The Soviet Union and Iraq

Hillel Ticktin

THE EMPIRICAL features of the Gulf crisis in relation to the USSR appear to be twofold In the first place, the USSR stands to gain through the rise in oil and gold prices. If oil prices were to rise 50-100 percent, for example, the USSR could gel from eight to twenty billion dollars more Just from its oil supplies to the West.

The USSR could also expect to extract more money from the East European countries, to which it supplied approximately $11 billion worth of oil in 1989. Since the USSR is proposing to go over to hard currency trade with these countries, it will make further gains, even though reduced by its difficulty in producing the same enormous quantities of oil it has pumped out in the past.

The price of gold is more likely to fluctuate, thus the gains made in this regard are more marginal. Nonetheless, since the USSR ran considerable trade deficit with the West last year, and has increased its gross debt to hard-currency countries to over $60 billion, it is quite clear that the USSR stands to gain very considerably.

The USSR could only be thankful for such a windfall, which would come at a particularly critical point in the process of conversion to capitalism. In order to import the necessary consumer goods that could soften the effects of moving to the market, Soviet liberals are talking about needing around $30 million.

A Time to Worry

The desperation of the liberals showed through in Gavril Popov’s recent article in the New Yost Review of Book’s (August 16, 1990, 27ff). Popov argues that the population is opposed to the economic reforms, and that the trade union bureaucracy combined with the conservative section of the Soviet elite are taking advantage of the reforms’ unpopularity to stop them. Popov concludes that an immediate move to private property is essential.

Therefore it is in the interests of the liberals and the dominant section of the Soviet elite that the Washington-Baghdad confrontation continue for as long as possible A short, sharp war that did not affect oil installations would not help the Soviets.

Pravda’s reaction to the possibility of war has been quite cool. While the USSI has gone along with the requests of the United States, official reporting has tried to take an “objective approach” Clearly the USSR does not want to lose its influence within Iraq. It wants to continue to supply the arms necessary for Saddam Hussein, and have sufficient influence in the Middle East to continue to constitute a worthy bargaining agent with the United States.

At the same time, groups within the elite now have differing interests. The more principled liberals see no need to maintain the integrity of the USSR They would prefer to permit various units to go their own way: Azerbaijan, Armenia and Georgia constitute both a problem and a drain on resources.

Hence a democratic republic of Iraq—possibly divided into two with a Kurdish republic—is probably these liberals’ preferred outcome. Moscow News, one of the organs of the liberals, is therefore taking a particularly belligerent line. The liberals’ policy, judging by Moscow News, is not just one of following the United States but of anticipating and supporting a direct attack on Iraq.

In this way the liberals achieve a number of objectives. First, they are seen to be a reliable ally of the Free World worthy of more financial support Second, they will knock out a further prop underpinning the old system in the USSR, by reducing the old base of its foreign trade and forcing it to go to the world market.

The problem with such a line of action, of course, is that the USSR would lose its economic role in Iraq and possibly even in the Middle East Nonetheless, the liberals expect that the price of oil would go through the roof fora time during and after the war, which would then compensate for the more rapid return to a longer-term considerably lower price.

To understand this change in Soviet attitudes to the Middle East it is necessary to understand the change in Soviet foreign policy, which is now bound within the same disintegrative process that is changing its domestic economy. Alongside the conflicting parts of the elite, whose foreign policy interests are now different, the needs of the economy themselves conflict.

From Stabilization to Disintegration

The Soviet economy now needs foreign aid on a large scale in order to stabilize itself and introduce the reforms but if it does not change it needs countries that will accept its traditional machinery, arms and raw materials exports.

Raw materials can be exported to the West, but the relatively inferior machinery and arms can only be exported to Third World countries.

It must be noted that the overall collective of Soviet foreign policy has now radically changed. Formerly its fundamental aim was the stability of the Stalinist system. Hence it could export both arms and machinery without reference to cost as long as it increased its influence in a part of the world.

Today, the disintegration of the Stalinist system dictates that Gorbachev establish market-type relations. This implies that profit and loss will be the only basis for Soviet trade. Support for foreign Communist parties, foreign elites and foreign nationalism can have no place in the new Soviet foreign policy.

But the USSR cannot compete on the world market, whether it be in arms or even outdated machine tools. While it might insist on payment from its numerous debtors, there is no reason to assume that the bankrupt countries of the Third World will ever pay.

As a result, Soviet trade with the Third World can only contract. Only countries that are both unable to increase their exports to the West, but can make use of Soviet production and are able to barter something with the USSR, can now continue to trade with it.

The Iraqi Card

Iraq in this context is able to pay for Soviet arms with oil. There is no real hope that the USSR could really export non-raw materials to the West As a result, countries like Iraq–one of the few that will assist the development of the USSR—are particularly important.

Yet only developed Western capitalism can actually supply the consumer goods and machinery that the USSR requires. Furthermore, the dominant section of the Soviet elite wants to be accepted as an integral part of world capitalism.

As a result the USSR can do nothing but maneuver. It does not want to lose its influence with Iraq, which it would do if it were to fight Iraq directly. Yet the USSR needs the support of the United States. As the regime becomes more beleaguered it has to accept the requests of Washington as commands that it must obey. Gorbachev has failed internally md is desperately flailing around for a policy that will at least prevent the situation from deteriorating further.

The old-style elite, however, would see its interest in supporting Iraq very clearly, though not to the point of confrontation with the United States Hence it took the apparently surprising step of surreptitiously sending arms to Iraq via Jordan. Unfortunately for them, the arms were held up by the blockading powers.

This group of the elite no longer exists in its old form, but is reincarnated as nationalists who would like to see an affinity with Iraq as opposed to the United States. They do want influence in the Third World but, since U.S. pressure takes precedence among the liberals (and so on Gorbachev), these nationalist-traditionalists are themselves forced, given the depth of the internal crisis, to follow the demands of the United States.

At the same time they put pressure on Gorbachev to keep the previous Brezhnevite policy. Gorbachev’s policy has therefore wavered. He attempted to support Washington without lending support to its bellicosity, but whenever the United States insisted he had to give way. The internal conflict in the USSR, however, compels Gorbachev to take a policy that satisfies both sides, at least minimally.

Crisis and Change

What must change Soviet policy toward Iraq is the change in balance of forces within the USSR. From the point at which the liberal economic plains failed to be adopted, the system began to retreat from its moves to the market. Popular rejection of high prices, unemployment and more intensive work has ended the move to the market before it could really begin.

In a sense, the Soviet working class has rejected the market, leaving the elite with no choice but to turn back to the older form of rule, requiring more centralization and hence more control over the constituent parts of the USSR.

If the West responds to Moscow’s reimposition of controls over the republics by applying sanctions, the nationalist factions of the elite will gain more power and Soviet foreign policy will switch towards Iraq.

In the absence of a decisive victory for one or another faction within the USSR—and indeed it is probably impossible for one side to defeat the other—Soviet policy can only vacillate between the two poles of collaboration with—or resistance to—Washington. The failure of the move to the market indicates that the Soviet elite must revert to a weaker and more contradictory form of Brezhnevite foreign policy.

March-April 1991, ATC 31