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-Confidential--• SOV 86-10023

April 1986

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Directorate ofIntelligence

The 27th CPSU Congress:Gorbachev's Unfinished Business

An Intelligence Assessment

Directorate ofIntelligence

The 27th CPSU Congress:Gorbachev's Unfinished Business

An Intelligence Assessment

—Coofideotiel--SOV 86-10023April 1986

IrdulArlantiol

The 27th CPSU Congress:Gorbachev's Unfinished Business

Key JudgmentsInformation availableas of 15 April 1986was used in this report.

Gorbachev's initial party congress effectively drew a curtain on theBrezhnev era and gave him a stronger hand to pursue his domestic and for-eign agendas, but it was not the decisive break with the past that some So-viets and Western experts had predicted.

Gorbachev emerged from the congress in an improved position to pressforward in rejuvenating the Soviet leadership and revitalizing the economy:• His control over the leadership was strengthened by the greatest turnover

in the Politburo, Secretariat, and Central Committee at a party congresssince Khrushchev. The promotion of several supporters to steppingstonepositions presages further housecleaning in the top leadership.

• The repudiation of the stagnation and inertia of the Brezhnev era, alongwith the strong endorsement of more exacting standards for party andstate managers, will allow him to maintain pressure on the bureaucracyfor improved performance.

• The congress's endorsement of Gorbachev's priority for machine buildingand accelerated technological renovation gives him the mandate he needsto push his goal of modernizing the Soviet economy.

• Gorbachev and his allies also broadened the scope of debate on how bestto achieve rapid economic progress by asserting the need for "radicalreform."

The congress approved Gorbachev's foreign policy strategy designed tonurture a favorable environment for domestic rebuilding through moreassertive efforts to blunt a renewed American defense buildup:

• By focusing his report squarely on arms control and the US-Sovietrelationship, Gorbachev underscored that foreign policy initiatives overthe coming year—from Europe to Asia and the Third World—will begeared to the effort to change American policies. Subsequent remarks byGorbachev and his colleagues at the congress indicate that Moscow willcontinue to engage the United States while sharpening its attempts topaint the administration as a recalcitrant partner.

• Advancement of two experts on the United States to the Secretariatpresages a more sophisticated and vigorous effort to generate domesticpressures against administration policy.

SO11 86-10023April 1986

Table 1Gorbachev's Unfinished Business

Issue Outcome

Implications Further Steps for Second Year

Top-level leadership Positioned several allies andproteges to advance from Secre-tariat and candidate ranks, butadded only one full Politburomember

Changes contribute to his un-precedented consolidation ofpower in his first year but alsoreveal limits on his ability topromote allies, particularlythose who have taken a moreoutspoken line on changing thesystem.

Move forward his point men on"radical reform," Yertsin andMurakhovskiy. Oust Kazakhboss Kunayev and isolate or re-tire other Brezhnev cronies andold guard leaders.

Central Committee

Responsiveness of bureaucracy

Greatest turnover since 1961,almost 50 percent, bringing inofficials appointed when he wassecretary overseeing cadres orsince his election.

Implicitly attacked Brezhnev'slaxity and set new, higher stan-dards, although without resort-ing to direct personal attack onBrezhnev.

Gives him more secure controlover body that is pivotal in car-rying out his program, but theresidual of Brezhnevites couldact as brake on change.

Returns initiative to the centerby recognizing need to turnover personnel and break uplocal cliques. Gorbachev's dom-inance of personnel apparatusthrough his protege Razumovs-kiy places him in strong positionto implement these standards.

Continue to replace remainingold guardists among ministersand party officials with youn-ger, more dynamic officials be-holden to him for theirpromotion.If Gorbachev is dissatisfiedwith what he got, he mightpress forward with further criti-cisms of the Brezhnev legacy.He must developi mechanismslike cross-posting to prevent hisappointees from becoming co-opted while avoiding Khrush-chev's excessive turnover, whichalienated bureaucrats and con-tributed to his ouster.

Economic policy Endorsed his strategy of focuson "human factors" and long-term shift to technological mod-ernization. Call for "radical re-form" supported by a handfulof economic leaders.

While positioned to move for-ward with cautious moderniza-tion strategy, Gorbachev hasprovided stimulus to debate ofmore innovative and radicalsolutions.

Gorbachev needs to give moresubstance to his call for "radi-cal reform." If he intends tochange the system in more thancosmetic ways, he needs to loos-en central control over pricesand allocation of materials, al-low greater reliance on marketforces, and permit functionalunemployment and bankruptcyas in Hungary.

Social policy Stressed importance of socialfactor and again attackedBrezhnev's laxity, but failed toprovide resource boost to solveproblem of low consumer mo-rale. On culture, took ambigu-ous line but pushed forwardmore pragmatic officials intoideological apparatus.

Continued focus on "humanfactor" approach---tighteningdiscipline, fighting alcoholism.Cultural issues may be sourceof continuing tension betweenthose worried about ideologicalcontamination and those whoview freer flow of informationas necessary adjunct to econom-ic modernization.

Gorbachev needs to push for-ward with revamping propagan-da machinery under tutelage ofhis protege Yakovlev. May needto confront intellectuals' grow-ing expectations for change.

Foreign policy and security Endorsed his more innovativediplomacy and reengagementwith the United States throughfocus on centrality of US-Sovietrelationship and leadershipchanges in the Secretariat.

Speeches and personnel changesunderscore focus on influencingadvanced Western countries,not Third World. Provides ra-tionale for more substantialshifts in policy toward the Westthan the stylistic changes wehave seen so far.

Gorbachev needs to strengthenhis grip on foreign policy andnational security apparatus andfollow through on rumored re-structuring. Also needs to givesubstance to rhetoric refocusingforeign policy toward West byforcing through changes in So-viet negotiating positions.

• The truncated nature of his review of foreign policy, however, makes itdifficult to predict Soviet behavior on specific regional and bilateralissues.

Although the congress gave new impetus to the main elements of Gorba-chev's domestic and foreign policy line, it also raised questions about theGeneral Secretary's will and ability to follow through on his ambitiousagenda. For every issue moved forward an equally important question wassidestepped:• In a number of areas—notably economic reform and elite privileges—it

was clear that differing perspectives at the top and bureaucratic foot-dragging below still limit the pace of change.

• The congress failed to clear up how Gorbachev can keep his promises tothe Soviet consumer while meeting his announced goals for investmentgrowth.

• A core of Brezhnev holdovers remains in key positions, while Gorbachev'smost outspoken proteges did not advance.

Gorbachev's avoidance of potentially divisive issues at the congress waspolitically prudent, but continued caution could slow the momentum he hasbuilt over the first year and undermine his image as a leader determined tooverhaul the Soviet system. Whether the congress proves to be the major"turning point" in Soviet history that Gorbachev clearly wants it to be willdepend on his ability to pursue the unfinished business left by the congress.To this end he needs to:• Further shift the balance at the top by replacing old guard holdovers with

allies more open to change.• Make headway against the vast bureaucracy that historically has

frustrated change by maintaining public pressure for exacting standardsand perhaps authorizing further exposes of elite improprieties.

• Prepare the ground for more substantial economic change by sanctioninga wider discussion and initial experimentation with reform measuresheretofore considered taboo.

• Gain a tighter grip on the foreign policy and defense establishments tomatch the control he has already achieved in other sectors, and begin tomake changes of substance in long-held Soviet foreign policy positions.

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Contents

Page

Key Judgments

Preface ix

The Congress in Perspective 1

Consolidating Power 2

Appearance of Incompleteness 4

Success in the Central Committee 5

Reorganization of the Central Apparatus 6

Honorable Retirement? 7

Shaping a More Effective Ruling Elite 8

Contentious Issues 9

Explanations for Gorbachev's Caution 10

Limits on Gorbachev's Authority 10

Endorsing an Economic Strategy 11

Debating Further Steps Toward Reform 15

Airing Societal and Cultural Issues 15

Law and Order 17

Alcohol Problem 17

Religion and Nationalism 17

Ideology and Culture 18

Tying Foreign Policy to the Domestic Agenda 19

Centrality of the US Factor 19

Covering Old Ground 19

The Third World 19

Personnel Changes in the Foreign Policy Apparatus 20

Unfinished Business 21

The Political Front 21

The Economic Front 23

Social Policy 23

National Security and Foreign Affairs 24

Establishing a Place in History 24

vii

Preface This Intelligence Assessment examines the implications of the 27th PartyCongress for Gorbachev's political strength and policy agendas.

rfhe analysis draws on related Directorate analyses of Sovietdomestic problems and foreign policy initiatives and reflects the views ofboth government and academic specialists. The paper presents a set ofindicators to measure Gorbachev's progress in the coming year on issueswhere the evidence remains incomplete or interpretations differ.

The Role of the Party Congress

Delegates to 27th Party Congress

Communist party congresses have met regularly sinceStalin's time. The quinquennial congresses supposed-ly act as the party's supreme policymaking institutionand select the Central Committee to act for itbetween congresses. In reality, the 5,000-odd dele-gates exercise little real power; they are carefullyselected by the party apparatus, and their delibera-tions are tightly managed by the party leadership inMoscow. Although the Congress formally selects the300-plus members of the Central Committee, thecomposition of this body is worked out by thePolitburo and the Secretariat according to a well-established procedure.

Despite their largely ceremonial function, congresseshave sometimes played an important role in Soviethistory. In the 1920s, when congresses occurred al-most every year, policy debate was lively and rivalfactions maneuvered for political advantage. Whileno congress was held from 1939 until 1952, Stalin'ssuccessors have used them to unveil important newpolicies. In 1956 and 1961 Khrushchev attackedStalin, and in 1971 the 24th Congress launchedBrezhnev's detente policies and "Peace Program."

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The 27th CPSU Congress:Gorbachev's Unfinished Business

The Congress in PerspectiveLike earlier Soviet leaders, Gorbachev used his firstparty congress to set the tone for what he expects willbe a long tenure as General Secretary. The hard-hitting speeches by party leaders at republic partycongresses, comments by some Soviet officials, andspeculations by Western journalists helped create aclimate of great expectation for the congress when itopened on 25 February. While Gorbachev in hisopening speech described the congress as a historical"turning point," the substance of his remarks and thefollowing debates suggest his immediate goals weremore modest:• To make a decisive break with the laissez-faire

leadership style of the Brezhnev era.• To further consolidate his power base, building on a

yearlong record of remarkable accomplishment.• To engineer a show of unity behind his domestic and

foreign policy strategy as it unfolded over his firstyear in office.

• To protect his options for considering more funda-mental changes to the system should they prove necessary.

While the 27th Congress failed to match the livelyones of the Khrushchev era, it departed dramaticallyfrom the tenor of Brezhnev's last congress in 1981,which was dominated by the propaganda of success,the touting of past and anticipated accomplishments,and sycophantic speeches of subordinates. Gorba-chev's first congress—while not free from a pep rallyatmosphere—projected a more self-critical vision ofcurrent Soviet problems. Gorbachev set the tone for amore businesslike and objective debate in his politicalreport. More than one speaker confessed to shortcom-ings, and the General Secretary conspicuously chided one delegate who heaped praise on him

Overall, a spirit of consensus dominated the congress.By eschewing radical rhetoric and approaches—andavoiding the personal attacks on former GeneralSecretary Brezhnev that many had expected—Gorbachev projected an image of a businesslike and

Gorbachev at the 27th Party Congress

responsible statesman and leader rather than a boldiconoclast. His positions were echoed by most speak-ers. Few defended the old guard, and no one rebuttedthe notion that serious problems had been allowed toaccumulate under Brezhnev. At least rhetorically, theleadership was in lockstep behind economic modern-ization and doing things in a new, more innovativefashion. On policy toward the United States, where

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C9..AA".14.1

some discordant notes were heard following the Gene-va summit, speakers at the congress lined up uniform-ly behind Gorbachev's approach.'

Gorbachev moved cautiously forward despite somefoot-dragging and anxiety within the bureaucracy andappears to have emerged from his first congress withhis image as a decisive leader enhanced both at homeand abroad

Consolidating PowerGorbachev's most impressive achievements have beenhis moves to reshape the top leadership, and thepersonnel changes at the congress constitute anotherlarge step in the process (see figure 1). Despite someapparent limitations in his ability to pack the Politbu-ro, personnel changes at the congress were the mostsweeping of the past 25 years. He added one fullmember—defense industry secretary Lev Zaykov—tothe Politburo, two candidate members—regional par-ty chiefs Nikolay Slyun'kov and Yuriy Solov'yev-and made major changes in the Secretariat (seeappendix for biographical information). Together withearlier personnel changes—including the removal ofthree old guardists who were full members of thePolitburo—Gorbachev has nearly remade the party'stop leadership (see figure 2). 2 These changes havebrought in many allies, albeit few clear-cut clients.

Gorbachev effectively rebuilt the Secretariat by add-ing five new members and dropping two, leaving onlytwo Brezhnev holdovers on the II-member body. TwoGorbachev proteges were added: Cadres DepartmentChief Georgiy Razumovskiy and Propaganda Depart-ment Chief Aleksandr Yakovlev. Gorbachev contin-ued to take control of the foreign policy apparatus byretiring Boris Ponomarev, International Departmenthead for over a quarter century, and KonstantinRusakov, head of the Bloc Relations Department(removed from the Secretariat on the eve of thecongress), and promoting Ambassador Anatoliy Do-brynin. For the first time since the Khrushchev era,

Figure 1First-Year Leadership Changes UnderBrezhnev, Andropov, Chernenko,and Gorbacheva

ens Deletions ILJ Additions

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20

2

a Includes all additions, deaths, retirements, and removals amongPolitburo Members and secretaries.

Gorbachev brought a woman into the top leader-ship—Aleksandra Biryukova, a longtime trade unionofficial, who will probably take over responsibility forlight industry.

Vadim Medvedev's precise responsibilities are un-clear. Contacts of the US Embassy in Moscow claimhe now heads the Bloc Relations Department, al-though this assignment might be only on an interimbasis. His vocal support for improved economic man-agement and accelerated introduction of technology,in any case, could make him an influential player onGorbachev's economic team. He might eventuallymove to head the still vacant Economic Departmentgiven this general focus.'

The changes will help Gorbachev advance his agendaof revitalizing the system and pursuing a more activistforeign policy. The new candidate Politburo membersand secretaries will not only give Gorbachev a moreloyal team, but will also bring additional practicalmanagement experience into the party's top bodies.ZaYkov, Slyun'kov—both former factory managers—and Solov'yev have extensive industrial experience,and their public statements echo Gorbachev on the

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Brezhnev

Andropov

Chernenko

Gorbachev

2

Figure 2CPSU Politburo and Secretariat

Promoted since March 1985, when Gorbachev became General Secretary.

Promoted at 27th Party Congress, 6 March 1986,

Politburo

Full Members

Mikhail Gorbachev

Gcydar Aliyev

Viktor Chebrikov

Audrey Gromyko

Dinmukhamed Kunayev

Party General Secretary

First Deputy Chairman, Council of Ministers

Chairman, KGB

Chairman, Presidium, Supreme Soviet

First Secretary, Kazakhstan party Central Committee

Yegor Ligachev

Nikolay Ryzhkov

Vladimir Shcherbitskiy

Party secretary, ideology and party personnel

Chairman, Council of Ministers

First Secretary, Ukrainian party Central Committee

Eduard Shevardnadze

Mikhail Solomentsev

Vitaliy Vorotnikov

Lev Zaykov

Candidate Members

Petr Demichev

Minister of Foreign Affairs

Chairman, party Control Committee

Chairman, RSFSR Council of Ministers

111111 Party secretary, defense industry and general economics

Minister of Culture

Vladimir Dolgikh Party secretary, heavy industry

Nikolay Slyun'l-coN1111111 First Secretary, Belorussian party Central Committee

Sergey Sokolov Minister of Defense

Yuriy Solov'yev MI First Secretary, Leningrad Oblast

Nikolay Talyzin Chairman, Gosplan; First Deputy Chairman, Council of Ministers

Boris Yel'tsin First Secretary, Moscow city party

Secretaries Not on Politburo

Aleksandra Biryukova Light industry, consumer issues a

Anatoliy Dobrynin Foreign affairs.

Vadim Medvedev Bloc relations

Viktor Nikonov ' Agriculture

Gcorgiy Razumovskiy Party personnel.

Aleksandr Yakovlev Ideology, propaganda'

Mikhail Zimyanin Culture

n Probable responsibilities.

3

need to retool the economy, accelerate the introduc-tion of new technology, and improve the machine-building sector.

Appearance of Incompleteness. Despite making im-pressive headway over the past year, Gorbachev doesnot yet appear to have a free hand in reshaping thePolitburo and may be meeting some resistance. Thepromotion of Zaykov to senior secretary will helpGorbachev balance the influence of "second" secre-tary Ligachev, but the Secretariat remains under-staffed at the senior level. There were rumors thatPolitburo members Eduard Shevardnadze and ViktorChebrikov were slated to move to the Secretariat—either one of which would have further diluted Liga-chev's power—but neither move materialized. Despiteindications that Gorbachev wants to remove Kazakhparty leader Dinmukhamed Kunayev and, accordingto some contacts of the US Embassy in Moscow,Ukrainian party boss Vladimir Shcherbitskiy as well,both were reelected at the congress.

Lingering conservatism in the Politburo may alsoexplain the failure to promote the two most outspokenadvocates of change at the Congress, Moscow partyboss Boris Yel'tsin and First Deputy PremierVsevelod Murakhovskiy—the latter a protege fromGorbachev's Stavropol' bailiwick.' While Yel'tsin hasheld his candidate post only since the precongressplenum and might be expected to wait for furtherpromotion, Murakhovskiy's failure to advance to can-didate membership is striking because two other firstdeputy premiers are already in the Politburo.

Importance of the Central Committee Table 2New Central Committee at a Glance

The Central Committee, most of whose members areelected on the basis of holding key party and govern-ment jobs, has always been an important lever ofcontrol for the General Secretary. In the 1920s Stalinbuilt his power base by packing that institution, andKhrushchev emulated his strategy in the 1950s.Although members have only an indirect role inpolicy formulation—that power resides in the Polit-buro and the Secretariat—they play a crucial role inpolicy implementation and can resolve conflicts whenopinion in these higher deliberative bodies is divided.They can even decide the fate of the General Secre-tary, as they did in 1957 when they supportedKhrushchev against his Politburo opponents, and in1964, when they threw their support to Brezhnev andsanctioned Khrushchev's overthrow

1986 1981

Full members

Reelected 182(59%) 238 (75%)New full members 125 (41%) 81(25%)

Elevated from candidate member 23(8%) 34(10%)Newcomers 102 (33%) 47(15%)

Total 307 (100%) 319 (100%)Candidate members

Reelected 54(32%) 61(40%)Newcomers 116(68%) 90(60%)Total 170(100%) 151 (100%)Grand total 477 (46%

new)470 (29%

new)

The changes at the congress have an incompletenessabout them that suggests Gorbachev has additionalpersonnel shifts in mind. His position in the Secretari-at is particularly strong—there are now an unusuallylarge number of junior party secretaries—and Gorba-chev is probably positioning some of them for furtherpromotions or other jobs. He moved Premier NikolayRyzhkov and Moscow party boss Yel'tsin to their present posts from the Secretariat.

Success in the Central Committee. One of Gorba-chev's priority goals when he took office was to placehis own selectees in positions conferring Central Com-mittee membership while removing as many potentialopponents as possible from such slots (see inset). Hehas been remarkably successful in achieving this goal;85 of the 125 new members have been appointed sincehis election. The wide-ranging purge of party andgovernment leaders that he has conducted since tak-ing power in March contributed to the largest turn-over of Central Committee members since Khrush-chev's time. Over 40 percent of the full or votingmembers of the Central Committee elected at Brezh-nev's last congress in 1981 were turned out of office,and almost 50 percent of the full and candidatemembers elected to the new body are choices ap-proved by Gorbachev, either when he was senior

Institutional breakdown of full members

National party 30 (10%) 31(10%)National government 69 (23%)Regional party and government 117 (38%)

77 (24%)127 (40%)

Military 23 (7%)- 23(7%)KGB 4(1%) 4(1%)Ministry of Foreign Affairs 15 (5%) 16 (5%)Media editors 3 (1%) 4(1%)Mass organizations and unions 8 (3%) 8 (3%)Scientific institutions 11(4%) 10 (3%)Others a 27 (8%) 19 (6%)Total 307(100%) 319(100%)

a Includes industrial and agricultural managers, workers, and hon-orary retirees.

secretary overseeing personnel or since he was namedGeneral Secretary (see table 2). They are presumablybeholden to him and his allies for their positions.

While engineering a historically high rate of turnoverof its members, Gorbachev—unlike many of his pre-decessors—did not expand the size of the CentralCommittee, nor did the influx of new members shift

5 Csrif .4"

the relative political influence of the country's majorinstitutions. The number of full members actuallydeclined from 319 to 307, while the number ofcandidate members grew slightly, from 151 to 170.While expanding the Committee would have allowedhim to pack it with even more of his supporters, heappears to have shifted the body's loyalty towardhimself without giving more of the elite a claim toCentral Committee status. He thus avoided givingthem greater political independence from the center—a step that could attenuate central control down theroad, as the Brezhnev era showed.

Gorbachev also took advantage of the elections toadvance several personal advisers, as well as to rewardthose supportive of his policy views and chastenopponents:

• New foreign policy adviser Anatoliy Chernyayevwas promoted to full member, and domestic aidesAnatoliy Lushchikov and Valeriy Boldin were madefull and candidate members, respectively. A possibleadviser on ideology, Georgiy Smirnov, retained hiscandidate scat as well.

• Arms control spokesman and reputed science advis-er Yevgeniy Velikhov was among several Academyof Sciences vice presidents advanced to candidatemembership, promotions that probably reflect thestress Gorbachev places on science and technologyin achieving his economic goals.

• Richard Kosolapov, the Kommunist editor who hasserved as the principal public spokesman for thoseresistant to economic reform, lost his position as fullmember.

• Reform-minded philosopher Ivan Frolov—criticizedand demoted in the 1970s for advocating "opendebate" of ideologically sensitive issues—was leap-frogged to full membership and has replaced Koso-lapov as editor of the important party theoreticaljournal

Reorganization of the Central Apparatus. The failureof a number of department chiefs to gain reelection tothe Central Committee strongly suggests that Gorba-chev also made good on his rumored intention to

—Cianfidavaiel-

streamline the party apparatus by reducing the num-ber of Central Committee departments:

• Letters Department Chief Boris Yakovlev failed toregain his position on the Central Auditing Com-mittee. Letters departments have already been elim-inated at the republic level, and the Auditing Com-mission has apparently assumed this function at thenational level. Yakovlev's removal confirms thedemise of his department.

• Agricultural Machine Building Department ChiefIvan Sakhnyuk lost his seat on the Central Commit-tee, possibly indicating that this department, creat-ed during Brezhnev's last years, has been mergedwith the Machine Building Department or with theAgriculture Department in a move parallel to Gor-bachev's recent merging of agricultural ministrieson the government side.

In addition, Kiri11 Simonov, head of the Transport andCommunications Department, and Vasiliy Shauro,head of the Culture Department, were not reelectedcandidate members. Their replacements have subse-quently been named, however, indicating that thesedepartments have not been eliminated in a generalreorganization.

These removals mark an almost complete turnover ofdepartment chiefs in place when Brezhnev died in1982, leaving only Administrative Organs Depart-ment Chief Nikolay Savinkin and Agricultural andFood Industry Department Chief Vladimir Karlov-both reelected at the congress—in their positions.Continued criticism of the poor performance of sever-al Central Committee departments and of their unde-sirable proliferation by Moscow party boss Yel'tsinsuggest more streamlining may be under consider-ation.

Honorable Retirement? In an unusual move, fourretired senior party and government officials—Pre-mier Nikolay Tikhonov, State Planning Committee

Brezhnevites Left in the Central Committee

While Gorbachev made impressive headway in clean-ing deadwood from the Central Committee, someBrezhnev longtimers managed to survive the Gorba-chev "purge" before the congress and hold onto theirseats:

• Over a dozen regional or republic party leaders ofthe older generation who have held their posts for adecade or more remain at the helm, some despitecriticism in the media and party directives.

• Several superannuated ministers, including onewho is 87 years old and several others who havebeen sharply criticized since Brezhnev's death, re-main at their posts.

• Some key economic functionaries such as StatePrice Committee Chairman Nikolay Glushkov,who shares an obstructionist approach to economicchange with ousted officials like Nikolay Bayba-kov, also remain in place.

Gorbachev will presumably continue his effort to rootout such officials, whose views or capabilities areclearly out of step with his program.

(Gosplan) Chairman Nikolay Baybakov, InternationalDepartment Chief Boris Ponomarev, and SupremeSoviet Presidium First Deputy Chairman VasiliyKuznetsov—were reelected to the Central Commit-tee. Gorbachev pointedly did not extend this gestureof respect to fallen foes Grigoriy Romanov and ViktorGrishin. This solicitude toward elderly ex-leaders-almost unprecedented in the rough-and-tumble arenaof Kremlin politics—is consistent with earlier signsthat Gorbachev wants to make retirement a morerespectable step, and it may be intended to coaxremaining superannuated officials into retirement.We cannot completely rule out the possibility that themove was a quid pro quo forced upon Gorbachev by

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remaining old guardists within the leadership. Gorba-chev, however, would probably find this a small priceto pay for removing those officials who have beenmajor obstacles to his policies.

Shaping a More Effective Ruling EliteGorbachev's plans for revitalizing the system rest notjust on getting new people in place but on developingand building a more effective and innovative leader-ship. One of the congress's most important results wasits authoritative condemnation of the laissez-faireleadership of the Brezhnev era and the articulation ofnew, more exacting standards for party and govern-ment bureaucrats.

Building on themes he has stressed since his election,Gorbachev's political report and a number of speechesby other key leaders give us a sharper picture of thenew leadership's program for changing personnel poli-cies, improving the responsiveness of bureaucrats, andrevitalizing central party control:

• Without mentioning names, the congress attackedBrezhnev's "irresponsibility, failure to be exacting,and inertia," and damned the failings of top leadersin Moscow, Uzbekistan, and Kirgiziya for thegrowth of corruption and nepotism.

• The congress called for continued replenishing ofthe party with younger cadres and women and forcleansing its ranks of corrupt, inept, or deficientpersonnel.

• The congress endorsed the principle of tighter con-trol over high party and government officials. Sever-al speakers called for regular examination of theactivities of top officials by their primary partycommittees.

• The congress endorsed greater publicity for partyactivity, up to and including that of the Politburo,with rank-and-file members being apprised of rea-sons for promotions or demotions.

• Gorbachev and others stipulated that no partyorganization or official should be outside partycontrol. Ligachev drove home the point by empha-sizing that all organizations—including those in his

A Quiet De-Brezhnevization

Since Brezhnev's death in 1982, a quiet de-Brezhnevi-zation had been under way, but Gorbachev hasgreatly accelerated the pace since he came to power ayear ago. Brezhnev's immediate successor, YuriyAndropov, had initiated steps to reverse the drift andlaxity under Brezhnev but moved cautiously becauseof the presence of Brezhnev cronies like "second"secretary Chernenko and Premier Tikhonov. Cher-nenko slowed this process during his tenure, but thepresence of Gorbachev and other Andropov stalwartskept the campaign moving until Gorbachev's election.

Gorbachev believes, to judge from his public state-ments, that Brezhnev's personnel policies and leader-ship style had resulted in the accumulation of seriouspolitical, economic, and social problems that had tobe confronted in order to revitalize the system.Brezhnev's laxity in dealing with subordinates, histendency to leave officials in place even after they hadgotten too old or demonstrated their incapacity fortheir jobs, and his complacency in the face of nepo-tism and corruption had contributed to a seriouserosion of the center's power vis-a-vis the major partyand government bureaucracies. Gorbachev's focus onpersonnel questions could indicate a perception,shared by some members of his team, that the"human factor" alone is sufficient to radically im-

prove the functioning of the system.

home region and in the home oblasts of Gorbachev,Zaykov, Ryzhkov, and Yel'tsin—must be open tocriticism.

• Ligachev proposed that the central apparatus assignofficials to the regional organizations arid transferthem between regions without regard to their na-tionality or regional affilation, to break down thedevelopment of local fiefdoms.

8

• Criticism and self-criticism were strongly touted asnecessary to maintain a healthy atmosphere withinthe party and avoid nepotism. Although Gorbachevfailed to follow the example, many other speakersadmitted their own shortcomings—as had mostrepublic first secretaries at their congresses. Yel'tsinattributed his failure to criticize the pervasive com-placency at the last congress to his own"immaturity."

• Speakers called for more aggressive work by partycommittees in the economic ministries to strengthenparty oversight of the economy. Yertsin—who asMoscow party boss oversees these committees—advocated a restructuring of the party apparatus soit would no longer be the captive of the economic.ministries or mired in the day-to-day resolution ofpetty economic questions.

Contentious Issues. Despite the implicit criticism ofBrezhnev and other members of the old guard, thecongress did not go as far as some unofficial Sovietand Western sources had predicted in attackingBrezhnev and sidestepped a number of contentiousissues.' There was no counterpart to Khrushchev's1956 speech that attacked Stalin and detailed hiscrimes and failings, nor did a number of the moresensitive issues that surfaced in the precongress dis-cussions get fully aired at the congress.

The publicationbeforhe congress in Pravda, Kommunist, and otherparty periodicals of letters from rank-and-file partymembers who proposed such changes suggested thatGorbachev might, in fact, have been manipulatinggrassroots sentiment to introduce such a provision atthe congress.

Privileges and Perks of the Party Apparatus

Despite the party rules—which claim that partymembers are distinguished from ordinary citizensonly by additional responsibilities—privileges haveplayed an important role in sweetening membershipsince the Revolution. From the outset, the partyintroduced special food rations for party workers,and Stalin went further—passing envelopes stuffedwith money to compensate for keeping officials' sala-ries on a par with those of workers. Under Brezhnev,the party leadership expanded the impressive systemof stores, cafeterias, and health and recreationalfacilities to serve the elite. Despite the new emphasison moral probity since Gorbachev's accession, therepublic and national congresses still had special"souvenir" shops set up for congress delegates, one ofthe traditional perks that go with the honor ofselection.

fall in a speech by the well-known poet and Stalincritic Yevgeniy Yevtushenko, who has -sometimes •been used as a stalking horse for controversial poli-cies. Soon after, rumors began to circulate that thespecial shops and cafeterias that serve the party elitewere being closed (see inset).

On the eve of the congress, Pravda—the party'smouthpiece—confronted the issue directly, printing aletter on 13 February from a reader who attackedmany of the inequalities of the Brezhnev period,including the access of party bureaucrats to specialstores and hospitals, demanding that bosses stand in line with everyone else.

,

The congress also for the most part dodged the evenmore explosive issue of restrictions on the system ofprivileges for the party elite. This issue surfaced last

This expectation was reinforced by the explicit criticism of severalformer republic first secretaries, including candidate Politburomember Sharaf Rashidov, at the republic congresses preceding thenational one.

ravda in fact published what amounted toa re u a in its 15 February issuej

ennfidontial

Gorbachev stayed clear of this issue at the congress,but other developments lend credibility to reports thatit remains a source of controversy in the leadership.Responding to a question at a press conference on 27February, Politburo member Geydar Aliyev admittedthat people at his level "live well" but denied thatparty bureaucrats received any unique privileges,claimed that they work 24 hours a day, and suggestedthat the discussion kicked off by the article wascontinuing.

At the congress, Ligachev took Pravda to task for itstreatment of issues leading up to the congress, andVolgograd First Secretary Kalashnikov—who hadworked under Gorbachev in Stavropol'—attacked aletter printed in the same Pravda article for itsdescription of an "inert, flabby party administrativestratum" said to enjoy unearned privileges. By con-trast, Yel'tsin—who reportedly closed the specialcafeteria for Moscow city party officials—used lan-guage that echoed the article's criticism, referring to"the inert layer of timeservers with a party card."

Explanations for Gorbachev's Caution. Several politi-cal considerations may have caused Gorbachev tomove cautiously on this whole range of issues. Theleadership may have agreed to avoid a sensationaltreatment of Brezhnev's personal failings that couldbe exploited for propaganda value in the West. Presi-dent Gromyko—who a year ago had warned thatforeigners were looking for signs of divisions in theSoviet system—in his speech to the congress under-scored the cohesion of the party and warned thatfrank criticism of personnel policies should stop shortof vilifying "honest Communists."

The leadership may have also been attempting todampen broad-based tension in the middle levels of aSoviet bureaucracy already unnerved by the whirl-wind changes in top leadership, steps to trim its size,and rumors of further reorganizations. Gorbachevaddressed this concern directly by rejecting a whole-sale "purge" proposed by some during the discussionof the party program and rules, asserting that theparty is a "healthy body"

Gorbachev could also have encountered sufficientresistance to make him think it was not worth thepotential gain to openly pursue controversial attackson party leaders by name or to openly attack partyprivilege, a fact underscored by the coolness of allieslike Ligachev and Kalashnikov. Numerous speakersat the congress referred to continued lower levelresistance to the new standards within the bureaucra-cy. A handful appeared to balk at the more extremeproposals to reassert central control.

While Gorbachev's conduct at the congress probablysuggests some limits on his ability to press radicalchanges, he may have gotten almost everything he feltwas essential. Gorbachev may have intended only tomanipulate grassroots pressure to move the leadershiptoward implicit repudiation of Brezhnev policies with-out necessarily favoring a formal change to partyrules. Such changes—like the limits on tenure enactedunder Khrushchev—had alienated the party bureau-crats. Consequently, Gorbachev might actually preferto establish such policies informally.

Limits on Gorbachev 's Authority. Despite the indica-tions of differences, and evident limits on the assaulton Brezhnevism, Gorbachev comes away from thecongress having achieved a strong endorsement of amore demanding standard for Soviet bureaucrats. Theunfolding of the privilege issue raises a serious ques-tion about the degree of consensus within the Gorba-chev coalition, but divisions may ultimately proveshort-lived and perhaps signify only tactical differ-ences between Gorbachev and Ligachev, neither ofwhom probably favors entirely dismantling the systemof party privilege. The choice of a less sensationalapproach to the question of Brezhnevism at the

10

Premier Ryzhkov delivers economic report atcongress while Ligachev, Gorbachev, andGromyko listen.

congress, in fact, may strengthen Gorbachev's credi-bility within the party, where concern about a purgeappears widespread. In any case, Gorbachev wouldcertainly want to avoid a serious rift in the party overa matter that is tangential to his main objective ofrevitalizing the system.

--Gentadantig__.

Endorsing an Economic StrategyThe Congress strongly endorsed Gorbachev's econom-ic strategy, which rests on raising the productivity ofthe labor force and renewing the country's stock ofplant and equipment. The first track is designed tokick-start the lethargic economy through "humanfactors," measures that the system is currently imple-menting: new personnel appointments, organizationalchanges, a vigorous temperance campaign, and re-newed emphasis on discipline and improved workereffort. According to Premier Ryzhkov, nearly one-third of the sharp rise in labor productivity called forin the 1986-90 Plan is to come from these measures

The balance of the planned increase is'eyed by substituting capital—in many in-

stances low technology—for labor in areas that em-ploy large numbers of manual laborers. Ryzhkov, forinstance, indicated that such substitution would add

the equivalent of 20 million people to the work forceby 1990. With an actual increment of only 3.2 millionpeople expected during 1986-90, this would, if suc-cessful, provide the major source of economic growthfor the rest of the 1980s.

Although freeing up these workers and improvingdiscipline would give a one-time shot in the arm to theeconomy, these measures cannot by themselves sus-tain high growth. Judged by its public statements, thenew leadership understands that substantial improve-ment in the economy's level of technology is requiredto recapture the high growth ra,tes of the early 1970sor begin to match the productivity of the leadingWestern industrial powers. Both Gorbachev andRyzhkov emphasized the need to move as quickly andas far as the economy can afford along the secondtrack of the General Secretary's strategy—moderniz-ing the country's stock of machinery and equipment

' For additional information on Gorbachev's1i3ea op

Ae DI Intelligence Assessment

September 1985, Gorbachev's Economic genaa: rrom-, ntial, and Pitfalls

11

Fligher eeotiOntie..groWth

More resOurees'foreonsuthptiethjnve0inot:Andefense

. •Modern competitive worldpower

ennfirlential

Figure 4Riding the Gorbachev Road

The "Human Factors" Track The "Modernization" Track

Appoint new personnel

Greater temperance

'Increase worker discipline

Lessenwaste, fraud, and abuse

Substitute capital for labor

\ Save energy and raw materials

Streamline management

retir. inent.s:Of.:olCjesuiRtnent....

RaiSe fitifis.im en•machine:tuildihg:

I ii .6re4.s pf ls ight

eqUipni.nt-• CorriP4ters.; .MicrbeleetkiiirCs-• .• ..KribotS. •

308814 4-86

through the development and expansion of high-technology industries (computers, microelectronics,robotics, and others).[

The leadership hopes that speeding up the productionand assimilation of high-technology machinery andequipment will provide the basis for even greatergains in labor productivity in the 1990s. Gorbachevplans to enter the next decade having renewed about'

one-third of the country's stock of machinery andequipment. Armed with a more modern and moreefficient (in terms of energy and raw materials use)industrial base, the General Secretary hopes to mergethe two tracks of his strategy at that time, synergisti-cally pairing a more disciplined work force andenlightened managerial cadre with modern high-technology capital to move the economy along an accelerating growth path (see figure 4)1

12

The economic growth rates published in the postcon-gress version of the Draft Five-Year Plan for 1986-90and Guidelines to the Year 2000 reflect Gorbachev'stwo-track strategy. The plan calls for economicgrowth to average almost 5 percent annually between1985 and 2000, beginning with a relatively modest3.5-percent average annual growth for the balance ofthe 1980s and accelerating to more than 5 percent peryear during the 1990s. Output growth in the vitalindustrial sector is to follow much the same pattern,rising from about 4 percent annually during 1986-90to more than 5 percent per year in the 1990s.

To finance his strategy, Gorbachev made clear at thecongress his intention to devote as much of theinvestment pie as possible to the machine-buildingsectors. Accordingly, investment in civilian machinebuilding in 1986-90 is to be 80 percent higher than in1981-85, and the bulk of this increase is to bechanneled into the high-technology sectors. Thiswould raise machine building's share of total invest-ment from 8.5 percent in 1981-85 to 10.4 percent in1986-90.

Figure 5USSR: Planned Investment Growth,/986-90

Percent increase from 1981-85

—20 0 20 40 60 80 100

Civilian machinebuilding andmetalworking

Fuels andenergy

Agro-industrialcomplex

Other sectors

Assumes 20 percent total investment growth over 1981-85. Planned totalinvestment growth is 18 to 22 percent. Other sectors include military-related MBMW, industrial materials, chemicals, transportation andcominunications, light and food industries, domestic trade, consumerservices, and housing and construction.

Earlier, Gorbachev had apparently intended toachieve this shift in investment to the machinery-producing sector partly by stabilizing energy's shareof investment. However, the speeches of both Gorba-chev and Ryzhkov at the congress have made clearthat this option has been discarded, almost certainlybecause it would lead to a more serious decline in oilproduction.' Investment in the energy sectors is nowslated to rise by almost 50 percent in 1986-90, withmost of this increment allocated to oil and coalproduction. This would raise energy's share of invest-ment allocations to 14.8 percent, almost 3 percentagepoints higher than in 1981-85. With the agro-industri-al sector planned to grow at roughly a 25-percent rateto maintain its customary one-third of the investmentpie, there will be no room for expanded investment inthe rest of the economy, particularly those sectorsoriented toward consumer welfare (see figure 5).Investment in the balance of the economy currentlyaccounts for 47 percent of the total.

13

366815 4.86

Although the leadership paid much lipservice duringthe congress to improving the lot of the consumer,without a substantial boost in resources there seemslittle chance for much material gain beyond perhapssome improvement in the diet—and even that willrequire benevolent weather conditions. The key maybe in Gorbachev's efforts to ensure that the moreproductive workers get first crack at what is availableand in his efforts to improve the quality of consumergoods which, while problematical, might not demand large additional investments.

The congress failed to reconcile some apparent tensionbetween the annual economic plan for 1986 and theFive-Year Plan for 1986-90. This may well reflectGorbachev's greater control of the annual plan thanthe five-year plan which—despite statements indicat-ing it was remanded for further work—was probablyso advanced by the time he entered office that he

Co-6do^t:^1

lacked the opportunity to change it significantly. It ispossible that Gorbachev has run into resistance fromthe ministries and planning organizations and hasopted to rely on annual plans to implement a morerapid investment growth policy.

While confirming that investment is scheduled toincrease by about 3.5 to 4 percent per year during1986-90, the congress made no mention of the whop-ping increase of 7.6 percent announced previously for1986 or the implications of this increase for invest-ment growth in 1987-90 (see inset). The accelerationof investment planned for 1986 implies that invest-ment would have to slow considerably during 1987-90, to around 2.5 to 3 percent annually, to stay withinthe five-year plan guidelines. However, the plans formachinery production indicate faster growth during1987-90 than in 1986—a pattern clearly out of linewith slower growth of investment.

The congress also underscored an apparent contradic-tion between the rhetoric on improving consumerwelfare and the meager resource share scheduled togo to the consumer sector—which will absorb a majorcut to fund the modernization drive (see figure 5).Premier Ryzhkov implicitly acknowledged that, de-spite the ambitious goals for increased production ofconsumer goods, the share of consumption in nationalincome will fall in 1986-90.

Signs of tensions over the ambitious nature of themodernization drive, which rests on some potentiallydubious assumptions about the capabilities of Sovietindustry, also surfaced in the speeches of severalspeakers:

• Many speakers highlighted the chronic deficienciesof the capital construction sector, and VolgogradFirst Secretary Kalashnikov frankly admitted thatthe targeted 80-percent increase in his oblast'scapital investment plan for the five-year period didnot correspond to the capacities of the oblast'sconstruction and installation organizations.'

Gorbachev 's Modernization Strategy and Defense

The issue of defense spending was artfully dodged atthe party congress, where the documents merelystated that defense spending be kept at a level toguarantee parity with the United States and NATO.Gorbachev's modernization strategy, however, clearlyhas implications for this sector. a Some Soviets havesuggested the competition for resources could becomeintense. Our calculations indicate that over the nextfew years the defense establishment is well positionedto accommodate the shifts in demand for high-technology machinery implied by the industrial mod-ernization campaign—despite some trade-offs at themargin for machine tools and microprocessors—because of past major investments that resulted in asubstantial expansion of the defense industry. Thereal test will come in two or three years whenrenewed demands for expanding and renovating de-fense industry begin to surface as the defense sectorstarts preparing to produce new generations of weap-ons. Demands for additional resources at that timecould well come before the modernization effort hasborne fruit, forcing the leadership to make some hardchoices between the pace of modernization and therate of growth of defense procurementL

a For a detailed examination of this issue, see DI IntelligenceAssessment i March 1986, Gorbachev'S niouc)nization rrogram. nripmations for Defense.

• Other speakers pointedly referred to continuedproblems in the quality of machinery, alluding tothe fact that some of the machinery installed duringreconstruction was still grossly outmoded while"new machinery" scarcely exceeded older models interms of productivity.

Many resource allocation decisions may also remainunder debate. Gorbachev could still face resistancefrom some in the military concerned that the modern-ization drive, particularly if it demands a high level ofmachinery for the civilian sector for the rest of this

14

rnnfidential

decade and into the 1990s, will seriously complicatetheir efforts to modernize the defense industry andkeep pace with new military technologies.

Debating Further Steps Toward ReformSo far, Gorbachev's specific proposals have been inkeeping with the conservative approaches of pastregimes—tinkering with the system, not radicallychanging it. More radical changes might even bedisruptive in the short term. The failure of a tinkeringstrategy, however, could push Gorbachev further inthe direct on of thoronah poing change over the nextfew years1

The congress, in fact, advanced the discussion of someof the more far-reaching economic reforms that mayultimately be required to achieve Gorbachev's goals.Gorbachev himself provided a clear stimulus by usingfor the first time the term "radical reform" to de-scribe his prescription for the Soviet economy—as-serting specifically that mere "changes in the econom-ic mechanism" would not be enough. Just what sort ofreforms Gorbachev intends remains to be seen. Buthis use of the phrase—subsequently echoed in Pre-mier Ryzhkov's report—may help tilt the discussionin the direction of more open debate over reforms andgive supporters of greater change the courage to voiceinnovative proposals.

While Gorbachev and Ryzhkov did not use the con-gress to announce bold new proposals or reveal aprecise blueprint for future changes, they moved thediscussion forward by expressing support for greateruse of finance and credit levers, a more flexible price-setting mechanism to better reflect supply and de-mand, and decentralization of the supply network toallow producers and consumers to deal directly withone another. Gorbachev's proposal for changes inagricultural procurement policy—which was endorsedby the Politburo at its first announced meeting follow-ing the congress—could result in more farm produc-tion being sold at prices reflecting supply and demand(see inset on "tax-in-kind" proposal) and might be the

'Traditionally, Soviet leaders have talked about "improving" or"'perfecting" the economic mechanism, phraseology that suggestsless thoroughgoing changes. They have not used the word "reform."KGB boss Chebrikov broke the taboo last November, and Gorba-chev has now legitimized the use of the even more provocative term"radical reform."'

harbinger of future moves to increase the influence ofthe market. The handling of the economic reformissue at the congress reinforces the impression thatGorbachev has a long-term game plan beyond thenear-term measures already fleshed out and may haveviewed the congress as only a beginning of the processfor discussing further change.

Other events at the congress also suggest that Gorba-chev is making progress on reform issues againsttraditional resistance. Ukrainian party boss Shcher-bitskiy modified his earlier hard line against reformand endorsed Gorbachev's proposals to increase therole of financial, credit, and price levers, while Gorba-chev protege Murakhovslciy—head of the State Agro-Industrial Committee—made the strongest defenseyet of greater reliance on the market. The new editionof the party program published after the congresscontained several revisions that brought the documentmore into line with what we know of Gorbachev'sviews

Airing Societal and Cultural IssuesSocial policy was an evident concern at the congress,and Gorbachev apparently sees it as an importantlever in his drive to revitalize the economy." Heimplicitly condemned Brezhnev's social policy by say-ing that in the early 1980s "signs of stagnation hadbegun to surface in the life of society," and Yakov-lev—the new party secretary—said that "the socialaspect is the most important in the strategy ofacceleration." Ligachev made unusually explicit ref-erence to the link between "correct" social policy andcontinued political stability, and Yel'tsin acknowl-edged that stability could not be taken for granted.Aliyev stressed the increased importance of societalissues by stating that "at no other congress havequestions of social policy been examined so strictly."

For a further discussion of social problems facing (iorbachev, seeDI Intelligence AssessmentlAugust 1985, Gorbachev's )1ppruucn to ()clew' muntiar. ,nun-aged Revitalization

15

Gorbachev 's Tax-in-Kind

While details are still sketchy, the new agriculturalprocurement policies unveiled at the congress suggesta possibly significant shift from current practice,which requires farms to sell the overwhelming major-ity of what they grow to state procurement agencies atfixed prices. Gorbachev's choice of the term "tax-in-kind" to describe the initiative will probably evokeexpectations of systemic changes. It is a reference to achange in agricultural policy that kicked off Lenin'sNew Economic Policy in 1921 by significantly ex-panding the role market forces played in the econo-my. Under the new program:

• State procurement from farms, Gorbachev statedemphatically, will be fixed for a five-year period.This measure, if faithfully implemented with rea-sonable quotas, might release the farms from atraditional vicious circle in which increased produc-tion is inevitably followed by an increased quota.Similar promises in the past to fix quotas—mostrecently in the early 1980s—have not been kept.

• Farms will be given more control over produce leftafter fulfillment of deliveries to the state (and up to30 percent of their planned deliveries for potatoes,fruit, and vegetables—an increase from the 10percent share currently allowed). Farms would beallowed to market this produce on collective farmmarkets—where prices are set by supply and de-mand rather than the state—or through the con-sumer cooperative network at mutually agreed

prices. The head of the consumer cooperativesorganization indicated in his congress speech thathe has been given funds to expand the cooperatives'procurement and marketing network to accommo-date such a change.

The program appears to be an effort to addressseveral agricultural problems simultaneously: to in-crease food production and farm profits withoutincreasing the burden of state subsidies to the agri-cultural sector. Having a larger proportion of producemarketed outside the state retail network would raiseaverage prices paid for food products. At the sametime, however, the consumer might benefit from anincrease in the availability of produce, and increasedsupplies in the collective farm markets would tend tolower prices consumers pay there.

The ultimate effect of the tax-in-kind depends on theleadership's willingness to follow through in the faceof problems that have ultimately undermined pastefforts to implement similar programs. The keyfactors to look for include:• How sharply farms' procurement quotas are cut.• Whether the regime keeps its promise to freeze

quotas for an extended period, particularly whenfaced with production shortfalls.

• How fully the plans to develop new marketingchannels are fulfilled.

• How free the farms are to spend the additionalprofits they earn.

Despite this seeming unanimity on the importance ofthe social dimension, few concrete remedies wereproposed. Judging by the planned investment alloca-tion for heavy industry and agriculture, no increase insocial spending can be expected. The only specificswere Gorbachev's promises—echoed by Prime Minis-ter Ryzhkciv and Aliyev—to provide a separate apart-ment for "practically" every family by the year 2000and increased allowances for mothers with infantchildren. Speakers focused their attention on better

distribution of available goods and services to stimu-late productivity, a strategy that fits well with Gorba-chev's approach of maximizing the return from avail-able resources on the consumer front.L

Statements on wage policy reflect an apparent univer-sal 'dissatisfaction with the wage-leveling policy of the

16

—GeafidantiaL_.

Brezhnev era and may presage a new initiative in thisarea:

• Gorbachev and other speakers noted the need toreform a wage system that allowed slackers andalcoholics to be paid at the same scale as productiveworkers.

• Aliyev noted at his press conference that the partyhad shortsightedly allowed salaries of workers toapproach those of technocrats. His demand for anend to "wage leveling" was echoed by several unionleaders and party officials.

Law and Order. The need for tighter discipline, anissue raised by Andropov and given renewed impetusunder Gorbachev, remained a focal point of thediscussion of revitalizing the system, and for somemay represent the lion's share of the changes they feelare necessary:"

• Both Gorbachev and Ligachev cited corruption inthe Central Asian republics that mandated theinterference of the Central Committee.

• Uzbek First Secretary Inamdzhan Usmankhod-zhayev bluntly noted that the "canker of demoral-ization and degeneracy affected many cadres withthe greatest power" and called for a strictaccounting.

• Gorbachev said that the Ministry of Internal Af-fairs (MVD), which controls the police, had beenimproved, but implied that its work was in need offurther improvement—a view reinforced by therecent replacement of MVD Minister VitaliyFedorchuk.

• Ligachev noted that the police were not "beyond thezone of corruption," and Yel'tsin, in listing especial-ly corrupt Brezhnev-era politicians, mentioned for-mer MVD Minister Nikolay Shchelokov.

17

Alcohol Problem. The antialcohol campaign appearedto be in good political health at the congress, althoughlittle new light was shed on its direction or impact.Gorbachev again plugged the campaign in his speech,reporting "in the name of health of society and ofman, we have embarked on decisive measures andwaged battle on traditions which have taken centuriesto develop." While remarks by less prominent speak-ers on the problem were greeted with little enthusi-asm, the congress documents point to the fact that thecampaign retains its place of prominence on Gorba-chev's agenda.

Religion and Nationalism. Problems in controllingthe growth of religion, an area singled out for particu-lar attention in many republic congresses, were nothighlighted to the same extent at the CPSU con-gress—perhaps because they were deemed a lessappropriate topic for a national congress and wouldconvey the unwanted image of vulnerability thatcould be exploited in the West. Concern was neverthe-less still evident in some speeches. Islam was attackedby several Central Asian speakers. In a statement thatindirectly indicated the strength of religion in hisrepublic, the Uzbek First Secretary said that radicalMuslims were endorsing the antialcohol campaign as"the work of Allah,"

The congress speeches reflected concern about nation-alism and localism, exacerbated in many regions byBrezhnev's lax cadres policies. A faint undertone ofRussian nationalism was reflected in the remarks byKomsomol First Secretary Viktor Mishin and byLigachev, who spoke of the need to preserve nationalmonuments "dear to the people's memory." Liga-chev's point was reinforced by his demands for tightercentral (read Russian) management of cadre policythrough cross-posting officials. Other comments bysenior party officials on the need for centralization ofstrategic decisionmaking could also indicate that theeconomic autonomy of non-Russian republics may befurther eroded under Gorbachev.

•GeofitleatiaL

Toward Neo-Stalinism?

Some Western commentators and even a handful ofSoviet officials have likened Gorbachev to Stalin.Such a comparison could be expected given his imageas a strong leader out to override bureaucraticresistance. Gorbachev's approach does, in fact, havemore in common with Stalin's than either Brezhnev'sstandpat approach or Khrushchev's mercurial ad hocmanagement, although this similarity does not ex-tend to the broad use of repression. Many of the newGeneral Secretary's priorities are also reminiscent ofStalin's: for example, his insistence on discipline, hiscall for greater wage differentiation, and his intoler-ance of local bureaucratic empires.

Yet, there are sharp differences between Stalin andthe present leader:

• Gorbachev's evocation of "radical reform" and hiscall for greater managerial autonomy run directlycounter to the central tenets of the Stalinist system.

• Gorbachev's policy of publicity for party leadersand his consideration of steps to cut down on partyprivilege run counter to the Stalinist penchant for

keeping the lives of the elite hidden behind a thickwall of secrecy.

• The security organs, despite a broader mission,remain on a leash. KGB chief Chebrikov, even if heis given greater powers to deal with dissent orcorruption, is not beyond party control.

• Gorbachev's ideology does not incorporate Stalin'sinsistence on a homogeneous cultural policy, withits glorification of Russian nationalism.

Gorbachev must also operate within bureaucraticconstraints that block a return to Stalinism, even ifhe were to choose to go in that direction. Neither thetop leaders nor the bureaucracy would willinglyaccede to a single strongman. While Gorbachev clear-ly believes he must be a strong leader to get thesystem moving, there is no evidence he thinks he cando that against and without the support of thePolitburo, party elite, or population. He has, in fact,moved cautiously and made efforts to gain supportfor his program, probably with the lesson of hispredecessors' failures clearly in mind.

Ideology and Culture. The congress failed to send aclear signal on cultural policy, reinforcing the impres-sion that the leadership has yet to come to a firmdecision on how to deal with the hopes for a liberaliza-tion that Gorbachev's election evoked. While Gorba-chev criticized Soviet culture's "deafness to the new"and has allowed the release of several controversialplays and movies held by the censors, most speakerswere more concerned about the relevance of thcpropaganda to the regime's program or displayedconcern that any liberalization might be exploited.The concern evident in speeches by Minister of Cul-ture Petr Demichev and Estonian First Secretary KarlVaino about the vulnerability of Soviet culture toWestern influences, for instance, raises doubts aboutany liberalizing trend. Demichev and KGB ChairmanChebrikov took particular note of the danger that thespreading use of VCRs presents to the party's monop-oly on films and television.

Yel'tsin blamed problems in the cultural sphere on theineptitude of the Central Committee's Cultural De-partment. His comments presaged the apparent re-tirement of 73-year-old department head VasiliyShauro and the elevation of Aleksandr Yakovlev tothe secretarial responsibilities in this area. Yakovlevwon a reputation as a pragmatist during his stint inthe propaganda apparatus in the 1960s and early1970s, but it remains to be seen if his promotionportends a more sophisticated approach in dealingwith intellectuals. He is, nonetheless, moving aggres-sively to get a new team of media officials in place.Numerous newspaper and journal editors have beentransferred or demoted in the last few months, and more changes are rumored to be in the works.1

-Confidential,.

Tying Foreign Policy to the Domestic AgendaIn his report to the congress, Gorbachev appeared tolay the groundwork for further shifts in Soviet foreignpolicy, stressing new departures rather than the conti-nuity stressed by Brezhnev's congresses, and claimingthat the congress marked a "turning point" in foreignas well as domestic affairs. While the practical resultsof the congress fell short of the rhetoric, Gorbachevmade a sharp break with tradition by dispensing withthe traditional tour d'horizon and centering his atten-tion squarely on the issues of US-Soviet relations andarms control that he and others apparently believe arecentral to his plans for economic modernization

Centrality of the US Factor. The contrast in thediscussion of foreign policy issues at this congress andthe 1981 congress is striking. Brezhnev opened hisaddress in 1981 with a detailed account of Moscow'sforeign policy successes and relations with specificcountries. Gorbachev's foreign policy comments--abroadbrush treatment that mentioned few states byname—opened with arms control and related US-Soviet issues. The domestic thrust was underscored byGorbachev's comment that the USSR's "main inter-national duty" was the creation of "viable socialism athome." In contrast to Brezhnev five years ago, heimplicitly recognized current limitations on Sovietambitions in calling for a program that "blends thegrandeur of our aims with the realism of our capabili-ties," an allusion to the threat economic stagnationposes to Moscow's international position—a notion hehas raised explicitly in the past.

Gorbachev painted a dark picture of US intentions inthe theoretical portions of his speech and commenteddisparagingly on President Reagan's response—senton the eve of the congress—to his 15 January armscontrol proposals. He used the congress, moreover, tostep up pressure on US policy by adopting a moredemanding position on the conditions for a secondsummit.

Nevertheless, he set out a clear rationale for contin-ued efforts to do business with the administration. Heemphasized the "interdependence" of nations in theModern world—a concept used by some Soviet aca-demics to justify East-West cooperation but neverused so explicitly before by a Soviet leader—and he

ended the congress on a conciliatory note, arguingthat the USSR could not "slam the door" on thedialogue begun in Geneva.

Covering Old Ground. Gorbachev broke no newground in his cursory survey of Moscow's foreignrelations, giving passing attention to Afghanistan,Western Europe and Asia, regional conflicts, andinternational terrorism. Charging that imperialismand counterrevolution had turned Afghanistan into a"running sore," Gorbachev stated that Moscow hopedto remove its forces—according to a timetable alreadyworked out with Kabul—but only after a settlementthat ensured the end of "outside armed interference."

Gorbachev's description of Soviet relations with "so-cialist countries" predictably stressed the importanceof closer economic ties and Bloc unity, but alsoacknowledged there were different "roads to socia-lism." It offered few hints of the degree to whichMoscow is prepared to let the East Europeans experi-ment in building socialism or play a role in interna-tional affairs—issues that had arisen in precongressdebates and in the party program. His-speech alsoincluded a positive reference to the potential forrelations with China but signaled no flexibility on thepolitical issues that currently separate the two coun-tries

The Third World. Despite his playing down of Sovietsupport to the liberated states, continuing militaryand economic aid to clients such as Angola, Ethiopia,Libya, and Nicaragua indicate that Gorbachev is notshying away from key foreign commitments. Hisfailure to highlight armed struggle and international-ism probably reflects his sensitivity to Western criti-cism of Soviet expansionism—which could undermineefforts to engage the United States on arms control—and an intent to dampen Third World expectationsconcerning Soviet economic largess. Gorbachevstressed the Third World's dire economic status butdid not suggest that Moscow could resolve theseproblems. While Brezhnev in 1981 explicitly notedMoscow's role in "strengthening the defense capabili-ties of liberated states" and in major economicprojects, Gorbachev was silent on this score.

19

• Dobrynin may have been brought in to handle areorganized foreign policy body in the Secretariatfocusing on East-West issues and arms control.

Gorbachev's rhetoric on Third World issues apparent-ly has raised concerns among several Soviet clientsthat Moscow may sacrifice their interests. Thespeeches of Cuba's Castro, Angola's dos Santos, andEthiopia's Mengistu all contained reminders of thecontinued need for Soviet "material assistance" toaspiring revolutionary regimes in the Third World.While he must be sensitive to this concern, Gorbachevknows that Castro and others have few alternatives todependence upon the USSR.

Personnel Changes in the Foreign Policy Apparatus.Personnel changes at the congress reflected Gorba-chev's focus on the US-Soviet relationship. Two ex-perts with firsthand experience on US policy—Alek-sandr Yakovlev, onetime exchange student to theUnited States and Ambassador to Canada, and Ana-toliy Dobrynin, longtime Soviet ambassador to theUnited States—were added to the Secretariat. Yakov-lev has reportedly provided advice to Gorbachev onhow best to play on US public opinion.

The specific limits of Dobrynin's foreign affairs port-folio are not yet clear. He already appears to behandling duties that traditionally fall within the re-sponsibility of the International Department, butsome comments by Soviet officials suggest his respon-sibilities might be even broader (see inset).

Dobrynin's appointment to this key foreign policyformulating organ on the Secretariat may heightenthe traditional rivalry between the Ministry of For-eign Affairs and the International Department. HowDobrynin's responsibilities overlap with those of For-eign Minister Shevardnadze remains unclear, but heis unlikely to achieve comparable political status soon.Dobrynin will probably work under the tutelage ofsecond secretary Ligachev, the senior secretary over-seeing foreign policy and a former classmate at theMoscow Aviation Institute in the 1940s.

The Dobrynin Appointment

Gorbachev has again demonstrated his capacity forunexpected personnel appointments and his penchantfor disregarding institutional affiliations in selectingAnatoliy Dobrynin for the Secretariat. Dobrynin's 25years of service in Washington make him a politicaloutsider, and his lack of previous party experienceleaves him seemingly ill-prepared for the job ofCentral Committee secretary. Amid continuing re-ports of a planned reorganization of the ForeignMinistry and earlier reports that Shevardnadzewould move to the Secretariat, Dobrynin's appoint-ment raises as many questions as it answers, andsuggests that Gorbachev has not yet completed anexpected reorganization of the foreign policy appara-tus. Several scenarios can be envisioned:

• Gorbachev may want an experienced US hand totake charge of the International Department tomodify its mission—refocusing it away from sup-port to Third World national liberation movementsand deemphasizing the ideological rigidity that hasled to friction with European Communists andleftists.

• Dobrynin's move may be a temporary one untilGorbachev can get Politburo agreement to shiftShevardnadze to the Secretariat, at which timeDobrynin will take over the Foreign Ministry

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Bringing in his allies—notablyYertsin and Murakhovskiy—would significantlystrengthen his ability to press for change

1"e–id^""el/7

Unfinished BusinessThe 27th Party Congress strengthened Gorbachev'shand for pressing ahead along the lines he had alreadylaid out in his first year. The trend lines all point inthe direction of Gorbachev's consolidation of powerand the advance of his policy agenda. Whether it willprove to be the major "turning point" in Soviet historythat Gorbachev clearly wants it to be remains to beseen. Those Soviet officials who have measured hisprogress by the traditional yardstick of political powerhave apparently been impressed by his success. Thosein the Soviet elite who anticipated radical changes, bycontrast, have undoubtedly been disappointed. It isuncertain how Gorbachev himself views his progress,although most signs point to general satisfaction with the outcome of the congress.

By failing to flesh out his calls for reform, to moveboldly on sensitive issues like party privilege andtenure, or to attack the Brezhnev legacy directly,Gorbachev has left in doubt his ability to translatepolitical success into more than a personal triumph.Does he really have a bold agenda for change? Is hemoving deliberately to implement some overall gameplan, or merely feeling his way? Is continued resis-tance from the old guard or even among his alliespreventing him from taking a more aggressiveapproach?

• It is possible that—whether by choice or politicalnecessity—he has already shown his hand. Gorba-chev may prove content to consolidate his power,stepping back from the implementation of boldermeasures he has hinted at for fear of adversepolitical reaction within the bureaucracy.

• It is possible that the congress came too early inGorbachev's tenure to permit him to get all hispolicy and personnel decisions ready for implemen-tation, resulting in his relative caution and thetentative nature of some of the more far-reachingissues he raised.

• Gorbachev could be choosing his battles carefully inorder to neutralize political opposition and bureau-cratic resistance before taking on more difficultissues. This possibility is suggested by the decisiveway in which he removed Romanov, Tikhonov, andGrishin, while letting Kunayev keep his post fornow

Whatever the reason for his cautious approach tofleshing out his policy agenda, Gorbachev clearly hasunfinished business on both the personnel and policyfronts if he intends to back up his rhetoric with actionand establish his credentials as a reformer of theSoviet system.

The Political Front. Upcoming Central Committeeplenums should give us a better sense of Gorbachev'sprogress in pursuing more significant change in thesystem. He needs to add allies and supporters andremove roadblocks in the Politburo, where he madethe least progress at the congress (see inset on page22).

Removal of would-be opponents such as regionalparty chiefs Shcherbitskiy and Kunayev will be amore formidable test of his power. Of the two,Shcherbitskiy is more secure—having run a tight shipin the Ukraine. So far, he has not been- implicated incorrupt activities, and his differences with Gorbachevseem more over foreign affairs, where he may be morein step with the conservatism of the party apparatus.Recently he has echoed Gorbachev's line on domesticmodernization,

Kunayev is probably a better test case because Gorba-chev has already committed himself to Kunayev'souster—judging from the appearance in the nationalpress of an attack on the Kazakh leader after hisreelection at the Kazakh party congress. Gorbachevmay use the coming months to get his Politburocolleagues to go along and to line up a successor toKunayev, who probably has little support in Moscowbut is still reportedly quite popular in Kazakhstan. IfKunayev hangs on indefinitely, Gorbachev's ability torecoup the center's loss of power to the regional organizations will be in doubt.

21 Confidential

Political Spectrum in Gorbachev 's Kremlin:A Preliminary View

Gorbachev's Young TurksForeign Minister Eduard ShevardnadzeMoscow First Secretary Boris Yel'tsinSecretary Georgiy RazumovskiySecretary Aleksandr YakovlevFirst Deputy Premier Vsevolod Murakhovskiy

Gorbachev AlliesSecretary Yegor LigachevPremier Nikolay RyzhkovPremier of RSFSR Vitally VorotnikovKGB Chairman Viktor ChebrikovSecretary Lev ZaykovBelorussian First Secretary Nikolay SlyunkovLeningrad First Secretary Yuriy Solov'yevFirst Deputy Premier Nikolay TalyzinSecretary Viktor NikonovSecretary Vadim Medvedev

IndependentsPresident Andrey GromykoFirst Deputy Premier Geydar AliyevControl Committee Chief Mikhail SolomentsevSecretary Vladimir DolgikhMinister of Defense Sergey SokolovMinister of Culture Petr Demichev

The Old GuardUkrainian First Secretary Vladimir ShcherbitskiyKazakh First Secretary Dinmukhamed Kunayev

Younger and more radical members of the leader-ship. . . probably will lead the charge for reform ofeconomic and political institutions. . . possibly out infront of Gorbachev, although he may be using them toair more controversial positions.

Allied with Gorbachev on major political and eco-nomic issues. .. most came out of Andropov's coali-tion . . . strongly endorse the modernization strategy,but may be more cautious about systemic reformthan Young Turks. . . some, like Chebrikov, alsoworry about impact of change on social stability.

Generally side with Gorbachev on his efforts to renewthe leadership but are more cautious on policy is-sues. .. do not owe loyalty to Gorbachev. . . stress"collective leadership" and may act as a constrainton Gorbachev.

Regional party bosses most closely tied to Brezhnevand his laissez-faire approach to policy and personnelmatters. . . as a rule, highly conservative on ideologi-cal issues. . . may harbor reservations about Gorba-chev's foreign policy toward the United States.

Signs of tension within the Gorbachev camp over howhard or fast to press change could be of even greaterlong-term significance and will be a key indicator ofGorbachev's political health. A split in his politicalcoalition, particularly between Gorbachev and Liga-chev, would be a major setback. While there appearsto be agreement between Gorbachev and Ligachev onthe need to renew the leadership, the signs of frictionsover the privilege issue could raise a serious dilemmaif they signify more than mere tactical differences.Gorbachev could choose to let the matter drop topreserve the unity of his coalition. But if he retreatsfrom a direct challenge to the more ostentatiousprivileges for the elite—which contributed to the auraof corruption, dissatisfaction, and low morale in thelate Brezhnev years—he risks sending the messagethat the demands for greater propriety for bureau-crats is empty rhetoric.

The treatment of the Brezhnev issue after the con-gress may provide another clue to Gorbachev's inten-tions. If the issue fades away, Gorbachev will have letdrop an important lever for flaying the old guard.Conversely, if he intends to keep up the pressure, weshould see a continued assault on the Brezhnev lega-cy, much as Khrushchev returned repeatedly to dc-Stalinizationi

The Economic Front. What happens after the con-gress will also provide the real test of Gorbachev's"radical" rhetoric on economic reform. While thearguments favoring caution are strong, the unveilingof yet another bureau for the energy sector only aweek after the congress suggests to us that Gorbachevmay be moving methodically behind the scenes tocarry through his blueprint for streamlining manage-ment. The lack of any mention of the imminentreorganization at the congress suggests that Gorba-chev may play his cards close to the vest to avoid cleartargets for opposition.

There will be no shortage of means to measureGorbachev's progress in pushing his economic agendaafter the congress:

■ Will the contradiction between the annual and five-year plan be resolved in favor of continued highgrowth rates for civilian machine building, which is

clearly Gorbachev's preference, or will the obstruc-tionism of the ministries and chronic problems inthe construction sector undermine his strategy?

• Will we see the accelerated rates of retirement ofcapital stock and increased output and utilization ofrobots, complex machine tools, automated prOduc-tion lines, and flexible manufacturing systems thatGorbachev's modernization strategy seems todemand?

• Will the leadership continue to move on restructur-ing management? Now that the Energy Bureau hasbeen created, will other such entities be created fortransportation and construction, as has been sug-gested? Will they and the already existing bureausextend their policy influence? Will their creationlead to the abolition of subordinate ministries as inthe case of the State Agro-Industrial Committee,headed by Murakhovskiy, or will they simply addanother layer of bureaucracy?

• How will Gorbachev's proposal for changes in agri-cultural procurement fare? The Politburo has ap-proved this measure, but much will depend on howit is implemented. Resistance could come fromideologues, who view it as a move in the direction ofcapitalism, and from workers, who—as in Poland—may resent paying higher prices for food.

• Will the regime follow up on Gorbachev's rhetoricabout an expanded role for prices and credit bychanging the price structure or dismantling or modi-fying the system of centrally allocated materials?Such changes are probably essential if the provisionson enterprise autonomy are to be fully realized, apoint alluded to by several speakers at the congress.

Social Policy. The postcongresg period may giveadditional tipoffs to Gorbachev's social and culturalpolicy. Ligachev's public statements imply a tradition-al utilitarian approach of harnessing the arts to theparty's efforts to perfect the flawed contemporarySoviet man. In a similar spirit, Chebrikov and Gromy-ko seem concerned with Western subversion, implying

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—Geo&leatiaL

C".,A•lrontial

tight party control over popular culture. Gorbachev,however, seems to realize that modernization necessi-tates greater trust in the technical intelligentsia andbroader dissemination of information, thus forcing theregime to give intellectuals a longer leash. His percep-tion has been reflected in the Soviet media—an areanow under the control of Gorbachev protege Alek-sandr Yakovlev—which have recently exposed Sovietcitizens to more controversial subjects.

Indicators of movement might be:

• Further release of embargoed artistic work and agreater willingness to allow free expression of bothRussian and non-Russian nationalist themes.

• Further relaxation of controls on the free flow ofinformation. Gorbachev implicitly seems to acceptthis as a byproduct of modernization—for instance,he supports the "computer literacy" program—butothers apparently worry about the fallout from a loss of control.'

• Strengthen his control over security policy by estab-lishing the national security staff he is reported tohave approved, giving him a capability for alterna-tive assessments in the area of military and armscontrol policy.

• Step up the pace of turnover among the militarybrass, which has been far less affected by personnelchange than the party or economic bureaucracies.Gorbachev needs to put his own man in charge ofthe Ministry of Defense, which is currently headedby 74-year-old Marshal Sokolov—a Chernenko apointee with little political savvy or clout.

Establishing a Place in HistoryIf the congress turns out to have revealed Gorbachev'sfull agenda, the forum will probably come to beviewed primarily as a successful step on the road toconsolidating Gorbachev's power, with marginal im-pact on the USSR's economic and societal ills. It willstrengthen the arguments of those who claim that heneither wants nor has the ability to significantly

National Security and Foreign Affairs. Gorbachevneeds to move further in his consolidation of controlover this sphere, which he evidently views as crucial toguaranteeing the success of his domestic program. Todemonstrate that there is substance behind the flashystyle and to maintain his political momentum, heshould achieve at least some of the following over thenext year:

• Follow through on his intimations of new flexibilityin Soviet arms control positions on issues like verifi-cation and on-site inspection.

• Carry through the rumored reorganization of theForeign Ministry and clean out more of the appoin-tees beholden to Brezhnev in the top levels of theMinistry.

change the Soviet system.

But, if Gorbachev's actions conceal a long-term visionand a calculated strategy of deliberate movement, thecongress could ultimately prove to be the majorturning point that he evidently believes it to be. If heproves to have the will and the power to makeheadway against his agenda of unfinished business inhis second year, he will have gone a long way towardemerging as the most commanding leader since Stalinand the leader who proved up to the bold measuresrequired to revitalize the Soviet system.

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