Foreign Relations of the United States, 1981–1988, Volume III, Soviet Union, January 1981–January 1983

202. Information Memorandum From the Director of Policy Planning (Wolfowitz) to Secretary of State Shultz¹

Washington, August 16, 1982

SUBJECT

• Upcoming East-West Strategy “Seminar”

The attached talking points for your August 21 “seminar” identify four broad areas of discussion:

—Soviet assets and vulnerabilities

—Current Soviet policy

—US leverage and priorities

—Building public support

Below, under the same four headings, are themes, problems, and propositions you may want to put before the group. They should provide the structure for a very general review of Soviet-American relations. Three narrower questions—linkage, arms control prospects, and a summit—are more fully developed in brief tabs.

One theme that recurs in every section below (and deserves special emphasis at the outset) is the difference between the bilateral half of our relationship and our broader efforts to create an environment in which we can limit Soviet openings and resist Soviet advances. The Soviet-American competition is, to a large extent, governed by each side’s relationship with third parties—with allies and proxies, with local troublemakers and their targets. Yet both those who want us to be tougher with the Soviets and those who want us to ease up too often treat bilateral dealings as the core of the competition. The first group, for example, treats pipeline sanctions as the ultimate test of our strength, no matter the impact on the Alliance; the second envisions fine-tuned leverage toward the Soviets, while demanding nothing more of Alliance relations than lowest-common-denominator unity.

Areas for Discussion

1. Soviet Assets and Vulnerabilities

a) How will the Soviets manage their economic crisis? In the group’s discussion of Soviet assets and vulnerabilities (most of them now well known), you will hear an increasing emphasis on Soviet resource constraints. This is important, but incomplete: we need to know how the Soviets will resolve the choices and conflicts created by these constraints. We should not think they will face a simple choice between reallocation (economic growth, but less for defense) and turning to the West (economic growth, but under tight leverage). Soviet problems are unquestionably severe, but in dealing with them the Soviet leadership knows that:

—some of them could change quickly (substantial price increases for gold and energy could cut Soviet mid-decade credit needs almost in half),

—some will change during this decade (labor-force growth turns back upward by 1990), and

—some may never change (low productivity and poor resource-management reflect structural defects of the Soviet system).

These facts may encourage the leadership to keep muddling through: the obstacles to systemic reform are, in today’s more institutionalized system, probably even greater than they were 20 years ago; great increases in Western resources may not seem worth the economic (or, possibly, political) price. Finally, even if resources are reallocated, nothing we now know tells us that completely new priorities will govern the decisions.

b) How will the Soviets manage the burden of the bloc? The outline of Soviet policy is firm: bloc living-standards will decline. The Polish experience has unsettled the Soviets, but two of its chief lessons will suggest a cautious, conservative policy:

—Steady reduction in living standards can be imposed and weathered.

—Even small socio-political experiments are very dangerous.

If this is the Soviet reading, we must expect recurrent repression in the bloc as a backdrop of our management of East-West relations.

2. Current Soviet Policy

a) How do the Soviets see their own position? Reduced internal flexibility does not always reduce flexibility in foreign policy. Can the Soviets minimize the impact of their internal vulnerabilities on their foreign policy interests? If so, how? In the short run, obvious opportunities exist, for example, in pursuing the following goals.

—In Europe: to promote West European independence, espeially in East-West trade; to blunt the President’s arms control proposals; to limit European support for US policy on issues like Poland, Afghanistan, or southern Africa.

—In the Third World: to preserve and exploit the proxy positions built up over the past decade, perhaps to regain or compensate for lost ground in the Middle East; to keep the costs of the Afghan war at their present low level; and more generally, to divide the West from the Third World (using pressure on Pakistan or Somalia, for example, to show the dangers of close association with the US).

—In arms control: to move the talks toward preserving present imbalances, or to weaken political support for Western defense programs.

—In East Asia: to create at least the appearance of movement toward better relations with China; failing that, to isolate China.

These goals will not be attained easily, but they are not narrowly dependent upon resources. And they do not require high risk or high-cost initiatives that would further expose the Soviet position. In light of problems in Eastern Europe and within the leadership, this consideration will help to sustain Soviet self-confidence.

b) How do the Soviets see this Administration? It is often said that they are uncertain about US policy. This uncertainty can have two different forms:

—first, whether they can do business with us at all, and

—second, whether we mean what we say and will stay the course (especially given our own political and resource constraints).

The Soviets may doubt both points. Thus, to clarify our basic message to them, we must demonstrate:

—first, that we do not deny their legitimate interests (narrowly defined), or aim simply to overturn their system, and

—second, that their conduct has exceeded their legitimate interests, and we will make this costly for them.

3. US Leverage and Priorities

a) What leverage can restrain Soviet behavior? Most problems of Soviet-American relations can be resolved above all (perhaps only) in an environment that limits Soviet opportunities—that is, by a favorable military balance, by active cooperation with friendly states, and by political stability and economic growth. The prime task of our Soviet policy even in the short term is to increase such leverage.

This Administration, however, also claims to favor “linkage”—between Soviet conduct and our readiness to cooperate on other issues. Exercise of linkage has always been very hard, and it may become more so:

—Arms control (though some call it a prime Soviet goal) may be a progressively less effective restraint. The radical Soviet concessions we propose reduce the Soviet stake in reaching an agreement. And the mere fact of negotiating may seem less likely to slow US weapons programs than it did five years ago; in fact, especially in INF, lack of negotiations might best stop Western programs.

—Economic incentives may also be ineffective, despite Soviet difficulties. Free-market systems are resistant to use as leverage, and lack of Western unity further limits the economic penalties we can impose; because Soviet economic problems are systemic, the benefits of East-West trade may be marginal too. The scale of Soviet problems may make marginal differences more important than usual, but our own recession will also increase opposition to regular use of such linkage.

—Soviet human rights policy—an appropriate and permanent issue of our bilateral relations—may be quite unstable during the succession. Offering inducements for liberalization in this period may be tempting (and useful for p.r. reasons), but leadership instability may preclude enduring results.

—Finally, geopolitical issues are hard to trade off against each other. The Soviets will cede valuable positions in the Third World—as in southern Africa—only under substantial US leverage. Yet our room to maneuver is slight. In area after area we want something of the Soviets. (You should ask the group’s view of what the Soviets want of us in the geopolitical realm and whether we have assets that can be safely and effectively bargained away; Tab A develops this issue.)

b) Which elements of US-Soviet relations require most urgent attention? Where can we most realistically hope for results?

Significantly, many urgent problems about which you may hear from the group concern third parties directly and the Soviets only indirectly. Yet each affects our ability to deal with the Soviets.

—Restoring Alliance unity. Since unity of inaction will not protect the West in the long term, it is essential to find ways of acting together effectively. The immediate cause of disunity is Poland. Friendly critics should be asked what policy package can both allay allied unhappiness and effectively strengthen our Polish policy (the President’s prime condition). If there is none in the short term, how can this problem best be made less urgent?

—Countering Soviet proxies. The Soviets are perhaps best positioned, by proxy, to do imminent damage to our policy in southern Africa. If they prove able to block Cuban withdrawal from Angola, what additional leverage can strengthen our position? The growing likelihood of such an impasse (and of other Soviet proxy probes) makes a common front with our Allies (now in question) all the more important.

—China. Severe downgrading would reverse one of the major accomplishments of US policy in the last 15 years, with domestic and international costs. Has this triangle become so difficult to manage because the Chinese take US anti-Sovietism for granted? Can the Soviets exploit this? How can we move the Chinese back to an interest in strategic cooperation?

c) Finally, can we do better than damage-limitation in the medium term? A firm US policy and the Soviets’ own difficulties may well persuade them to hunker down over the next several years—cautiously awaiting both a more receptive US administration and an upswing in their own downturning indicators.

Such a Soviet pause may be a working definition of US success for the medium term. Does it, however, miss opportunities, created by developing Soviet difficulties, to put the relationship on a better long-term basis? These opportunities might lie in the direction either of more actively weakening the Soviets or of more energetically seeking out ways to resolve differences on favorable terms. How can we identify and explore such opportunities as they appear?

4. Building Public Support

How can we correct the public confusion about our Soviet policy?

Soviet efforts to divide the West against itself will be encouraged by, among other factors:

—uncertain public support if arms talks stagnate,

—the apparent inconsistency of our trading policies, and

—the contradictory picture of Soviet aggression and weakness.

Our strengths lie in the enduring power of the human rights issue, in our openness to negotiation, and our diplomatic activism in resolving conflicts. Yet in trying to convey consistency, firmness, and balance, we face this dilemma:

—Harsh and ideological rhetoric, particularly when directed at the Soviet system rather than at Soviet behavior, may seem likely only to increase tensions (and thereby the public’s fear of war). Emphasizing the need to overturn Communism may in fact set a standard by which we will be seen to fail.

—Failure to emphasize our ideological differences, however, may signal business-as-usual and make it harder to defend costly policies. It also surrenders a key basis of Allied unity—the common commitment to Western values.

(You might ask the group to give concluding thoughts to the public presentation of our policy; Tab C discusses how a summit might strengthen this effort.)

1. Source: Reagan Library, Shultz Papers, 1982 Soviet Union. Secret; Sensitive. Drafted by Sestanovich. All tabs are attached but not printed.