployments of ships and aircraft to the Indian Ocean andew* naval presence in Southeast Asian waters and Vietnam. In addition,hird of the Sovietorce is capable of striking China, Japan, and other Far Eastern targets.

he Soviets view China's Improved relations with both the United States and Japanerious security problem, raising the possibility lhat the USSR might have to fight all three countriesonflict in the Far East. More immediately, the USSR fears this trilateral rapprochement portends active US andaid in the modernization of Chinese armed forces.

The Korean situation, especially thebehavior of Kim ll-song isomplicating factor in Soviet Far Eastern policy. Because renewed fighting between North and South could become the catalystroader conflict Involving ihe United Slates and the USSR, the Soviets wouldapid cessation of major hostilities between the two Koreas to be in Moscow's best interests The Soviets probably would provide some materiel support to the North but would conclude that the risks attending direct combat Support would far outweigh the possible benefits unless the North were In danger of lotal collapse.

A renewal of fighting between China andwould lead to increased Soviet supporl ofWe would expect the Soviet reaction to be similar to that after Ihe Chinese attackn Initial propaganda campaignubstantial increase in materiel aid to Hanoi, which could be tied lo increased use of Vietnamese military facilities. If the conflict were going badly for Vietnam, limited Soviet military action against Chine would be possible.

The Soviei Far Eastern position is furtherby Moscow's limited diplomatic and political flexibilityis its principal antagonists. Thedo not even have diplomatic relations wilh South Korea Territorial disputes with both China and Japanajor obstacle to any dramatic improvement In Soviet relations with either country Moreover, the Sino-Soviet border dispute and Soviet occupation of Japan's "northern territories" arc intimately linked for Moscow' to concede on one would implicitly open the issue of ihe other. Finally, Moscow's regional military buildup, together with the Soviet invasion of Afghanistan and Moscow's support for the Vietnamese invasion of Kampuchea, has further aggravatedwith China. Japan, and the ASEAN countries

The Soviets have nevertheless sought to mute the political impact of their invasion of Afghanistan and to exploit US differences with Japan and Chinaeries of recent diplomatic initiatives. In

President Brezhnev and Soviet Premier Tikhonov calledroadening of the dialogue on disputed issues with both China and fapan. Brezhnev,egional dialogue on militarybuilding measures Soviet propaganda has sought lo supplement these initiatives by emphasizing Moscow's desireoderation of tensions and the expansion of trade. Soviet overtures, however, are unlikely to make significant headway. In fact, these efforts have been hindered in some ASEAN states by recent exposures of KGB operations

e see little likelihood that ihe Sovietwill reverse the momentum of Moscow's military effort in the Far East. Indeed. Soviet concerns with Sino-American ties and with the potential upgrading of Japan's Self-Defense Force have probably already been factored into Soviet defense planning.adical change in Chinese attitudes would be likely to produce incentives for Moscow seriously toeconciliation of differences with China.

C. South ond Southwest Asia

oscow's decision to invade Afghanistan was in manyatershed in US-Soviet relations. The Soviets presumablyemporary setback in bilateral relationships, but were clearly surprised by the intensity of the US reaction, particularly the grain embargo. Tbc Soviets also appear to havethe military cost of their intervention, expecting neither the accelerated decline of the Afghan Army

nor ihe protracted war of attrition against aresistance force.

oscow's Inability to consolidate the Soviet position io Afghanistan has led lo changes inmethodsodest increase In troop levers Since1 the Soviets have engagedimited augmentation of their forces there, bringing the total Soviet force level tohe Soviets appear reluctant to deploy the considerably larger force needed touick end to the resistance and to seal off insurgent movements from Iran and Pakistan

The Soviets have sought to alleviate theirproblems within Afghanistan by 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 aid to Pakistan and the promise of Afghanistan's recognition of Pakistan's version of their disputed border The pressures have involved diplomaticas well as incicaied support for seme of President Zias domestic opponents There have been infrequent raids against Afghan insutgent positions in Pakistan bv the Soviets and Afghani While the most likely course of Soviet action will remain diplomatic pressure,increased aid to Zia's domestic opponentsoviet option We cannot ruleimitedinto northwestern Pakistan to destroy insurgent bases. But any increase In Soviet military activity in this area could complicate Soviet relalions with India

The maintenance of good relations with India remains one of Moscow's primary goals In South Asia Motcow will continue to offer tophi ti teat ed weapons to India at concessionary rates in an effort toarming of relations between New Delhi and the West, and the USSR ts likely lo remain India's largest, foreign weapons supplier Never!heless. in recent months India hasayor arms deal with tlie French, and has taken tactical steps to improve relations with Pakistan, China, and tlie Untied States. The2 vistl of Soviet Defense Minister Ustinov in New Delhi failed to block the French deal.

he overall volatility' of the region will continue to create opportunities and dilemmas for Moscow The Soviets have been seeking to improve their relations with Iran while sustaining Iraqi dependence on Soviet arms supplies. Soviet options will be stronglyby events within Iran, and Iranian actions within tlie Periiun Gulf region The Soviets clearly lookost-Khomeini regime for more significant opportunities lo improve thetr position in Iran, but they also appreciate that political evolution tn Iran la highly unpredictable

o long as the situation in Iran remainsstable, Moscow' almost certainly will adhere to the course il has followed since the revolution seeking to improve economic and military ties, hoping to forge an arms sale relationship with Tehran, andthe Khomeini regime's anti-US orientationwill seek the best possible relalions with Tehran and will advise tbe Tudeh {Communist) Party to do the same, subordinating Soviet use of "activeIn order lo avoid damaging relalions with ihe regime and risking severe repression of Tudeh At the same time. Moscow will seek to strengthen the position nf Tudeh.

hould Ihe political situation In Iran deteriorate dramatically, producing internal chaos and possible fragmentation, the Soviets probably would undertake large-scale assistance to leftist and pro-Soviet Iranian elements, seeking to manipulate events to theirProlonged chaos or civil war with attendant disruption in the Soviet-Iranian border areas could lead Moscow to opt lor limited military intervention, at least in those ureasS militaryInto Iran or the threat ofove couldoviet military response or preemptive Intervention.

D. The Middle East

The Middle East remains the most volatile area of US-Soviet regional interaction with the greatest potentialirect confrontation between Moscow and Washington. Notwithstanding US success inthe Camp David agreement, Soviet entree into the region is ensured by the polarization of the Arab states over the Camp David process itself, continued US military support for Tc) Aviv, the persistence of the Palestinian problem, and recurrent hostilitiesIsrael and its Arab neighbors. Despite Moscow's extensive military and political commitments to Egypt's regionalibya and Syria, the Soviets will continue to seek improved relations with Egypt because of its gcostrategic position and historical role in the Arab world.

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

oscow's ability to supply arms and military advisers to clients, however, contrasts sharply with the limitations of Soviet diplomatic options throughout the Middle East. Moscow's primary concern is that the United States might still be able toiddle East settlement that would effectively exclude or isolate the Soviet Union in the region, notwithstanding the Israeli action in Lebanon. This concern is based on the recognition lhat only Washington has thecredibility and Influence to negotiatewith Israel and the principal Arab parties toward any potential peace arrangement. OtherSoviet liabilities are ihe paucity of Soviet economic aid and the region's economic links to the West, tbe dependence on military assistance to sustain Soviet influence in the region, and the ideological antipathy of Islam toward Communism.

To preserve Soviet diplomatic equities in the region, President Brezhnev in1 outlined the Soviet Middle East peace plan, centeredroad international conference of all interestedincluding the United States and the USSR. The Soviet plan has not been well received, however, even by Moscow's closestas Syria and tbeprincipally because it explicitly recognizes Israel's right to exist. More active Soviet efforts have been directed alrooder coalition among radical anli-US Arab regimes The Soviets played an indirect and behind-the-scenes role In the formation of the tripartite security pact among Libya, Ethiopia, and South Yemen, signed inlthough Soviet hopesroader alliance including Syria, the PLO, and Algeria have not been realized. The Soviets are nevertheless encouraged by the deepening hostility between Iran and tbe pro-Western Arab slates of (he Persian Gulf.onsequence, the Soviets may seek to encourage evolving lies between Iran, Libya, and Syriaeans of countering US influence with moderate Arab and Gulf states, and possiblyIranian-Soviet relations as well.

Recent Soviet policy in the Middle East has also been characterized by Moscow's attempt to woo stales such as Jordan and Saudi Arabia. The Soviets have sought to provoke distrust between these regimes and Washington, attempting in particular to capitah'ze on frustration in Amman and Riyadh over the lack of progress on the Palestinian issue and their sense of vulnerability to Israeli military action. The Soviets have concluded an important sale of mobile airequipment tofirst ever to thata US refusal to supply suchThe Soviets have continued their private lobbying for the establishment of diplomatic relations with Saudi Arabia.imited Soviet arms client, has been enlisted in this lobbying effort.

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Israeli invasion of Lebanon hasSoviet policy in the region Over (he long run, the Soviets may benefit from increased cooperation between radical and moderate Arabs, increased Syrian dependence on (he USSR,ossible weakening of Egyptian political links to the United States In the near term, however, tbc Lebanese crisis has ledolitical and military setback for maior Soviet clients, Soviet diplomatic isolation from the keyand Arab accusations of Soviet perfidy. Syrian inability successfully to utilize Soviet militarycould lead some Third World states to question (he effectiveness of Soviet arms and training programs Above all. tbe Soviets are faced with (he prospect of US force deployment to monitor any politicalwhile Moscow remains on (he sidelines

The Soviets will continue to politick hard against US diplomatic initiatives that exclude Moscow or any moderation of Arab-Israeli tensions lhatlo diminish Soviet influence in tbe Middle East. The Soviets clearly do not wish to encourage Arab-Israeli hostilities that mightS-Soviet crisis- On the other hand, Moscowontinued polarization of political opinion within the Arab camp over ihe dispute with Israel and US peace initiatives as the best means of ensuring the dependence of radical Arab regimes on Soviet arms and diplomatic support. The task of Soviet policy, therefore, is to frustrate US efforts to moderate the Arab-Israeli dispute without provoking another Middle East conflict. The inherent difficulty In this pursuit increases the dangers of miscalculation wilh respect to Moscow's ability to constrain its Arab clients militarily. In like manner, it increases the possibility of an unwanted regionalescalatingS-Soviet confrontation

E. Afrka

Moscow's growing African involvement reflects both opportunism and (he longer term objective of channeling the political currents of poslcolonialin an anti-Western direction. MoreSoviet goals in Africa arc served by theof Moscow's strategic military presence in tbe form of air and naval deployments off West Africa and In the Indian Ocean.

As in tbe case of its Middle East involvement, Moscow's influence in Africa is in large parton arms sales and military aid Politically, the

Soviets benefit by supporting black nationalistmovements and by exploiting opposition to South Africa. The principal weakness of Soviet policy in Africa remains its relative lack of diplomatic orflexibility in contrast to (he United States and the West. Soviet involvement in Africa isby the dependence of Moscow's principal clients, Angola and Ethiopia, on the direct presence of Soviet. Cuban, and East European military personnel to sustain tbe regimes of those countries against internal armed opposition Without Soviet and Soviet proxy

Figure II

Pravda Cartoon SbowsSs Dropping "Made In USA" Bombs on Lebanon

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support, the regimes would either fall or their pro-Soviet character would be substantially changed.

Soviet polio- in the Horn of Africa has traded on the Ethiopian-Somali conflict and rhe Mengistu regime's need for Soviet military aid to meet ethnic insurgencies. The Soviets have welcomed Ethiopian efforts to undermine Somalia and Sudan as counters to the Increased US military presence In the region. While the Soviets may see renewed fightum along the Ethiopian-Somali border as pushing Somalia closer to the United States, they have nonetheless publicly sided with Ethiopia, claiming that the conflict reflectsSomali opposition to the Slad regime and its close ties to the United States.

Southern Africa Is the principal focus of US-Soviet interaction, centered around the problem of Namibian independence and the conflict between the Republic of South Africa and the "Frontline" black African states. The Soviets remain deeply suspicious of the US- and Western-sponsored initiative to foster the emergence of an independent Namibia within the contextroader regional settlement. In particular, Moscow Is firmly opposed to linking any settlement in Namibia with the withdrawal of Cuban forces fromtep which Moscow believes could result eventually in the emergencero-Westernin Angola.

The noticeable increase in Soviet propaganda alleging US-South African "collusion" and "shared objectives" is aimed at diminishing Washington'scredibility as an objective broker in Namibia Soviet propaganda linking the United States to the abortive coup In Seychelles, as well as to the South African-backed insurgencies in Angola andserves to reinforce the image of US-South African collaboration.

Moscow hod made its most seriousefforts on issues that directly impinge on key actors In the Namibia talks. For example, aoperation alleging US training of Angolan resistance forces in Zaire was clearly intended to raise doubts In Luanda about US trustworthiness and lo reemphastze Angola's dependence on Soviet military assistance. Soviet-inspired disinformation also may have contributed to the periodic strains In US-Zambi-an relations; Moscow probably hopes that Zambian fears of alleged US involvement in subversion will translatereater skepticism of US negotiation efforts in Namibia.

Having clearly expressed their reservations about the US and Western initiative and their position on tbc Cuban troop Issue, the Soviets will closely monitor how the Frontline Stales, particularly Angola, and SWAPO proceed from here- Even if the Soviets find the evolving settlement tolerable, thev willseek to fuel tensions and suspicions lo ensure that the final accord is reached in an atmosphere of antagonism and distrust rather than reconciliation. The Soviets would hope that, in such an environment, the Namibian Government would turn to the USSR for support.

If the present US Initiative collapses, or Is indefinitely dragged out. the Soviets will be quick to remind the black Africans that their warnings and suspicions were justified. US "hypocrisy" andwith South Africa will be highlighted in major propaganda campaigns aimed at further discrediting US intentions in tbe Third World. Moscow- may push for United Nations sanctions, hoping to force the United States into the difficult position of voting for or against South Africa.

A successful settlement would enhance the United States' and the West's standing in black Africa. As long as South Africa remains under minority white rule, however. Me>scow will have an issue to exploit. Given black African expectations that thein particular the Unitedthe leverage to force change in South Africa, Moscow will be able to continue to cite US collusion with Pretoria. Moreover, the failureamibian settlement either to lead to regional economic and political development, or to end Pretoria's aggressive behavior in the region, would provide the Sovietsew opportunity to reassert their influence.

F. Centrol ond Sourh America

activity and interest in Latinincreased significantly in the past few years,the aftermath of the battle for the Falkland*and their Cuban allies will be probingoscow has moved more

ore detailed assessment of Sovici policy lo-ird tut moon see SME ll/SO/WSZ. Sorter Fokae, and AeUWIa in latin America end ihe Caribbean, hh

St^BET

to exploit opportunities presented by(or revolutionary change in Central America and tbc Caribbean and bv the willingness of Latinstates to deal with the USSR and its allies The Soviet Union has helped to consolidate revolutionary regimes in Nicaragua and Grenada, has providedthrough proxies and other thirdto revolutionaries elsewhere in Latin America, and has intensified its efforts to develop favorable political and economic ties with such countries as Argentina. Brazil and Mexico.

ubaentral role in Soviet relations with Latin America not onlyependent client serving Moscow's interests but also as an independent actor influencing Soviet policies and tactics. Fidel Castro's vigorous support of Nicaraguanfor example, wasuban initiative, and the Sandinista victoryarked impact on Soviet attitudes and policies. Soviet leaders came to share

Castro's assessment that ihe prospects for the success of revolutionary forces in Central America were brighter than they had earlier calculated. Moreover, the Soviets appear to assume lhat direct military intervention by the United States in support of threatenedwould onlyroader tide of anti-Americanism and revolutionary ferment throughout Latin Americahole. Also, the Soviets may doubt that Washington would be able toomestic consensus in favor of military intervention in Central America

Nevertheless, the Soviets probably believe that further Soviet and Cuban support of revolutionary activity in Central America could precipitate US military action againstevent the Soviets clearly wish to avoid. Thus, Soviet policy in Central America is to promote ihe fortunes of theleft whileore extensive or direct commitment that mightS military countermove. Thb element of flexibility in Soviet policy is reflected In tbe nature of Moscow's response to the Reagan administration's heightenedto stability in El Salvador.

While encouraged about the prospects for tbe revolutionary left In Central America, the Soviets do not wish to jeopardize evolving economic and political ties more broadly throughout Latin Americaore assertive or opportunistic involvement In the region. In Argentina, Brazil, and Peru. Moscow's policy has aimed largely at cultivating positive state-to-state relations This approach has emphasized trade expansion and readiness to sell military hardware:

Brazil is becoming an important Soviet trading partner.

The Sovietsubstantial arms supplywith Peru

Argentinaajor exporter of grain and beef to the USSR and, In the wake of tbc Falkland Islands dispute, could conceivably become an importer of Soviet arms.

Soviets further recognize that, withexception of Cuba. Latin Americaperipheral to Soviet geostrategfctherefore, can afford to be patientin its support for the radical left. Evenwhere Moscow clearly wishes to"socialist transformation" of the currentSoviets have been careful not to become involved

SECRET

es

in an entangling commitment. The Sovieti haveboth mstBBmk and mililory aid to Nicaragua but appear to he wary ofreater economic burden in the near term

support Latin Americanwhdc distancing the USSR frombe seen as especially provocative acts,are relying extensively on tbe use ofother third parties. Within the region. Cubabeen joined by Nicaragua in playingrole Nicaragua maintains trainingLatin American insurgents and actsunnelexternally supplied arms into Ela lesserother support are shipped from or throughof countries Other actors encouragedinclude most prominently the PLO, butVietnam, and several East Europeanalso participated. Latin Americans are sentand political training to sites in Cuba,Easl. Libya. Eastern Europe, as well as

IV. Policy Options and Pokey Dilerrsrnos A. The Strotagc Out loo*

policy environment for the Sovietover the next three to five years will beprimarily by Ihe Interplay between ansuccession, continuing slowdown inand anpotentially moreenvfronmcnl Decliningwill further intensify competition forwill pose Increasingly acute policy dilemmasSoviet leadership Policy divergences over aof economic and International Issuessignificant consequences for the conductforeign policy Nevertheless, no Soviet leaderto open himself to the charge ofsecurity needs as defined by tbethrough advocating absolute cuts inbudget during an Interregnumleaders ofill be confronted withofialogue with theiradversaryackgroundutualthe ihreat of iechnological surprise, andon both sides engendered by the collapseattempt at limited political accommodationprevious decade

The Soviets viewerious problem the prospectong-term mutual arms buildup which threatens lo lax Soviet economic resourceseriod of domestic political uncertainty Themilitary challenge that the United Slates poses lo the USSR, specifically in terms of stiateglc nuclear programs planned for the latter half of, Is an ominous des elopment for the Sovieti- Rut, In Moscow's view, tlie read ration of US plans will be strongly dependenl on domestic political and international factors affecting US policymaking. In any event. Ihe accumulated military assets of Moscow's militaryover the past two decadesource of Soviet confidence

It Is doubtful, however, that Soviet leaderswindow of opportunity" based on any overweening confidence in present Soviet slraleglc nuclear force* relative to future prospects From the perspective of Ihe present and probablo future Soviei leadership, there will remain important deterrents to major military actions. These Include the dangersirect conflict with the United Stales that could escalate lo global proportions, concern about theof some Easl European allies, and an awareness of the greater Western capacity to support andefense effort. These concern? do not preclude action abroad but they act as constraints on military actions that could leadirect US-Soviet confrontation.

Strategic nuclear arms negotiations are likely toeniral Soviet priority evenost-Brezhnev regime. Moscow will continue to see the strategic nuclear arms control processeans of moderating broader US political attitudes toward ihe USSR and of reducing the possibihtvSbreakthrough lhat might jcopardiic Moscow's strategic nuclear status Although anxloui about the potential Inchnological dimensionseinvigorated strategic arms competition, immediate cosl consideia-tions arcactor In the Sovietgiven declining economic performance Spending for strategic nuclear forces constitutes roughlyercent of the Soviet defense budget and even an Intensified efforton-SALT environment would be unlikely to resultisproportionate increase in ihis amount In addition, strategic nuclear force requirements are less labor Intensive than other military services, and the high-technology production resources devoted to

SfXKE'

nuclear systems are less eanlv transferable to civilian purposes

ore compelling economic incentive to arms contiol talks, however, could be Ihe cost avoidance benefits In tbc absence of an arms control agreement to channel and limit US weapons developments.could see itself as locked into spending even larger sums nn developing new systems andreater number of them. Such concerns, particularly if they were reinforced by the feeling thai the United States was successfully reversing the overall militaryof the last decade, could, in turn, add to the impetus for strategic arms control agreementsthe more threatening US systems. The Soviet offer toap on Typhoon submarinein exchange for Trident constraints is anof the type 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"

euiled diKutnco see. Sortel CspnWuf /or Slnwntlc .SWear Ccnflkl. IM/ei.Vciumf II,arch 1W2

f the Soviets should oonclude that their Is no prospect In the near term for an advantageous resultenewed strategic arms dialogue withthen they may decide to ignore SALT constraints Among the earliest Indications that they had decided to do so would be the failure to dismantle older systems as new ones are deployed, the testing of ICBMs with more reentry vehicles than permitted under SALT II limits, and the testing of more than one new type of ICBM. Moreover, they arc well positioned for potential force expansion and could increase the number of MIRVed ICBMs, continue SSBNwithout any dismantlement of older missile launching submarines, increase Backfire production, and lest and deploy new strategic systems. Some of these actions, such as the failure to dismantle older missile submarines and land-based missiles inwith tbe putative SALT restrictions, areThe Soviets might undertake such measures to pressure the United States cither lo refrain from certain weapons deployments or to induce Washington lo resume the strategic arms dialogue within the general framework of previous strategic arms

B. Defense-Economic Trode-Offs

Soviets recognire that military powerprincipal foreign policy asset and lhatleveb of defense Investment are necessaryihe present dimensions of Moscow's globaldeclining economic growth, we haveeduction in Soviet defense spendingbasis of observed militarynumbersystems in production, weaponsand trends in capital expansion Inexpect that Sovietwill continue to grow at aboutear al least5

estimate, on the other hand, thateconomic growth will beercentmid-lOftus. and will remain near tbethroughh Five-Yearspending is to continue Incieasing at aboutper year, the defense share of GNPwill be at leastercent by mid-decadetrends are not changed inhthe defense share of GNP could0 This level of military spendingreduce tbe ability of tbe Sovietallocate additional resources to InvestmentUnder these conditions,In defense spending at Its historical lateto declines in living slandards. Per capitaprobably would continue to growthe next few years, but. by mid-decade,certainly be in decline

ikely that the Soviets' perceptions of theii economic predicament are lesi pessimistic than those of Western analysts, thus reducing the likelihood of major economic reforms Thts might partly explain why, for example, thelan falb to address adequately the declining abiUty of theto offset slow labor growth wilh more capital investment The opportunities for growth fromcapital for Labor will be limited by thedecline in capital productivity as well as by the need to Unk most of Ihe Investment increment into capital-intensive proieets. particularly in the energy sector, the return from which is long deferred. This constraint suggests that by mid-decade the Soviets willarger defense burden than they currently anticipate, and pressureslowdown in defense spending could increase

Because military programs require low:eduction in tbe rate of growth ol defense spending would probably have little impact on Soviet military capabilities during this decade. Soviet(bit will be In the field throughuy will consist prima his of it stems already deployed as well as those now entering production and in the late stages of development.

The foreign policy payoffs of high military spending might engender Politburo deliberations of even larger allocations to defense Such increases in military spending might be managed by tbe selective acceleration of Individual Soviet weapons programs, but tbe social costs would be high To the extent that any plan revisions increased Investment in defenseinvestment in some civilian sectors would suffer. Cuts in Ihe consumer sector, however, could have two unpalatable consequences: they would worsen already poor prospects for Improving labor prodiK-tiviiy. and they might increase worker discontent Moscow ts counting heavily on large gains in labor productivity to meet the economy's output goab Indeed, the plan directives currently stipulate thatercent ol the growth in industry and all of the growth in agriculture must come through iricreases us productisitv Without some improvement in consumer welfare, chances of generating the productivity gains Implied inhear Plan will be much reduced

C. The Political Succession and Foreign Policy Options

he economic dilemma outlined almve will serve as the critical backdrop to Ihe decisions taken by the post Brezhnev leadership on domestic policy and will influence foreign policy choices asajor issue confronting Ihe future Soviet leadership will thus be how to sustain high leveb of defense spending without imposing severe cutbacks on consumeror reducing the rale of Industrial modernization and renovation. In spite of the declining economic growth rate, the Brezhnev regime has opted lo sustain the rate of growth in defense spending and. aided by high leveb of investment in agriculture, to continue to seek marginal improvements in consumer welfare.

uccessor leadership may be inclined to reexamine these priorities, particularly the high levels of investment incommitment closely identified with Brezhnev personally Although lute cuts In defense spending are highly unlikely, declining economic growth will further Intensifyfor resources, compelling Soviet leadersigh the effect of constant increases in defense spending on the overall development of the economy.

oviet leaders ate likely to seek greaterwith Westernthe United Stales if political conditionsrelieve economical homeove abo might be teen by future Soviet leaders as having the political virtue of increasing Sovict-WesI European political interaction, possibly at US expenseno mator increases in the price of oil. gas, or gold, or any significant expansion in Soviet armsincrease in import! beyond1 level would be achievable only if Moscow were willing to Increase its foreign debt. The level of debt, in turn, would be contingent upon tbe willingness of Western bankers and governments to extend further long-term credits to Moscow

he Soviets believe that without strong West European support the United States would have little leverage to affect Soviet economic choices They anticipate that any US-instigated effort lo embargo or

restrict the flowechnology or food io the USSR ran be circumvented by turning lo Western Europe.or alternative grain suppliers such as Canada and Argentina

ncreased debt and hard tunency shortages could affect the level ofconomicto client regimes in the Third World Even under present protections, the hard currency crunch probably will make the Soviets leluclanl to provide or.her clients with economic aid as extensive as that provided to Cuba or Vietnam. As In Eastern Europe. Moscow is already cutting back on subsidizedof commodities that can be diverted to Western markets, such at oil or goods for which tbe Soviets must pay hard currency to Import, notablyproducts Soviet milltaiy assistance probably will not be senousli affected and arms sales are unlikely to be affected at all Arms aid will not increase the strain on Soviet domestic economic resources as directly as deliveries of important commodities and industrial goods Moscow Is likely to be even more active In seeking new purchasers of Soviet arms and seeking hard currency as payment from existing clients The net result, therefore, is lhat Moscow will be even more dependent than at present on military salesever of influence in Third World resumes

ival factions or claimants to leadership In theBrezhnev era are likely toetermination to maintain and expand Moscow's global presence This determination could he reinforcedosublr tendency on the partounger generation of Soviet lenders to equate the growth of Soviet military power with Ihe growth of Soviei global power and influence Supporting such thinking, moreover, arr factors that go beyond tangible or measurable indexes, factors such as Ideologicalingering sense ofand of hostile enclrclrmenl.ontrasting confidence and sense of achievement in the USSR's emergencelobal superpower. Collectively these will tend to reinforce tlie new leadership'sto sustain the global dimensions of Soviet policy.

he specific foreign policy options of aleadership will be conditioned not only by the level of Easl-Wesl lenxions bul by the prevailing consensus within the new leadership on foreign policyIn past successions, some fairly radical policy departures were in fact undertaken The post-Stalin leaders, for instance, moved quickly lo end the Korean war. Within the first months of its tenure, the posl-Khrushchev collective sought to mend (albeitIhe political breach with China and made the decision to increase sharply Soviet assistance lo North Vietnam. If precedentuide,ost-Brezhnev regime could explore options relative to the USSR's more pressing foreign policy dilemmas.

he Soviets are probably pessimistic about the longer term prospectsoderation of US-Soviet tensions, particularly in light of planned US strategic weapons deployments and military programsfor Ihe latter half of. Bul even in the even! of an Improved climate ol US-Soviet relalions. the fundamental antagonistic nature of US-Sovietwill persist because of the two sides'political and international goals Moreover, the Soviet perception of underlying US hostility toward the USSR, combined with the persistence of broader East-West problems, will result In continued Soviet efforts to undermine and discredit US policies

Aegime could examine new possibilities for accommodation with Beijing, in the hope ofS global strategy predicated on Sino-Soviet hostility Butove would be contingent on prior Improvement In the Sino-Soviet political dialogue, and Moscow would have to offer significant concessions on contentious mililary and bolder Issues.

Western Europe looms as another area of Intensified maneuveringuccessor regime for significant geopolitical advantage over Washington, The prtie in this instance would be the erosion of NATU or,inimum, the provoking of serious divisions within the core of the US alliance structure. The principal sources of Soviet leverage in this regard would be Moscow's potential ability lo ease fears In Western Europe that the region mightuclear battleground, and to offer greater intercourse between East and Weil Germany.

otential Soviet flexibility toward Westernhowever, would be compromised bv an outbreak of renewed social and political turbulence In Eastern Europe The economic conditions tbat engendered the political crisis in Poland0 are present to varying but significant degrees In the other slates of Moscow's East European empire Increasing foreign debt obligations, diminishing hard currency reserves, and deteriorating economic performance will worsen

sewet

conditions. Moreover. Soviet policy makers will be confronted with the dilemma of weighing the Increasing burden of economic subsidization of the East European economiesolitical reluctance to allow greater economic reform

ramatic unanticipated changes in theenvironment couldrofound impact on future Soviet policyollapse of the Saudi monarchy, for example, could usher in anregime, precipitating the expulsion of the United States and potentially dividing US interests in ibe Persian Gulf from those of Europe and Japan-the outcome of Iran's revolution and tbe Iran-Iraq war might abo create significant opportunities or dangers from Moscow's perspective, raisingurther Soviet military incursion intoAsia or the Persian Gulf legion

espite uncertainties, the Soviets probablythat they will be able lu take advantage of trends in international politics, particularly in ihe Third World, to create opportunities for theof Moscow's geopolitical stature. The likely persistence of regional rivalries, economic disorder.

and the political undercurrents of anti-Americanism are probably viewed by Moscow as developments that will pose continuing dilemmas for US policy and, conversely, relatively low-risk opportunities for Soviet exploitation of regional Instabilities. Active Sovietto exploit such instabilities are particularly likely in thoseas southern Africa, the Middle East, arid CentralUS policy Is closely identified with regionally isolated orelated Soviet objective will be to frustrate US diplomatic and political attempts toregional disputes in the Third World.

s Ihe Soviet leadership mom furthereriod of political succession, Soviet policies willless predictable The potential confluence of greater Soviet military power, increased regionalmore assertive US policies, and the potential for expanded US military capabilities in theoulduccessor Soviet leadership increasingly willing to exploit current opportunities in what it perceives as low-cost, low-risk areas. This attitude, in turn, could increase the possibilities of miscalculation and unpremeditated US-Soviet confrontations, most likely in the Third World

Pvyfrr

I able I

Military

In Selected Third World1

Total

Attic*

Aoaertca

Saari Africa Ma* Eaff

Vctc-

Vcnfc

YciBca

<Mmm Eifciopia

l.'OI)

BUuu

500

* 3

S

-

J

3

X

2

o

5

s

s

s

!

-

S

8

|

s

3

S

*

-

]

J

I

3

i I

1,

i

i

5

i

? I

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