ENCYCLOPEDIA OF Espionage, Intelligence, and Security Volume ...

Cold War: The Collapse of the Soviet UnionBerliners sing and dance on top of the Berlin Wall in front of the Brandenburg Gate to celebrate the opening of East-West borders in 1989. Built of barbed wireand concrete in 1961, the wall divided Berlin and became the most powerful symbol of the Cold War. AP/WIDE WORLD PHOTOS.wounded by opposition to the Vietnam War, however,America resorted to conducting covert operations in LatinAmerica. During the administration of President James E.Carter, communist backed Sandinistas overthrew Nicaragua’sgovernment. President Ronald Reagan later providedfinancial and material support to anti-Sandinistarebels. Reagan also backed anti-communist forces in ElSalvador, even though Congress did not always agreewith the White House on the issue of Nicaragua and ElSalvador.With proxy victories in Southeast Asia and Latin Americaand with a booming national economy, the power ofthe Soviet Union appeared formidable under Soviet PremierLeonid Brezhnev. To many outside observers, theSoviet Union appeared to be on the verge of winning theCold War. The post-Brezhnev years, however, would seethe internal collapse of the Soviet Union. Even while theSoviet Union was soaring to new heights, cracks werebeginning to form in the monolithic empire. Economictroubles, military failures, and emerging nationalism wouldsoon result in the end of the Soviet Union and communistregimes in Eastern Europe.Economic stagnation and the arms race. The vigorousSoviet economy of the late-1960s and early 1970s quicklyEncyclopedia of Espionage, Intelligence, and Securityfell victim to the very factors that had contributed to itssuccess, central planning and raw materials allocation.Brezhnev recognized that the Soviet economy was slowing,and attempted to patch problems rather than completelyoverhaul the system. His efforts failed. Even ifBrezhnev had attempted to overhaul the Soviet economy,the highly entrenched special interests that made theirliving by manipulating the Soviet Union’s centrally plannedeconomy could have defeated Brezhnev’s efforts.Throughout the 1970s and into the mid-1980s, theSoviet Union’s GNP and industrial output continued toincrease, but at a lessening pace, eventually leading toeconomic stagnation. The Ninth Five Year Plan (1970–1975)saw a growth rate of approximately 3%. The period of1975–1980 experienced a growth rate of between 1% and1.9%, depending on whether revised Soviet numbers orthe West’s estimate is examined. Likewise, 1980–1985 sawa further decline in economic growth, between 0.6% and1.8%. Declining economic growth rates were not confinedto the Soviet Union. Eastern Europe, with its economiesintertwined with the Soviet Union’s, suffered a similar fate.This declining growth rate in the 1970s and 1980sresulted in the Soviet Union receiving a diminishing rateof return on capital investment. This proved disastrous forthe Soviet economy, because by 1980, the Soviet Union239