Opening Up The Soviet Economy
The prospect of serious reform in the Soviet economy greatly complicates the choices the United States must make about trade, technology transfer, joint ventures, human rights and relations with allies. Professor Hough of Duke University shows why and makes the case for relaxing American policy. Unlike others, he does not think Gorbachev would make concessions on arms control or foreign policy solely to get better economic treatment. The gains for both countries would come through long-run changes in the U.S.S.R. and a reduction of the anti-Western and protectionist forces there.
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The Caspian basin holds enormous oil and gas deposits that could play a critical role in the world's economic future. But getting them out of the ground and onto the market requires overcoming formidable political and geographic problems. For its own sake as well as the region's, Washington should do whatever is necessary to ensure the emergence of secure and independent routes for Caspian energy to reach the outside world.
US policy to isolate the USSR from the world economy (such as the 1974 Jackson-Vanik amendment, the grain embargo, and the attempt to impede the Soviet-European gas pipeline) ought now to be discontinued, so that (1) Western businesses can discover the new Soviet market (2) an economic wedge can be inserted to prevent backsliding in Soviet political and economic reform.
Ukraine has yet to solve the challenge of life after communism. Hyperinflation is just a memory and democracy is well entrenched, but production is declining, state industries remain unsold, and investors have largely stayed away. With nationalists ascendant in Russia, Ukraine needs Western money and diplomatic backing to preserve its independence and keep reform on track. A free, democratic Ukraine can serve as a model for Russia, prevent a new Soviet Union, and promote stability among its neighbors. A civil war between its Russified east and its more Ukrainian west, or its absorption into a new Russian empire, would reverberate throughout Europe.

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