mammal-whom 483 SOVIET 258R PORCH cum um Hodnesday December 1 1988 United States Senat Select Committee on Intelligence Washington D C The Select Committee met pursuant to notice at 16 50 o'clock in Room Hart Senate office Building the Hancrable Bill aradkey yresiding Present Senator Bradley Also Prasent John bespres and Fred Ward Staff Numbers mum-m manna-hump mu attainment SSIATOS BRADLSY The Task totes will can to order Doug thanks for caning back and bringing your astute parceptive and insightful collaagues 53 319 4170 and 9096 DIRECTOR orrxca SOVIET AHALXSIS DIRXCTOKATB 0 INTELLIGENCE CENTRAL n3 I might upon by mentioning that the rumors are at least that in about 15 minutes or so we may find out it one of my analytical judgments is going to turn out to be correct And we can taik about the atoriea later if you would like on the cuts We tua11y can t tako you much beyond the Washington Post this aorning insofar as the evidenco what I thought we would do as I say I think you are SKNATOR Which is that I didn't see the Post I began the morning in New York 33 aacnacuxus This is the rumors that Gorbachev is going to announce a unilateral SKRATDR BRADLEY Conventional force cut an nacnncuxx It is an armed forces out not further specified We've had lots of evidence going back to last tailor a you know of a specific cut in East Eurooe These rumors say u I mean I can reconstruct the sources of a rumor fro the tutors of the changes in the military hierarchy to the stories of some unilateral action and they could have come together to create a plausible but totally unfounded story of very large cuts which provoked a shakeup in the military sou-mutationa 833 83333333231 55323 Nanothcless we have teen enough of Gorbachev that I wauld not rule anything as batng out at the question And no at I taid I know that I have taken a position for a long tine that he will have to cut his military w the alount of resources the prcportion of resources that go to the military While I recognize that reforms and all of these things are necessary to ultimately sustain his economic program at the prascnt this is the enly economic mechanism he has there is input and there is output and he is going to have to regulate that 10w to get any results in the term But we will so that What I thought we would de today briefly is I would let Bab Slackwell review where the political situation standt And then Paul Erickson will address what we think ate some of the critical economic decisions which seem to have been made or benchmarks which we will be looking for in the short term And at the end if it is agreeable I would like to talk a little bit about the kind of the intelligence challenge that I think we faca in the coming year at so and some thoughts I have had on that matter 3mm smut Okay HR HGCIACBIR Bob tam- muo-swum 487 8TATKHENT OF 308 NATIONAL INTELLIGENCE GPPICER 30% TEX SOVIET an Senator Doug and his colleagues I think talked last October some time in October after the shoot-out in Moscow about changes in the leadership and gave you some observations then I would like to build on that foundation If you would like to go back and talk about some of that we can But building on it I wouid point out a couple of things in the few months since One we have seen further efforts in the sort of political consolidation game both in terms of Gorbachevfe own position and in terms of the political reform agenda There have been some backtracks here and there but on the whole a fairly decisive effort to try to push the gains of the fall and to consolidate those in early winter 1 would highlight a couple of things One is on the front of the Communist Party itself Last fall net in motion 3 reform of the Communist Party structure its organization and its size We have pretty good evidence now that that in fact has gone forward fairly substantieliy If you would have asked any of us 6 months ago we wouid have said this is one of the most sensitive areas politically in that system and to even touch it runs great riok and would suggest it would be very difficult to do I can talk you I think he in fact has done it Some examples of it he seems ta have effectively neutered or reduced the significance of the Central Committee Secretariat by in effect putting mast of its members as full members of the Politburc and creating these cammiseiens of the Central Committee with an individual Secretary being a Chairman 9 each But it appears that the Secretariat ne longer meets as a body no longer has a number two man in power te administer the party machinery It looks like he has found a way to get around the dead souls in the Central Cemmittee as veil as the Secretariat as an organization SERATOR BRADLEY Ans ycu say he has done that by an Essentially the device is creating the Central Committee Cemmissions there are 6 of them each headed by a Party Secretary but with defined areas of respansibility Ad secondly apparently by not having the Secretariat as an organizatien meet er if it does not meet very much And then thirdly not having someone who serves in the role as number two man in the earty hierarchy Ligachev clearly does not and it does not appear that anyone else really data Some people would argue that Zaykov who is head at Moscow may have moved up a bit but that is fairly subtle stuff Sut basically the Party machinery seems much more responsive to him prabably than it did at least at the highest level acconmma-uN a 21 439 7 The other thing that has happened in addition to reorganizing the Control Committee s work into those commissions is a cut in the staff by 30 to 50 t we don't quite know but we do know it is going to to high One of the elements of the reorganization of the Central Committee incidentally was basically to eliminate or abolish most of its economic dayartments that micromanaage the ministries and whatever They still have a commission on economic social issues but they have done away with the departments that are there primarily to oversee particular sectors of the econouy They havc an Agricultural Commission and they have an Economic Commission The Economic Commission covers what formerly 7 or 8 departmunts would have probably covered The second thing they have done and it has to be viewgd in parallel to this 1 think is a strong effort to SENATOR BRADLEY Agriculture and what was the other one an BLACKHELL Well there are two economic related commissions Social Economic is one which is chaired by Slyunkov who is a Party Secretary and Agriculture is chaired by Ligachev Not a friendly gift to him I don't think There are four other Commissions as well Ideology is a third Legal matters is a fourth There is a fifth one on foreign policy The sixth one escapes me for a minute I will think of it in a second szunron BRADLEY Okay umwmm-hwn-u 490 a an but anyway that is basically the way they have reorganized the work The second thing they have done is a strong effort to try to transfer some authority to a legislature which in principle has always been there but lt has never really had it This is something that I would say is in process not completed And we will see the completion of it next April and than you will have to watch it for 2 or 3 years to really see how much of it has actually happened BRADLEY What is the date in April that it will be complete an BLACKKELL I don't think they have set a date hey so a date for Supreme Soviet elections in March ano SKRATOR BRADQBY Yes I saw the notch m the elections of the Supreme Soviet HR ELACKWELL And the new Congress of People's Deputies is supposed to convene sometime in April I on't think they have given us a date yet Or they have not announced a date But it will he a big show because it will be the first time largo oxpande group has ever met Obviously you were thinking of a trip there somewhere around that time BRADLEY I mean you know that was my next shot I was going to go in August everybody is on vacation In November and they said all the yeople would be in these 491 9 constitutional meetings Detember they couldn t receive ne at the proper level whatever that maans And so I had said April Now you tell me the time I want to go there they all have a big conference HR Well it won t last more than a week But when it accuts a BRADLEY but maybe it'll be early April HR Maybe it will be Don't know But in any case this thing will get aft the ground then But 'tho thrust of it seems to be to try 'to craate a sort affective legislature that's one And also to givq Gorbachev anathar power base that's two And we are seeing some reflection of this already just in moving of people like Dobtynin and Zagladin who clearly were demoted But nonetheless they have been move over the Supfeme Soviet side as advisers to Gorbachev It looks like Akhronayev may move ave in the same way I think in a way of course that is taking them off line Nonetheless they may well be consequential evan in those rolls Dobrynin did came here to Haw York even in his new capacity with Gorbachav's entourage But I would say with both things both the Party racrqanization as wall as the Supreme Soviet it is going to take time to see how this plays out in acutality It think it is real It is dramatic that he was able to da it It helps him It is all of those things But right now it is like 33885333525553 2 492 10 rearranging the furniture and you really need to see how people sit in it for a while and how they use it And it is still an Open question as to whether you can breathe real life into that legislature or not By making a portion of it more or less full time you at least create some potential for it And the fact that ha is going to head it and seems to want to use it as an instrument to try to create more popular pressure on the administration of the country the executors is another reason why you might see that It seems like that is where he wants more of the pressure to come from rather than the Party organizations themselves The second issue I would pick up on and we can talk about it at almost any length because it is so dramatic is the turmoil among nationalities There are two things that I think have to be said about this Some of it like the Caucasus clearly reflect ageuold problems that have bubbled up in part as a result of perestroika Now he says perostroika is only helping us to deal with it but in fact perestroika and glasnost created an environment where people have lost their fear to a considerable degree and speak out In the kinds of areas as in the Caucasus between Armenia and Azerbaidzhan this is a by-product of it This is a no win situation for anybody down there because it has gone so far the area is in a virtual state of semipermanent martial law They don't call it that and it ebbs and flows but there is no mmwmuwa n n HMhit- -oC t 493 11 obvious easy solution in eight othe than while and huge they can just keep the violence under control and manage it sennroa BRADLEY And this is a as of right not it is primarily Azeri Armenia and some Georgian nationalists an There are some Georgian nationalist disturbances but it has not figured in the communal violence And also I think relatively speaking it is of a much lower order than the other two SRRATOR So you are talking about primarily Arnenia and Azerbaidzhan an Yes And you are talking about over 100 606 refugees now with Armenians going one way Azeris coming another I mean there is a lot of resettling of populations just out of fear fear of communal violence and the need to get inte a more protected area So I mean they have got a real probiem it is not separatist in its thrust It is not secessionist But it is a management problem ssunron BRADLSY It's not Estonia 13 It's not Estonia It's different than that BRADLEY It is right KR But to speak of the Baltic that moves to the second of which Estonia is the most dramatic The thing aboot the Baltic I think that is the most interesting is that wauwgumwo-IH 39a ammuw ma 2 494 12 this is the area where the legitimacy of the Soviet stata was always the most questioned but yet it is the area where Gorbachev and his colleagues seem to hava chosen to try to experimant with paresttoika the most Because in tact what has happened in the Baltic is not just a product of glasoost and peresttoika in that sense that is bubbling up because petestroika creates more opportunities Gorbachav's own policies have abetted what has happened in the Baltic more directly than that essentially by replacing a whole slew of conservative old line Brezhnevite political leaders with reformers in the Baltic and given them the charge it seems the right side of popular feeling as best they can And so in effect what has come of that is that you have had party laaderships and Supreme Soviets as in Estonia that basically are really pressing at the edge of what Moscow in the ens wants to allow Now obviously there is a calculation here in the long run that they think I think on Gorbachev's part that maybe this can be managed that the rationality of offering the Baltic tore than it ever has had since Soviet rule came into it will overcome the emotionalism of wanting to try to take it to its logical conclusion which is independence which Moscow will not allow 2 think they have made that fairly Estonia is farther out He seems to have been somewhat successful at pulling Latvia and Lithuania back a bit short of mammal-human 8%33333335523 33 495 13 pressing this to the end this i an on qolng process nut I think it in clear that they are trying to treat that issue very differently than they are trying to treat the problem in Armenia and Azerbaldzhan because it 3 very different But you know the end is not in sight This is one of the inevitable problems that perestroika of the sort he is talking about has to ultimately deal with It has just come a bit sooner than I thought it would partially because he pushed it sooner than I thought he would Two other things briefly because the other two have to get in Paul is going to talk about it but this whole general shift towards consumption another way The need to give people a reason to believe in perestroika has become ever more evident ever more evident In any case it is an obvious political need on his part He has got to get the populace to buy into it and right now they aren't because basically they don't know where don't know where tho beef is That is the third point And then the last one that fits in thin same period is what I would call foreign policy I don't want to turn this discussion over into it but obviously the New York initiative the acceleration in relations with China which you have been talking about for some time the fact that you are going to have a summit next year almost oertainly_1 would say their national reconciliation or what you could call a gamma MHH emw muwmmawwua 21 496 1 conetruetive role in both Vietnam and in Angola in trying to reach some sort of settlements there even in the Angolan case one that is orchestrated and managed by us It is a very activist approach geared both for its own aake that is better foreign policy as well as creating this kind of envitoneent that he wants I would also submit senate BRADLEY That environment being 8R nanoxwent Very benign very accommodating very- that is the Soviet Union as a constructive world power rather than as someone who is always w I mean I think that is the image he wants and to some extent the reality in ways Not necessarily senaeon So he gets trade an BLACKIBLL I think he probably thinks that is further down the road in terms ofaw Paul is going to talk about it so I will let him han le the trade part of it But I don't think that is the immediate thing I think there are political benefits to be had in general in terms of creating a better image for the Soviet Union And also I think he has done a coatwbonefit analysis of what some of these other areas like Angola and Vietnams amount to and has decided there is a better approach for the Soviet Union than the one he was purauiog one that both cost less and is politically more beneficial and doesn't hurt his security and doesn't threaten much of anythingi ammo-mammo Wt-Ohut- m warns-numb l 497 15 Other thing on this one point though goes back to the power consolidation earlier one impact of what happened in September and October in Gorbachev s assuming the presidency Ligachev'e downgrading and all of this has essentially been to increase his clout e already heincrease his operational and tactical control over foreign policy decisionnaking and I would say national security decisionueking Kit allies Yakovlevu and Shevardnadze sit athwart that Yekovlev heading the foreign policy consission for exeople in the central Committee Shevardnadze the roreign ninistty The changes resulted almost certainly in changes in the Defense Council composition we don't have ovidence for it but based on precedence and what we know about who usually is on that body one could judge that Even Kryuchkov's casing to power in the K63 woul probably be viewed as furthering that I think you are seeing a Soviet SIADLSY furthering what ll furthering Gorbachev s effective control of tho foreign policy nationol security policy decisionneking process Sort of not just as ooterninout with the Politburo but the key players are his or at least very responsive to whats he is going to vent to go And if we inossd are getting large decision node on this at the UH I think it would be reflective very much of decisions that at go back that 498 16 for of thinking further back than that but of decisions that coma out of this I don't think we can underestlaate the importance of those changes in terms of how it has probably helped him in foreign galley SERATOB BRADLEY In addition to Shevardnadze and the Befense Council you said who an Shevardnadze would have been there anyway Yakovlev would now be there Kryuchkov the new KGB Chairman would probably be there Ligaohev would probably be out if he had been there before And Chobrikov night be out also Don't know We don't know precisely But the thrust of all of this is -- and Gromyko would be out of course whioh is another important one in that context So you are dealing with a political leader in a stronger more authoritative position on some key areas in dealing simply with the West And I think that you see that partially in his activism and I certainly would say if you get any dramatic move in conventional arms of that sort and we'll talk about that later -- it has to have reflected this political reality as well as the sort of larger policy reality of his ability to drive a consensus and have a lot more support in tho leadership than we probably have given him strength for -- taken into account That doesn't mean that problems go away that perestroika works You know all those kinds of caveats I 8%333333333335 5 499 17 how not talked about They would still be there If you want to we nan get to them SENATOR kill- LEV Okay 93 11 sauna-Inma menu-Amp new vamp-mung 18 STATEHENT 0 PAUL 93901 DIRECTGR OFFICE OF swarms OF HR ERICSOH What I thought I would do is kind of couch why he is taking same of the moves he is taking and what he hopes he ll gain and what he is net doing I think that the nee to gain additional flexibility on econoaic issues may have also played in last September's events I think we'll point cut that there were leadership disagreements suzraunding the FY 89 pian that it surfaced and also perhaps on the upcoming rive Year Plan and that same of the stop that he has taken have addressed some of these disagreements I think Gorbachev felt that it was increasingly clear that his reforms woul have to he in some ways more rather than less radical and that he had concerted resistance to some of these reforms At the same time I think he feit that he could not afford ta wait for such reforms to take etfect He needed the old style resource transfer m the bullet that he had been trying to dodge for the last few years n- and that he needed to have shifts to the civil sector primarily from the defense sector It was clear to him that the workers were net going to put their beaks into making peresttoika werk until there was something tangible on the table Domestic inflatian which we'i1 talk about raises yet umwmubwnu another problem and the need for yet another set of initiatives In tact the etonony has not performed well this year Soviets can point to a rise in investment spending but at the same time the commissioning of new plants is down And so what you have is a chokepoint They tried to do too much too fast and you have a lot of unfinished plants because you just can't get everything to everyploce and there was too much competition for key inputs And so his modernization if you look at it in terms of bringing new modernized capacity on line was clearly falling behind At the some time he had a situation where you could point to increased production in consumer goods but increased consumer dissatisfaction Inflationary pressures led to longer rather than shorter lines and marked price increases in those markets that were private Fruits and vegetables moreover in short supply because of a poor harvest in av aa And even though we see signs of substantial increases in meat production complaint form consumers on meat have been substantially on the rise 5333103 BRADLEY 0n the quality at BRICSON No availability We frankly haven't figured out the discontinuityt SKNATOR That there is increased production a an ERICSOR That by all indications there woo an increased production while at the some time there have been on 0 ch 0 ti BR3333333535333 24 502 20 increases in complaints about shortages The budget deficit problem as well is coming home to roost as they begin to sense that it was a real issue Overall growth is likely to be about 2 this year it s a so t number They will make no major gains in modernization I think Gorbachev and his economic advisers ere increasingly aware of the risks and costs of fundamental change think they w as one of my colleagues would say they walked up to the cliff of radical reform and took a look down in the gorge and backed off I think Gorbachev realizes that he cannot move ahead aggressively on price reform and some other major initiatives and decentralization For example he stepped away from quality control 50 even though he has in all likelihood gained additional flexibility as a result at this fall's events my sense is that the pace of reform may be a little bit more neasured in many areas than we would have thought But he has advanced and moved ahead aggressively I think in two main areas The first has to do with consumer welfare we believe that the FY 89 nlan received some last minute revisions For example in early September we were hearing about public complaints by light industry about investment having been cut We were hearing other noises about investment going to agriculture having been cut But yet when we see the final plan these cuts id not waunatarialiro mw in fact invastnent tn light industry and booting food processing a all sectors associatad with consumer welfare have been emphasized Inportantly the shift cones at the expense of investment elsewhere as near as we can tell there have been cuts for planned investment Pauaa l sxxaron BRADLEY at the expanse of what an antenna 0f investment going into some heavy industry The Soviets have aatablishad what they call 49 priority industriasr And my sense is that what you are seeing is a recognition in part tied to tho lack of commissioning and the competition for investment duration that to get the job done they have to narrow the scope of their efforts and focus on a smaller set of industries This strategy also allows them to free up some investment resources as wail Gorbachev also has expanded private and cooperative opoortunities and offered long term leasing arrangements in both agriculture and industry And I think we are seeing more of that than we would have otherwise have seen A racond area worth nottng is what seems to be increased pressure on the defense industry to boost production of the ctvilian sector I think if you go back and look at the record on this the leadership started out by transferring some managers from the defense to the sector to boost management productivity Then you saw pressure to boost aau ugmgmamgmrezg 22 production of investment goods out of the defense sector Host recently you saw the tasking of the defense sector with the production of of what had heretofore been civilian plants And lastly what you are seeing are clear statements by officials from the defense-iudustrial sector that they have made accommodations and will be boosting production of civilian type goods at the explicit expense of de ense production We haven't seen senaroe SRADLSY You mean they will close military an eaxcsoa They'll say I've got to close this plant to meet these civilian production targets an ancestors 0r 1 have to retool this plant to produce w stop producing what it has been producing and proouce something else an ERICSOR For exampie in midw0ctober on national TV Prime ainister bloated the Chairman of the Hilitery Industrial Commission for inadequately supporting the leadership'e civil economic agenda at that time he ordered defense industries to staff newly ecquire civil plants quickly with their best people and to integrate specifically the production of food proceseing equipment with their main activity weapons production SENATOR BRADLEY Could I interrupt a minute I have to take a 10 minute break to see this Japanese minister axon 505 23 A brief recess was taken tron 11 20 to 11 42 o'clock SENATOS DEADLKY We left off with your second poiat that the defense sector is actually spending sore of its own Ianey on these other nonasilitary areas as 3316808 That's right Senator I think there had been a couple of other public announcenents by managers in the defense industrial sector that have been sosevhat specific including language to the effect that certain production lines would have to be closed down which lead credence at least to the seriousness with which the defense industrial sector is according to leadership issuance of orders to boost civilian production We have yet to tee a flow of product as we said and we have yet to see anything tsngibie but it is our judgsent that a sandate has been laid down and that the ieadership is serious and that its orders be followed The third point I want to raise pertains to where Gorbachev wants to go tron here as ends 1988 basically a year where nothing happened with worsening inflation He has a new sense of flexibility He has taken that flexibility and saved towards greater privatization throwing sore resources at tho consuser and laying down some additional sarkers vis awvis defense I would like to point out that we now look at the next mammoth-unh- atanaazazaazazzg 2 five year plan as an indirator of where he is moving with this flexibility If Gorbachev wishes ta make significant shifts in investment between the defanse and civil sectors certainly new is the time to do it It is optimal in teraa of the Soviet planning process at it pertains to datense planning to finalize resource ailacations aver the next five to seven months It doesn't mean he has to do it new but it is the optimal time to do it think that over the next five years he will continue to decentralize but I think that he remains stymied the entire leadership tannins stymied over the role a price and natketization in general They haven't figured out how to solve that problem and continue to wakk around it I think you are going to see in the next five year plan a continued push an modernization clearly but a more focused push as they better understand what the ecanony can do SERATOR But when you say continued focus on modernization ycu mean new plant and equipment KR ERICSON Yes sir t hrOl BRADLEY Okay at 3116808 But you know and I am just speculating here that what you may not see is storming type apprcach that ycu saw as being very prevalent in the last two or three years that they have learned from that But Gorbachev has a numbtr of problams which are coming wuwmmuwnhone ta tnoet which will complicate hie lite immensely He sent tind a way ta balance his budget in some feehion or else inflatian as it did this year will erode nay gains in consumer welfare that he is able to bring home he a matter at fact in tadey'e_ 819 there is a feature on next yrar'e prablen The 1989 plan is more rather than less inflationary because he has called for increases in spending on the consumer that are net matched by decreases elsewhere or by increased revenue The ecancny is still overheating How he addressee this is prohienetical But I think that what he has done by publicizing it is ta lay down a marker eaong nuuber of the Party and the civil sector that eonething he to be one to raise revenues enhntet So he is not only going to give people higher prices lees job security but now he is going to give thee higher taxes an $316808 Well I would imagine thet he would feel more contorteble in terms at latteries or some other type at indirect leans of seeking up excess income And he has other option which the Soviets have used in BSHATOR BRADLIY The stock market I mean that is the first thing I thought of when I heard this idea that they were going too allow private citizens ta invest in stock en xaxcsos That's part a it You could look at it free that perspective and thet pleys role yes 60 233 0 92 - 17 eh 238333 3333383 26 an nacxacazu I think they ara trying to get the rcv nues back iron the tax on alcchol that they lant ssuawou SIADLEY Right tight an anxcson What he is not going to do 1 salsa you know my sense is ht is not going ta do it by ruduclnq his subsidies I lean par of his problem is the heavy uubnidles in staplas And that would solve a lot of his problang to let retail prices rise And that Hl Prices cauld be raised on luxury good and othcr kind of good it he did thatproblan here a nucleus at A problon he hasn't focusod on in energy Thu cost of maintaining production for all and coal are accelaratlng And certainties ntnoclatod with the ability to uaintain the lcval of production are ocrcasing Ha suen the Sovlcti focus on thin ene We think it will be a big issue ova the act five ycarn Part of the Bovlot ptogran traditionally was to address this by not nuclear energy but Chernobyl I point in $0 8 w for nationalistic so he has I hard 1 3uc hurt I would like to and with what all this means or occign trad and zaltwuoat uconoalcu and what hava scan over the 13 low Ionthu eewnmenmrexe's 21 I would thet en indigenoue solution romaine preferred We have no indication of a major itport punh not do we believe that there will be one herring elnoet penic buying to quiet consumer unreet I think the Soviets ere eeneitive extreaely eeneitive to the risk of tecoeing financially leveraged to the West and I think that they are uncertain about their ability to maintain export earnings over the medium and long tern And given this uncertainty building up indebtedness carries significant risks Horeover I think they continue to harbor misgivings about the effectiveness of direct equipeent purchases particularly when their industrial base is in transition There are probleae today bringing plant and capacity on line and the foreign trade sector is still in the lidet of reorganization i find it personally useful to characterize their foreign trade initiatives as being those that are designed to rationalize trade and technology transfer and to design and implement rules and procedures that allow for the eoet attentive tapping of western technology and capital and ultimately to eexinize their opportunities for export ealee joint venturee and secure So basically you say they went to tap technology and take joint ventures to try to increase exports an nexcson wellone Senator but I think what Gorbachev needs is western knowahow not just 510 2C eetern equipnent And weetern direct investment connite the eetern consortia tire to the of the venture in nude-entez way And thet is whet he vents when we talked about the benign economic environment end the linkage to econonice I think it liee precisely here It it one thing for weotern tire to go in on coneueer goods reject let'r say in china to nuke 9y clothee where the event heppene in in loathe or 12 loathe It is quite another thing to have western fire go in to energy developeent or 10 eeic industries or none other type of thing that the Soviets ll eede where the payout be 5 or 6 years in the offing And 12 it is my personal view it is precisely to encourage western 3 oenerciel interests to take a long tern position that he 4 eede to have this benign atmosphere 15 Thet is not to that the whole idea of creoits and 9 15 illion here and 8 billion here does not serve his purposee 11 at I would note that the orders ere yet to bel forthcomingwith the broader dynamics 15 seearoe slasher got that implies that he he got to 29 really create clinete of tone reel stability for people to 21 elieve that it is good for 30 years I mean he has got to 22 even more dramatic on the conventional force side and on 23 he defense budget side than he has been to date then I have 2 eerd anybody say or I have heerd enybo y sey he it going to Humane-emu wmmnuwuo 511 29 53 netlncaxns Up until 15 minute ago perhaps SIIATOR SRABLSY But you say even 30 cut in areas I Fuuan You said 30 cut in his military budget was the ruler an The rune was forces 33 forces The size of the erce an forward deployed forces an ISCIACEIN Not u BLACKHELL No I mean if you did it niliian and alt or so In nacxecaxu we re talking on the order of a nillion ersen cut and whatever attends that in terms of structural eduction taxaton BRADLEY But let's say that that flaws through herefere to the defense budget right Hear ing that you then an out the defense budget nut the titan that are going to eke these cannitments they' re not going to make them all in st year nu enxcsou That's right he eeriaue counitnent that it at any point in year 1 2 t 7 things begin to ga had these tne just won't be ete ight Thty ll just pull out They just wan't they reach he point where they will have to make a judqaent and cut heir losses 1 333320 BRADLEY 59 I mean if he he to create this 11- to by dre-atic reductions at whatever even to attract panama-wrun- mutant- think a fundaaental probial that he has in my View is that the ting horizon for the kinds of thing that he want out of joint venturas is inconpatible with the state of affairs Stanton BRADLEY With what he has to do to attract it in Ithe first piste an zaxcsox Right BEKATOR SEADLIY You seem to be downgrading in inportance thia problem that he has with the mass of people eying as you said Bob where s the beef of peraitroika on onruner a HR Gh -- allure He can purchase a lot of things as on buy allot of perfume or clothes u an razcsou That's right assure BEAHLEY or food and put it on the shelf 80 he poopie any ah see what perestroika has neant for as ut that is realiy just a short tina thing KR It is a high risk saunter BRADLEY That is not a whola lot different than avinq the central bank advance credits to the enterprise and 3y that is an advance because productivity is going to ncrease It is essentially having us play the role of entrai bank or whatever advancing to than their goods with he assumption well productivity is going to but it he M s s w 513 31 Otin't get to the razor-n it it jult a thort tern thing which will ultiaataiy lock his in more an tore to a rtiationahip with the ght which is -- which sakes his a kind 6 Iuppiicant I mean he can anly a HR BLACKKILL It would ask no sense w an unresos A superpowar supplicant that's right manhunt It makes hi 3 true daveiaping country HR IRICSON That's right got it an It would make no sense unlas he in following that up with both changes in sort of the praduction consume durables the incentives that go into it and the ovengnt of factories to producing it to providing the - hing on their own Because atherwisa he'd be chasing an RRICEQK Well he still would make those moves whe same is what happens it they fail The risk yoh run if he oesn t make it xx anhcanhhz But they can do a b tter job in that area moving so-e resources to it at Well at the risk of aversimpiifyinq to 0 back to one thing Paul said earlier where Gorbachev ovioutiy wax driving a pace of reform and a pace of change but the system wasn t ready to absorb he has madified that pproach ha hasn't abandoned industrial modernization but a has recognized and has focused on the head to develop a ustaining notivntion for change in the area of foraign y pnumwmp paum- 21 514 32 lpolloy thte is something where we could probably spend nest of the day because the developments that have been occurring are very interesting You way remember a session we had here I think it had to do with South Asia -- when we got into a lecuaelon of what we saw at that tine an a changing Soviet arediga for foreign policy strategy In effect the new thinking said that heretofore the USSR has relied on military owe to oanage its security That is very expensive and resource consumptive The USSR should develop a political trategy which will not only maintain but perhaps enhance ecurlty at re uced ooet We have seen this summer with the heating up of the with the Shevardnadze addressee followed up by the boheaup in the Central Committee and Hedvedev's reaffiroatlon i this move away iron the class struggle as defining the urpoeen and objectives of forelgn policy If you will it is towards a more real I think Gorbachev would till see geoetrategic geopolitical East Weet ut the way it is now being articulated and nob Blackwell out went down the hall to watch some of Gorbachev'e UN ddreea on television and tells us that it is very much the hevardnedae line which we may have all heard but which is oing to be rather impressive to an audience that hasn't heard -- which is saying that heretofore -- I am not going to note now and quite frankly I am drawing a lot on some of mmwamnumw unk- Mm cannula-un t 515 33 tha cthat thearaticians too a but what it say is that the 56853 has presented to the world a threataning inaga and the world hat reacted ta that threatening inaga and the 8333' need far strong forces has became a yrophecy it also says that because the ussa viewed all turaign policy ventures in terms at a class struggle rather than in what is in its best interest taking into account the mutual interests or the legitimate interests of others we've creatad this situation which has imposed this heavy burden And if we can remove an wall excuse me there is one are aspect of this which is quite interaating I an getting a little academic here But some Soviet theoreticiana who ave acceded to positians at political influence in recent ears have written about the 0 5 military industrial 36 its ability and the 0 3 military power as being the chief source of v 5 political intluance around the world and that the way to weaken the 0 3 influence was to attack that And they seem to be saying that the way ta attack that is remove his threatening image thereby removing the ability of the S to start its political influenca in places like North 31a tha North Pacific and in Europe All of which is a long lead-up to say that what I think on are seeing in Europe and what I think you are going to see van lore of in the coming year regardless at whether thara a a major announcenant today is a heating up or a much more intonaitication of the effort to convincu nutopu that the Soviet Union is less of a threat That gives Gorbachev at are latitude to pursue his own internal economic agondn ado will be a part of that but only a part And it will also Strengthen his hand politically in Europe So 1 think that to see Gorbachev's foreign policy agenda in Europa solely in turns of getting access to trade is to arrow it too much Ho sees it as tracing up this butdtn of grants One comment on that burden at detonse I certainly grco -- in fact y sort of wind op content here had to do ith looking out at this tuture and how long it lasts but it a going to be important I think to keep in mind that it orbaohev is able to politically bring about soncthinq on the at a reduction of nilitary forcct which really goon act to Khtuahohev in 1957 -- I think it was 57 to '59 hrulhchiv undo the fitlt big lot of cuts if Gorbachov is bit to politically Ianagc this it would suggest to no that has is nnough behind tho whole into at rcsourca llocation hctwoon civilian and lilitazy purpotc that ovon it should pass tron the political scan too or five oars tron now bccaulc of the particular naturc of certain atoll or political infighting or political learn that there I at loatt enough at a body of opinion that wants to nova in hit direction that that o it any well sustain ittult which bring no to this long tango problem thut we have umunubweou 617 35 for the Intelligence Connuntty And I heve to loot at it solevhet petochieily I look at the Office of soviet Analysis in 15 a a starting point and I have tried to think a Rat about this recently both because I knew I was going to end up here today and for a meeting that we had amongst the Agency hierarchy about month ago And I thought oi a couple of fundaleotal gointe we need to keep in 31nd if 1 can be pernitted to go into a little bit of extraction first so much discussion I find myself in both in the government and in the outside world focuses on the Soviet Union in almost an academic way like we are all sociologists studying this sociological phenomenon or thie political phenomenon And there is a need to renenber the the button line is what does it teen tot the United States Now that is the job for us as intelligence officers we all retire and take up ocedeaic poets there say be some more freedoe Secondly the Soviet Union in ueny ways is fundenental part at the Alericen political concept It 13 w I teen 1 think back went to school there was Stalin The postwar concept ll neceacnxu It is the postwar concept It is whet all of on who grew up in the postwar period and even c- I think of Iy parents end their outlook who were young untried during the war end the Soviet Union is eo tundelental to our outlook on the world to our concept of what is right one Minn-nonun- MmmnuN-na 518 36 in palitics to our sense of security that major change in the 0333 is as signifitant as some Iejor change in the sociological fabric of the United_5tatee itself And that is not a frivolous point I think betenee it gets down to what has been the analytical challenge for us and what I think in going to rennin the analytical challenge for us A news bulletin Gntbechev will cut troop strength by 500 006 over the next two years and will substantially cut conventional armaments 500 900 is a fairly -- an BLACENILL 10% RR EHCBACHIN That's 10 an The bulk of that can easily cone out of East Asia KR 3LACKHELL Don't bet on that an Let us return to that subject in just moment Let we finish this I'll come back to that That s true 80 we now have a new analytical challenge for the coming year and that is finding out where these Stanton His speech did not ask for reciprocation In BLACKWELL Speech is not done yet This is sort of nidwtlight KR ERICSON This is analysis on the fly 31 me BRADLEY Okay HR secencazn we ll get an update and then we'll come mu-ruebeak to thie BRIATOI No but keep going Deng because I ind this very interesting at all right Now one of the things and I'll be completely candid 1 have made some frivolous remarks on social occeeiene about if Gorbachev is he will cause major social displacement in the United States but the ie only m that is not entirely trivelous There are not many hone at old wizard of Armageddon and it is kind of like old case officers trying ta find enploynent But it is so fundamental that in all hcneety when I think of what he been the burden on resources of the last few years a aejor pert of the burden he been not just in the analysis but in the brokering of the analysis SWWR SHELBY The what an necencaxn The brokering eenneoe stunner Ne no no you any the reel what Kl I think of what has drained our analytical teeourcee That ix enelyete' hours enelyate' weeke anelyets' months and what have you There is both the effort to do the analysis and there is the effort to foreulate the understanding en to articulate that understanding in a not neutral paliticel environment Stanton BRADLSY In a not mutual HR nacnncaxn Neutral 83833 83538333353 520 38 RR Neutral SKRATOR BRADLSY Okay an That is to say let me come back a SENATOR anannar you mean it la to articulate the analysis in an environment that presupposes the Soviets as the enemy an achC INr Well that resupposes all kin a of things about the Soviets Now let me make one more remark here that puts some of this in perspective I don't believe that you will be able to find anywhere in the government out or the government think tank academic or otherwise anyone who articulated in 1984 a forecast or an outlook even as a relate possibility What wa have seen in the last 4 year I do not think that exists Now we spend megadollars studying political instability in various places around the world but we never really looked at the Soviet Union as a political entity in which there were factors building which couldxlead to the kin of -- at least the initiation of political transformation that we seem to see it does not exist to my knowledge Moreover had it existed inside the government we never would have been able to publish it anyway quite franhly had had we done so people would have been calling for my head And I wouldn't have published it In all honesty had we said a weak ago that Gorbachev might come to the UN ano offer a amount-mun 24 521 39 unilateral out of 500 900 in the nilitary we oold have been told we were crazy We had a dif icult enough tine getting air space for the prospect of some unilateral cute of 50 to 60 006 SIRAIOR BRADLEY What do you mean getting air space an naclhcal Well getting it written and getting it articulated without it being hammered to death and 8335108 BRADLEY You really are a- this is extremely helpful and provocative u see you are aaying that one week ago or two weeks ago that you m- that the 500 060 person prediction would have been snuffed basically KR nacracaxu Well we would have been able we would have -- if we would have had some legitimate evidence from a reliable source with access who says it was going to happen we would have been able to exercise our responsibility to report this information and comment on it But I can assure you that that comment would have been heavily caveated and the arguments against it would have been heavily driven towards preeulptiona about Soviet behavior HR ILACKUBLL Senator if I could just add something on it just to get the sense of disagreement thee Up until two weeka ago or yesterday for that matter there were real oifferenceo in the Intelligence Community over how much economic strain the Soviet Union is under and how much they have the kino of economic motivations for cutting defense 522 40 That is at one level The real difference in the Connunity were as to whether the Soviet Union would undertake any significant unilateral out at all I am not talking about 500 606 I am talking about 50 000 or 20 000 or anything that was otherwise not tagge to something reciprocal KR HachC xu And I don't want to pick on any indivi ualt 33 ELACKWELL no and I didn't say anything about any lndivi uai HR But one person has already disparaged the $00 600 that I just announced here Someone in the room I have forgetten who it was SKNATOR BRADLEY 0h yes an nacaacaxn tut my point is when I think about the analytical challenge at the intelligence challenge of the future oi the Soviet Union it may be my bias having spent nest of my career in analysis but my etperience of the last several years says it is still going to be in analysis It is still going to be our ability to ferret out the information our ability to do a careful rigorous analysis an our ability to present balanced even if somewhat provocative and unconventional views Now I think we have had some success on that in the last ten years and i will try to describe what kind of environment I think has contributed to the success and also contributed to tho coat and where I think we will be going with this ow as we said the Soviet Union is such and the percaptions of it are so ingrained there is no one who is really neutral about it except for ma and objective that we can make logical arguments but we have to be able to get down to hard evidence About four years ago we reotructured our analytical component that dealt with the Soviet Union and I can't say we did it becauoe we forecast what was coming down but we did put a heavier effort on societal issues we did make a much heavier analytical commitment to dafense industry than had been the case before and we did about half of this by restructuring our own effort It was not just through increased resources Ano I think that that i5 what we are going to have to look at in the future we are going to have to go back and take a look at how we use our available analyst hours because I don t see a great period of largeos in terms of numbers of resources And so it is going to have to be e fioiency a little perastroika of our own We spend a great deal of time on pr sentation and many of us wish we didn't spend so much and we re trying to experiment with some new forms of publication which are less draining of time SENATOR BRADLEY You mean you spend a iot of time writing up doubts 524 42 an writing reviewing palixhing and going ovei the texts -i HE Editing uasaaging 53 It is not just editing SKRATOR BRABL32 Getting ready to defan what you write basically an nacxncaxn Because an of the deveiapments of the last 5 to 10 years in intelligence that has been most ptanaunced from my perspective has been tha greater expoxure or the ptaduct of the Intelligence Directorata to otha guadcrs including the Cangtess And that means that that is no targiveness for carelessly wording things I give you an example with which I think you are quite familiar Wu did a study some time back a study which has stood up against heavy scrutiny from people who dcn't find its message ta be helpful SENATOR BELDLEY an oil an aaczacnzaz No air This is more recent than that Oh okay as aacxacaxu This had to do with the readiness of Soviet torccs in Eurcpe to go to war how much time it would take than and how ready they would be We got a few hits in the newspaper on this We outraged many paaple in Aliied Intelliganca Services NATO has m I guns I haven't talked to an official of an Allied Intelligence Service in a year who c-333c3oaczotocza i i 525 t3 hasn't taken me over in a corner and asked me when I an going to get of this silly position we have that the Sov etc can't go to war in 8 hours I understand the political problem at these Allied service reps My point being is m SBNATOR You mean you're saying that NATO couidnt' go to war in 48 hours an naceacnzu The Warsaw Pact could not And would not It has no plans to In fact there was niece -- we gave a briefing on that to the House and it finally contributed to the piece that Yes I saw that 4 HR Eacaacal z Now that there was one paragraph in the pivce that was carelessly worded which should have said that as a consequence of many improvements the Soviets have made in their forces they had also brought upon themselves a much greater requirement for mobilization A much larger infusion of men would be required in order to get the kind of sustainability that they had sought in these improvements The paragraph was somewhat carelessly worded to say in one aspect they are less ready Well that one sentence caused a furor in two continents And my only point is that SENATOR BRADLEY so you have to take your documents and your analyses which while precise should be loose enough so that it allows creative thought and instead you treat them as 526 4 -- you have to treat them as if they are speechee in a canpaign where every word will be looked at 0 speeches of a leader or head of state sacsncaxa When you are dealing with the Soviet Union yes Sir There is not much slack So -- 58 stacxusttz Talmudic In necsacaxs So we really do have to work very hard at this Now i don't want to aake this sound all bad because I will be completely honest I mean the word polltioization is used and it is used incorrectly Intelligence judgeente have a lot sore politicel resonance than they used to because they get more exposure in the press in the Congress in the publio On the other hand frou adversity strength perhaps In my own viee because of this our product is better so long as we continue to insist that we are professionals and we want the best analysis And we're going to find a way to deal with this sensitive and loaded consumer market And we're going to have to sake our analysis better work the evidence be careful about the foruulation of the judgeents don t go v don't be overly assertive and try to do those things which intelligence can do that other people can't Row nany professors on the outside write they print in the sedia and they get great attention Hany of then quite 0 qu 527 45 trenkly and interesting that have tote credibility with policymakers singly because they're not pert at the intelligence eetablishnent Kn nacencxxu what I an saying is that this is a for lure challenging pzoblen And it we are going to get in credibility with the coneuuer we have to demonstrate that our product is more reliable more carefully docunented more carefully researched And when we articulate these judgments well 1 think that we had a session here following some press discussion of our economic analysis A soviet economist can get out back of an envelope under Glasnost and do a piece and that piece will capture more attention and in many cases more credibility than all of the work of all 0 our terrific blue collar who walk in every day put down a lunch pail and grind awey and muck away on these data and produce things like the paper on the deficit for example BRADLEE Right an We we first came out with our studies and said Soviet defense spending the growth rate w has dropped to something about one or two percent and stayed there for a long work has to stand up And we devote a lot of resources to it And I guess I'm not going to say this has to change What I'm going to say is in some resyects I think because most mowmmuwn name-anus 528 46 of we have thie lost of on have thie coneiteent we are intelligence officers just like none people are leavers and doctors that we're going to succeed in making thin better I think that the product hee gotten better because we've dealt with the note intense environment And we've dealt with it we've paid note and increased attention to the product itself And because since the rest of the world is going to be playing we're going to play with the rest of the world Now we have routine and ontortunetely eonetinee we think too routine contacts with an immense range of outside experte And we intended to continue that He deal with the routinely e keep these things us And we nd thee to be of intense veiue A there ere ideas outside the Community T ere are thoughts Secondly even when there are not sometimes the best way to steel your product is to subuit it to the heaviest criticien you know you are going to get And we know of placee where we can send our products where we know what the ctitiolee 1 going to be and we'll soy take your best shot Maybe you'll find flaws in the analysis 0 we re too close to it 80 Whuwm m83833938 529 7 SKRATOI Yau mean you knew what the criticise it going to be an Sure Stanton You send it to the right and they'll say you re too soft ea eclncax I know someone who for example on any military anaiyeie that we have where I can send it end he will nail all the analyses and when he fails on that he ll tell me all the evidence is Heekirovka disinforeetzie But if I find hie reduced to that I know I've got pretty good paper How the problem to the coming year ie going to be lee a collection groblen and it's going to be less a proble of trying to get other pravocetive ideas The problee it going to be getting at the reel analytical queetioae and getting the evidence together end trying to whet it and ta articulate whet it aeene he I've said before we just have to get away iron or get beyond political social abstractions The biggest queetione ee eure you are aware are in Gorbachev for reel '511 I've heard ere worde no deeds I haven't seen anything yet 1 511 right well true we haven't enythiag yet It'e here to see things and eeybe eeteriei thinge heven t loved yet nut we're going ta have to decide whet does reel quote unquote mean What are the signs of this real change We have to look at alternatives and explore those alternatives Again I have found that the best way to deal with people who have a particular bias is not to dismiss their View but rather do the best you can to substantiate it And then show that person well we looked at this alternative We had a group of academics in recently and just did a quick look at alternative futures and got their views on whether Gorbachev would consolidate cover would be accommodate would there be political change and would he be ousted Just for what it is worth that group of five or six came out with twenty-five percent chance that he would consolidate power ano be able to proceed on his agenda Forty-five percent chance he would have to accommodate And I think that leaves me what thirty percent chance that there would be a political change and he woulo actually leave office in the next few years We don't see too much prospect of getting more as I ve said So quite honestly I and my colleagues are -- now that we are over or part way through certain administrative issues having to do with an election year u going to be looking at any changes we may have to make in the way we allocate our analytical core What are the questions that are going to be more pressing require more effort where can we do some contracts 25 531 9 -- external supgort -- in areas f kind of a maintenance sort But it really comes down to this question of yes collection and technical collection as well as human source think maybe we may be getting some oovances in this There are some programs ahead which are going to help us very much on the military front r SENATOR BRADLEY Right HR But it takes us down to whether Gorbachev is really reconstructing or retooling plants fro military har ware to civilian hardware Today I have a five hundred thousano person out w a half a million -- a ten percent out w in armed services manpower announced Where is that cut going to be Is that out going to be in ministry of Defense support troops In that out going to be in the kinds of terror with both constitute part of the combat threat and which draw heavlly on resources That is if there are some cuts in the numbers of active divisions not only does that reduce some of the force but that reduces from Gorbachev's standpoint some of the forces that have to be equipped And I guess my bottom line is thir that people are continually telling us that there is an answer out there that we are stuck with this w there's an answer by going off and getting new analytical input from here spending some money to get some collection there That will all help 2C 532 50 ant the truth o the matter is that there isn't any easy way We're going to have to do our work continue to try and improve the analysis Continue to confront the tough questions And ultimately the questions I seen the importance of this for the United States is monumental If the Soviet Union in the year 2010 is not the kind of military threat that has driven so much of what we have confronted for the past three our four decades what will it be I'll give you another example I think I may have solo this last session If I di n't I have said it at the management conference That I saw to salient events caning ahead One was going to be sooner I thought that within the next year or so that Deng xtaoping and Gorbachev wouid shake hands somewhere And that now looks like it may cone true even sooner This will have an immense political resonance And the way that the perception of this event affect behavior in pkace like Japan and Europe is going to be very important to the United States policy It could also be very important to the way the Soviets disperse resources to military forces in the FA Eartern theater It could he very we the 855R is perceived in Manila The second event a little further down the road one which seems to have even of greater hurdles is Europe 92 And therein is a good case if the Soviet Union and perhaps 51 because the Saviet Union is a less apparent less military threat the role 9f the Soviet Union in the equatlen of the United States Europe and the East may be greater not less facing an econamically integrated Eurape because the attitudes of the Eurcpeans tcwards the Soviet Union are going ta be immensely affected by their percepticns if it stands up of a changing u s sra So I don't I guess I see that the intalligence -l BKKATQR BRADLEY 50 their attitude will change and that means what an nacaacaxn They may engage the Soviet Union they nay engage Eaat Europe in quite a different way and be less susceptible to the rs desires if they no longer see the military threat in the sane rdimensions And therefore putting it bluntly may feel less need to please the v 3 in order to sustain a relationship which has had largely security as its glue 335 0152 R1 HR nacaacnru That's exactly the strategy advacated by the theoreticlans mentioned earlier SERATDR HEADLRY Yes well that's very I find it is very provocative because I've sensed aspects of that over the last year and half talking to a lot of Europeans And I ve talked to a lost of Europeans about what Gorbachev means and basically they've said what Gorbachev ls 52 playing it a Socialist with a human face In other words human Socialism night And the question is what's the idea that you're playing And the anlwer that you're giving ne is well you know aaybe the Soviet theoreticiene are right in their analysis t at the Europeans aren't attached to any idea they're simply used to a military and a paternal or protective relationship ea uncencazx well I guess what I would also say is maybe that the challenge to our policy is going to be to demonstrate that there is more to this western alliance than a security arrangement BRADLEY Yes an HeanC lN And that's where it seems tr ne seuawon BRADL313 Now 1992 how does that it into this an neczacaxu Well I'm just thinling that if you a BRADLEY Specifically I mean you know you are saying that this is just another step along the road to European self identity Kn HCGIACEIR Yes senaroa BRADLEY ano tha #f0re because there's going to be a more integrated market they might say well we want to 90 our way in our relations with the Soviet Union well does that also imply we don't need you troops an anacxnenl Probably not an eacxacazu Probably not But it is liable to lean me w mg 19 53 that our exhortations for budget and connitoents on program will have less force an or course that'e going to be true in our own country a well If the threat is either perceived to be lee or in fact is lees it can t help but have resonance in tern of the question of ouch is enough in Europe and there and in tang other places The fact will difter ea KICIACEIK The single non answer I think to your queetion Senator Bradley is and this is again a purely personal sense that you know i've been grinding away as all of us have on this Soviet problem twenty years or more and the dinenaiona have changed in ways that we can describe when we describe the Soviet Union itselfe out I get a greater sense a sense that there are very large ieportant things having to o with international economic relations political relations and national objective that I guess being fully engaged in the Soviet problem that we haven't had a chance to think about and to articulate but they are clearly there And it seems to me that being able to ferret then out as to how the Soviet Union in developing and hot it will play into this is the real analytical challenge that intelligence faces in the 19903 as BLACXHELL What little part I saw of Gorbachev's speech certainly was very much playing to the notion about world trends that are indepenoent of ideology and alliance and 54 all of the other thinge And how his country at leaet it trying to get in with that I lean that's the whole face that's all of the Shevradnaze stat that's been in his speeches but Gorbachev a aoproach at the 0 x really reflected it as well Si Cone hack to one of your questions If suddenly there is an upheaval at the USSR and Gorbachev is out and we're going to cast aaide Pereatroika and all of these things what does that lean ln sone reepeeta that's the least interesting question smma amt Yes an Because we know hoe to handle that St hfcn And you bring the booka out and w ea aacaacara That's exactly my point If he w lost of the people will try to settle on a middle road that he muddle along It's less bad but it's still the same old Soviet Union That's kind of interesting seaaroa smasher Well how do you get people to really think about the other more radical alternative that indeed the new thinking strategy la playing out and the military is less significant and they've decided that they are truly not vulnerable and therefore they don't see any reason to appear vulnerable Appear hostile ea aacaacnrn Well inhumane-whoaSEEATOI ERADLHY Let's say that he follows this next year with another 500 006 and let's say you know at what point are you able to say this is really an irrevocable point You made you said earlier you think it it gets to a certain level that even it he goes that the momentuu of the reduction of military will have been so deep that he can t reverse it So the question is really well when is that point where is that point in time and in amount as uscsacaxu This will probably be a cop out This is a question which is HI Probably should be an eclhcax z Well I've elweye been a fool who rushed in but I don't think we're going to define it an a point And the analogy I've used is when you are on the tape of the lountain it looks like you're on flat territory when are we there I has lunch with an acade-ic specialist a tow months and he made an interesting point that we keep sey ng well the real test for Gorbachev is going to be here oil he passed that one But then the tee test is going to be there And he passes that one And this professor's cosneot was when are we going to say that Gorbachev has passed the test Rhea he abolishes the arsed forces It Gorbachev lakes these cuts and it he sakes the as I think he will frankly at least sole of the in visible 56 definable combat forces n- if ho doesn't he's gong to give up a lot of the political benefits that would accrue to this than if he follows it up at what point do various and at what point than does Gorbachev become a more active player in international markets Rot as a supplicont but as a player At what point do the Europeans who have always seen an active economic engagement if it could be economically sound as contributing to their security As you have probably noticed every time there is a slightest thou the Eoropeono quickly move that direction They see it as in their economic interest it they can develop' it And secondly they will all talk you that an active engaged economic reintionship contributes to security by reducing the threat SENATOR BRADLSY How is it in their economic interests so Well it's not now and I think that's the problem KR anxosoua In Western Europo's economic interest SENATOR BRADLEY I mean I can't see us n how it's in ostorn Europe's economic interest Thoro'o a port of me that says that Europe '92 and the tendency in Europe is to turn much more to the Soviet Un on and really going to plow a lot of resource into there My response to that looking at Anerkcan interests is to be my guest Go right ahead 1'11 focus on the Pacific you focus an BRICSON That would be the point that I would loot at And that is that you have a world that is much more contentious economically than a world 10 years ago in terms of a rush for technological lgadership Where is Western Europe in this All right It's sort of the odd man out in many ways in struggling for world leadership And one of the ways I think that you demonstrate or develop that means to catch up or stay on the top technologically is by building up new business Where s Western Europe's market Is it in Japan Not really Is it in the niteo States One of the things that is very attractive about the Soviet Union is that it is the largest untapped market that is credit worthy I could anviaion in the year 2900 a large European trading block where exports to the Soviet Union large joint ventures etc etc are mutually beneficial I mean it s not there today and Doug makes a very good point Because you got security costs and everything else stAton BRADLBY how can it be there without let's take the most elementary without some price mechanism 32 All I am suggesting is the sweep of the economic dynamics are not incompatible with the kind of the 60-283 0 - 92 - 18 monument-when l 540 58 other IR Hecaacara They can do some things to their which would enable i mean the price mechanian changes They desperateiy need it w they deeperately need to make their own economic mechanism work But they can manage to create a market for foreign producers I think without going through a full price reform an SRICSON Senator Bradley if you were to look at the excessive suppiy of Soviet natural gas See that lies outside the Persian Gulf There's economic conplinentariee there that are worth expioring In some areas of energy some areas of co production and just the idea of complete plants and elsewhere You are right however you can't have a full integration without price change HR atacxwaat I don't think anyone would argue that the Soviet Union by the end or the century is going to be an econonic player on the scale of western or Northern Asian countries nor should we fear it to become one I lean they simply -- they've got too long a road to hoe- to get there an IRICSON The issue is is there a true a European interest and I think there is There is economic letit an anacxnatt But it is bounoed because the Soviet Union really cannot be a heavy purchaser and other than raw 541 S9 notariala much of a heavy supplior economical it seems to me Thay don t havo a labor pool like the Chinese do or other countries do SBRATOR onaotsvz well I'm doing a speech tomorrow night calling for a acific coalition And I tend to think that there is this problem of not being able and that's what the last forty minutes have been not to be able to get out from under the lock of past assumptions and envision just from a standpoint of a creative and playful mind alternatives I scan that ought to be one of the central functions for you as nacsacaxn Well that is what we consider to be one of our central tunctions And I will say that while life isn't easy we've been --we've had some success and we're going to keep hammering it BRADLEY I would encourage you to And think you are right to say that in order for you to do it productively given the direction Gorbachev is heading you need a broader reach You need to figure in well where does Europe 92 fit in to this thing What about m where does China or Japan or am an Hoct C I The whole north Pacific nexus The other thing is that we will have lost I not sauna like I'm totally off the reservation I guess I am all right l- is that there is this other scenario which says the Soviets use you know they do this as part of a means of getting 542 60 hrtathiaq space getting thair house in 0 69 to thay can come back and batons an even greater military threat in the next century That's alternative that we cannot dismiss and we are going ta have to treat serioutly an Except their way of getting there an sacsacarn well I have personal views on it that I saunton BahnLaY Their way at getting there makes the a diffarent society 83 aacsacazs That's exactly right They won't sat there unlass they make same changes such that when thay dc get there they won't be driven by same set of goais that they ance had It's a complex problem and I think that the coming year or two in fact a break in the long tarn w no policy consumer is really as interested in long term atratagy as he claims He wants to know abcut what's on his dackat tonarraw next week and six months from now It you ask than they will tell you they want the iongwrange view That's what they say tut when you start sending products down -- ow the trick for us is going to be to develop the lonq range outlook so we can keep our an the inng range ball but in the shortmterm it seems to at the question for the next twelve to twentwaour months is going to drive sight excuse ue obviously we have a major analytical problen in keeping up with the extremely volatile political situation in the Soviet Union which could make all this change It could But insofar as sort of a v 3 strategic interest is concerned and the conceptual framework in which 0 5 policy is developed I think the key question is is there a reel lasting revolution under in the Soviet Union and if so what direction night it take That's our challenge SENATOR BRADLEY But taking also what you have said your challenge isn t simply to describe aspects of that and determine whether it is really real but it is what is the implication for the United StateS ax nacnncaxn What does it mean for us And much of the u- and much of it will depend upon a lot of other structures that are only now being formed SENATOR shanter I mean just the very fact that information on the Soviet union has such a high currency and popularity now suite Gorbachev'e purpose anyway by eating his the dominant player And everybody'a talking about him and what s happening in his country which if you have personal experience with it you say a little bit like Nicaragua it's not worth all the talk And then you fit that into an information delivery system to the broader population in this democracy where whatever is said whether it is the most well researched thorough analysis the impulse -- and television is the ultimate highlight of this um aiways has to have the counter view However irresponsible it is And unresearched So you get this idea that you are kind of out adrift you're not able to get your own hearings in this and he's always got a chance to have his view 0 a view similar to his 0 a View that says well Gorbachev is rally not x and 2 And it seems to me that that crootes a problem for us too Ha It comes with the territory It goes without saying HR Competition doesn't hurt But a lot of the competition is on a plane that isn t equal And some people have greater access through the media and other places that you can't match But there are a couple of points that occur to no there are a couple of things that may be worth taking a note of One the revolution we're talking about in the Soviet Union -- I really think it is Gorbachev describes it that'way bit it is really a part of it's a global Communist revolution All of those systems in one way or another are coming up to the natural limits of the Stalinist order The problem for every one of them has essentially been they've 3w wmm-wmm5 21 545 63 adopted some fore of Stalinist eecheniene for running and controlling their country and they have cone up against the revision of the superstructure in nerxiet terns It aieply is not working in this environment That s one Two Gorbachev for an is a discontinuity in our understanding at Russia and the Soviet Union Either one And we are having as community an analyst individually as a government and as academics en enoreous difficulty caning to terse with that because by what he is doing he has broken all of our chine We never thought he would -- we never say hie eating on plate before and we never thought they would or could So the fact that they are there is a discontinuity That does heip you break your mind set for thinking about the future But you are still struggling with that post and it s very tough to get over it And then of course noncone keeps -- cone along and says well it could still go away Before has cone and gone at other tines in the Soviet Union Alexander the aucond got assassinated and you ended up with Alexender the Third So I mean there are all sort of thingn like that ant Gorbachev is a discontinuity and it is herd to get on top of it The Deputy Director has the third thing The deputy director has commissioned a kind of agency conference some t 3 next winter where we draw in big thinkers in a fairly small compact setting Some futuzologfots some from -- we haven't even scoped it yet But essentially big thinkers to think about the Soviet future ten fifteen twenty years froa now SENATOR When is that an BLACKWELL We don't have a time no nectacaln We're talking around match an BLACKRELL Harch February or March some time seuaron BRADLEY Any Senatorial attendance an Yes I am sure if you ask I am sure if you ask him he'll fin a way an And Bob didn't mention we're also next week doing one on political instability in the USSR 3o this goes back to my point that I was describing an a situation for the intelligence analytical core has become more complex more challenging And it is always interesting for no to seep people who were successful at it ten years ago or fifteen years ago who have dropped out and came back who say the sane for me how much more challenging it is But at the same time I that we have it has resulted in a hotter analytical system and a better product That may be patting ourselves on the back but t is really not we probably if left to our own devices would have equirreled away in Langley and done our little thing So this exposure this challenge this kind of sensitivity has caused I think a better product an BLACKIELL Two pieces of product Doug has had a nuaber of papers that really have tried to press the envelope some to come out of SOVA i still think actually the estimate we did last year for its time did that but if you look back at it now it's tao conservative Even stretching as far as we could as a Community on whether Gorbachev in allowing for a lot we actually said he was reall some peaple didn't want to but I mean we really pressed that but it was too conservative If you 90 back and do it now you'd have to push it even further It's too conservative both in we di n't capture how radical he would go and we didn't quite capture how much diagt er would be created We asknowledged it would ehppen but we didn't get its dimensiene We re also gaing to do an estimate new on -l lt'a called 11 4 but it is essentially Soviet national security strategy toward the west Basically I don't know what all the answers will be in the estimate and we have written it but one at the thing you're gaing to find in it is we're going to use it to try to stretch the Community's thinking so that we at least if we do 0-0th 66 bathing alto find out how much we disagree or agree on some things That is we're nat going to try ta reach consensus in it because it realiy shouldn't There are cosmic issues on that kind of a subject There's probably not yat revealed truth to be fouad SERATGR SRADLIY 6n Soviet strategy HR National strategy toward m- national security strategy toward the West Where it's this question of breathing ayaca sea change SSHATOR The question of haw far they are willing to 90 t6 accommodate It's those kinds of Ha nay not know yet But wa ra going to try to push thoaa issues And stretch them out SSRATOR What is your best concise statement of the strategy of these theoreticians you spoke of aarliar who have gained palitical influence aacaacnzaz Interestingly enough that yau should ask I thought it I advertised this paper here you light ask We have a draft on my desk and I think it is going to be a very good papa SKIITOI unannar Can I get it Kacxacaxa Yes sir I'd like to db a little scrubbing I told you about but we should have it out within the weak or so or earliest available a couple of waeka nay be mmummuwm-u can 549 57 sesame BRADLEY But basically it is as you outlined naceacnxu Yes sir In fact the author Gray Robots went back and studied sort of these background It's an interesting bit of personal hietory here belated The enigma or what aeny people say is engine how could people ease of who have expressed euch hostility toward our society and way of life be the architects of this new foreign policy well it s not all that strange when they see it as this is the way to serve the best interests of the Soviet Union and our Communist Party the Party at Lenin And so there is some continuity there BXRATOR annonxv They believed that the military industrial coaplex was the prime political force in the Unite States 38 Hacahcal x Exactly SKNATOH And believed the United relationship to the rest of the world fundamentally flowed from the military relationship 30 that if you were the Soviet Union and you no longer presented a hostile face that would defang the threat RR Well the first part of it was aw the theories didn't quite get there that fast And there have been others who have taken the arguments further 68 Initially one theoritician identified that 0 5 military strength and projection as the source of the U s 'e global power and that was the strategic lihchpin That we the point at which he should attack What has evolved in the more recent thinking is that the way to $0 it is by removing the threatening image A piece that appeared in the Soviet Foreign Journal recently had a interesting opening by the way It said how could the rest of the world not fear the USSR when we are murdering each other right here in our own country 1 mean the author started right with the Stalinist iuega and proceeded all the way through the Third World He even had comments to the effect that the Third World is not interested in the class struggle and in fact host of the Third World is now trying to follow the Western model In effect the Western modal delivers SENATOR amt Right Kn There is a much more Stanton ERADLEY But I oon t get it So the -- take the analysis IO that he says that it the Soviet Union des not present a hostile face what happens en eaceacnrn That the raison d etre -- that the v 5 leverage and entire SENATOR theater The West will say why do we need all of this military You mean the Western democracies them eelvee In other words you couldn't do this that the public would say I don t want to be taxed to pay for a defense budget if there's no threat And so what they have to do is present an image where there appears to be not threat What you don't know is is there in truth is he in ttuth headed towards a point where there is no threat HR I have on opi ion but I can t prove it naenner Well you have an opinion which I presume is the opinion of every one in the culture for the last twenty years which is well we've always got to protect so that they might be the threat 3 that your opinion HR secencaxs My opinion is that it is real that the problems inside u do I went to say this on the record BKNATOR BRADLEX you can take it oft an Hecthcalu No My opinion is that while there may have been some soviets who supported this restructions and new thinking under the belief end to whom it may well have been sold as a means of getting around and getting the drop on the other guy I believe that ultimately the process itself will become the reality That's Iy belieft one it is becoming that But when you say it will becoae reality what is it HR naceacaxu That the five hundred thousand out in military forces is a reality and there will be more over the wmummnuwma 23 24 25 552 70 next five or six years HR A Soviet Union that is far less isolationist A Soviet Union that has a much 1955 repressive system than it had It be much more international economic links than it had It's basically more responsive to normal environment than it has been It still in their own vision of it would be run by the Communist party and somehow be a one party dictatorship of sorts But it would be dean sight different than the one they're telinq about now I think that's what they're talking about annoter So you are saying see one of the things the I have though recently is that with Gorbachev'e reforms he can simply claim that there is a different kind m- tnere are two kinds of democracies There's his and then there's the Western And his is defined as secret ballot and choice within a dominant within one party or a 9erty so dominant that anything else even if it were allowed would be ineifnificent That structure to a Mexican or to a Japanese even is little more familiar thenv a structure of multi-perty contention where power shifts back and forth between partiee in governance an well I think there will be another aspect to it _cmsruaron BRADLEY Do you agree or disagree 24 25 71 an unconcern I agree 33 I would agree Although the very fact of moving that way creates pressures to go beyond I mean it's hard to it's hard for an authoritarian system to relax like that we're talking about the vision not the 33 It's stiil a very Eastern culture in neny way and will not look like Western liberal denocraciee Another aspect of this I think you ll see and already are seeing in that the issue of whether to support this foreign insurrection or to deal with this foreign government will not be based on whether one is xernist and one isn't It will be based on sort of -- Stanton BRADLEY The interest an Kocln nlu The soviet national intereset And contesting I think you will find there will be accounodetiont where the Soviet Union sees that it can gain eonething by ecconnodeting some other national interest in a given eituetion That both side -- that it'e not a zero one gene ll ELACKUBLL Even if we accept the vision I also do being able to collapse three hundred years or so so of Western history into a couple of generation or three or four decades ain't going to be no easy achievement and you're not going to do it ten years anonymous-when s fmmr senaros scatter Okay KR I have one that I find that will maybe illustrate much of what we talke about Speaking again candidly the position was designed with a careful calculation that the Soviet Union would never say yes to a zero zero proposal like was offered The correct calculation That Soviet leadership wouldn't have This one did this one accepted a level of intrusive verification and inspection that went so far as to go beyond what we were willing to accept This isadership accepted a progreo oi cuts in strategic armaments in terms of the size of the cuts that were inconceivable in our winds at some earlier point They have a- I remember calling one of my old ears colleagues after the Stockholm agreement saying when we wre working on that in the 1920's did you ever in the world believe the Soviets would accept that kind of inspection And said no This person is not a doomsayer We keep hearing the question of well it isn't real yet He really hasn't shown us anything yet Okay Now my point is today we have announcement of five hundreo thousand people being cut from the military and is this going to contribute to the statement of maybe this is a sign that something is reai Or not That question will not be answerabie in the next week or i 555 73 49- 901119 t9 ha a two ty ar pIOg a nut i tum 0 59 93 MM iliustrateeuhere we have another piece And yet I'm not sure we're going to be further down the line on this question then we were before the announcement was made We re going to spend a lot of analyst hours And make a lot of projections SWTOX Yes an unchecnxe So that kind of describes the nature of the problem Are we at this break point for oonething new or not When is the point reached And it's elusive BHHATOR BRADLEY But it does have m I mean your whole impulse in talking about Ithe challenge for the defense community an the intelligence community is duplicated in the political process in the media And when went to the European Command and we talked to three lilitery officials who were in the first party to go to the inspection exercise in the Soviet Union and these guys in part conveyed the impression to me that they were genuinely disoriented and depressed that they didn t have to nee more skillful techniques to observe what they bed been presented with Like I've trained all my life to develoy all these skills in order to get into the room and you're giving me the key and saying walk in there's an easy chair take a look around end on you went a beer And that's clearly the case in the Intelligence Callunity in tht gii tcal conaunity if you have constructed as th reason you do what you do because theta in this threat and what you are doing is protecting your family basically and than suddenly thre is nat threat yot'vs got a reorientation An tha question is how and who and to what do you reorient It That is what 30b calls a discontinuity It any be an early for of institutianal disorientationchaliunga for us is to continue to as I put it is lots in getting right and wrong answer because those answers are always on in front of you BKIATOR BRADLEY Yes an nachCEIx It's to maintain akind at a clear protestiannl approach to this ptoblol And not to jump at the duty and either way And help those who have to formulate pclicy and the national nuuaron BIADLBY Well this has been a real good tuition I appreciate it Before yau 9e I just have one turn lat count question Whit do yau tee u s guarantees of crc its or GPIC inluttnco or varieties of other thingt fitting into this picturu Kn anxcsou I think that if a you knew if you look in maum ou wwmmauwmwa 557 75 the 70 s in the 10's the Soviets thought so highly of 3 5 technology equipment and knowhow that they really wanted to come here for the best I think in the late 80's they recognized that they can get similar or even better technology knowhow elsewhere So they are not driven the way they wore a decade and a half ago I think they see the United States in some ways as a hard target when it comes to normalizing commercial relations And they can down a road a for piece with the west Germans with the Italians with the British the Japanese But ultimately for some 0 the reasons we've talked about before theso countries look to the United states for ainglos regarding tra o with Moscow So one of the reasons for normalizaing trade with the United States is to work the hard target and to move us off the extreme A second thing that the Soviets attach to normalizing economic relations is that the signing of agreement on economic matters 3 think they there as a barometer of the willingnes of the United States government to accomodate than or otherwise move ahead The political importance of such agreements is greater than the economic importance in terms of what the Soviets will do in terms of trade with the United states 558 76 sanawoh BRADLSY So you are saying that even with that m without Jackson-Vanick or Stevenson that the Soviets really would get some ad itional trade but not a whole lot more because people would look it and say it really doesn't make much sense Even with credits and other things 3k BKICSOR In some aspects yes It you look at the pure economics of the deals which would be proposal SENATOR ERADLBY The political significance to the Soviets of having them removed is really what they are after Now the quoation I have is if they are not removed are they a significant deterrence to 0 5 involvement HR We're circumventing w an saxcsoa What do you mean by involvement Senator SENATOR BRADLEY well Chevron building a big petrochemical an ERICSOH Yes It is my view that guarantees lower the cost But it also sends a message from the US government to the private sector not just the United States and elsewhere 8883203 BRADLEY Yes but we don't guarantee Chevron a investment in Belgium HR No Chevron doesn't necessarily ask us If we give them Ex-Im Bank credits they would that they purchased those guarantees I mean there are guarantees that have an economic meaning to the firm But there's also a 359 7 government annaintnent I think that is impetant that goes alnng with this When we go back to what we talked about before taking a long tern position in the Soviet Union I think credit guarantees serve to facilitate that I mean you wouid have to talk to the firms But that would be my sense Credit state in effect that the United States Government blesses this Operation it gives business some sense of cnnfidence Sanctity of contracts is still a big issue It's stili a lingering doubt on their part And that's an issue I think they will want to he addressed as much as Ex fn bank credits at 091C BRADLEY What sanctity of contracts Kn ERICSOH Yes sir SENATOR And they were broken with the Soviets on the grain embarga HR ERICSON The embargo and the natural gas The economics are there I'm not trying to belittle then And I also think that the Soviets would go out of their way to sign a copule of big deals with the United States for a lot of reasons SENATOR BRADLEY Woulan't they sign the big deals absent the special No-non wmummuwmu 78 no ERICSON If they could get them Yes sir saxawon BRADLEY But you are saying you doubt that any Amorican firm would go into the deal an ERICSGN I would think that taking a longwterm position in the Soviet Union is a tricky business And it you look at the kinds of joint ventures you have their shortwteru positions and a lot of thse Goals be funded multi nationally You'll havo v 5 enginerring expertiso West German equipment Japanese equipment SERATOR So then the real question at what point and this is back to your at what point along the process of reform five hundred thousand a million troops price meohaninm an BRICSOK Emigration SENATOR BRADLEY Emigration and a variety of other things at what point do you regard the Soviet Union like any other country in terms of economics K3 ERICSON That's right SHRATOR BRADLEY I mean that to me seems to be the control question Not if he does five hundred thousand do we give the Host Favored Nation It seems to me you would want to keep it on HE ERICSGN That's their thrust The Soviet thrust has always been to depolitioize economic relations from the West s perspective while politicizing it somewhat tron their own t Q Hh 581 if out that's what they would argue Let's separate the two an In fact the long-term formulated intelligence issue w SENATOR BRADLEY -Xo They wouldn't argue They would say separate the two They'd say separate human rights But they w KR BRICSON Political from economics Senator We should do business on a purely economic basis as the normal trading goes ssnaron BRADLKY ant then why do they need subsidies On a purely economic basis they don't deserve subsidies tithe they got a good deal or they don't Sane as ew Jersey investment So this 5 a problem This is a thought that I on having trouble unraveling here an ERICSON out the subsidy issue -- talk about eibusidies right rho subsidy wouid be something that they would say to pthe West let's say to Chevron and they say we have a bid coapeting bid out of British Petroloun for the sane deal Your are equal British Petroleun'e costs for the project are 15% below yours 1 1me owner Right K3 It is like buying grain That's all wegre just after the best deal Strictly commercial terns 85H5 0l BRADLEY Chevron cannot get the deal an ERZCSOR And they would say -- Chevron would say gee I can't match that and they would say well that s sort of your problem Why don't you go talk to your government BRADLEY Well then that gets to ultimately a judgment do you think the greatest return on investment comes in the Soviet Union or elsewhere HR BRICSON I mean you have credit lines put in place by a Western government to encourage their firms participation Hot heavily subsidized at this point if subsidize at ail aithough you have the poiitical rink guarantees -- SENATOR So that basically the view on economics it to you know if somebody wants to invest or trade they can do that today But they as of today can't get subsidies or guarnatees to do that HR ERICSON From the united States From the United States Right HR ERICSON Yes sir And if you take the position that no subsidies or guarantees until the economy of the Soviet Union is reformed sufficiently that you can make money there like you can make oney anywhere else without subsidies and guarantees that is one position The other position is fi you say well the overall critical mass of reform whether it is human rights troops whatever has reached the point where we can regard them like any other country And then the tird position woulo he eey well let's immediately give Garbachev a little carrot let's immediately give him a reward far this $60 060 trgop refuctlon Wauld yau argue that m I mean those are three positias HR enxcsonz when you talk about profits in the absence of guarantees I am net not sate what that SENATOR BRADLEY Well New Jersey pizza company goes to Moscow en ogens up a pizza Pepsi Cola has been there for a generation They obviously are figutlgg that they are making money unless HR well same You lower the cost he the firm to compete What Pepsi Cale will tell you what farmers will tell you is that we can t compete on world markets because other countries are providing export credits to the Soviet Union If I glay the Soviet Union part I would say to the United States you pruvide export guarantees to the following 75 experts to the follow 80 countries all right SRKATOR Right W m_m ea SRICSOR If a 0 3 exporter wants to export to Brazil he can apply for Ex-Im Bank credit and guarantees for political risk an beapnzs Friendly developing countries RR ERICSON And the Soviet Union would say we want normal access We don't want to be treated special one way or the other So his report is you're saying for this to be hat-aw 32 special treatnent it s not It is treatment that in anestded by Ex 11 Bank to most of the cnuntries in the world That would be hit argument sxnaron BRADLEY That is his argument That is directly joined on the grain question Australian journalists I said we don't want any subsidies and ha said does that you're taking n export aubsidien worldwide Ta which I had to say logicaliy yea unless I was going to say walk no because the Soviet Union is a special case Okay while we're proceeding dawn this read thank for this diveraion and thanks for this session I appreciate it very such Theruupon at 1 15 o'clock the rank Pores briefing val cancludod This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu