As a result of the rapid changes following the breakup of the Soviet bloc, there were suddenly new markets of hundreds of millions of people, covering a large portion of the earth, containing large fractions of many of the world's natural resources, possessing extensive research and production capacity, with a highly educated workforce, and utilizing many advanced technologies. Russia contained a large fraction of these factors, especially those oriented toward high technology, and hence it behooves international companies to formulate and implement strategies for doing business in Russia.

This particular study was undertaken because the quest for cooperative ventures has been a major portion of the strategy of many Russian defense enterprises and U.S. companies in addressing these changes. We deemed it important to gain a better understanding of the factors affecting companies' and enterprises' decisions regarding cooperative ventures and some of the determinants of success, as well as to analyze strategies for U.S. companies and Russian enterprises contemplating or participating in cooperative ventures.

The conclusions in this report are based on case-study interviews with companies and enterprises engaged in cooperative ventures. All of the Russian enterprises in our study, with the exception of some start-ups, had been heavily involved in military work; the American companies were from both the military and civilian sectors.

Risk can be thought of as the product of consequence times probability. No one can assign a number to the probability, for example, that a terrorist gang will acquire a nuclear weapon, although experts think the probability is considerably greater today than at any previous time. We do know, however, that the consequences of a nuclear explosion in any major population center would be catastrophic. The inescapable conclusion is that the global community is facing a very serious risk. What I want to discuss with you today is what is being done to deal with it and what still needs to be done.

The renewed American debate over ballistic missile defenses (BMD) echoes loudly in NATO, in Europe, and in France. This issue will be decisive for the future of European political organization and its security and defense. The issue will also be important for the future of relations between Europe, the United States, and Russia.

Faced with the potential threat of ballistic missiles equipped with nuclear warheads (or biological and chemical payloads) that could strike French and European territories, deterrence is sufficient and offers the greatest cost-effectiveness. In this analysis, the question of the broadening of the French and British deterrent and the political organization of a possible European anti-missile defense system will be discussed. Then, a new transatlantic strategic partnership, the robustness of which lies in counterbalancing the vulnerabilities of its members, will be described.

Transcript of the first in a series of lectures on  "The U.S.-Russian Strategic Partnership: Premature or Overdue?"

This discussion focused on what Russia and the United States might do to dismantle the nuclear weapons legacy of the Cold War.  Tens of thousands of nuclear bombs and warheads are still held by the two nations.  Wat can be done to rid the world of these weapons?  Can we move beyond START II, and indeed, will the Russian Duma ratify START II? Russia and the United States have the capacity to lead the world into a post-nuclear war era.  The question for today is, will they?

Participants:

AMBASSADOR JAMES E. GOODBY, Distinguished Payne Professor, IIS

Principal Negotiator and Special Representative of the President

for Nuclear Security and Dismantlement, 1995-1996

MR. ALEXANDER YERESKOVSKY

Minister-Counselor, Russian Embassy in the United States

DR. NIKOLAI SOKOV

Fellow, Monterey Institute of International Studies

DR. JOHN STEINBRUNER

Senior Fellow and holder of the Sydney Stein, Jr. Chair in International Security

at the Brookings Institution, Washington, D.C.

This essay surveys and seeks to explain the (re-)emergence and enforcement of international minority-rights standards in Europe after the Cold War.  The period since 1989 has seen a marked divergence between strengthening minority-rights standards at the international level and worsening conflict and repression in many states in the region.  Enforcement efforts by the CSCE/OSCE, Council of Europe, and European Union have been modest and are focused on states integrating economically and militarily into Western Europe.

The size of the defense industry in Russia has been a primary concern for policymakers and scholars interested in international security and arms control, as well as for students of Russian politics and economy more generally. For an issue attracting so much apparent
interest, however, there appears to be remarkably little quantitative information available on the scope of the military production sector and, particularly, on the extent to which it has changed in recent years. Analysts of the military-industrial complex (MIC)1 have either
combined the scraps of information derivable from official reports to try to form an overall picture (e.g., Cooper (1991a and 1991b), Despres (1995), Gaddy (1994), Sapir (1994), Sanchez-Andres (1995) and most of the published literature in Russian language), or they have been limited to detailed case studies of just a few firms, eschewing any attempt to measure the sector as a whole (e.g., Bernstein (1994)). Both approaches have contributed substantially to our qualitative understanding of the organizational structure of the military industry and of recent changes in the operation of some of its enterprises. But neither provides quantitative answers to the following questions: How large is Russian defense industry? What is the magnitude of decline in military production since reforms began?
What are the sources of the change? To what extent are resources being released for civilian purposes? Yet the answers have important implications for international security and for the design of foreign aid and domestic policies to assist the conversion and industrial
restructuring processes.

Has the rapid ownership transformation in Russia had an impact on enterprise performance or on worker behavior and attitudes? This paper investigates this issue using data from a nationwide survey of 1,176 Russian workers conducted in April 1995. We focus on the two primary types of ownership change in Russia: the privatization of existing state-owned enterprises, and the creation (de novo) of new, private organizations. Examining such types of firm behavior as restructuring of product lines, investment in new equipment, changes in internal organization, influences on decision-making, and labor market behavior, we find large and significant differences between privatized and state- owned enterprises, and between new private and all old organizations, controlling for other firm characteristics. Differences in the labor market behavior and attitudes of workers are significant when comparing new and old firms, but less so when comparing privatized to state enterprises. Finally, we analyze the relationship between the ownership of the firm in which an individual works and her political attitudes and voting intentions, finding that employees of the privatized companies tend to be the most anti-reform group while those in new private firms are the most pro-reform.

This volume contains the proceedings of a conference held at the Center for International Security and Arms Control in May 1996. The meeting was the latest in a series that CISAC had held over the years with Russian specialists from the Center for Scientific Research of the Committee of Scientists for Global Security, the Ministry of Defense, and the Russian Academy of Sciences. The general rubric under which these meetings were organized is "Strategic Stability to the Year 2000."

The May meeting had a special significance because 1996 was a year of presidential elections in both Russia and the United States, and the prospect of these elections was inevitably reflected in the discussions. But another general point emerged in the meeting, and that was the need to pay more attention to the strategic relationship between Russia and the U.S. Much had been done since the end of the Cold War to wind down the nuclear competition between the two countries, and agreements have been signed to reduce the enormous nuclear arsenals built up during the Cold War. There is much to be done, however, to ensure that this course is continued. The uncertainty
about ratification of START II by the State Duma, and the proposals in the U.S. Congress for deployment of a national ABM system both cast doubt on the possibility of further reductions in strategic offensive arms. The prospects for pushing nuclear weapons into the background of international politics are clouded by the renewed Russian interest in the role of tactical weapons in regional conflicts, and by U.S. interest
in the use of nuclear weapons to deter chemical and biological weapons attacks.

The issues discussed in the conference are embedded in broader political relationships, and this meeting suggested the need for a more intensive and broader strategic dialogue. In both countries there had been a lessening of interest in issues of arms control, but the process of reducing and eliminating nuclear weapons, to which both states are formally committed, is a complex and contentious one, which requires
political trust and careful management. Hence, the importance of a strategic dialogue which examines the conceptual basis of Russian-U.S. relations. Several participants in the conference spoke of the need to transform, or move away from, nuclear deterrence.
Many proposals were advanced for further cooperation in arms control and disarmament. But it is clear that much remains to be done to move Russian-U.S. relations onto a more stable footing.

The Center for International Security and Arms Control (CISAC) at Stanford University convened a workshop that dealt almost exclusively with software groups from the military-industrial complex. It also excludes any examples of software initiatives in Russia that are currently directed at the Russian market; however, it is the author's undocumented impression that there is not yet much commercial activity in this area.

This report is based primarily on the presentations and discussions at the workshop and secondarily on additional case data. The process of selecting cases for the workshop was not geared to find these failures as easily as those cases in which there is an ongoing activity. Nonetheless, the tendency toward success in software ventures versus
manufacturing ventures in the enterprises that are included is compelling.

Nuclear war is generally believed to bring risks of destruction out of proportion to any gain that may be secured by the war, or to any loss that may be averted, except perhaps for the loss of national independence and group survival. Nuclear-armed states, however, continue to project military force outside their own territory in order to carry out rivalries for power and influence. Will these rival power projections lead to war, as they often did in the past? If not, how will they be resolved? This paper makes the case that, because of the recognized destructiveness of nuclear weapons, rivalries among major nuclear-armed states for power and influence outside their own territory are not likely to lead to central war among them, but that definite lines separating zones of exclusive security influence, such as prevailed during the Cold War, will reappear where circumstances prevent
other compromises. This conclusion does not hold in the case of nuclear powers that are centrally vulnerable to conventional attack from each other: in that case, nuclear deterrence is less likely to be stable. Where lines are established, they may facilitate rather than prevent cooperation in dealing with the next century's global problems.