Dimitri K. Simes
President, The Nixon Center
Author, After the Collapse: Russia Seeks Its Place as a Great Power

"Russia's Tragedy, America's Stake"

Thank you so much for this wonderful introduction. Thank you, Mr. Mack for having me. It’s a great honor for the beginning of my book tour, and I have to say I couldn’t start it in a better place than Los Angeles and the World Affairs Council. Of course, so many of you not only follow international affairs, not just are interested in Russian developments but a lot of you are also familiar with the Soviet perspective of foreign affairs, which is somewhat different from the perspective of this Administration.

Let me say at the outset, the Nixon Center is a nonpartisan institution, an institution which rarely takes position on substantive issues. For instance, in terms of the impeachment of President Clinton, we had a variety of opinions among our board members. They include Senator Lieberman and Senator McCain, who did not vote quite the same way, and we have different opinions on our staff. My opinion was that since we were already exposed to the terrible costs of one presidential impeachment-- I am, of course, talking about the impeachment of President Nixon-- my view was, a reluctant view, that as much as one could disapprove of President Clinton’s actions I personally thought that it would be better to keep him in office until the end of his term. But I am convinved, however, that unless we do something serious about U.S. foreign policy, Mr. Clinton indeed may become known in history, his legacy may be determined by affairs-- not, however, his affairs with Monica Lewinsky and others, but the serious disarray in American foreign affairs.

When you talk about foreign affairs today, of course, in a group like this, people don’t understand why foreign policies are important. But if you talk to ordinary Americans, including perfectly smart, well- educated people, they ask a very sensible question "What does it have to do with us? Why do we have to worry about those kinds of things?" Yes, of course, there is a global financial crisis, but the Department of Treasury, the International Monetary Fund, helps to protect the United States against the worst complications of the global financial instability. Of course, unpleasant things are happening in the Persian Gulf, India and Pakistan tested nuclear weapons, there is tension in the Korean Peninsula, there are disagreements between China and Taiwan and, of course, now there is the Balkans, [and we] are discussing sending U.S. troops to Kosovo.

But when you look at all this involvement, they do not immediately affect an average normal American. We have kind of found a formula, between the International Monetary Fund and cruise missiles, to protect ourselves from the unpleasantness of the world. It’s very tempting to say, "Well, what does this have to do with us? Look at the stock market, look at the declining crime, look at more interracial harmony," and you would say "We’ve never had it so good." That’s what the Athenians were saying to each other 25 centuries ago, after their historic victory over Persia, when they became the only superpower in that period of time. And remember how shocked they were according to historians, when they discovered that not everyone in their little universe shared their sense of triumph.

There is a story of Athenian ambassadors arriving in Sparta (remember that Greek state which became the major competitor and finally the architect of their undoings?) and the ambassadors, according to historians, said "Why are they upset with us? Our lines were created because everybody wanted us to be in charge in the great war against the Persians who represented a threat towards the Greeks, the whole democratic civilization. We were in charge of the effort, we put forward most of the troops, we have provided most of the money, you wanted us to be in charge, you wanted us as the leader, and when it all ended we had our bases on your territory, our fleet was providing you with protection and you were initially very enthusiastic about our presence. Then something went wrong. Suddenly you began complaining that we were taking advantage of our presence, that we were supposed to be entirely altruistic and not to think about our own interests ...." Then the Athenians said, "Before we knew it, there was this common alliance led by Sparta and they were threatened with a powerful counter- coalition, and there was this famous Peloponnesian War which lasted for several decades." You know, my friends, the Athenians lost. At best, they lost their sense of proportion and their sense of reality about the world affairs of the time. Then, as a result, they lost their lives and then they lost the war.

Please don’t misunderstand me. History rarely repeats itself. This is a very different world today, and I’m not predicting anything similar happening to the United States as what happened to the Athenians 25 centuries ago. History does not repeat itself, but there are certain historical lessons which we have to remember even in our current triumphant mood, because we like to say "Look what happened to us, it’s absolutely unique. Nobody else has experienced that." This is not entirely true. There were other periods in history where there was competition between two major powers in addition to the Athenians and Persians. I could mention Rome and Carthage. There were many such competitions in history, and one great power would go down the way the Soviet Union went down. There would be always a period when the victorious superpower of the time would be able to be a huge presence, and for a certain period of time, everybody would welcome that because everybody would remember how that superpower had delivered against the common enemy. Then they would feel that that great power was far away, it was not in the neighborhood, it is better to have their benign presence than to have other powers present in the neighborhood bullying smaller states.

If you are not very careful during this time of triumph and opportunity, history always demonstrates that it’s quite remarkable what a short time it takes for your former admirers, for your former clients, to turn against you. If President Clinton and his administration are not very careful, it is the creation of this counter-coalition against the United States that may become a major legacy of this administration. Friends, that’s not about obstructions. That’s not about just politics. That is about blood. That is about American lives. That is about American treasure. This is just as much about the world our children are going to inherit as is Social Security, because if we are not careful at the beginning of the 21st century, after this short period of triumph and great opportunities and glory on the cheap, we may discover very serious challenges which at the minimum will require a great deal of money, a higher defense budget, and a much more tense international environment. And it could be worse.

That brings me back to the collapse of the Soviet Union, which I witnessed with President Nixon. We all more or less know how it happened, and I’ve tried to talk about that a great deal in my book. One thing is not in my boo,k because I learned about that after the book was finished, which should illustrate to you to what extent history was not predetermined. The extent of the weight of the collapse of the Soviet Union depended upon not only major trends of history but also on particular personalities and their interaction. Late in 1987 near Moscow, a KGB officer who was a security aide to one of the Soviet leaders at the time came to that particular town because his boss was strangely absent for too long a time. When he opened the door he found his boss hanging. The man tried to kill himself. The security aide cut the rope and was able to save his boss. The name of the boss was Boris Yeltsin. That was after Boris Yeltsin, of course, was disgraced. After he lost his seat in the Politburo as he admits in his own book, he was totally devastated, he had a nervous breakdown. What we did not know before was that it led to that kind of dramatic episode. I talked to the aide who was responsible for saving Yeltsin - his name is General Aleksandr Kazakov. He was Yeltsin’s closest aide for many years, and then Yeltsin fired him like he fired everybody else who used to be close to him. I talked also to a couple of people who were very close to Yeltsin who were able to confirm this episode to me to my full satisfaction.

The way the Soviet Union collapsed was based on a lot of things. It was based, of course, on the mental structure within the Soviet system. On their inability to maintain military competition, political competition, which they started with the United States. But they could not maintain it particularly when President Reagan decided to proceed with his Star Wars initiative. You may remember the so-called Reagan Doctrine when the United States decided to challenge the Soviets politically, to support guerrilla movements, the so-called Freedom Fighters, to pay back the Soviets for their many years of support of the so-called national liberation movements, Except the United States had history on its side, and much more money to do what America wanted.

And, of course, there was Mikhail Gorbachev, a unique man who was a brilliant Communist political tactician but who did not understand the first thing about his own system, who thought that you can destroy ideology, you can remove political police controls, you can undermine powers of the KGB and the party apparatus and, guess what? He thought the system would only become better, because he thought that those things were aberrations which were obstacles to building an efficient Communism with a human face. He did not understand that these were the fundamentals of his system, without which it would be very difficult to keep the system together. To keep the empire together. And then came Boris Yeltsin, who was a great destroyer, a man of great courage and energy in protecting his own interests and fighting his enemies, but at the same time a man who is very lacking in many fundamental respects.

I remember his conversation back in March 1991 with President Nixon when he said to President Nixon in all seriousness that the collapse of the Soviet Union was not an option. President Nixon asked him just after he came back to Moscow after visiting Lithuania and Georgia, at that time two rebellious independent-minded Soviet republics, and it was very clear that they were striving for full independence. President Nixon asked President Yeltsin about that, and Yeltsin said "Well, this is not a serious possibility. They want to leave the Soviet Union the way it exists today. They have no confidence in Gorbachev, but at the moment we destroy the union these people can go nowhere else. Once the old union is destroyed, they would crawl to Moscow on their knees and would ask us to take them together because we’re the ones who have all the raw materials, we’re the ones who have all the know-how, all the foreign investment is coming from Moscow."

Boris Yeltsin did not seriously expect to destroy the Soviet Union. He wanted to take the Soviet Union from under Gorbachev on the naive assumption that that would put Yeltsin in charge and that he would be able to recreate some kind of new consideration on the former Soviet territory, consideration which would be run from Moscow and still be Russian dominated. That was Yeltsin’s very deep miscalculation. He had no plan for what to do if the Soviet Union collapsed altogether. What to do with the economic dependency of former Soviet republics which, remember, did not have a free market. It was all based on the plan: you would have an enterprise in Moscow totally dependent upon receiving raw materials from Siberia, packaging from Armenia and delivery through railroad going through the Ukraine. No thought was done on how you conduct this great transition froma centrally- planned economy to a market economy when you are destroying all the ties between different parts of the Soviet Union.

Yeltsin also was not a man who ever seriously thought about democracy. He was a man who wanted to be a democrat because he knew that that was the right thing to do. But I don’t think he ever gave any serious thought to what democracy actually meant. In another meeting between President Nixon and President Yeltsin, this time April 1992 in Moscow, President Nixon asked Yeltsin what was he going to do about his conflict with the now-defunct old Russian Parliament, and Yeltsin said that he would not allow - listen to this - "These midgets to influence fundamental Russian political decisions." That was not just about substantive disagreements; that was about Yeltsin building new Russian democracy while being true to Russian autocratic traditions. How do these little people, these Russian parliamentarians, how do they dare to challenge the emperor who always knows best? There was no serious thought about building institutions for democracy and for a free market, because if you want to build institutions, if you want to build democracy and free market from the bottom up, that takes a little bit of time and an emperor cannot do it alone. He has to share the power with the civil society, with the legislature.

Yeltsin did not want to do any of that. He was not temperamentally fit for this role of a great architect. He wants to bring advisers who could do everything at once, a quick leap forward like in China. Remember what happened in China when Mao tried a great leap forward in the ‘50s? It was a great economic and human disaster. Yeltsin wanted a Russian version of leap forward, and he was told by a bunch of young academics that if you just unleash a free market and privatize everything that can be privatized things would improve very quickly. And Yeltsin liked that, no need to negotiate with the Parliament, no need to make deal with republics. Just do what was natural for Yeltsin - you destroy, you eliminate all institutions, you put an end to policies of the past and then things will improve somewhere, somehow. Well, obviously what happened is that when they eliminated price controls without a free market, with all the monopolies intact, the first thing that happened was that there was an increase in prices of about 2,000% in the matter of three months. Now what did this mean? Millions of people who had savings, a few Soviet people had savings. The Soviet Union was a relatively poor country, but because they were, to put it mildly, not very attuned to consumer goods production, people had very little to buy. Accordingly, they had [savings], they lived poorly but they had money. But then this money disappeared as a result of this hyper-inflation. But how do you privatize if you do not have people with money? Privatization without capital.

There was an option, of course, of bringing in foreign investment but to bring foreign investment you need legislation. Foreign investments would not just come there with billions of dollars because Boris Yeltsin invited them. To get legislation you need to deal with the Parliament. To make deals with the "midgets." Yeltsin would not do tha,t so they started the privatization without Russian capital and without foreign investment. So how did he conduct privatization? They shared the huge Russian pie among themselves. A few people became very rich. Almost everybody else was in poverty. By the beginning of 1996, Yeltsin’s popularity was about five to seven percent. That was his approval rating. 5-7%. And it was assumed that Yeltsin could not win in the Russian presidential election which was supposed to take place that June. The leading candidate was a communist, Gennady Zyuganov. He was No. 1 in public opinion polls, but Zyuganov also had huge negatives, and the majority of Russians were saying they would not vote for him. So there was a widespread assumption that Zyuganov would be the No. 1 vote getter during the first round of Russian presidential elections, but that he probably would be defeated in the second round because, according to the Russian constitution unless one candidate got more than 50% of the vote there would have to be a runoff. And in no public opinion poll could the communist candidate get 50%. So it was very important who would run against Zyuganov. There were several candidates. There was Grigory Yavlinsky, an economist, an intellectual and the leader of the Yablokov faction in the Duma. There was Luzhkov, a populist, but he had conducted a little economic miracle in Moscow and was fairly popular. There was General Lebed, a tough- minded man who sometimes today is called the "Siberian Pinochet," but who was trying to prove to the Russian voters that while he looked somewhat scary he was a pragmatist and could deliver.

All of them were above Boris Yeltsin in public opinion polls, but because of the way Russian privatization was conducted there were a lot of people among the oligarchs, among members of the old nomenclatura, who gained so much during the distribution of the Soviet property. There were a lot of people who did not want to allow anyone to become president who would not guarantee that you got your share. So they were not just afraid of Zyuganov. They were afraid of virtually anyone who would come from outside the system and [whom] they could not count upon. Sometimes these people were compared to robber barons, American- style. That is a gross over simplification and an insult on American robber barons. American robber barons, mind you, they were building railroads, oil wells, steel mills and engaging in philanthropy. I don’t want to present these people as saints, but certainly they made an important contribution to building the American economy and the American society.

Russian robber barons were not builders. Russian robber barons were manipulators who knew how to build connections which would allow them to privatize on the cheap without paying almost anything, and then they would immediately open bank accounts in Switzerland. Thus, they were taking money from the country, and because of that they were very afraid to have any one as Russian president who was not one of them. From that standpoint, Yeltsin was a deal. He had presided over the privatization; he could be counted upon to protect their interests. These same people who were Yeltsin’s official advisors were in charge of major networks. You’d have the money going from Russian central bank, to private banks, and the private banks would immediately give the money to Yeltsin’s campaign. There was really no difference between the Russian state treasury and Yeltsin’s personal campaign chest. That’s how those elections were conducted.

And that’s where we are today, with a Russian president, who, despite being reelected, is very unpopular, who’s also quite sick. You have a country in economic turmoil, you have a country where the gross national product was reduced between 40-50% during the last eight years, where life expectancy for men is 68 years, where despite immigration from other former Soviet republics the population is declining. We’re talking about a nation which is no longer a serious economic player and, after the great default in August, frankly, they did not just lose credibility with the international financial markets, they lost relevance to the international financial markets. There is a growing assumption among Western business leaders that Russia is essentially irrelevant, that whatever they could do to damage the global economy they more or less have done. It is tempting to dismiss Russia or it is tempting because the Clinton administration says "Well, they don’t have a very good government, let’s wait just a little bit." To use the Secretary of State’s expression: "Let’s exercise strategic patience." It’s very tempting to say, "Let’s neglect Russia, let’s pursue those projects where we have mutual interests with Russia and then let’s wait for a serious government. One day they may have it, and at this point we can talk about doing something more ambitious together, but meanwhile they’re not terribly important." That’s a very tempting view. It’s not a very realistic view.

Let me give you two pieces of statistics. Try to guess who is the most unpopular foreign statesman in Russia. Saddam Hussein. Who is the second most unpopular foreign statesman in Russia? Bill Clinton. Which country do the Russians view as the greatest threat to their survival and territorial integrity? The number 1 country is Chechnya. You know the Russian experience with Chechnya, that is understandable. The second country is the United States. The second country is the United States. How is it possible that after everything we have done for them, after President Clinton constantly talking about strategic partnership with Russia, after Russia being invited to join the G-7, now we’re talking about G-8, talking out of proportion to the political and economic progress, how after all of this they have this negative view of the United States, and in particular the Clinton Administration? Their view of the Clinton Administration is more negative than their view of the United State, because 54% of the Russians still say that they like and trust Americans. The principal problem, according to the public opinion poll is with the Clinton Administration.

Before I go any further, let me mention how reliable or unreliable is this statistic because Russian public opinion polls are very unreliable and I know you may be tempted to dismiss it. I would not depend on Russian polls for something like that. That poll comes from the United States. It comes from the Clinton Administration, from the United States Information Agency. The good news is that the United States Information Agency is still intellectually honest. The bad news is that you can see how devastating are Russian perceptions of the United States. Now, of course, the Russians are principally responsible for their own predicament. They have conducted their reforms, they were destroying the Soviet Union without asking where [do we go] from here, they were the ones who were in charge of their privatization and corruption. But what was our role? Where was the United States in 1992 when Yeltsin was having his confrontation with the parliament? Were we taking a hands- off position, saying Russia is a sovereign country, make your own decisions? Or maybe we told Yeltsin the way President Nixon did in my presence: "Be a little careful, Mr. President. You may not like the Parliament, but if you want to build democracy a modicum of dialogue with the Parliament is not advised"? No, the Clinton Administration was doing exactly the opposite. The Clinton Administration has a very specific notion of how Russian economic reforms were conducted. And if the Russian government could not persuade the Parliament to support those reforms, the Clinton Administration was consistently pressuring the Russians - do whatever we are telling you, do whatever the International Monetary Fund, recommends and if it would lead to a shoot- out with the Parliament, we would at least understand you and support you.

I have mentioned those so-called 1996 presidential elections when Yeltsin was reelected president. President Clinton called it a triumph for Russian democracy. President Clinton had to know better. You know how these elections were conducted? The moment Mr. Yeltsin decided that he would run and that Mr. Chubais, the favorite of the International Monetary Fund who was accused by many people in Russia-- democratically-minded people in Russia--of serious corruption, the moment Mr. Chubais became director of Yeltsin’s presidential campaign the International Monetary Fund, who just two weeks before said that Russia was not qualified for another IMF loan, they suddenly decided at the suggestion of the Clinton Administration to provide Russia with this loan. And you know what kind of loan? No strings attached. Just transferring money to the Russian Ministry of Finance to do whatever. It was with American money that Boris Yeltsin was able to steal the election, and this is widely known in Russia. Of course, when you look at the results of their reforms, a lot of them are willing to look for a scape- goa,t but you can also make a case that advice and, indeed, pressure from the Clinton Administration have contributed to that predicament.

That is how we came to the point that the country for which we were trying to do so much is really very, very ungrateful. It doesn’t have immediate implications for the United States because, even if they disagree with America, what can they do? They do not know how to balance the budget without refinancing their IMF loans, without restructuring the old Soviet debt. They need Clinton Administration support. They’re weak. They’re almost on their knees and that is why they would complain about the American actions in former Yugoslavia and against Iraq, but at the end of the day, they would do very little. Make no mistake, there is a difference between being on your knees and being genuinely supportive of American global leadership. They’re on their knees but they’re angry and they are looking for a way to punish the Clinton Administration and, of course, the United States for their supposed humiliation. Today they cannot do that, but their emotions, their coalitions, increasingly pull them in an anti-American direction.

You have to be concerned about a lot of things happening in Russia. One of them, of course, is that there is [instability] in Russia; they can lose control over their nuclear weapons, and you can imagine how devastating the problem would be. Then, also, Russia may start entering into all kinds of anti-American alliances. I have just talked about them. The Chinese Premier was in Moscow and he was talking to Mr. Primakov about fighting the Americans through Germany. It was said very publicly, very loudly, there was no question about what they had in mind. Now, of course, today because the United States is a predominant power, the Russians and the Chinese realize that they need more from Washington than they can offer to each other. But this is a pragmatic coalitio,n and if we slip somewhere, if there would be an area of American vulnerability, there is no question that there is a strong temptation in Beijing and in Moscow alike to cut the United States down to size.

Finally, if we [follow] the Russian so-called strategic patience model suggested by the Clinton Administration, what is likely to happen is that once they understand that their IMF loans are not going to be refinanced, that they have nothing to hope for from the Clinton Administration and little to fear from the Clinton Administration-- because we’re obviously not going to take over Russia militarily-- then they may start changing their pragmatic foreign policy calculations. If they cannot get money from IMF where would they go? Well, there is a market in Iran where they’re asking for Russian technology and for Russian help in producing weapons of mass destruction. There is a market in India. There is a market in China. They’re dying to get Russian navigation technologists for their missiles and to get access to Russian progress in [developing] all kinds of precision guided weapons. And, of course, there are the North Koreans. Today the Russians understand that this would be an unfortunate choice in terms of their own nation’s interests. That would make them an international pariah, and to Mr. Primokov’s credit that is not his choice. But if we let Russia lose, if we essentially say we’ve had enough of you people, you’re a pitiful giant and we want to wash our hands, then they may have to change their foreign policy calculations. We’re not talking about the extremists, not about communists, but about practical pragmatic people who are saying that if we cannot get money from the United States, from international money organizations, the money which the Russians absolutely need, not just to balance their budget but to stay afloat and avoid destablization of the country, then they may start doing things which would be very unfortunate from the standpoint of important fundamental American interests.

At the end of the day I’m still optimistic that we can manage the Russian problem, that we will help them at least enough to muddle through and to avoid the worst. My problem is that this is not just about Russia. It is about a number of policies of the Clinton Administration where so many people did not want to serve in the military, did not want to support U.S. war in Vietnam. Americans complained about Iraq in the Persian Gulf, were opposed to supporting the Contras in Nicaragua, etc. etc, etc. But once the Soviet Union has disappeared from the map, once there is no other superpower that would really challenge the United States, many members of the Clinton Administration suddenly have acquired courage bordering on recklessness. The Clinton Administration has answers for everyone. They offer indispensable guidance for almost every nation, foes and friends alike. They speak in the name of the international community. What international community? China is the most populous nation, Russia is still the largest nation. Do we really believe the Clinton Administration can aspire to speak on their behalf?

You remember and tremendously appreciate America’s historic role in ending the Cold War, on justice, on heroic attempts which favor peace and freedom and prosperity, but you already begin to see an emergence of counter- coalition, of a backlash which Russia cannot lead but to which it can powerfully contribute. As you can see, these are pretty important decisions and if these decisions are not made, if they are not made right, if they’re postponed until things begin to happen by default, it is really these affairs, the failure to handle these foreign affairs rather than what happened in Mr. Clinton’s personal life, that may become the defining point of his administration. Fortunately, it is not yet too late.

Thank you.