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STRATFOR.COM
Global Intelligence Update
Weekly Analysis November 8, 1999

Ten Years after the Fall: After the Celebration


Summary:

Last week saw a remarkable display of nuclear saber rattling by the
Russians. Triggered by U.S. insistence on deploying an Anti-
Ballistic Missile system despite a 1972 treaty and by Congress'
rejection of a nuclear test ban treaty, the Russians put on a
display of symbolic nuclear muscle-flexing unlike anything seen in
10 years. The real issue behind the display was that the United
States is discounting Russia in its foreign policy decisions. U.S.
meddling in Russia's sphere of influence, the former Soviet Union,
is posing real problems for the Russians. Moscow is trying to
remind the Americans of the risks it will run if it places Russia
in an untenable position. This also makes for good domestic
politics in Russia.


Analysis:

The Berlin Wall came down 10 years ago this week. This made the
events of last week all the more startling. The Russians rattled
their nuclear sabers louder than they have since Gorbachev's day,
reminding the United States that whatever else has happened, Russia
remains a great power. The United States appeared simultaneously
confused and angry at Russia's behavior. This is what made the last
week interesting. The United States still thinks it is operating in
the post-Cold War era. The Russians have moved on to a very
different place.

It all began with discussion in the United States about amending
the 1972 treaty banning the deployment of Anti-ballistic Missile
Systems. The logic behind the treaty was that peace between the
United States and the Soviet Union depended on Mutually Assured
Destruction (MAD). As long as both sides were assured of the
ability to destroy the other, neither would attempt a nuclear
attack.

Anti-ballistic missile systems had the potential of destabilizing
the situation. With such a system, one side could gain the ability
to block all or most of the other's attack. More important, was the
uncertainty surrounding the system. As neither side could be sure
the other side was able to block its attacks, each had to assume
the worst: that its own nuclear arsenal was about to become
impotent. This increased insecurity would obviously knock out the
"assured" element of MAD, increasing the likelihood of war.
Therefore, they formed a treaty banning all but a limited number of
ABM sites in each country. What was particularly nice about the
treaty was that the agreement banned a technology that didn't
really exist yet.

The United States toyed with the idea of an ABM shield during the
1980s. Called Strategic Defense Initiative (SDI), and nicknamed
Star Wars, it came to little, because of serious technical
difficulties in implementation and attacks by those who felt MAD
was a more secure foundation for preventing nuclear war.
Nevertheless, research and development on some sort of missile
defense went on in the Ballistic Missile Defense Organization
(BMDO), and in a system called Theater High Altitude Area Defense
(THAAD).

THAAD differed from Star Wars in several ways. It was not designed
to shield the United States against a massive Soviet attack.
Rather, it was intended to defend U.S. troops abroad against the
threat of smaller powers like Iraq or North Korea. THAAD's function
was to destroy a small handful of incoming missiles, not to serve
as a shield against massive attack. Therefore, from the U.S. point
of view, THAAD posed no challenge to the Russians.

>From the American point of view, the 1972 treaty is now irrelevant.
The foundation of the treaty was MAD. With the United States and
Soviet Union training thousands of missiles on each other, an ABM
system would have undermined MAD. In 1999, there is no Soviet
Union, and the United States and Russia are not aiming thousands of
warheads at each other. We are not on hair trigger alerts, ready to
move to DEFCON 1 on a moment's notice. Therefore, U.S. reasoning
holds that introducing interceptor missiles would not destabilize
the balance of terror, because there is no longer a balance of
terror. What remain are threats from minor powers that can be
blocked by new ABM systems. Thus, not only is the 1972 treaty
meaningless, but the Russians cannot reasonably object to the
United States protecting its cities from destruction by dangerous,
small enemies.

The United States was wrong. The Russians did not think the treaty
was irrelevant. In fact, they went ballistic last week. Earlier,
Russian President Boris Yeltsin wrote a letter to U.S. President
Bill Clinton stating that the U.S. plan would have "extremely
dangerous consequences for the entire disarmament process." Then
things started happening:

* On Nov. 3, with a massive publicity blitz, the Russians announced
they had test-fired one of the anti-ballistic missiles they were
permitted under the 1972 treaty. Col. Gen. Vladimir Yakovlev, head
of Russia's rocket forces, was quoted by The Associated Press as
saying the test must be viewed in the context of a "possible
symmetrical and asymmetrical response" to U.S. actions. In defense
jargon, this meant Russia already has an ABM system under the 1972
treaty, and may decide to respond to new U.S. deployments by either
upgrading its ABM system or developing new, non-defensive systems.
In other words, if the United States goes ahead, all bets are off.

* The Russian publicity blitz continued to focus public attention
on the deployment of Russia's new ICBM, the Topol-M, which Moscow
made clear would be deployed and operational by the end of this
year. Russia also made clear it was considering putting multiple
warheads atop the Topol-M -- in defiance of START treaty
restrictions -- to decrease the effectiveness of the U.S. ABM
system. In short, the Russians were pointing out their willingness
to wreck the entire arms control regime created in the 1970s and
1980s if the United States undermined the ABM treaty.

* On Nov. 5, again amid massive publicity, Russia received the
first of 11 strategic bombers from Ukraine in exchange for writing
off its $285 million natural gas debt. Eight of the 11 bombers will
be supersonic TU-160 Blackjack bombers. The other three will be
refitted TU-95 Bear bombers. Both are able to fire nuclear-tipped
cruise missiles. Since Russia currently has only six TU-160s, the
deal with Ukraine represents a substantial strategic boost.

* Prime Minister Vladimir Putin had previously announced massive
increases in defense spending. Last week, Col. Gen. Anatoly Sitnov,
chief of armaments, announced that up to 28 percent of all money
invested in weapons procurement would go toward modernizing
strategic nuclear forces.

* The Kremlin ordered U.S. Ambassador James Collins, who was
supposed to visit a secured Russian military site known as
Kraznoyarsk-26 for the inauguration of a U.S. financed business
center, not to bring his top science advisor. It also told him he
could not inspect any other U.S.-Russian projects at the site. The
ambassador cancelled the meeting. Later, Energy Secretary Bill
Richardson, at a meeting in Denver attended by Russian Atomic
Energy Minister Yevgeny Adamov, protested Russian restrictions in
such strong terms that Adamov walked out of the room.

This is interesting stuff to be happening on the 10th anniversary
of the fall of the Berlin Wall. To understand what is going on, it
is useful to consider some things said by Hungarian Prime Minister
Viktor Orban in an interview with the Canadian newspaper Globe and
Mail. Orban said Hungary needed nuclear weapons based on its
territory, because of "uncertainties about the future of Russia."
Francois Leblennec, a NATO spokesman, agreed that Hungary could, in
principle, deploy nuclear missiles, but that the current strategic
balance in Europe made the action unnecessary. The Russian Foreign
Ministry blew up at Orban's comments, calling them a "direct
violation of the Russia-NATO Founding Act, in which NATO countries
confirmed they had no intentions, plans or causes to deploy weapons
in the territories of new members."

Lurking in Orban's statement is the real starting point for
understanding what is going on here. Orban said Ukraine should
never become part of Russia, since that would threaten Hungarian
national security and therefore NATO. The Russians blew up not only
at the thought of NATO nuclear weapons in Hungary, but also because
Orban was intruding into what Russia regards as its sphere of
influence, the former Soviet Union. Orban tried to downplay his
statements later as a comment made in the context of a discussion
of Canadian nuclear policy and having no practical significance.

>From the Russian point of view, the statement seemed to be fraught
with practical significance. Orban had linked the Ukranian question
with the nuclear question. NATO seemed to be joining in this. Both
said, given the current military and political situation, there was
no need for nuclear weapons to be based in Hungary. Orban, however,
made it clear that in Hungary's mind the need for nuclear weapons
shifted if Ukraine changed its neutral stance. If Ukraine fell
completely into the Russian sphere of influence, and Russian forces
once again deployed in the Carpathians, Hungary would not be able
to defend itself by conventional means. At that point Hungary would
require nuclear weapons.

Ukraine is critical to Russian national security. A hostile Ukraine
threatens the southern flank of Belarus and Russia. On the other
hand, Ukraine is economically dependent on Russia, particularly as
a source of energy and as a market for Ukrainian manufactured goods
that cannot compete on the European market. For its part, Russia
needs Ukrainian agriculture. The two economies intertwine deeply.
There is a deep economic fit between Ukraine and Russia that
predates the Russian revolution. There is also real and deep anti-
Russian sentiment in Ukraine. There is a deep tension between what
Ukrainians want to see happen and what economic and geopolitical
realities will make happen. The transfer of bombers to Russia in
order to pay off energy debts symbolizes this interdependence. They
are being pulled closer together on a number of levels. Hungary
sees this and is worried, worried to the point of speaking of
nuclear weaponry.

Three levels exist to this process of Russian reassertion. First,
there is public opinion in Russia. The Russians are tired of being
treated as a banana republic by the United States. Standing toe to
toe with America on nuclear issues is good politics in Russia.
Upsetting the United States is even better politics. Therefore,
Russia will not allow the United States to change a treaty that is
in place, such as the ABM treaty, without its permission. Second,
Russia has substantial strategic assets and the technological
capability for producing more. It retains few levers in its
relationship with the United States. This is a very real one. Last
week's exercise was designed to remind the United States that the
current status of the nuclear equation is neither fixed nor
entirely dependent on the United States. Russia is as capable as
America is of upping the temperature.

Third, and most important, Russia is in the process of reclaiming
its empire. This process will take a generation at least. Orban's
statement symbolized what Russia sees as American meddling inside
its sphere of influence. The Russians do not believe that Orban
said what he did without U.S. permission. U.S. support for the
Baltics as well as U.S. meddling in the Caucasus, Central Asia and,
most important strategically, Ukraine has practical implications
for Russian expansion. By using the ABM treaty as a basis for
reopening the nuclear relationship between Russia and the United
States, Russia will force the United States to think seriously
about the consequences of pressing Russia too far, particularly in
preventing it from reasserting its sphere of influence.

Responding to the Russian statement on its ABM tests, U.S. Defense
Secretary William Cohen said, "I'm not sure what point they were
trying to make." The point is simple. Russia is a great power with
a massive nuclear arsenal and serious regional interests. If the
United States chooses to disregard its treaties with the Russians
and to meddle inside of Russia's sphere of influence, the United
States will find the Russians can still pose a threat on the
strategic nuclear level. The risks of U.S. activities inside the
former Soviet Union will rise prohibitively.

In short, if the United States wants a new ABM treaty, it had
better ask Moscow and be prepared to pay a high price. Included in
that price will be abandoning any thought of deploying nuclear
weapons in Hungary or Poland, or of further NATO expansion. Most
important, Russia expects to exercise its influence in the former
Soviet Union without American meddling.

>From 1992-1995, there was a window of opportunity in which the
United States could have moved directly into the Baltics, Ukraine
or the Caucasus and created a framework for containing Russian
power. For better or worse, it chose instead to focus on relations
with Moscow, assuming that if Russia were pro-Western, everything
else would follow. It was a decent assumption, save for the fact
that the means for keeping Russia pro-Western -- namely, prosperity
-- never happened; nor could it have happened.

The United States is now in a position in which relations with
Moscow are deteriorating daily, but relations with the rest of the
former Soviet Union have not taken on forms that could help
countries like Ukraine resist Russian pressure indefinitely. As
Russia returns to a more traditional foreign policy, it reminds the
United States that it has nuclear teeth. Therefore, the United
States had better take those teeth into account in its dealings in
areas such as Lithuania, Georgia or Kazakstan.

Russia is back in the great power game. It may not be a superpower,
able to project its forces globally, but it is the preeminent power
in the former Soviet Union. It may not be economically healthy, but
it has a massive nuclear force and a very respectable conventional
force, more than enough for asserting power along its frontiers.
The United States has a strategic decision to make. Will it
challenge Russia's sphere of influence in the former Soviet Union
or will it cede the region to Moscow?

Russia's nuclear saber rattling was an attempt to remind the United
States of the risks of intrusion. What is not clear is whether the
United States is, at this point, capable of disengaging from the
region. Russia cannot bear U.S. intrusion and the United States
will find it difficult to disengage -- an interesting and dangerous
problem for the millennium.


(c) 1999, Stratfor, Inc.
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