1 I SOVIET TASK PORCB 2 3 Mednesday Dece ber 7 1988 4 5 united States Senate 6 Select Committee on Intelligence 7 washington D C 8 9 10 The Select Committee met pursuant to notice at 10 50 o'clock a m in Room 5H-219 Hart Senate Office BUilding the Honorable Bill Bradley presiding II Present 12 Also Present Senator Bradley John Despres and Fred Ward Staff embers 13 I 14 15 16 17 18 19 21 n 23 o 2 Q 1 8BXA a 2 BRADLEY The Task Force 3 Doug 4 perceptive and insightful colleagues 5 6 7 o 10 11 12 13 ' 14 15 I' 17 It 1 20 21 22 23 24 25 thanks tor co ing back will co e and bringing to order your astute and 3 1 STAT JIBH'I' or DOUG ecUCRIN 2 DIRSCTOR orrICS or SOVIET ANALYSIS 3 DIRECTORATE or INTILLIGBNCB 4 CENTRAL INTBLLIGBNCE AGENCY 5 KR acBACBIN I might n by mentioning that the 6 rumors 7 find 8 out to be correct And we can talk about the storiea later if 9 you the cuts are at least y out if one of would like on 10 beyond 11 evidence the that washington in about 15 minutes analytical judgments is We Post or so we may going to turn really can't take this mornin9 you auch insofar aa the 12 What I thought we would do as I say 1 think you are -- 13 SENATOR 14 Which is that I didn't see the POlt I began the mornin9 in New York 15 16 BRADLBY AB JlacBACBIN This is the cumors that Gorbachev is 9 01n 9 to announce a unilateral -- 17 SENATOR BRADLEY 18 MR MacBACRIN Conventional force cut It is an armed forces cut not further 19 specified 20 au er 21 ruaors aay -- I mean I can reconstruct the sources of a rumor froa n the stories of ome unilateral action and they could have come 24 togethee a veey We've had lots of evidence goin9 back to aa you know of a specific cut in East Europe the ruaors of the changes in the military last These hierarchy to to create a rlausible but totally unfounded tory of large cuts which provoked a shakeup in the military c 1 hierarchy 2 I 3 80 4 5 tia 6 ailitary Nonetheless we have aeen enough of Gorbachev that would not rule anything s being reaourcea 7 taken a poaition tor a long aa I said I know that I have that he will have to the while of re ource8 recognize that reforms I a unt of cut hi ailitaty -- the proportion that go to and all of these are 9 the present this ia the only economic mechanism he h a necessary to ultimately sustain his ia 11 regulate 12 we will see that 13 input and there is output and the thingG econoaic pr09r at 8 10 And out of the question he i going there to have to that flow-to get any results in the short tera What I thought we would do today But briefly is I would let 14 Bob Blackwell review IS And then Paul Erickson will address what we think are aome of 16 the critical economic decisions which seem 17 or 18 And 19 little 20 that 21 thought I have had on that matter at the end if bit about I think we it is agreeable I the kind of -- face 8BHATOR BRADLEY MR NacEACBIN 25 political situation stand' to have been made bench arks which we will be looking for in the short term 22 24 where the in the okay Bob would like to talk a the intelligence challenge coming year or 80 and so e 487 5 1 STATBIlENT or 80B BLACItlfBLL 2 NATIONAL INTBLLIGENCB orPICBR 70R THB SOVIET UNION 3 KR BLACKWELL 4 Doug 5 so e 6 changes 7 then 8 like 9 bulldin9 10 Senator And his colleagues time in in after the ahoo -out October the I think talked leadership and gave you last October in Moscow about some obaervations I would like to build on that foundation to go back and tAlk about on it I would point If you would some of that we can out a couple of things But in the few months since 11 one we have aeen further efforts in the sort of 12 political consolidation game both in terms of Gorbachev's own 13 position 14 have 15 fairly 16 and to consolidate those in early winter 17 and in terms of the political reform agenda There been some backtracks here and there but on the whole a I decisive effort to try would highlight a to push the gains couple of things of the fall One is on the 15 front 19 a 20 and 21 fact has gone forward fairly substantially 22 asked n of the most sensitive areas politically in that system and to 24 even touch it runs great very difficult to do of the Communist Party itself reform of the its size Last fall set in motion Communist Party structure We have pretty good any of us 6 months ago we its organization evidence now that that in If you would have would have said this is one risk and would sU9gest I can tell you it would b I think he in fact has 6 1 don it 2 So exa ples of it he seems 3 neutered o Secretariat members 6 the 7 Chairman 8 longer 9 power to administer the party machinery to have effectively or reduced the significance of the Central Committee by in effect putting most of of the Politburo Central Committee of each meets as and creating these with But it a its members as full commissions of an individual Secretary appears that body no longer being a the Secretariat has a number two man in It looks like he has 10 found 11 Committee as well as the Secretariat as an organization a way to get 12 SENATOR BRADLEY 13 KR BLACKWELL 14 Central 15 headed 16 responsibility 17 Secretariat 11 very much 19 the 20 clearly 21 really do 22 of 23 stuff 2 responsive highest level a dead souls Commissions Party in the Central And you say he has done that by Essentially the Committee by around the no there are Secretary Ad secondly device is creating but with apparently by as an organization meet or if 6 of the them each defined areas not having of the it does not meet And then thirdly not having someone who erves in role as number two man in does not and it the Party hierarchy does not appear that Ligachev anyone else Some people would argue that Zaykov who is head Koscow may have moved up a bit but that is fairly subtle But basically to him the party probably than machinery seems it did much more at least at the 489 7 1 The 2 reorganizing 3 commiasions 4 quite know but we do know it is going to be high One of the S element Committee 6 incidentally 1 its 8 whatever 9 issues other thing the that has Central Committee's is a cut in the of the happened in addition work into staff by 30 to 50 reorganization was basically to of the Central to th ae We don't eliminate or abolish most of economic depart ents that micromanaage the Ministries and They still have a commission on economic social but they have done away with the departments that are 10 there 11 They have an Agricultural Commission and they have an Economic 12 Commission 13 8 departaunts would have probably covered 14 15 primarily to oversee particular sectors of the economy The The Economic Commission covers what formerly 7 or second t hing they have done and it has to be view d in parallel to this I think is a strong effort to 16 SENATOR BRADLEY Agriculture and what was the other one 17 AR Well BLACKWELL there are two economic related 1 commissions 19 Slyunkov who is a Party Secretary and Agriculture is chaired 20 by 21 22 There third Legal mattera 23 foreign policy 24 will think of it in a second 25 Social Ligachev are four Not Economic a friendly is one gift to other commissions i a The sixth SENATOR BRADLEY Okay fourth which ie him I as well don't th nk Ideology is There is a one escapes me chaired by a fifth one on for a minute I 490 8 I 2 U 8LACK1fBLL but an way that is basically the way they have r or9anized the work 3 The second thing they have done is a strong effort to try 4 to transfer some authority to a legislature which in principle 5 has 6 is 7 And 8 will 9 of it has actually happened always been there but it has something that I would say is in pror-ess This not completed we will see the completion of it next April and then you have to watch it for 2 or 3 years to really see how much 10 SENATOR II be complete 12 13 never really had it BRADLEY MR BLACKWELL What is the date in April that it will I don't think they have set a date They set a date for supreme Soviet elections in March and 14 SENATOR BRADLEY Yes I saw the IS of the Supreme Soviet -- 16 R BLACKWELL March -- the elections And the new Congress of People'S Deputies 17 is 18 have 19 But this large expanded group has ever met supposed to convene sometime in April given us a date yet it will he a big 21 Obviously around that time 23 SENATOR 24 shot In Or they have not announced a date show because it will be you were thinking BRADLEY I don't think they I mean you of a trip the first time there somewhere know that was my next I was going to 90 in August everybody is on vacation November and they said all the peopl would be in these 491 9 1 constitutional aeetings 2 the 3 April 4 have a big conference 5 S 7 proper level December they couldn't receive me at whatever that aeans flow you tell me the time I MR BLACI WSLr Well it And so I had said want to go there they all won't lll t lIlore than a week But wh n it occurs -SENATOR BRADLEY but r lbc it'll be arly April 8 MR BLACKWELL 9 But in any case thir thing will get off the ground then Kaybe it will be Don't know 10 But 11 effective legislature that's one 12 another 13 reflection 14 Dobrynin 15 nonetheless they have been moved over the Supie e Soviet aide 16 aa 17 over 1 taking 19 consequential 20 New York even in his new capacity with Gorbachev's entourage 21 the thrust of power it seems to base of this and that'6 zagladin in the same way But I off two already just who advisors to Gorbachev them be to try to create a I line It looks say t And we in moving clearly both re seeing aom of people like demoted But like Akhromayev may move Nonetheleas with give Gorbachev were think in a way of even in those rolls would And alao course that is they may thi qs both reorganization 23 take time to see how this plays out in acutality 24 ia him as well as the Supreme Soviet It is dramatic that he was able to It is all of those things well be Dobrynin did come here to 22 real aOre But right the Party it ia going to d It think ' t it It helps now it is like 492 10 1 rGarranging 2 people 3 still an open question as to whether you can breathe real life 4 into 5 or 6 And 7 use it as an instrument to try to create more popular pressure 8 on 9 another fur iture the and you really need sit in it for a while and how that legislature or not to ee they use it how And it is By making a portion of it more less full time you at least create some potential for it the fact that he is goin9 to head it and seems to want to the administration of the country reason why you might see that 10 where 11 the Party organ1zations themselves the executors is It seems like that 1s he wants more of the pressure to come from rather than The second issue I would pick up on and we can talk about 12 13 it at almost 14 turmoil 15 think 16 Caucasus 17 up 18 perestroika is only helping us 19 perestroika and glasnost created an have 21 In Azerbaidzhan n situati n 24 the They don't call it that and it ebbs among have in any length because it nationalities to be said is so dramatic There are about this two things Some of clearly reflect age-old problems part as a result of is the that I it like the that have bubbled perestroika Now to deal with it he says but in fact environment where people lost their fear to a considerable deqree and speak out the kinds of areas as in the Caucasus this is a by-pr01uct for anybody down there area is in a virtual state of it between rmenia This iE because it has 9 ne and a no win so far of semiperManent martial law a d flows but there is no 493 11 1 obvious 2 for 3 control and manage it 4 5 easy solution in sight othe than to try to sit on it a while and SENATOR hope they can BRADLEY just keep the And this is violence under -- as of right not it is primarily Azeri Armehia a d some Georgian nationalists7 6 MR B CKWELL There are some Georgian nationalist 7 disturbances but it has not figured in the communal violence 8 And 9 order than the other two 10 11 also I think relatively SENATOR BRADLEY So you are a much lower talking about primarily Armenia and Azerbaidzhan7 11 NR 8LAC LL Yes 13 100 000 14 coming 15 populations 16 the 17 have 18 It is not secessionist refugees now another I And you with mean are talking Armenians going one there is a lot of about over way zeris resettling of just out of fear -- fear of c mmunal violence and need to get into a more protected got a real problem it is 19 SENATOR BRADL3Y MR 21 speaking it is of BLACKWELL area So I mean the1 not separatist in its thrust But it is a management problem It's not Estonia It's not Estonia It's different than that SENATOR BRADLBY n MR BLACKWBLL 24 the about It is right But to speak of the Baltic that moves to second of which Estonia is the most dramatic The thing the Baltic I think that is the most interestinq is that 494 12 1 2 always 3 Gorbachev 4 experiment 5 has happened in the Baltic is not 6 and perestroika in 7 perestroika a policies have abetted has happened in the Baltic more 9 directly than that essentially by replacing a whole slew of this is the area where the legitimacy of the Soviet state was the most questioned but and his colleagues yet it seem to have with perestroika the most that sense creates more what is the area where chosen to try Because to in fact what just a product of glasnost that is bUbbling up opportunities because Gorbachev's own 10 conservative 11 reformers in the Baltic and given them the charge it seems to 12 be to try to get on the right side of popular feeling as best 13 14 they 15 16 I can old line Brezhnevite political leaders with And so in effect what has come of that is that you have had party leaderships and Supreme Soviets as in Estonia that basically are really pressing at the edge of what Moscow 1n the end wants to allow 17 o viously NOW there is a that they think I think on calculation here in the long 18 run 19 this Baltic 21 it it Moscow N Estonia successful at pulling Latvia and Lithuania back a bit short of can be managed that the aore than it ever has had Gorbachev's part that maybe r ionality logical conclusion which is will not allow is farther out I think they He the since Soviet rule came into will overcome the emotionalism of wanting to ita of offering to try to take independence which have made that seems to have been fairly somewhat 495 13 1 pre oo ing this to the end 2 think 3 very 4 Armenia and Azerbaidzhan because it is very different 5 it ia clear this ia an on-going proc that they are trying to treat that issue differently than they are trying to treat the problem in But you know the end is not in sight 6 the 7 talking about has to ultimately deal with o bit 9 pushed it sooner than I thought he would 10 But I inevitable problems sooner Two than that I thought This il perestroika of the it would one of ort he is It has jUlt com a partially because other things briefly because the he other two have to 11 get 12 general shift towards consumption is the 13 another way 14 perestroika has become ever more evident -- ever more evident IS In 16 has 17 aren't l' in any Paul se got to is goin9 but this whole or let me put it a reason to believe in it is an obvious political need on his part et b cau6e And about it The need to give people He the populace to buy into it and right now they basically where the beef is 19 to talk they don't know where don't know That is the third point then the last one that fits in this same period is what I would call foreign 21 turn thil discussion over into it but obviously the New York 22 initiative 23 you have been talking about for 24 are going to have a summit next year almost certainly 1 say policy activism the acceleration in I don't want to relations with China so e their national reconciliation or which time the fact that you ould what you could call a 14 1 conltructive 2 reach 3 one 4 activist S better 6 environment that he wants 7 SENATOR BRADLBY o KR 9 role in both Vietnam and in Angola in trying to so e sort of settlements there even in the Angolan case that is orchestrated approach foreign and mana qed by geared policy both for as well us its own as It Is a very sake that creating is this kind of I would also submit That environment being BLACKWELL Very benign very accomaodating very-- that is the Soviet Union as a construr tive world power rather 10 than 11 image 12 necessarily-- as someone who is always -- I he wants and to mean I think that is the some extent the reality 13 SENATOR BRADLBY So he gets trade 14 KR I BLACKWELL think he probably in ways Not thinks that is Paul is going to talk 15 further It 17 about it so I will let him handle the trade part of it don't 18 political benefits to be had in general in t9rms of creating a 19 better 20 done a cost-benefit analysis of what 80me of these other areas 21 like Angolas and Vietnams amount to and has decided there is a better 23 pursuing 24 beneficial much of anything down the road in terms of-- think that is the immediate thing image for the Soviet approach for one that union the Soviet both cost I think And also I Union than les5 and But I therp are think he has the one is politically he was more and doesn't hurt his security and doesn't threaten 15 I Oth r thing on this one point though that goes 2 the power consolidation earlier one impact 3 in September 4 presidency Ligachev's essentially been to increase his clout of 7 over 5 o 9 it and October in But to increase his decisionmaking Shevardnadze and all 5luming the of has this He already had a lot operational and tactical control foreign policy decision aking security of what happened Gorbachev's downgr4ding back to and I would His sit athwart that allies say national Yakovlev Yakovlev heading the and foreign 10 policy 11 Shevardnadz 12 almost 13 co_po ition 14 precedence and what we know about who usually i on that body 15 one could judge that I' G8 coaai sion the for example in Foreign certainly in Ministry changes He don't the central in have evidence ven ryuchkov's Coaaitte Th chang r ooulted the Oefen e Council for it but ba ed o coming to power in the would probably be viewed as furthering that 17 I think you are seeing a Soviet -- 1 8KaA It 8aADLBY 8LACEWBLL Furthering what Furth ring Gorbach v' eff ctiv control of 21 proc D but n u wh re he i going to want to go a refl ctive the for01gn policy-national security policy d ci ionmaking larg Sort of not just a coterminous with the politburo the key players are decision m de on hil or at least thi very re pon ive to And if we indood are g tting at the UN I v ry much of deci ion that at think it would b8 le st go b ck that 16 1 far 2 that come out of this 3 importance 4 elped him in foreign policy -- of thinking further S 6 back than that but I don't think we can underestiaate the of those changes in SENATOR of dsciaions BRADLIY In terms of how it addition to hal probably Shevardnadze and the Defense Council you said who 7 RR BLACKWELL 5hevardnadze would have been there a anyway 9 Chairman would probably be there Ligachev would probably be 10 out And Chebrikov might be out 11 also 12 of 13 which is another important one in that context 14 ryuchkov the new KGB Yakovlev would now be there if he had been there before Don't know all of this We don't know is and precisely But the thrust Gromyko would be out of course 50 you are dealing with a political leader in a stronger 15 more 16 simply with the West 17 in authoritative his activism 1a dramatic position on some key areas in dealing And I think that you see that partially and I certainly would say if move in conventional arms of that you get any sort -- and we'll 19 talk political reality as well as the sort of larger policy reality 21 of lupport n strength for -- taken into account 24 about his that ability in the That perestroika later to drive it a consensus leadership than doesn't works mean Y u has that know to have reflected this and have we probably problems a lot have given go all those kinds away more him that of caveats I 499 17 1 have 2 want to we 3 4 S 6 7 8 9 III 11 12 13 14 15 16 17 1 I' 20 21 22 23 24 25 not talked about an They would still get to them SENATO BRI LSY Okay paul be there If you 18 1 STATBRENT OF PAUL BRICKSON 2 DBPUTY DIRECTOR OFFICE or SOVIBT ANALYSIS 3 DIRBCTORATB OF INTBLLIGBNCB 4 CENTRAL INTELLIGENCE AGENCY 5 RH ERICSON What I thought I would do is kind of couch 6 why 7 hopes I need to gain 9 have also played in last he is taking some of the moves he is taking he'll gain and what he is not additional doing and what he I think that the flexibility on economic September's events issues may I think we'll 10 point out that there were leadership disagreements surrounding 11 the 12 upcomin9 13 haa taken have addressed some of these disagreements 14 FY 89 plan -- that it surfaced -- and also perhaps on the I rive Year Plan and think Gorbachev 15 that his reforms would 16 than leas radical 17 aome of these reforms felt that some of the that it was have to be and that he had stepa that he increasingly clear in some ways more ra'her concerted resistance to At the same time I think he felt that 1 he could not afford to wait for 19 He needed the old style resource transfer m h had been trying to dodge for the last few years '- and that 21 h the defense sector not 24 until there was something tangible on the table needed to have shifts qoing to Domestic such reforms to take effect the bullet that to the civil sector primarily from It was clear to him that the workers were put their inflation back which into making perestroika we'll talk about raises work yet l 19 1 another problem 2 initiatives 3 year and the need for yet another set of In fact the economy has not performed well this Soviets can point to a rise in investment spending but 4 at the same time the commissioning of new plants is down 5 And so wllat you have is a choke oint They tried to do too 6 m ch too fast and you have a lot of unfinished plants because 1 you just can't get everything to everyplace and there was too 8 much competition for key inputs 9 you look 10 t And his modernization if 50 it in terms of bringing new modernized capacity on line was clearly falling behind 11 At the same time he had a situation where you could 12 point to increased production in consumer goods but increased 13 consumer 14 longer rather than shorter lines and marked price increases in 15 those 16 moreover 11 '87-'88 18 increasea 19 meat have been substantially on the rise di satisfaction markets in And that were short in meat SakATaR BRADLBY 21 Ra BRICSON because we see of a led vegetables poor harvest signs of to in substantial form consumers on On the quality No availability We frankly haven't figured out the discontinuity n SENATaR BRADLEY RR though Fruits and production complaints N n private supply even pr sures Inflationary increased ERICSON That there is increased production -That by all production while at the indications there same time there have was an been 502 20 incre oo es in complaints about shortages 2 3 The roost as they Overall 5 soft number 6 roblem budget deficit begin to well is sense that growth is likely coming home it was to be about a real to issue o 2 this year It's a They will make no major gains in modernization think I as Gorbachev and his econolllic advisors are 7 increasingly 8 change 9 they walked up to the cliff of radical reform and took a look 10 down in the gorge and backed off 11 that he cannot 12 some 13 example he stepped away frolll quality control 14 he 15 result 16 reform lIIay be a little bit more measured in many areas than we 17 would hao 'e thought I' aware of the think they I other move major 19 think 20 welfare 21 o fnute 22 hearing 23 investment 24 about 2S yet has initiatives advanced For public haVing and we see The f1 rst For So even though cut is that the We li9ht sOllie last these we were industry were hearing plan I has to do with consumer about other noises agriculture having been final pace of in early September by a aggressively FY 89 plan received complaints been the price reform and decentralization moved ahead example investment going to when and events my sense We believe that the about think Gorbachev realizes gained additional flexibility as in two main areas revisions I of fundamental colleagues would say ahead aggressively on of this fall's he and costs as one of Illy has in all likelihood But risks uts cut But did not Z1 1 aterl ll 2 hou inq in food fact invest ent proce sinq all in light sectors indu try and a sociated with Importantly the 3 con umer 4 hift we can tell there have been cuts form planned investment welfare -- have comes at the expense of inve tment el ewhere as near a 6 Pausoo 7 SENATOR BRADLBY o Ra 9 been emphasized BRICSON industry The At the expense of what Of inve tm nt Soviets going into have establi hed some what they heavy call 49 10 priority industries 11 is 12 and the competition for investment durables 13 job done they have to 14 focus 15 allow them to free up some investment resources as well 16 17 I' 19 20 And my sense is that what you ar oooo ing a recognition in part tied to on a nat row the seop of smaller set Gorbachev opportunities also the lack of co_' 'uionings has of industries expanded and offered long both agriculture and industry that to get the their effort and This strategy private and also cooperative term leaBing arrangements in And I think we are seeing more of that than we would have otherwise have seen A second area worth noting is what seems to be increased 21 proo sure on the defense industry civilian ector n record 24 some managers from the defense to the civilian sector to boost management on thi I the think if to boost production of you go back and lead rship started out productivity Then you saw look at the the by transferring pr oo sure to boost 22 1 production 2 Kost 3 o of investment And lastly 6 made 7 civilian a production 9 what you the defense sector with are seeing are from the defense-i oodustrial accommodations type and goods at will the be clear statements sector that they boosting explicit by have production expense of of defense We haven't seen -- 10 SBNATOR BRADLBY 11 AR BRICSON You mean they will close military -- They'll say I've qot to close this plant to meet these ciVilian production targets 13 RR 14 produce 15 proQuce 16 RacEACBIN stop so ethinq Or I have producinq what to retool it has this plant been producing to and else AR IRICSON 17 For example in mid-October on national TV Prime Minister Ryzhkov blasted the Chairman of the Military 1 Industrial 19 leadership's m d fen industries 21 quickly with their best people and the 23 activity weapons production defense ector the production of of what had heretofore been civilian plants o officials U of the recently you saw the tasking of 5 12 goods out Commission inadequately civil-economic agenda to production of food SBNATOR for BRADLIY staff newly supporting At that acquired the time he ordered civil plants to integrate specifically processing equipment with their main Could I interrupt a m nute take a 10 minute break to 6ee this Japanes minister I have to 606 1 1 1 2 3 A brief rece w We left off with your second point that SENATOR BRADLBY 4 the 5 on theae other non-ailitary areDS defense sector is actually spendinq ore of its own aoney KR the That' riqht BRICSON 7 had been a couple o to 11 43 o'clock 6 defense specific 10 production 11 credence 12 industrial 13 orders 14 flow IS tanqible II down 17 will be followed incl dinq octor lanquaqe lines would is to he soaewhat that to down which defense We have yet to ee of a have yet to see any thin but it is our judqaent that a aandate has been laid third point I l' Gorbachev 20 year 21 a new en e of fle ibility 22 aoyed 23 at 24 vis-a-vi defenae want to qo froa is serious and that want to here raise ita orders pertain to He end 1988 and Se hoo He hoo taken that fleXibility and tow rds qroo ter privatization throwinq con uaer wbere ba ieally a whore nothin9 happened with wor enlnq infl tion I lend leadership issuance production and that the leadership tho certain seriousness with which the accordinq to boost civilian The -- there been effect be closed of product as we said and we 11 I think nave th t to h e at least to the sector Senator other public announceaents by aanaqers in f industrial t 25 t ken fro 11120 layin9 would like to point out down so e aore r ooource additional arker that we now look t the ne t 24 1 five year plan as an indirator of where he 2 flexibility 3 in investeent between the defense and civil aectors certainly 4 now is the 5 Soviet If Gorbachev uishes to tiee to do It ake moving with this significant shifts It is optimal in teres of planning process as it pertains to defense planning 6 finalize resource 7 eonths It doesn't mean he has 8 optieal time to do it 9 s I think hat allocations over the ext five to do it now but decentralize 11 entire 12 marxetization 13 solve that problem and continup to walk around it 14 co seven it is the I think that he remains stymied -- in general They haven't figured out how to I think you are going to see in the next five year plan a continued 16 push a8 they L2tter understand what the economy can do 18 the leadership remains stymied over the role of price and 15 17 o over the next five years he will continue to 10 but the push on modernization SBNATOR PRADLKY But clearly but a when more focused you say continued f cus on modernization you mean new plant and equipment 19 Ma BaICSOM SENATO BRADLEY 21 KR I ICSOM Yes sir But Okay you know and I am just speculating here that what you may not see is storming type approach that you saw as being very prevalent in the last two or three years 24 that they have learned from that But Gorbuchev has a number of problem which are coming 507 25 I hoa to r ost which will coaplicat his life i nsely H 2 aust find a way to balance his budget in soae fashion or else 3 inflation as it did this year will erode any gains in 4 consuaer welfare that he is able to bring home As a aatter 5 of next yoar's fact in S problea today's The 7 inflationary a HID there is 1989 plan is a feature on more because he has celled for rather than less increases in spending on the consumer that are not matched by decreases elsewhere or The econoay is still overheati n9 9 by increased revenue 10 How he addresses this ia problematical 11 what 12 aaong 13 soaething has to be done to raise revenues 14 he h s done by publicizing it is a nuaber SENATOR of BRADLEY 15 higher 1 thoo higher taxes 17 prices MR the le s ERICSON P rty and But I think that to lay down a aarker the civil sector that So he is not only going to give people job security but now he is going to give Well I would imagine that he would feel 18 aore 19 indirect 20 21 option which the Soviets have used in -- first thing I thought of when I heard this idea that they were going too allow private citizens to invest in stock 24 25 co fortable in terms of lotteries or eans of loaking up exce oo income 8BXATOa D some other type of BRADLEY ERIC80N The stock market That's part of it I And he has other mean that is the You could look fro that perspective and that playa a role yes 60-283 0 - 92 - 17 at i t 26 1 2 Ra KacKACBIM I SKRATOa BaADLBY 4 Ra 5 know to get is not going to Ra do it by reducing 1 his I ean part of his proble is the heavy s bsidies Itapl s And that would solve BLACKWELL Pric s could a lot of his And that -be rai ed on luxury good and ther kind of 900ds -- if he did that Ra ICSOM But he ha got a proble here a erious o e A proble he hasn't foculed on is energy The co t of 14 aatntaining production for oil and coal are accelerating 15 the Right right proble s to let retail prices rise 11 U 13 are trying What he ia not going to do is rai e -- you y ense is he consuoo r t 10 aleSON subsidies 7 in o they revenues back fro the tax on alcohol that they lost 3 think the certainties associated with level of production are the ability to decrea ing 17 Soviet d g over the next five yeara 21 thia 21 pot ntial 22 aapirationo oo he ha a hard i ooue her oo focua on thia on art 21 by I We ore nuclear rallying energy point in oo intain the We haven't think it will be a of the Soviet progra traditionally but ao e een the big is ue wa to address Chernobyl for And provide a nationalistic would like to end with what all this ooana for foreign II trade II la t f w ontha and laat-We t cono ics and what have we a oo n ov r the 21 1 I vould 2 pref rred 3 do oooo rt that an indigenous olution We have no indications of a aajor iaport ve b li ve that th r viii b r in pu h one barring alao t nor panic 4 buying to qui t conaua r unre t I think the Sovi ta ar 5 a naitiv xtrea ly a naitive to the riak of c coainq o o financially leveraqed to the Weat '_ d I think that they are 7 uncertain about their ability to aaintain export earning over t the aediua and long tera And given this unc rtainty bUilding up indebtedne a carriea ignificant ri ks Roreover to I 11 effectivenoo s of direct equipaent purchase particularly vh n 12 their 13 problea 14 foreign trade sector i still in the aidat of reorganization think th y continue to harbor doae tic industrial bas about i in tran ition today bringing plant and I find it personally useful 15 aisgivings There are capacity on line and t the the characterize their foreign 1 trade 17 rationalize 1 iapleaent rule It eff ctive tapping m ultiaately to aaxiaize their opportunities for export aales -- 21 joint venture and -- n u a initiative as being those that are trade and technology transfer and IKKATOa and of BRADLSY procedures woo tern that allow technology So basically you say designed to to d sign and for the and capital aost and they vant to tap technology and take joint ventures to try to increase exports RR saICSOM Well it aay not be a one to one Senator but J think what Gorbachev needs is western know-how not just 1M 3 I e tern equipaent I e tern coaaorcial fir to 3 funda nta1 way And ve ter n direct invoot nt coaait the t le ucceoo of the venture in a And that i8 vhat he vants 4 When ve talked about th benign eeono ie environ ent and S the linkage to econo ics I think it lie precisely here It 7 is one thing for a vestern fira to roject let' o oay in Ch na 90 in on a consu er goods to ake gva clothe o happen in 18 aonths or 12 aontha t to have a western 10 11 U fira go in to is ay personal view it is precisely to 14 eed to have thiS benign ataosphere 7 II It 20 21 22 23 24 a energy developaent or where the payout aay be 5 or 6 yeara in the offing oaaercial 1 It i quite another industries or soae other type of thing that the Soviet 13 15 vhere the That interest to take a long tera i not to ay that the whole here and 8 billion here doea I would note that the ordera BaADLBY But that poaition that he idea of credit and 9 not aerve his purpoaes dynaai s i plie that he create a cliaate of oae real stability for that it is good for 30 years even aore draaatic on encourage we tern are yet to bel forthcoaing d it ha a lot to do with the broader 8BMA And ha got to pe ple to ot to I aean he has the conventional force side defense budget side than he has been anybody sayar I have heard anybody and on to date than I have say he is going to ' 611 29 1 Ka AacKACBIN 2 81n1ATOa 3 an up until 15 inute ago perhapo But you say even 30' BRADLIY You said 30' cut in hi o oilitary budget va the ru or7 4 KR AacBACBIN The rumor vas forces 5 Ka BLACKWBLL Forces I KR DBSPRBS 7 HR RacBACBIN I KR t cut in force I The size of the force Forward deployed forces No BLACnBLL No I ooan if you did it a 111ion and alf or so -- 10 KR NacBACBIN II er on 12 eduction J3 We're talking on the cut and whatever attends llatATOR BRADLEY th t herefore to the defen e budget right7 15 an 11 ake 17 ue year t l i 1 in ter s of But let's say that 4 cut the defense budget But the order of a il1ion tructural that flows through Kee lng that you then firms that are going to the e co it ent they're not going to make the all in BaICSON BMATOa That' right BaADLIY 50 I ean if he has to create this 20 li te 21 he Z2 7 things begin to go bAd these firm just won't be ere 23 19 1t 1 24 he 25 heir 10ooooo by dra atic reduction or whatever ven to attract serious co it ent that if at any point in year 1 2 4 They'll just pull out point where they They ju t won't -- they reach will have to make a judg ent and cut I' ' ' 512 30 1 MR EaIC'ON I think o fund ooental 2 1n y view i th t the 3 that proble that he has ti e horizon for the kinda he want out of joint venture of thing i inco patible with the 4 atate of aUa ra 5 SENATOR BRADLIYr With wh t he haa to do to attract it in 6 the fi CIt place 7 JUt IRICBOM 8 9 SENATOR portance ight BRADLEYr You aee thia problem that he to be downgrading has with the oooo in of people 10 ying -- aa you s id Bob where'a the beef of p roo troika on 11 on u er 12 JUt BLACInfBLL 13 SDA'J'OR 14 Oh BRADLIYr He c n purch se a lot of things He an bUy a lot of perfu e or clothea 15 JUt IRICSON 16 SENATOR BRADLBY That's right or food nd put i t on the ahelf 17 h 18 ut th t i really juat a short ti e thing people a y ah 19 JUt BRICSON a SBKATOR 21 aving ay 23 ncrea e 24 25 entral he se what perestroika It BRADLIY h a eant for So e 11 a high r 18k That is not a whole lot different than the central bank advance credits to the enterprise and that i It an is advance because productivity euentially having bank or whatever advancing to assumption well productivity is u play i going to the role of the their good with going to -- but if he 618 31 1 oe n't 2 hieh get to viii Ra BLACKWELL 6 AR BRICSON 7 BBNATOR BRADLBY o AR BRICSON t AR in ore and ore to a It would ake no sen e A uperpower supplicant that's right It akes him true developing country That'S right got it BLACKWELL It would ake no ense unle oo he il that up with both changes in 80rt of the production 11 f 12 ove ent 13 hingl on their own 14 AR BRICSON consu er durable the incentives that go into it and the of factories 15 sue 16 oesn't make it 1 hi tar thing I ean ha can only -- 5 17 lock ju t o ohort vith the We t which i -- which akes hi a kInd f upplicant 10 following reforoo it is ulti ately 3 relationship o the to producing it to providing those Because otherwise he'd be chasing -- Well he still would ake those moves is what happens if they AR BLACKWELL fail The risk you run But they can do a b tter The if he job in that area y oving lo e re ources to it 19 AR 20 0 21 ravioully hat 23 pproach 24 e ustaining back KacBACBIN to one Well at the risk of oversi plifying to thing Paul said earlier where woo driving a pace of reform the sYlt m wasn't re dy to absorb Gorbachev and a pace of change he has modified that -- he hasn't abandoned industrial modernization but has recognized and motivation has focused on for change the need to In the area develop a of foreign 514 u 1 policy thil il lomething where we could probably Ipend oat 2 of the day because the developments that have been occurring 3 are 4 very interesting You may remeaber a aesaion we had here I think it had to do wlth South Alia 5 ilcualion 6 aradig of what we saw for foreign when we got into a at that ti e aa policy strategy a changing Soviet In effect the new 7 thinking said that heretofore the USSR has relied on ailitary o ower to manage 9 resource it o o ecuri y consumptive The 10 trategy 11 ecurity at reduced cost 12 We which will have seen not That is USSR should very expensive develop a only maintain but this su_er with the and political perhaps enhance heating up of the 13 i cu sion with the Shevardnadze addr ooooo follow d up by the 14 hmke-up ln the Central Committee and edvedev's reaffirmation 15 f this move away from the cla s 1 17 ove ent towards a more real politik II till truggle as defining and objectives of forelgn policy 19 ee geo trategic 20 went 21 down the If you will it is I think Gorbaehev would geopolitical Ea t-West the way it i now being hall the competition articulated -- and Bob Blackwell to watch of 'ODe on televi ion and tells us that Gorbachev's UN it i very much the 22 hevardnadze n olng to be rather impressive to an audience that hasn't heard 24 t line which we aay have all which i aaying heard but which is that heretofore -- I now and quit frankly I aa drawing am not going to a lot on soa of 515 33 1 the other theoreticians too -- but what 2 USSR has pre ented to the world a 3 orld has reacted to threatening iaage and th that threatening image also says that because the 6 ventures and the USSR's s lf-fullfilling 4 need fQr strong force has become a 5 it it says is that the ussa prophecy viewed all foreign policy in terms of a class struggle rather than in what is 7 in its best interest taking into account the autual interests o or the legitimate interests of others we've created this 9 situation which has imposed this heavy burden 10 And 11 ore 12 a if we can remove -- well excuse me aspect of this which is quite interesting little academic here But some Soviet There is one I aa getting theoreticians who 13 ave 14 ears have written about the U S military-industria 15 nd its ability and the U S military power as being the chief acceded to 16 source positions of political influence in recent co plex of U S political influence around the world and that 17 the way to weaken the U S influence was to attack that 1 th y sooo to be saying that the way 19 his threatening i age thereby 20 21 22 23 24 S to exert ven s its Ana to attack that is reaove r moving the ability political influence in of the places like North sia the North Pacific and in Europe All of which is a long lead-up to say that what I think ou are seeing in Europe and what I think you are going to see ore of in the coming year regardless of whether there a ajor announcement today is a heating up or a much more 516 14 1 intendfication 2 soviet 3 ore 4 rade the effort to convince Europe Union is less of a threat That gives latitude of to pursue his vill be a part of own internal that the Gorbachev far economic agenda that but only a part And i t vi 11 5 also strengthen his hand politically 1n Europe 6 7 o So in I think that to see Gorbachev's foreign policy agenda Europe solely in arrow it too auch efense 10 gre 11 ith 12 s 13 orbachev 14 rder 15 1 17 II 11 o 21 teras of getting He sees it as access to trade is to freeing up this burden of One coaaent on that burden of defense I certainly in fact my sort of wind-up coaaents here had to do looking out at this future and hov long it lasts but it going to be I think to keep in aind that if is able to politically bring about soaething on the of a to iaportant reduction Khrushchev of ailitary forces in 1957 -- I ade the first big set of think it cuts to politically aanage this it vould i enough consensus behind the which r ally goes v s '57 to '59 i f Gorbachev is suggest to oo that vhole issue of resource llocation between civilian and ailitary purpose that even if should pas fro the political cene fro now becau e of hi ooo lf four or five the particular nature of certain 2Z eforoo or political infighting or political cau th t th n 2S at l oost enough of a body of opinion that vant to ove in at direction that that part of it aay veil sustain it oo lf 25 Which bringooo to this long rang problem that we have 517 15 1 for the Intelligence Coaaunity 2 sooowhat parochially 3 in And I have to look at it I look at the Offie of Soviet Analysis CIA a a starting point and I have tried to think a lot 4 about thia r c ntly both because I knew I waa going to nd up 5 h re today and for a cetin9 that we had a ongat the Agency 6 hierarchy about a onth aqo And I thought of a couple of 7 funda ental o points we ne d to keep in ind if I can be per itted to qo into a little bit of extraction t Pirst so uch discus ion I find yself 10 govern ent 11 Union 12 studying and in lin 15 i oul ide world focuses on the Soviet in al oat an acadoo ic way like we are all sociologists this 13 phenOMenon 14 the in both in the sociological phenOMenon And th re ia a nood to ia what do s it ean for or thia politieal roooob r that the bottoa the United Stat a the job for u a int lligenc officera Now that IF we all r tir II and take up acadooic posta there aay b ao e aore freedooo 17 secondly the Soviet Union in any waya is a funda ental 1 part It think back I w nt to school th re was Stalin of the AMerican political 20 8KKA 21 KR 8aADLSY concept It is I ean I Th poatwar concept It is what 22 all of u who grew up in the poatwar period and even 1 a RacSACBIM It ia the poatwar concept think of y parents and their outlook who were young arri d 24 during 2S our the war -- and the Sovi t Union ia 0 funda ental to outlook on the world to our concept of what ia right and 618 J6 I wrong in politic to our aena of ecurity that aajor chang 2 in the ussa ia 3 ociological o not 5 ha aa aignificant aa oao oajor chang fabric of the United State itaelf a frivoloua point I think because in the And that i it gets down to what be n the analytical challenge for ua and vhat I think ia going to reaain the analytical challenge for us 7 A neva bulletin Gorbachev o 500 000 over the next tvo t conventional araaaents strength by years and vill substantially cut 500 000 is a fairly -- 10 JUt ItLACl1fBLLa 10 II JUt RaCBACBIN That's 10 12 JUt DBS aSS vill cut troop The bulk of that can easily coae out of 13 East Asia 14 JUt ItLACKWBLL 15 Ka Don't bet on that KacBACBIN Let us return to that subject in just a 1 oaent 17 true I' co inq year and that is finding out vhere the e -- It 21 Let me finish this So ve S NATOa nov have BRADLEY a nev His I'll come back to that analytical challenge speech did not That's for the ask for reci rocation JUt BLACKWWLL Speech 16 not done yet This is sort of 22 aid-flight n JUt BaICSON 24 SENATOa BRADLBY 25 Ra This is analysis on the fly KacEACBIN Okay we'll get an update and then we'll coae 519 37 I back to this 8KMA a 2 3 BRADLBY No but keep going Doug because I find this very interesting 4 Ka NacKACBIN All right 5 I'll be coapletely candid 6 on Nov one of the thing -- and I have aade oae frivolous re arks ocial occasions about if Gorbachev is successful he vill 7 cause ajor social displaceaent in the united States but that o is only -- that is not entirely frivolous ho es for old wizards of There are not any Araageddon and it i kind of llke 10 old II funda ental that in all honesty when I think of what has been 12 the burden on resource of the last fev years a ajor part of 13 that 14 brokering of the analysis case officers trying burden has been 15 8BNA 16 Ka NacKACBIN 17 SBKA a I' Ka BRADLEY to find e ploy ent not just in But it i the analy i but so in the The what The broke ring BRADLEY No no NacKACBIN I nOI think you lay the real what of vhat has drained our 1 analytical 20 veeks 21 22 effort to do the analyaisand there is the effort to for ulate 23 not neutral political environ ent the lesources That ia analyats' analyst ' onths and what have you understanding and to 24 SBWA a 25 fta MacRAC8I BRADLEY hour analysts' Thvre is both the articulate that understanding In a not autual Neutral in a 38 I AR BLACKWELL 2 SENATOR BRADLBY 3 Ra RacBACBIN 4 SENATOR Neutral Okay That is to say BRADLBY 'ou mean let me come back -it is to articulate the 5 analysis in an environment that presupposes the Soviets as the 6 enemy 7 I Ra RacBACBIN about the Soviets 9 puts well that resupposes all kinds of things Now let e make one more remark here that some of this in perspective I don't believe that you 10 will II government 12 articulated in 1984 a for ca t or an outlook even a a re ote 13 possibility 14 not think that exists 15 be able to find anywhere in Now think tank the government out of the academic or What we have seen in otherwise anyone the last 4 year who I do we spend megadollars studying political instability 16 in various places around the world but we never really looked 17 at II factors 19 the 20 ooo 21 the Soviet union as a political entity in which there were building which initiation of could lead political to the kind of at least transformation that we seem to It dooo not exist to my knowledge or ove had it existed inside the government we never 22 would have be n able to publish it anyway quite frankly n had 24 And I wouldn't have published it 25 a we done so people week ago that would have been calling Gorbachev And for my head In all honesty had we said might com to the UN and offer a 521 I 39 I un1l t r l 2 told 3 air 4 w ould cut of 500 000 in the military ve were crazy We had a difficult enough apace for the prospect have been time getting of aome unilateral cuts of 50 to 60 000 5 SBNA OR BRADLBY 6 KR What do you mean getting air apace RacBACBIN Well getting it written and getting it 7 articulated without it being hammered to death and -o SBNA OR 9 helpful BRADLBY You and provocative really are -- this ia extremely Because -- see you are say1ng 10 one II peraon prediction would have been snuffed basically week ago or 12 two Ra RaeBACBIN weeks ago that you th t -- that the 500 000 Well we would have been able -- we would 13 have 14 reliable 15 we II report 17 you that that coaaent would have been heavily caveated and the 1 19 if we would have had 50ae legitimate evidence froa a aource with access who says it would have been able to exercise was going to happen our responsibility this information and comment on it arguaents againat it would to But I can assure have been heavily driven towards pr aumptiona about Soviet behavior na 20 BLACKWELL 21 it 22 weeka n differencea 24 economic 25 have Senator if I eouid just add something on just to get the sense of disagreement thee ago or in yesterday the for that matter Intelligence strain the Soviet Union there were Community is under Up until two nd over how how real much much they the kind of economic motivations for cutting defense 522 40 I That is at one level 2 were as to 3 significant The real whether the unilateral cut differences in the COMaunity Soviet Union at all would undertake I am not talking about 4 500 000 5 waa otherwise not tagged to something reciprocal 6 7 I am talking about 50 000 or 20 000 or anything that MR MacKACBIN And I don't want to pick on any individualGBP-- a 9 any BLACKW LL MR No and I didn't say anything about any individual 10 KR MacEACBIN But one person haa already disparaged the 11 500 000 12 have forgotten who it was 13 SENATOR BRADLEY 14 KR that I just announced MacBACBIN Oh here Someone in the room I yes But my point is when I think about 15 analytical 16 future 17 moat II several years says it is still going to be in analysis 19 still our 21 ability 22 unconventional views challenge or of the Soviet the intelligence Union it may of my career in analysis but going to be our ability to ability to do a challenge of be my bias t the having spent my experience of the last It is ferret out the information careful rigorous analysis and our to present balanced even if somewhat provocative and 23 Nov I think ve have had some success on that in the last 24 few years and I viII try to describe what kind of environment 25 I think has contributed to the success and also contributed to 41 1 the cost and where I think we will be going with this 2 Now as we 3 perceptions 4 really said the of it are Soviet Union is such so ingrained there neutral about it -- except for we can make logical arguments but we 6 get down 7 restructured 8 Soviet 9 what hard our evidence analytical Union and I can't was coming 10 societal 11 commitment 12 and 13 effort we issues we About four component that we did did make a the who i objective have to be able to say we did it down but i no one me -- and 5 that to -- and ago dealt with we the because we forecast put a much years heavier effort heavier on analytical to defense industry than had been the case before did It about WdS half of this by restructuring our own not just through increased resources And I W think that that is what we are going to have to look at in the 15 future 16 We are going to have to go back and take a look at how we 17 use 18 period of largess in terms of numbers of resources 19 is going to have to be efficiency a little perestroika of our 20 own 21 of 22 23 experiment draining of time 24 SENATOR B writing up doubts our available an lyst hours because I We spend a great deal of us wish we didn't spend so You And so it time on presentation and many with some new forms of BRADLEY don't see a great mean much and we're trying to' publication which at less you spend a lot of time 524 42 1 MR MacBACBJN Writing reviewing polishing and going 2 over the texts -3 MR BLACKWELL Editing massaging -- 4 MR MacBACBJN It is not just editing 5 SENATOR BRADLEY 6 basically 1 o 9 Getting ready to defend what you write MR last 5 MacBACBIM to pronounced 10 Because one years in of the developments intelligence that has of 11 readers including the Congress 12 no forgiveness for carelessly wording 13 an example with which I think you are quite faailiar 14 been most from my perspective has been the greater exposure 10 the of the product of the Intelligence Directorate to other And that aeans that there is thin I will give you We did a study some time back a study which has stood up 15 against 16 to be helpful -- heavy scrutiny from people who don't find its message 11 SENATOR BRADLEY II MR 19 SENATOR BRADLEY 20 MR On oil No sir MacBACB N RacBACBIN This is more recent than that Oh okay This had to 2 Soviet 22 take 23 the 24 Intelligence 25 to an official of an Allied do with forc s in Europe to go to war this Services We We got a few hits in outraged many NATO has -- I of how much time it would them and how ready they would be newspaper on the readiness people in Allied guess I haven't talked Intelli ence Service in a year who 525 a u 1 hasn't taken me over in a corner and asked me when I going 2 to get off this silly position we have that the Soviets Cdn't 3 go 4 I understand the political problem of these Allied Service reps S 6 to war in 48 hours SENATOR BRADLEY y point being is -- You mean you're saying that NATO couldnt' go to war in 48 hours 1 aR 8 not 9 gave aacEACHIN The Warsaw It has no plans to a briefing on that And would Pact could not In fact there was a piece -- we to it the House and finally 10 contributed to the piece that 11 SENA R 12 KR BRADLBY c CBIN Yes I saw that Now that -- there was one paragraph in 13 the 14 that s 'C ma in their forces they had also 16 much greater 11 infusion 18 sustainability that they had sought in these improvements pifce that was carelessly The 19 a consequence of requirement worded which should have said many improvements the Soviets have b ought for mobilization upon them elves a A much larger of men would be required in order to get the kind of paragraph was somewhat 20 one aspect they are less 21 caused a furor in two continents ready 22 And ay only point is that 23 SENATOR BRADLBY carelessly worded to Well that one say in sentence so you have to take your documents and 24 your analyses which while precise should be loose enough so 2S that it allows creative thought and instead you treat them as 626 44 I you have to treat them a if they are peeche 2 campaign where every word will be looked at in a Or peeche of a 3 leader or head of state 4 Ra RaeBACBIN 5 union ye Sir When you are dealing with There is not auch slack the Soviet So 6 Ra BLACKWELL Talmudic 7 Ra RacBACBIN So we really do have to work very hard at o this 9 Now I don't want to ake this sound all bad becau e I 10 will be completely honest 11 uaed and it is used incorrectly 12 a 13 get 14 public 15 On I mean the word politicization is Intelligence jud ments lot more political resonance than they u ed to becau e they more exposure in the pre s in the Congres my own view because of this our product is better 17 we continue to in ist that the be t analyais have 21 careful don't n intelligence can do that other people can't our analysis long as we want be overly assertive and And we're going to better work about the for ulation of NoW the make In And we're going to find a way to deal with this ensitive and loaded consumer aarket to 50 we are profeasionals and It 24 in the the other hand froa adversity atrength perhaps 16 1 have the evidence be the judgment don't go try to do those things which many professors on the outside write they print in media and they get great attention Many of them quite 4S 1 frankly and intere ting 2 polic akerl 3 i ply that becaule have ore credibility they're not part of with the intelligence oo tabli h ent 4 Ra 5 ore KacBACBIK challenging hat I a proble aying i that this And if we are i a far going to get in 6 credibility with the con u er we have to de onstrate that our 7 product o carefully 9 10 i aor reliable aore researched carefully docu ented ore And when we articulatethe e judgment well I think that we had a session here following 0 pres discussion of our econo ic analysi o 11 A soviet econo ist can get out a back of an envelope 12 under Glasnost and do a piece and that piece will capture ore 13 attention and in many cases ore credibility than 14 work 15 every 16 on 17 deficit for example 1 of all of our terrific blue-collar of the analy ts who walk in day put down a lunch pail and grind away and muck away these data and produce SENATOR BRADLEY 19 ll RR RacBACBIN things like the paper on the Right We we first came out with our studies and 20 aid Soviet defense spending -- the growth rate -- has dropped 21 to 22 long of resources to it 24 so ething about one or two percent and stayed there for a ti e o o that work has to stand up And I guess I'm not going to And we devote a lot say this has to change What I'm going to say is in some respects I think because most 528 46 1 of ua have this co itaent -- aost of ua have thia coooitaent 2 we ar 3 lavyera intelligence and doctors 4 this better 5 I officers just like that wa're going to dealt with the ore intense environ ent 7 it o product o going 10 world because we've itself paid ore And we've dealt with and increased Now we have routine of the world is and unfortunately sooo ti e 13 expert oo And we intended to continue that too routine contact with an U Me deal with the routinely 15 We keep these things us we i nee range of outside And find the w to be of i ense value 17 A there thoughts are ideas outside Secondly even when the Co unity there are not THere are ao eti oo s the beat way to ateel your product is to sub it it to the heaviest 2Ocriticis 21 place 22 23 critici Maybe 24 to it 25 the to be playing we're going to play with the re t of the think 1 1 attention to And because since the rest 12 16 aucceed in a king think that the product has'gotten better because we've 11 aoae people are you know you are going to where we can send our products is going to be get we know of where we know what the and we'll say take you'll find flaws in the analyaia So ANd your best shot Or we're too close 1 SBKATOa BRADLBY ou aean you know what the critici oo i 2 going to be 3 Ma RacEACBIN 4 SENATOa Sure You send it BRADLBY to the right and they'll S say you're too oft -6 Ra RacKACBIN I know someone who for a ple on any 7 military analysis that we have where I can send it and he will a nail 9 all the evidence il a kirovka di infor at ia 10 11 all the analy es and when he fails on that he'll tell e But if I find hi reduced to that I know I've got a pretty good paper 12 Now the problem for the coming year i going to be Ie oo 13 a 14 trying 15 to be getting at the real analytical que tion and getting the 1 evidence 17 articulate vhat it eano 1 collection problem and it's going to be Ie to get other provocative ideas together and tryi g to a problem of The problem i see what it ean oin and to A I've aid before ve ju t have to get avay fro or get It beyond m a 21 U I've he rd are words no deed political aoclal abstractions I' sure you are The bigge t que tions avare are i Gorbaehev for real -All I haven't een anything yet - All right D U ee things and aybe o e oo t rial a But we're Well true ve haven't een anything golng to have to decide yet It's hard to things haven't oved yet what do r al quote 48 1 unquot oo an 2 We 3 alternatives What are the signs of this real change have to look at alternatives and Again I have found that the explore those best way to deal 4 with people who have a particular bias is not to dismiss their 5 view 6 then show that person well we looked at this alternative but rather do the best you can to substantiate it And I 7 We 8 qUick 9 whether had a group of look at academics in alternative futures Gorbachev would recen ly and and got their views on would be consolidate just did a ower 10 accommodate 11 ousted 12 came 13 consolidate 14 Forty-five percent chance he would hhve to accommodate And I 15 think there 16 would be a political change and he 17 in the next few years 18 would there be political change and would he be Just for what it is worth that group of five or six out with twenty-five power and be that leaves me what We don't he on his ould much quite of getting 21 cer ain U year -- going to be looking at any changes we ay have 23 in the way we allocate our analytical core So prospect colleagues that we are administrative issues having are the agenda actually leave office are -- now would thirty percent chance that too said to proceed that analysts What I've able chance 19 24 as see percent questions pressing require more effort that honestly I and more my over or part way through to do with an election are going to o be make more Where can we do some contracts 1 49 external support -- in areas f kind of a maintenance sort But it collection really and comes techn cal down to this question of collection as well as uman yes source r think maybe we may be getting some advances in this o There are some programs ahead which are qoing to help us very much on the military front SENATOR BRADLEY KR K cEACSIN is Right But it takes us down to whether Gorbachev really reconstructing or retooli q plants from ilitary hardware to civilian hardware Today half a million manpower cut I have a announced going to be that a cut 90ing five hundred thousand ten percent Where is that in Ministry of to cut -- be in person cut -in armed ser icel cut going to be Is that Defense 6upport troops the kinds of a forces with I both constitute part of the combat threat and which draw heavily on resources active but That is if there are sose cuts in the numbers of divisions not only doe that reduce some of the force that reduce from Gorbachev's standpoint 60me of the forces that have to be equipped And I gue my bottom line is this that people are continually telling U6 that there is an answer out there that we are stuck with this and 25 getting new -- there'S an answer by analytical input money to qet some collection there from here goinq off spending some That will all help 532 50 1 But 2 way the truth of the matter is that there isn't any easy We're going to have to do our work continue to try and 3 i prove the analysis Continue to confront the tough 4 questions And ultimately the questions I mean the 5 importance 6 the 7 threat o the past three our four decades what will it be 9 of this for the that has driven so much of what we have confronted for give you another example 10 this 11 management 12 ahead 13 next 14 hands 15 even sooner 17 1 If Soviet Union in the year 2010 is hot the kind of military I'll last session If conference I That I And that I may have said have said saw to salient year or so that Oeng Xiaoping somewhere I think didn't I One was going to be sooner This 16 united States is monumental it at the events coming I thought that within the sha e nnd Gorbachev would now looks like will have an immense political it may come resonance true And the way that the perception of this event affect behavior in place like Japan and Europe States policy is going to be very important 19 united 20 way the soviets disperse resources to 21 rAr Eastern theater 22 the USSR is perceived in Manila The 23 second event seem 24 which 25 therein to the It could also be very important to the It could a military forces in the ----- -' _ __ be very important in the way little further down the road one to have even of greater hurdles is Europe 92 is a good case if the Soviet Union And and perhaps 5S3 51 1 because the Soviet Union is a less apparent lesa 2 demonatratable military threat the role of the Soviet Union 3 in the equation of the United States urope and the East may 4 be greater not less facing an economically integrated Europe 5 because 6 Union are going to be immensely affected by their perceptions 7 if it stands up of a changing U S S R the attitudes of the Europeans towards the Soviet a So I don't -- I guess I see that the intelligence -- 9 SENATOR BRADLBY 10 So their attitudea will change and that means what 11 MR NacBACBJN They may engage the Soviet Union they 12 aay 13 less susceptible to the U S desires if they no longer see the 14 military 15 putting 16 order to sustain a relationship which has had largely security 17 as its glue I'19 20 engage East Europe threat in the different way and saaedimensions it bluntly may feel less need SBNATOR BRADLBY KR in quite a NacBACBIN SENATOR BRADLBY Right That's exactly the strategy advocated by Yes -- ---- well that's very -- I find it is 22 very 23 last year and half talking to a lot of Europeans 24 25 therefore to please the U S in the theoreticians l entioned earlier 21 And may be provoc8tive because I've sensed aspects of that over the And Gorbachev I've talked to a lost of Europeans about means and basically they've said what what Gorbachev is 51 1 playing 2 huaan i a Socialist Socialila JUght 3 that you're playing 4 vell with a human face In other And the questioll ia what vord the idea And the anlver that you're giving ae ii you knov aaybe the soviet theoreticians are right in 5 their analylis that the Europeans aren't attached to any idea 6 they're limply used to a military and a paternal or protective 7 relationship o o 9 Kft aaybe KacEACBIN that the Well I guess challenge vhat I vould allo for our policy say il il goinq to be to 10 demonstrate that there is aore to this Nestern alliance than a 11 security arrangeaent 12 SENATOR BRADLBY 13 Kft KacEACBIN 14 SENATOR BRADLBY 15 Kft KacEACBIN SENATOR 16 Yes And that's vhere it seems t ae -Nov 1992 how does that fit into thil Well I'a just thin ing that if you BRADLBY specifically 17 are saying that this is l'It European self identity -KR KacEACBIN aean you knov just another step along the road to and th effore because there'S going 21 to 22 to go our way in our relations with the Soviet Union 23 24 25 you Yes SDA'1'Oa' BRADLBY 20 I be a aore integrated market they might say vell ve want well does that also iaply we don't need your troop KR BLACKWBLL KR KacBACBIN Probably not Probably not But it is liable to aean 53 1 that our exhortation fo budget and coaait ent on prograoo 2 will have Ie oo force 3 Ra BLACKWBLL Of cour e that' g01ng to be true in our 4 own 5 Ie ter country a well If the threat i either perceived to be or in fact i Ie oo it can't of the que tion of 7 and in any other place o Ra auch ia enough in The i ple Senator Bradley non answer I is and 10 personal 11 of 12 the 13 we describe the Soviet Union itself this is think to your again a Soviet proble twenty years or ure and di enaions have changed in ways that we can d scribe vhen But I get a greater 15 large 1 econo ic 17 objective i portant proble things relations that I sense a sense that having political guess to do there are very with relations and being fully engaged that we haven't had international a chance to think about and to articulate m that 21 i analytical challenge that intelligence faces in the but they are clearly being able to ferret developing and MR hot it BLACKWBLL What the there national in the Soviet 19 purely len e that you know I've been grinding away a all ua have on this 14 1 Europe and there The facts will differ RacKAC8IN que tion help but have relonance in And it seeas to ae out as to how the Soviet Union will play little into this part I saw is the real 19 Os of Gorbachev's 24 speech world trends that are independent of ideology and alliance and certainly was very much playing to the notion about 5 1 all - of the other thing And how 2 trying to get in sync with that 3 I ooan that' the whole hi country at fac -- lea t i that' all of the 4 Shevradnaae tuff that been in his speeche but Gorbachev's 5 approach at the U N really reflected it as well 6 7 o o Ka RacBACBIN Co e back to one of your questions If sUddenly there i an upheaval of the USSR and Gorbachev il out and we're going to cast aside'Perestroika and all of thele things what does that ean1 10 In'lo e respects that 11 SBKA'l'Oa BRADLEY 12 Ka RacBACBIN 13 SBNA'l'Oa BRADLBY 14 Ka the least intere ting que tion Ye o Becau e we know hoe to handle that And you bring the books out and RacBACBIN That exactly y point If he aoat 15 of the people will try to settle on a middle road that says he 16 uddles 17 Soviet Union along It's le bad but i t ' II That's kind of interesting -- 19 SBRA'l'Oa BRADLEY Well how do till the same you get people to old really 20 think about the other aore radical alternative that indeed the 21 -new thinking- strategy 22 le ignificant and they've decided that 23 vulnerable 2 vulnerable Z5 i playing out and and therefore they don't see Appear hostile Ka RacBACBIH Well-- the ailitary i they are truly not any reason to appear 5S 1 2 SBNATOa ear BRADLBY Let's say that he follows with another 500 000 and let's say this ext you know -- at what 3 point are you able to say this is really an irrevocable point 4 You ade you said earlier you think if it gets to a 5 certain level that even if he goes that the moaentu of the 6 reduction of ailitary will have been so deep that he r-an't 7 reverse a point it So the question is really well when Where ia that point in time and in amount 9 Ma KacKACBIM 10 a question which is II Ma BLACKWBLL 12 Ma KacBACBIM This will probably be a cop out w ll I've always been a fool who rush d in 14 And IS ountain it looks like you're on flat territory I' there 17 I he but -- I don't think we're going are on the tope of the oode an interesting point th t we ke p say ng re l te t for Gorbachev is going to be h re th t one But then the real te t i he pooooo that on D we n aboli he the ar ed force If well the Well he pas ed 90in9 to b th r And And this profe ooor' co ent was wh n ar 901n9 to ooy that Gorbachev has think When are we h s lunch with an ac de ic specialist a few aonths 21 8 to define it as a point the analogy I've used ia wh n you M This is Probably should be 13 I' I' m is that pooood the te t Wh n h Gorb ch v akes the oo cuts and if he ak s theo o o I he will frankly at least so e of the in vi ible 56 1 2 efinable combat fotces -- if he uoesn't he's gong to give up a lot of the political benefits that would acetue to this 3 then if he follows it up at what 4 what point then does Gorbachev become a mote aetive player in point do vatious -- and at S international markets Not as a supplicant but as a player 6 At what point do the Europeans who have always seen an active 7 economic 8 contributing to their security 9 As engagement if you have it could be economically probably noticed every time sound as there is a 10 slightest 11 They see it a6 in their economic interest if they can develop 12' it And 13 engaged 14 reducing the threat thaw the secondly economic SENATOR BRADLEY 16 RR 17 problem I' m RacBACBIN KR ERICSON SENATOR they will relationship IS 18 Europeans quickly all tell move that ditection you that contributes to an active security by How is it in their economic interests Well it's not now and I think that' the In Western Europe's economic interest BRADLEY I mean I can't see UI -- how it's in We tetn Europe' economic interest 21 There'S u tendency n and 2e response guest a part of me in Eutope is to really going to that says that Europe turn much more to plow a lot the Soviet Union of resource into to that looking at American interests Go right ahead '92 and the there y 1 to be my I'll focus on the Pacific you focus 9 51 1 on 2 RR 3 at 4 ERICSON And that is That would be the point that you have that I would loot a world that is much more to years ago in terms of contentious economically than a world 5 a rush for technological l adership 6 Where is Western Europe in this All right 7 of struggling for 8 leadership 9 the And odd one man out of in many the ways ways in I think that you 10 develop 11 technologically is by building up new business 12 13 14 that Where's really One means to catch Western Europe's up or market stay It's sort world demonstrate or on Is it in the top Japan Not Is it in the United States of the things that is very attr ctive about the 15 Soviet Union is that it is the largest untapped market that is 16 credit worthy 17 I could envision in the year 2000 a large 18 trading 19 venture etc etc are mutually beneficial I 21 point U n block where exports to the European Soviet Union large joint mean it's not there today and oug makes a very good Because you got security costs and everything else SENATOR BRADLEY How can it be there without -- let's take the most elementary without some price mechanism 24 KR economic ERICSON All I am suggesting is dynamics are not incompatible 60-283 0 - 92 - 18 the sweep of the with the kind of the 540 58 1 other 2 Ra MacBACBIN They can do some things to their proce oo 3 which would enable I mean the price mechani changes 4 They desperately need it they desperately need to make 5 their own economic mechanism work 6 But Ra ERICSON they can manage to create a market for foreign 7 producers I think without going through a full price reform 9 excesoive supply of Soviet natural gas 10 the Persian Gulf 11 are 12 co-production 13 else 'he e 14 15 Senator Bradley if you were to look at the Gas that li oo outside There's economic complimentarie th re that worth xploring and In some areas of just the idea of energy so e area of complete withou price change Ra BLACKWELL I don't think anyone would argue that the 17 Soviet l' econo ic 19 countri oo nor hould we fear it to become one Union by I 20 the player on end of the scale to get there 22 AR BaICSON MR Union century is going of Western The issue is is there interest and I think there is 24 the to be an or Northern Asian ean they simply -- they've got too long a road to hoe 21 25 and You are right however you can't have a full integration 16 23 plant BLACKWELL But a tru a European There is econo ic erit it is bounded because really cannot be a heavy purchaser the Soviet and other than raw 541 S9 1 aaterial auch of a heavy supplier econoaical it seeas to ae 2 They don't have a labor pool like the Chinese do or other 3 countries do 4 SSNATOR 8RADLSY Well I'a doing a speech tomorrow night 5 ca lin9 6 there is this problea of not being able -- and that's what the 7 last forty ainutes have been -- not to be able to get out from 8 under 9 stftndpoint 10 for a facific coalition And I tend to think that the lock of past assumptions and envision just froa a of a creative and playful mind alternatives I mean that ought to be one of the central functions for you MR 11 RacEACBIN well that is what we And I will 12 of 13 isn't 14 going to kee halDJ1lering it our central functions easy we've SSNATOR 15 are been --we've BRADLSY right say to 16 you 17 productively 18 need a broader reach 19 20 Europe 92 fit I say that while had some success and would encourage you to that in given the direction in consider to be one order flJr you life we're And I think to Gorbachev is heading do i t you ' ou need to figure in well where does to this thing What about -- whece does China or Japan or -- 21 MR RacaACBIN 22 The The whole north Pacific nexus other thing is that we will have lest I not sound I' totally off the reserv tion I guess I aa all right 23 like 24 25 -- is that there is this other scenario which says the soviets use you know they do this as part of a means of getting M2 60 1 breathing pace getting their hou e in order so they can eome and become an ven 2 back 3 greater ilit ry threat in tne next That's alternative that we cannot dismiss and ' e are century 4 going to have to treat seriously 5 KR BLACKWELL Except their wey of getting there -6 Ma MacBACBIN Well I have personal views on it that I 7 o SENATOR BRADLBY Their way of getting there makes them a 9 10 different society 11 there unless they make some change such that when they do get 12 there they won't be driven by the same set of goal that they 13 14 once h6d It's 15 or 16 policy 17 as l' tomorrow 19 thea That' 21 down KR acBACBIN fact the He t e wants to know next week they and will tell what they say Now ball a break in They won't get that the coming ye8r short-term long-term -- no consumer is really as interested in long-term trategy he clai 23 24 exactly right a complex problem and I think two in That's long-range the trick about what's on six months from you they want But when y u for us is going outlook so we can keep our now his docket If you the long-range ask view start sending products to be to develop the eye on the long-range but in the short-term it seems to me the question for next twelve to twenty-four months is going to drive ight 61 1 at excuse e 2 proble in keeping up 3 situaticn 4 change 5 6 obviously we in the with the extremely Soviet major analytical volatile political which ould Union But insofar as sort of u s a this s rategic interest concerned a d the conceptual framework in which r think the I lasting 9 direction might it takec 10 make all It could 7 developed key question is u s is policy i5 is there a real revDlution under in the Soviet Union and if so what SBNATOR your 12 determine 13 implication for challenge isn't That's our challenge But B aADLBY 11 th RR RacEACBIN 15 And taking imply whether it is 14 16 have a to also what you have said describe aspects of that really real but it is what and is the united States What does it mean for us much of the -- and much of it will depend upon a lot of other structure that are only now being formed 17 SENATOR I BRADLBY mean just the very fact that 11 inforaation 19 popularity now suits Gorbachev's purpose anyway by making him 20 the 21 what's experience with it you say a little bit like Nicaragua it's n not worth all the talk 24 doainant player And to on the Soviet Union has such And everybody's talking about happening in his country th n a high currency and which if you have him and personal you fit that into an information delivery syste the broader population in this democracy here whatever is 62 1 said whether it is 2 analysis the 3 highlight of this 4 However irresponsible it is 5 So impulse you qet this 7 always got a chance to have 8 his 9 and to z is thorough the ultimate have the counter view And unresearched 1et your own are kind of cut adrift bearings in this his view Or a view Or a view that says well Gorbachev and he's similar to is rally not x y And it seems to me that that creates a problem for us too MacEACBIN KR It comes with the territory It goes without saying MR 13 the competition is IS people 16 that you can't match II there 19 of on a plane that But isn't equal a lot of And some have greater access through the media and other places But 17 competition doesn't hurt BLACKWELL 14 U researched television idea that you not able 11 21 well always has to you're 12 most and S 10 the there are a couple of points are a couple of things that may One the revolution we're that occur to me-- be worth taking a note talking about in the Soviet Union -- I really think it is Gorbachev describes it that way bit it 23 revolution 24 coming problem is really a part cf -- it' All of those systems up to the natural limits of for everyone of them has a global Communist in one way or another are the Stalinist order The essentially been they've 63 1 adopted so 2 controlling 3 for of Stalinist oo chanis s for their country and they have 5 TwO 6 understanding 7 And o a 9 co ing 10 co e up against the r vilion of the superstructure in arxist ter 4 not working in this environ ent Gorbachev for of Rus ia and we are having a a a govern ent and us running and It si ply ia That's one is a discontinuity the Soviet Union Either one co unity as analyeta individually as acade ic an to ter s with that because by what enor ous difficulty h is doing he has We never thought he would -- we never say hi eating on 12 these 13 So the fact that they are there is a discontinuity 14 plate before and we never thought they would or could That does help you break your ind set fOl thinking about 15 the future 16 it's 17 keeps U l' awny m Union 21 with things like that 24 25 our broken all of our china 11 n in But you are still struggling with that past very tough to get over it And then of cour e so eone -- co es along and rightly says Refor has eo e and Al xander the Alexander the Third But well it cou4d still go gone at other S cond And ti es in the Soviet got assassinated and you ended up So I ean there are all sorts of nonetheleoo Gorbachev is a discontinuity and it is hard to get on top of it The Deputy Director has -- the third thing The deputy M6 64 1 director haa commissioned a kind of agency conference some 2 ti next winter where we draw in big thinkers in a fairly 3 mall compact setting Some futurologi ts some from -- we 4 haven' 5 think about the Soviet future ten fifteen twenty years from 6 now 7 even scoped it yet SENATOR BRADLEY But essentially big thinkers to When is that 8 9 KR BlACKWELL We don't have a time 10 KR KacGBPACBIN We're talking around March 11 KR BlACKWELL March February or March some time 12 SENATOR BRADLEY 13 KR 14 Yes I am sure if you ask -- I am lure if you ask him he'll find a way 15 16 BLACKWELL Any Senatorial attendance KR ftacEACBIN And Bob didn't mention we're also next week doing one on political instability in the USSR So this goes back to my point that I was describing -- a 17 18 situntion 19 mor 20 for 21 or U SAy the saa for me -- how much more challenging it is intelligence analytical coaplex more challenging core has become And it is always interesting ae to s ep people who were successful at it ten years ago fifteen y ars ago who But 23 for the 24 resulted 25 That at the same have dropped out and time I think that we came back who have -- it has in a better analytical system and a better product may be patting ourselves on the back but it is really M7 65 1 not W probably if left to our own devices would have 2 squirreled away in Langley and done our little thing 3 So this exposure this challenge this kind of 4 sensitivity has caused I think a better product 5 MR BLACKWELL Two pieces of 6 nu b r 7 some to come out of SOYA 8 9 product Doug has had a of papers that really have tried to press the envelope 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 too 10 conservative 11 community 12 actually 13 but 1 mean we really pressed that but it wac too conservative on stretching whether as we could as a a lot we allowing for want to you go back and do it now you'd have to push it further 16 radical 17 di r 18 but we didn't get its dimenslons ev n It's too conservative both in we didn't capture how he would 90 and would be created We're we didn't quite capture We asknowledged it how much would ahppen also going to do an estimate now on -- it's called but it is essentially Soviet national security strategy 11 4 21 toward the West Ba ically 22 far -- 80me people didn't 15 19 as Gorbachev in said he was reall If 14 Even I don't know what all the estimate and we have writte it 23 the 24 you're 25 stretch the Community'S thinking answ rs will b in but one of the things going to find in it is we're going to use it to try to 50 that we at least if we do 66 1 nothing else find out how much we 2 things That ls we're not going to try to reach consensus in 3 it 4 thftt 5 truth to be found because it really shouldn't kind of a subject disagree or agree on some Theee are cosmlc issue There's probably 6 SENATOR BRADLBY On Soviet strategy 1 MR National 8 security 9 of breathing pace sea change BLACKWBLL strategy toward the West SENATOR 10 BRADLBY The wl11ing to go to accommodate 12 aay 13 issues not know yet But where question 11 of toward national it's this question how far they are It's those kinds of issu we're going to try to push He those what is your best concise statement of 15 the strategy of these theoreticians you 16 have 9ai ed 1 I 19 have 20 good pl'per spoke of earlier who political influence Aa R C N 11 not yet revealed And stretch them out S ATOR BRADLBY 14 strategy on Interestingly enough that you should ask thought if I advertised this paper here you aight ask a draft on ay desk and I 21 8 TO 22 Aa 23 scrubbing 24 the 25 be BRADLIY RaCUCBIN I it Is going to be a very Can I get it Yes told you about week or so or thi k We sir I'd 11ke to but we should have earliest available a couple do a it Ollt little within of weeks may M9 67 1 SENATOR BRADLBY But basically it is aa you outlined 2 Ka Yes RacBACBIN sir In fact the 3 Hobnia 4 an interesting bit of personal history here 5 Deleted 6 went back and studied sort of thes background The It's enigaa or what aany p60ple say is engiaa how could 7 the e 8 towards 9 new foreign policy 10 author Gray people so e of who have expressed such hostility our aociety and way of life be the architecta of this well it's not all that strange when they see it as this 11 is the way to erve the beat interests of the Soviet Union and 12 our coaaunist party the party of Lenin 13 continuity there 14 SBNATOR BRADLBY They believed And so there ia so e that the military 15 industrial co plex was the prim political force in the United 16 States 17 KR KacBACBIN 18 SBNATOR BRADLBY 19 the relation hip 21 U Exactly And believed the United relationship to rest of the world fundamentally So that if you were the Soviet flowed from the military Union and you no longer preaented a hoatile face that would defang the threat 23 RR RacBACBIN 24 theories 25 been others who have taken the arguments f rther didn't quite well get the first part of there that fast it was the And there have 68 1 Initially one theoritician identified that 2 strenqth 3 power and that was the strategic linchpin _4 as the source of What A piece 8 Journal 9 said re ovin the threatening image appear d that in the Soviet recently had a interesting how could the rest of the world we 11 ean 12 proceeded 13 co ments 14 in 15 now trying to follow the Western model are urdering each other right here in our own country the author started right with the all the way through I Stalinist i age and the Third world He even had to the effect that the Third world is not intereated the class atrug91e and in fact most of the Third World is In effect the Western Modul delivers 17 SI TOR 18 KR BLACKWELL 19 SENATOR BRADLEY so BRADLEY th t Right There is a much more -- he But I don't get it 20 analysis 21 present a hOltile face what happens Ka It not fear the USSR when 16 n Foreign inistry opening by the way 10 KacEACBIN says that if So the -- take the the Soviet Union That the raison d'etre des not -- that the U S leverage and entire -SENATOR 24 25 That was the point has evolved in the more recent thinking is that the way to do it is by 7 23 the U S 's qlobal at which he should attack 5 6 and projection u s o ilitary of this BRADLEY military The West will say why You mean the Western do we need all democracies the 551 69 1 aelve 2 would ay I don't want to be taxed to pay for a defanse budget 3 if 4 an there's no threat imag 5 6 In other words you couldn't do thi that the public What where there appears to be not threat you don't know is is there in truth IIR lIacEACSIN 8 SENATOR presu e I have an opinion but I can't prove it Well BRADLBY is the opinion you last 11 so that they might be the threat 12 have of everyone 10 13 -- is he in truth headed towards a point where there is no threat 7 9 And so what they have to do is pre ent an opinion which I in the culture for the twenty years which is well we've alway got to protect IIR lIacKACSIN 18 that your opinion I'ty opinion 1 that i t is real proble s inside -- do I want to say this 14 SBNATOR BRADLBY 15 JUl lIacUCSIN Oil -- that the the record You can take i t ofl No My opinion is that while there may 16 have been some soviets who supported this rest ructions and new 17 thinking under the belief -- and to whom it may well have been UI sold as a means of 19 the other guy I believe 20 will becooo the reality 21 That's y belief n NATOa 23 BRADLEY g tting around and getting the drop on that ultimately the process itself And it is becoming that But when you say it will beco e five hundred thousand cut in reality what is it 24 IIR 25 military lIacUCSIN That he forces is a reality and there will be more over the 552 70 1 next five or six years 2 KR 3 isolationist 4 system 5 links than it had 6 environment J of 8 one party dictatorship of sorts 9 different than the one they're talinq about now BLACKWBLL A Soviet Union that is far less A Soviet Union that has a much less repressive than it had It hs much more international economic It's basicdlly more responsive to a normal than it has been it would be run by It still in their own vision the Communist party and somehow But it would be a damn sight 10 I think that's what they're talking about 11 SENATOR BRADLBY So you be a are saying -- see one of the 12 things 13 reforms he can simply claim that there is a different kind -- 14 there IS there's 16 choice 17 dominant 18 insifnificant 19 That that I have though are two the Western democracies There's And his is defined within a dominant _ within one that anything else even if it s Gorbachev's his and then secret ballot and party or a Party so were allowed would be structure to a Mexican or to a Japanese even is a little 21 contention in governance more familiar than- a structure where power shifts back and 23 KR 24 aspect to it 25 kinds of recently is that with NacBACBIN _ _ SENATOR BRADLEY Well I think of multi-party forth between parties there will Do you agree or disagree be another 71 1 Ra 2 RaCBACBIN BLACKWELL 3 of 4 it's hard to 5 like that oving that way I agree I would agree Although creates pres8ure8 to go beyond I ean it'8 hard for an authoritarian 8y8te to relax 6 We're talking about the vision not the -- 7 D RacBACBIN 8 the very fact It'8 still a very Ea8tern cultu e in allY ways and will not look like western liberal dooocraciea 9 Another aapect of this I think a eing is you'll aee and already 10 are 11 forelgn 12 govern ent wll1 not be based on whether one ia arxiat and one 13 isn't a that the in8urrection isaue of or to whether to deal with support thia this for ign It will be based on sort of -- 14 8 NA 15 D BRADLEY The interest RacBACBIN 16 cont sting I 17 ccoaaodatlona II ao ething 19 given situation The soviet think you national will where the Soviot Union intereset find That both aidea -- 21 Ra DLACKWJ LL if 22 also 23 of 24 four 25 not 901n9 to do it ten years we accept the do being ble to collapae three W atern history into a be galn int reat in a It's not a z ro su gooo th t Even will aeea that it can by accoaaod ting ao e other national 20 there And couple of vision wh ' h I hundr d years or ao 80 g neration or thr oo or decade ain't going to be no easy achieve ent and you're 72 1 0 2 IIR Could BRADLBY SENA R 3 4 lIacUCSJN I leave a questic ' _l '_r iItciLI lIayl okay lIacUeSIN I have one that I find that viII maybe illustrate lIuch of what ve talked about 5 Speaking again candidly 6 vith 7 say yea to a zero-zero proposal 8 calculation 9 did th IN' a careful calculation that the lik position vas designed Soviet Union would never vas offered The correct- That Soviet leadership vouldn't have This one This one accepted a level of intrusive verification and 10 inspection 11 willing to accept 12 in 13 were inconceivable in our minds at some earlier point that vent so far as to go beyond They have I rellember size of the cuts that calling one of myoId BrR 15 colleagues 16 vorking 11 believe the Soviets would accept that kind of inspection 18 said no after the Stockholm agreement saying on that vere This leadership accepted a program of cuts strategic arllaments in terms of the 14 what we in the 1920's did you ever when we wre 1n the world And This person is not a doomsayer We keep hearing the question of well it isn't real yet 19 20 He 2i is today ve have announcement of five hundred thousand people 22 bei g 23 to 24 real 2S really hasn't shown us anything yet cut froll the military the statement of Okay Now my point And is this going to contribute maybe this is a sign that something is Or not That question will not be answerable in the next week or _ 655 13 I _0 It' 1_ 90in9 to be 2 illustrate--here 3 we're 4 we 5 spend a lot of analyst hours we have another piece the announcement 6 SENATOR BRADLBY 7 RH the 9 not two __year -prog r aa - But -i t-- - oo rvel- toAnd yet I'm not sure going to be further down the line on this que tion than were before 8 L RacBACBIN problem Yes So that kind of BRADLBY 12 co -unity 13 political process in the media And talking And it's elusive But it oe have -- impulse 14 describes the nature of Are we a thi break point for soaething new or 11 in to And make a lot of projections When is the point reach d SBNATOR 10 We're g oin 9 was made about the challenge __ the intelligence community is when went to the 1 aean your whole for the defense duplicated in the European Command and we talked to 15 three military officials who were in the first party to go to 16 the inspection exercise in the Soviet Union and these guys in 17 part 18 disoriented 19 skillful 20 with conveyed the impression to me that they were and depressed that they techniques to observe genuinely didn't have to use what they had more been presented 21 Like I'v trained all my life to develop all these skills 22 in order to get into the room and you're giving me the key and 23 saying 24 do you want a beer1 25 And w lk in there's an easy chair take a look around and that's clearly the case in the Intelligence 74 1 Coaaunity in the poliitcal coaaunity if you have constructed 2 as the r oo son you do what you do becau e there i this threat 3 and 4 and what you ere doing then uddenly 5 reorientation 6 you r ori nt 7 Ka a is protecting your feaily thre i And 10 continu 11 an wer 12 you thre t RacBACBIN That i what Bob got a it il the -- call a di continuity in tituti nal as I say a to oo I put it i le s dilorientation challenge for us is to in getting right nd wrong b caus tho e an wers are alway one tep in front of 13 8KMATOa 8aADLKY 14 Ka IS profe sional 16 the deep and 17 the policy and the national objective o 1 you've And the question i how and who and to what do It aay be an early fora of 9 not basically RacBACBIM 8KMATOa Ye oo It' aaintain approach to this problea e ther way aADL Y ak nd of a And not to juap cle r off And help tho e who have to for ulete Well 19 oooo ion aor leoo co aie que tion I to appreciate it this ha been a fore you go a real I ju t have good on 21 Wh r do you ee U S govern oent guarantee of credit or OPIC 1n urance or varietie of other thing fitting into this 23 picture 24 IDBLKTBD Ra B ICSON I think that if -- you know if you look in 557 1S 1 the 70's in the 70's 2 technology 3 the Soviets thought so nowhow equipment and that they really I 5 get similar or even better technology wanted to think in the late 80's they recognized that they can knowhow elsewhere So they are not driven the way they were a decade and a half ago 7 I think they 8 hard 9 relations target see when the United States it comes to in some wayu normalizing as a commercial And they can down a road a far piece with the west 10 Germans 11 But 12 before 13 regarding trade with Moscow 14 u s come here for the best 4 6 highly of with the Italians ultimately for some with the British fo the reasons the Japanese we've talked about these countries look to the United states for singlas So one of 15 'Inited 16 the extreme 17 A the reasons for normalizaing States is to work the hard second thing that and to movp us off the Soviets attach the relations 19 economic matters 20 willingness of the united States government to accomodate them 21 or otherwi e move ahead 22 DELETED I think they political importance of signing of norm lizing economic The that to 18 23 is tar et trade with the aqreements on there as a barometer 6vch agreements is of the greater 24 than the economic importance in terms of what the Soviets will 25 do in terms of trade with the United States 76 1 SENATOR 2 without BRADLEY Jackson-Vanick 3 really 4 more 5 make much sense 6 7 Stevenson additional because people would look trad that the but Soviets not a whole it and say it lot really doesn't Even with credits and other things ERICSON In some aspects yea SENATOR BRADLEY If you look at the The political significance to the Soviets of having them removed is really what they are after Now the question I have is if they are not removed are they a significant deterrence to U S involvement 12 MR MacSACOIN 13 MR BRICSON 14 SENATOR 15 or that even with that pure economics of the deals which would be proposal 10 11 would get some MR 8 9 So you are saying We're circumventing -What do you mean by involvement Senator BRADLEY Well Chevron building a big petrochemi al 16 MR baICSON Yes It is my view that guarantees lower 17 the 18 to the private sector not just the United States and elsewhere cost But it also sends a message from the US government 19 20 21 SENATOR BRADLEY Yes but we don't guarontee Chevron's investment in Belgium 22 MR 23 If 24 purchased 25 have I ICSON we give them No Chevron Ex-1m Bank credits those guarantees an economic doesn't necessarily ask meaning they would -- us that they I mean there are guarantees that to the firm But there's also a t159 71 1 govern ent -annointment- I think that is iaporant that goes 2 along with this 3 DELETEDI 4 When we go 5 long-term back to position what we in the talked about Soviet Union befor I takinq think a credit 6 uarantees serve to facilitate that 7 I 8 would aean you would be my sense Credit Governm nt blesses 9 States 10 have to talk to the firms But that state in eftect that this operatiun the United it gives business so e en se at cClnt idence DEI ETRD sanctity f contracts is still big issue 11 12 a 13 they lingering doubt on their part will want to be addresE ed as It's still Aad that's an issue 1Il1Jch as X-x 1I I think bank credits 14 or OPIC 15 SENATOR BRADLIY 16 R 17 SENATOR BRICSON What sancti ty of contracts Yes sir And they were broken BRADLBY with the Soviets 18 on the grain elllbargo 19 1Ut aRICSON 20 The 21 n the 'l'he embargo and the natural gu DELBTED econollics are there I'm ot trying to belittle And 1 also think that the Soviets would go out of their ay to si n a copule ot big deals with the united States for a 23 lot of reasons 24 SBNATOR BRADLEY 25 the special -- Wouldn't they sign the big deals absent 560 78 1 MR ERICSON 2 SENATOR 3 If they could get them BRADLEY Yea sir But you are saying you doubt that any American firm would go into the deal 4 MR ERICSON I would think that taking a long-term 5 position in the Soviet Union is a tricky business 6 look at the kinds of joint ventures you have their short-tera 7 positions 8 ulti-nationally 9 Wnst German equipment Japanese equipment 10 and a lot You'll SENATOR BRADLEY 11 of thse have will U S enginerring be funded expertise So then the real question at what point and this is back to your -- at what point along the process 12 of 13 aechanism -- reform five 14 MR ERICSON IS SENATOR hundred thousand a million troops price Emigration BRADLEY Emigration 16 things 17 other country in terms of economics and a variety of other at what point do you regard the Soviet Union like any 18 Moo ERICSON 19 S TOR 20 contral question 21 give 22 to keep it on -- 23 deals And if you That' BRADLEY I right mean that seems to be the Not if he does five hundred thousand do we thea Kost Favored Nation MR ERICSON to me That's the r It seems to me you would want thrust The Soviet thrust has 24 always been to depoliticize economic relations from the West's 25 perspective while politicizing it somewhat froa their o n 1 1 But that's what they would argue Let's separate the two 2 the 3 AR MacEACHIN In fact fo mulated intelligence issue -- 4 SENATOR 5 say separate the twO 6 they 7 AR No BRADLEY ERICSON political do business on a 9 goes tr din9 10 SENATOR a BRADLEY purely They wouldn't from But then economic basis 12 Bither they got a good 13 investment 14 aa having trouble unraveling here de l sibusiditi But right But Senator We the normal need ubsidie they don't deserve sub idie o or they don't Same as New Jersey So this is a problem ERICSON economics Why do they On MR They would purely economic basis as 11 15 argue They'd say separate human rights 8 should 16 long-term the This sub idy is a thought that I issue The subsidy would be talk about something that they 17 would say to pthe West let's say to Chevron and they say we 18 have a bid -- a 19 for Petroleua the aae coapeting bid out of deal technologies are equal Briti co t for the project are IS' below yours 21 SBNATOa 8aADLSY U Ma 23 Your BP British Petroloua BaICSON Right It is like We re ju t after the best deal 24 SBNA a 25 AR BRADLEY ERICSON buying 9 ain That's all Strictly cu -ercial teras Chevron cannot get the deal And they would say -- Chevron would cay 80 1 gee I can't match that and they would say well that's sort 2 of your problem 3 SENATOR Why don't you go talk to your government Well then BRADLEY that gets to ultimately a 4 judgment do you think the greatest return on investment comes 5 in the Soviet Union or elsewhere 6 R by 8 participation 9 subsidize 10 I mean you have credit lines put in place BRICSON 7 a Western at government heavily ot all encourage subsidized -- although you have their at this firms point the political if risk guarantees -- DELETEDI 11 So that basically the view on economics SENATOR BRADLEY 12 is 13 can do that today 14 or guarnatees to do that to you know if somebody wants to invest R ERICSON 16 S NA'roR 1 R ERICSON Yel sir 18 And take 19 guarantees 20 sufficiently oney From the united States BRADLEY if you or trade they But they as of today can't get subsidies 15 21 to From the United States the position until the economy of the that Right no subsidies or Soviet Union is reformed that you can make money there like you can make anywhere else without subsidies and guarantees that is 22 one pOlition The other position is fi 23 overall 24 troops 25 them like any other country critical mass of reform whether whatever has reached you say well the it is human rights the point where we can regard And then the tird position would 563 81 1 2 carrot 3 troop 4 three positin o be ay 5 6 immediately give Gorbachev let' immediately give him a refuction RR Would you argue ERICSON a little reward for this 500 000 that -- I mean tho oo are When you talk about profits in the absence of guarantee I am not -- not sure what that -- 7 SENATOR 8 Moscow 9 generation 10 let's wel 1 BRADLEY Well New Jersey pizza company goes to and opens up a pizz pepsi Cola has been there for a They obviously are figuring that they are aaking monay unless 11 KR ERICSON Well some 12 to 13 tell you is that we 14 other countries are 15 union 16 united 17 compete You lower the cost to the fira What Pepsi Cola will tell you what farmers will can't compete on world providing If I play the Soviet markets because export credits to the Sovi t Union part I would say to the States you provide export guarantees to the following 75 exports to the follow 80 countries all right 18 S NATOR BRADLEY 19 D ERICSON 20 Brazil 21 poli t1 cal r hk D DESPRES 23 D normal 25 the If a u s exporter wants to export to h can apply for Ex-1m Bank credit and guarantees for 22 24 Right ERICSON ccess other Friendly developing countries And the Soviet Union would say we want We don't want to be treated special one way or So his report is you're saying for this to be 82 1 special treat ent it's not 2 by 3 would be his arguaent lx-I Bank to 4 SBNA 5 That 6 Australian 7 and 8 worldwide 9 going 10 c se 11 Okay 13 very uch 16 17 l' 19 21 23 24 25 world That That is his arguaent directly joined journalists 1 said on the qrain we don't want question any subsidies taking on export subsidies To which 1 had to say logically yes unless 1 was to say well no because the Soviet Union 1s a special this 15 countries in the he said does that a an yOU're 12 14 ost of the BRADLBY is It is treat ent that is accorded while we're proceeding diversion and thanks for this down this read thanks for aession 1 appreciate it Thereupon at 1 15 o'clock p ooo the Ta k rorce brleflp9 va concluded