1 The Association for Diplomatic Studies and Training Foreign ...

Q: This is tape eight, side one, with Bill Miller.
MILLER: One of the features of the Soviet Union, as you've alluded, was its diversified
economic structure. For example, there were the assembly plants in Kazakhstan for
helicopters using parts made in Magnetogorsk or in Odessa and they'd be transported over
and assembled in a remote part of Kazakhstan. This was not the most cost effective way
of developing an economy. Certainly, the intention was to pull the vast areas of the Soviet
Union together by having economic activity throughout, and that they would therefore, be
interdependent and, therefore, dependent on the Soviet structure. The Gosplanners
(Soviet central planners) believed that Russia had all of the internal resources needed to
build anything needed by a modern state, which indeed it did, and that the Soviet Union
was large enough to have an indigenous circle of production that would be self sustaining.
The idea of profitability, of course, wasn't a major concern. Certainly, the Soviet planners
had a kind of market in mind. Their market was largely contained within the Soviet space,
and what they were working out in their own minds was how to provide adequate goods
to all of the population. And they really didn't see any need for external markets. It was a
closed system. But it was also a substantial part of the world. They reasoned that a closed
system could work, and believed that to the end. I talked, indeed, about this to one of the
last of the Gosplan heads. He was a prime minister of the Republic of Ukraine before
independence, briefly, Masol, a very intelligent, well-trained Soviet economist. He made
a very plausible case for the viability of the Soviet system within the Soviet Union. And
in my view it was a conceivably plausible case. It denied the need for any foreign market,
except for prestige purposes. To this day, I'm sure, he is of that view.
Russia and all of its independent states found themselves with this inherited economic
base that had been interdependent in the past. Much of the politics and foreign policy of
the last dozen years from 1991 on is an attempt to form a viable CIS, a community of
independent states, which is a reformation in an economic sense of the former Soviet
Union, in order to take advantage of the existing base.
Actually, the industrial base that had been created in Soviet times in large measure is now
obsolete. The industries, as we have found, are now rust belt, and a lot of them
environmentally dangerous and should be dismantled or rebuilt. The new age of service
industry and information technology has changed almost everything. In Russia, they're
going back to the most primitive of economic steps, which is creating capital by the sale
of resources. That's the present base of the Russian economy, oil and gas and metals.
Q: Well, tell me, in all this, and we're talking up to December of '91, where did something
that was logically much more, but at that time, where did Ukraine fit in? Because it
always struck me, looking at this as an – that if Ukraine – I have a hard time not saying
the Ukraine, but one learns after a while to call it Ukraine – moves out, that means
Russia is no longer a particular threat to anybody. Because this is sort of the bread
basket that got – it's a huge state.
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