Table of Contents

Is Russia lost? To read the barrage of op-ed articles, congressional testimony, and political position papers that have flowed from both the left and the right since last summer, one might have concluded that Russia is dead and gone - and the Clinton Administration is to blame. It is true that eight years after the fall of communism, Russia is riddled with corruption, its politics are unstable, and the structures of democracy and free markets have yet to strike deep roots. There is also a resurgent anti-Western element in Russian politics. But Russia is not lost.

On the contrary, despite real setbacks regarding reform and integration into the Western system, Russia still aspires to build a democratic polity, consolidate a market economy, and join the Western community of states. Although opinion polls demonstrate that Russians are disappointed with the performance of Russian capitalism and Russian democracy, most people still want to improve these new political and economic systems rather than go back to communism. No serious political leader or party, not even the Communist Party, advocates returning to the command economy or resurrecting dictatorship.

The Russia-is-lost Cassandras argue that Russia's current parlous state can be blamed on U.S. policy over the past decade, primarily our support of profligate International Monetary Fund (IMF) loans. A second group of finger-waggers argues that the United States was wrong to try to engineer domestic change within Russia in the first place.

While both these arguments are wrong, it is true that policies which were appropriate yesterday to help Russia pursue domestic reform and integration into the Western community may no longer be appropriate. As conditions in Russia change, so too should U.S. policy. The 2000 presidential elections in both the United States and Russia offer a propitious moment to reframe the bilateral relationship.

Depoliticize and Democratize the U.S-IMF- Russia Relationship

The political argument for more IMF assistance even after loans were defaulting was a form of nuclear blackmail based on the notion that because of its huge warhead arsenal, "Russia was too big to fail." Russian leaders cleverly exploited this argument, hinting that civil war, anarchy, or fascist dictatorship might follow in the land of 20,000 nukes if the West withdrew assistance. They thus guaranteed the continued flow of loans without making the economic reforms that other, non-nuclear powers are compelled to adopt before obtaining Western aid.

This game should stop. Whatever the political merits of IMF loans to Russia in the past, they have now disappeared. U.S. officials should refrain from using the IMF as a conduit for politically motivated aid to Russia. If the next U.S. president wants to provide assistance to the Russian government for political reasons, then that money should be transferred through the Agency for International Development or some other U.S. government agency, not through the IMF.

Fund officials are most effective in encouraging reform in Russia when they act like bankers rather than diplomats. The IMF must regain its credibility as an autonomous financial institution concerned first and foremost with assisting macroeconomic stabilization in Russia. If this approach means no new IMF loans to Russia in the foreseeable future, then so be it.

In return for reclaiming more autonomy over decisions of when and how much to lend Russia, the IMF's decision-making process must become more transparent. Greater openness will expose IMF decisions to greater scrutiny, which can only improve the quality of these decisions. Greater transparency will also allow more Russians to understand and influence the IMF-Russian relationship. More information about the execution of an IMF program should also be made available to the public as a way to help counter corruption.

Assist Russian Society, Not the Russian State

State reform in Russia will not be generated from within the state. Rather, state institutions will change only when there are strong societal groups pressuring them to reform. Yet Russian political and economic life today is dominated by the chummy conspiracy between the financial oligarchs and the authoritarian politicians; they constitute the greatest threat to Russian capitalism and democracy.

To counter this threat, the United States must assist economic and political groups that act as a check on this unholy alliance. This calls for a kind of "tough love" policy towards Boris Yeltsin's government and its successors. Except for nuclear threat reduction programs and some educational and medical assistance efforts, the U.S. government should eliminate all financial aid to Russian government bureaucracies. Instead of trying to assist the Russian president directly or state officials more generally, U.S. assistance should be channeled through non-governmental organizations, such as programs that lend money to small businesses. We should also back political parties, civic organizations, business associations, and trade unions - but not government bureaucrats. This would mean supporting public interest law organizations and providing seed money for a Russian Civil Liberties Union rather than funding Russian law enforcement officials.

America's most effective tool in promoting markets and democracy is the example of the United States itself. The more Russians who are exposed to this model, the better. We should expand military-to-military exchanges, sister city programs, business-to-business meetings, and especially educational programs for young Russians. Tens of thousands of Russian students, not dozens, should be enrolled in American universities.

Inside Russia, mass civic education projects should be promoted. Programs that increase the flow of information about successful business or political ventures in Russia should be encouraged. The demonstration effect of a profitable small business in the city of Perm will mean much more to a future entrepreneur in Novosibirsk than will a success story from Silicon Valley.

The best way to assist the development of Russian civil society is through small-grants programs that give money directly to Russian organizations. Programs with large budgets often translate into waste, corruption, and big salaries for Washington-based consultants. Organizations such as Internews (which assists the development of independent media in Russia), the National Endowment for Democracy, and the Eurasia Foundation are models at providing this kind of assistance on the proper scale. Although not in the business of grant-making, groups such as the International Foundation for Electoral Systems, the National Democratic Institute, the International Republican Institute, the AFL-CIO, and a host of smaller non-governmental organizations also facilitate the flow of ideas about civic organizing, advocacy, and democracy. These programs need support.

Less Arms Control, More Cooperative Arms Building

Throughout the Cold War, arms control dominated the agenda of U.S.-Soviet relations. During periods when the United States and the Soviet Union clashed in several arenas both literally and figuratively, the arms control regimes kept open a channel of communication between the two superpowers. The very process of negotiating these agreements helped to ease tensions in the bilateral relationship.

Today, the opposite is true. At a time when the United States and Russia have begun to cooperate on a wide range of issues that would have been unthinkable in the Cold War era, arms control has stalled. In particular, the Russian parliament has refused for several years to ratify the Strategic Arms Reduction Treaty (START II), even though it is in Russia's strategic and economic interests. Russian lawmakers have practiced the policy of linkage - an American invention from the Cold War days - in trying to obtain American concessions in other policy arenas in return for START II ratification. All they have achieved so far is delay.

U.S. foreign policy leaders can exit this game of blackmail by simply moving ahead unilaterally with arms reductions. The next American president should announce that the United States plans to reduce its arsenal of strategic nuclear weapons to the lowest level that will still give the United States a deterrence capability. Some have suggested that this number is 2,500; others have posited that the United States can go to as low as 1,000 warheads if all of these weapons are placed on submarines, safe from a first strike. Given Russia's dire financial situation, the Russian government is likely to reciprocate. To be sure, arms control agreements are preferable in that they provide better information about intentions and more opportunities for verification. Ironically, however, the United States and Russia are likely to achieve START II and even START III levels of nuclear weapons much faster if they stop negotiating these treaties and simply act unilaterally and encourage the other side to reciprocate.

If the U.S. objective of reducing strategic nuclear weapons might be achieved better through less engagement with Russia, the objective of developing and deploying missile defenses is best achieved through greater cooperation. In the spirit of Ronald Reagan's original speech on the Strategic Defense Initiative, the United States should seek to develop missile defense technologies in full cooperation with Russia, even if the United States has to foot the entire bill. Persuasive as money always is to countries in deep financial trouble, this might soften Russian resistance to amending the ABM treaty, while also giving us the benefit of Russia's technology and scientific personnel in developing these systems. Recent successes in negotiations about Shared Early Warning suggest that the United States and Russia can devise regimes for cooperation that enhance the security of both countries. We owe it to ourselves to try.