FL-2017-13804 c Ell$ B-00002630156 09 1 2 2024 Page 105 - - - -- -- -- --------------- -- - --- -08-- - -- - -- 53 am 09 06 94 W58 Automaced Telegram Handler - 1 t ern Subject DISSENT CHANNEL S P DIRECTOR STEINBEP G- S STATE 239531 031510Z SEP 94 · B TECT DISSENT CHANNEL S P DIRECTOR STEINBERG-$ F E$FOtlSE TO DISSENT CHANNEL MESSAGE FROM HEAD OF POLITICAL INTERNAL SECTION EMBASSY MOSCOW REF MOSCOW 08427 L QIIFIEE ITfA b • f OP UNCLASSIFIED EUTIP E TEXT WAYNE MERRY FROM S P DIRECTOR STEINBERG J I WANT TO THANK YOU FOR A STIMULATING PIECE ON THE SITUATION IN RUSSIA AND U S POLICY I REGRET THE DELAY It PESPONDWG1 BUT YOUR EXPANSIVE ESSAY GAVE US MUCH TO COllTEl·IPL l TE UNFOP TUNATELY THE TIME AVAILABLE FOR SUCH PEFLE TION COMES IN SMALL AND INFREQUENT INCREMENTS s MIJC H OF WHAT YOU HAVE WRITTEN I AGREE WITH ESFF CIAL t YOUR COMMENTS ON DEMOCRATI C REFOP11 AND p JSSIAtl BEHAVIOR IN THE OTHER SOVIET SUCCESSOR STATES THE LI IK BETWEEN THE TWO IS ONE THAT LIES AT THE CENTER • r OUF RUSSIA POLICY IT HAS INFORMED OUR THINKING ON PUSSIAN ACTIVITY IN THE CAUC SOS AND THE BALTICS AND TC•l'IAP D R1JSSIAN - UKRAINIAN RELATIONS MOREOVER THIS LitlKA• E IS ACCEPTED BY PRESIDENT YELTSIN AND THE RUSSIAN ' ovEF lMENT WE MAY DEBATE HOW BEST TO PURSUE DEMOCPATIC PEFOF11 AND EtlCOURAGE RESPONSIBLE RUSSIAN BEHAVIOR ABROAD BUT THERE IS NO DISAGREEMENT WITH THE BASIC LINKAGE YOO UNDERSCORE A I P EAD YOUR CABLE YOUR CRI TICISM OF U S POLICY IS DIRECTED LARGELY AT WHAT YOU BELIEVE IS A MISGUIDED EFFORT TO PRESS FOR RADICAL ECONOMIC REFORM IN RUSSIA IN YOUR VIEW SUCH REFORM IS UNSUSTAINABLE IN RUSSIA AND PRESSING FOR IT WILL ONLY UNDERMINE THE DEMOCRATS AllD PUSH ECONOMIC ADJUSTMENT FARTHER OFF INTO THE FUTURE THEREFORE YOU ARGUE WE SHOULD ABANDON OUR SUPPORT FOR PADICAL ECONOMIC REFORM AND FOCUS ON SfJPPORTING DEMOCRATIC DEVELOPMENTS 5 I HAVE TWO PROBLEMS WITH THAT CRITICISM ONE IS THEORETICAL THE OTHER IS FACTUAL F iP T THE THEORETICAL YOOR ARGUMENT IMPLIES THAT THERE IS NO VITAL LINK BETWEEN A FREE MARKET ECONOMY AND DEMOCRACY HISTORY I WOULD ARGUE DEMONSTRATES OTHERWISE AS YOU NOTE THERE HAVE BEEN FREE MARKETS WITHOUT DEMOCRACY BUT THERE HAVE NEVER BEEN DEMOCRACIES WITHOUT FREE MARKETS THERE IS A REASON FOR THIS MODERN DEMOCRACY HAS BEEN BUILT ON THE BASIS OF THE MIDDLE CLASS ITSELF A PRODUCT OF THE FREE MARKET IT IS THE MARKET THAT CREATES THE MULTIPLE ZONES OF PERSONAL AUTONOMY ESSENTIAL TO DEMOCRATIC DEVELOPMENT WHILE ECONOMIC REFORM IS OFTEN DESTABILIZING IN THE SHORT RUN ALL THE EVIDENCE INDI CATES THAT IN THE LOtVi RUN IT IS THE ONLY PATH TO DEMOCRACY FOR THE FOPHEF COMl-lt lNIST STATES BY ABANDONING ECONOMIC P EFOfl -1 WE WOULD ALSO BE DOOMING DEMOCRACY IN RUSSIA OIJE COtlLD ARGUE THAT GIVEN THE STRUCTUP E OF P tTSSIAtl SOCIETY POLITICAL REFORM HAS TO PF ECEDE FP OFOUND ECONOMIC REFORM MARXISl-1- LENINISM WAS AFTER ALL THE GREAT POLITICIZER or SOCIETY THERE WERE NO REAL ECONOMICS IN THE SOVIET UNION ONLY POLITICAL DECISICtl 3 ABOUT PRODUCTION AND DISTRIBUTION CONSEQUENTLY THE FIRST STEP IN ECONOMIC REFOPM IS TO DEPOLITICIZE THE ECONOMY THAT ARGUMENT IS GOOD AS FAR AS IT GOE3 IN OUR VIEW THE CRITI CAL STEPS IN DEPOLITI CI Z UG THE ECONOMY WERE BEGUN UNDER GORBACHEV AND ACCELERATED - AND LARGELY COMPLETED - UNDER YELTSIN AND GAYDAR THE TASK NOW IS TO CONSOLIDATE THE EMBRYONIC MARKET SYSTEM THAT HAS EMERGED THAT CAN ONLY BE DONE THROUGH CONTINUED ECONOMI C REFORM AND IN THE fIP ST PLl' CE FINANCIAL STABILIZATION OF COUP SE AS yr u t10TE ECOITOMI C REFOP M HAS TC TAKE ACCOUllT OF THE FQLITI• AL CONTEXT Ill WHICH IT I S UNDERTAKEN THAT LEA S TO l-l i SECOND CRITICISM IT IS SIMPLY UNTRUE THAT WE HAVE PRESSED FOP f' ll DI CAL ECONOMIC REFORM OR QUOTE SHOCK THERAPY UNQfJOTE lll RUSSIA WHAT WE HAVE PR ESSED FOR IS ECONOMIC REFOFH THAT PROCEEDS AS RAPIDLY AS POLITICAL CIRCUHSTANCES PERMIT FOR EXAMPLE WE ENCOURAGED THE IMF TO TAKE A FLEXIBLE APPROACH TO CONDITIONALITY Oil LOANS TO P 1JSSIA IF I DIFFER WITH YOU IT IS PERHAPS IN BELIEVIllG THAT RUSSIANS ARE CAPABLE OF BEARING A MORE RAPID PACE C•F REFORM THAT THE RUSSIAN GOVERNMENT HAS MOVED AHEAD St•lARTLY ON REFORM AFTER THE DECEMBER PAF LIAMENTAP Y ELECTIONS WITHOUT A NOTICEAB LE INCREASE IN SOCIAL UNREST - INDEED THE COUNTRY HAS ENTERED ONE OF ITS CALMEST PERIODS SINCE INDEPENDENCE - GIVES t-lE CONFIDENCE THAT OUR ASSESSMENT IS CORRECT 6 FINALLY YOU MAKE SEVERAL CRITI CI SMS OF OOR ASSISTANCE PROGRAM THAT HAVE FOUND RESONANCE Itl THE CONGRESS AND IN THE EXECUTIVE BRANCH SOME OF THAT CRITI CISM IS JUSTIFIED BUT THAT IS NOP EASON TO ABANDON THE EFFORT FATHER IT IS A CBALLEN6E TO IMPROVE OUR PERFORMANCE I'M SORE YOO HAVE NOTICED THAT WE ARE TAKING STEPS TO RECTIFY THE DEFICIENCIES IN THE ASSISTANCE PROGRAM TO ENSURE TIMELY DELIVERY OF AID TO THOSE BEST ABLE TO ADVANCE REFOPl•I 7 YOUR CANDOR AND INSIGHT ON THIS MATTER HAVE BEEN MOST WELCOME I C011l1END YOUR EFFECTIVE OSE OF THE DISSENT CHA lNEL TALBOTT cmlFlli iill l' EAis FL-2017-13804 B-00002630156 lsQtlFi BBUTIAL POEMS u ornated Telegram Handler - W58 Item Subject UNCLASSIFIED DISSENT CHANNEL S P DI RECTOR STEINBERG-S n P6332 88HFIB8HTftlfJ l INFO 239531 STATE F ' GE 01 PTP6 332 031 508Z SP 00 - -- 031 613 Z SEP 94 STePS TOTAL COPIES 00 0 ORIGIN SP- 00 ItlFO LOG- 00 TEDE-00 ES-01 ADS - 00 SOF-00 OOlR DRAFTED BY S P TZAMOSTNY TZ APPROVED BY S P JBSTElNBERG s r LFE INP rJDI S P ROtlEILL ESIRED DI STRIBUTION $ P OtlLY DES IRED DISTRIBUTION ONLY ------------------6EC5El 0 031 510 Z SEP 9 4 FM SECSTATE WAS HDC TO AMEM BASS 'i MOSCOW IMMEDIATE ' 11 F I 8 Ei II Ff I A f STAl'S 239531 riISSENT CHA INEL E 0 12356 DECL OAOR TAGS P REL P60V RO 031509Z 38 09 12 2024 09 06 9 4 Page 106 08 53 am