Soviets May Want Credit for Mideast Peace

What’s the Soviet Union up to with its peace plan for the Persian Gulf? One big consideration may be money, the fading superpower’s need for massive financing in this decade to reform and develop its economy.

In a sense, Soviet President Mikhail S. Gorbachev is trying to reaffirm his country’s superpower status to lift its credit rating.

To be sure, money gets little mention in the hopes and suspicions aroused by Gorbachev’s plan for an Iraqi withdrawal from Kuwait.

President Bush said only that the plan “falls well short of what would be required” to end the war. Many U.S. commentators worried publicly that the Soviets were returning to an adversarial relationship with the United States, to a renewal or extension of the Cold War.

But that is almost certainly not true. The Soviets, in offering the peace plan and declaring an active interest in the postwar Middle East, are not making a show of strength for military purposes but with an eye to the years ahead when they will need hundreds of billions in loans and investments from other countries.

“If Gorbachev can pull off something that is appreciated--that certifies the Soviet Union as a continued major player in events--Soviet credentials would be strengthened for the financing it needs to do,” says Charles Wolf Jr. of the Rand Corp., which has just completed a two-year study of the Soviet economy and military budget for the U.S. Defense Department.

By “appreciated” Wolf means that Gorbachev hopes to gain both the gratitude of the United States for having helped end the war and respect for its superpower status from other wealthy nations, such as Germany and Japan.

Little U.S. gratitude has been expressed so far, but there are benefits for the United States, too, in a postwar Soviet role in the Middle East. Since the war began Jan. 16, some thoughtful experts have said that total destruction of Iraq would not serve U.S. interests. “Unless U.S. troops occupy it, the destruction of Iraq would leave a power vacuum,” says Joshua Epstein, military affairs analyst at the Brookings Institution. Other nations would fight over Iraq’s considerable oil reserves, and the region would be more unstable than ever. “Remember,” Epstein says, “we didn’t decimate Japan and Germany and simply leave.”

Thus there is a place for the Soviet Union, as Iraq’s keeper and as a great power able to keep peace and get people talking about Middle East arms control.

Arms control will be a prime Soviet interest in the 1990s, says the RAND study, which is titled, “Gorbachev’s Allocative Choices, Constraints, Dilemmas and Policy Directions.”

Its basic conclusions are that substantial cuts will be made in the Soviet military budget, which eats up 24% of the country’s $1.7-trillion gross national product--compared to 5.6% of GNP for the U.S. defense budget. “Pressures to reduce military spending will be intense” and “Soviet motivation for arms control measures will be powerful,” the report states.

But even major defense cuts won’t yield sufficient resources for housing, health, transportation and other needs. And so, “Soviet interest in substantial external financing may be very high--in the neighborhood of several hundred billion dollars--in the next decade.”

Simply put, the Soviet Union is in for a long siege of economic chaos, which won’t be relieved by odd government schemes. Prime Minister Valentin Pavlov has just proposed raising food and consumer goods prices by 60%, in order to increase supplies of goods. But he has also proposed increasing wages and pensions by the same amount, in effect bringing Brazil’s failed experiment with indexing to the Soviet Union.

But the Soviet Union is no laughing matter. These days it is highly unstable, with thousands of military officers homeless and living in tents and an army resentful of the decline of Soviet prestige.

Soviet sensitivity flared Monday on ABC’s “Nightline,” when guest Yevgeny Primakov, the diplomat who delivered Gorbachev’s peace plan to Saddam Hussein, was asked by Ted Koppel why the Soviets hadn’t cleared their plans in advance with President Bush. “We are not reduced to being a secondary power,” Primakov replied curtly.

The upshot is that if the Soviet Union wants to play a role in the region on its southern borders, it cannot be ignored. And its role could be constructive. President Bush was keeping his own counsel on the Soviet peace plan. But as of Tuesday night, the word in Washington was that major offensives in the ground war were put off for at least another day to allow time for the plan to get an airing.

Meanwhile, financial markets in Europe and Asia rose in anticipation of an end to the war, and U.S. stock and bond markets marked time after rising three weeks straight. But if Gorbachev and his country’s need for financing can really bring about peace, it will give a big lift to the markets and to the U.S. economy--and one great gift to U.S. and allied troops.