Section 4. The Soviet Union


1. Domestic Affairs

The dramatic changes in the situation in the Soviet Union since the Summer of 1991, particularly since the failed coup d'etat by the conservatives, can be interpreted as the beginning of real reforms toward liberalization and democratization among the general public. In particular, the termination of the Soviet Communist Party and the communist ideology which had in effect governed the Soviet Union since the Revolution of 1917 and the shift to the "Union of Sovereign States" recognizing the sovereignty of each Republic from the federal system, as well as the independence of the three Baltic states, were epochal events that could compare with a revolution. The situation emerged against the background of the aspirations of the Soviet people for democracy and freedom that have been steadily nurtured in the reforms. Also, in the background was the political situation of the past one year when the problems of the economic crisis, the federalism and ethnic problems intensified over which the conservatives and reformists were disagreeing, as well as support from the Western democratic countries toward freedom and democracy.


(1) Transformation of Political Stance

The political stance of Soviet President Mikhail Gorbachev fluctuated greatly from being a reformist to a conservative and back to a reformist, against the background of an increasingly intensifying political and economic crisis.

General Secretary Gorbachev decided to abandon the dictatorship of the Communist Party and allowed for the creation of a pluralistic political system in the Central Committee Plenary Session of February 1990. Assuming the position of President in March and somehow controlling the conservatives in the 28th Communist Party Congress of July, he tried to strengthen his governing base. However, the economic crisis and ethnic problems that had been intensifying in the last several years became more grave. Coupled with the rapidly mounting political and economic chaos due to the relaxation of rules, the domestic conditions increasingly deteriorated. Amid such a situation, daily life of the general public was threatened by food shortages and growing crimes, which led to a growing number of voices seeking a restoration of order rather than reform. For this reason, President Gorbachev began around the Autumn of 1990 to take a series of tighter policy measures in cooperation with the Communist Party, the military and security bodies such as the KGB.

The tightening policy was implemented in the aspects of personnel appointments, ethnic problems, economic measures and glasnost. In personnel appointments, liberal Interior Minister Vadim Bakatin was dismissed at the beginning of December by the pressure of the conservatives. The conservative Chairman of the Control Committee of the Communist Party Boris Pugo was appointed as his successor. Foreign Minister Eduard Shevardnadze, who had been a target of the conservative's censure on the "new thinking" diplomacy, announced his resignation in the Congress of People's Deputies in mid-December with a warning that a reactionary force was emerging. The resignation of the Foreign Minister left a strong impression both at home and abroad that President Gorbachev was relying greatly on the conservative force of the military and the KGB.

As for the ethnic problems, increased deployment of airborne troops in Lithuania and Latvia was announced in January 1991 in the name of implementing the drafting of soldiers, which intensified tensions in the Baltic countries. On January 13, Soviet airborne troops invaded and occupied the Lithuanian television and radio station, killing 13 and injuring 112 citizens. On January 20, the special police force of the Soviet Interior Ministry attacked the Latvian Interior Ministry, and in the ensuing firefight, five were killed and 10 injured. Furthermore, joint military/police patrols began on February 1 to maintain order.

In the economic field, a Presidential decree was proclaimed concerning the abolition of currency with high denominations with the main objective of dealing a blow to the underground economy and restoring economic order. This was followed by another Presidential decree to ensure the battle with economic crimes.

In the area of glasnost, the presidium of the Supreme Soviet tried to fire the reformist deputy editor-in-chief of Izvestia. President Gorbachev himself proposed a temporary suspension of the newspaper law which stipulates freedom of press. 

Such series of tightening policy movement invited protests from the democratic forces at home and Western countries. Particularly on the armed intervention in the Baltic countries, many countries, including Japan, strongly demanded the immediate suspension of the use of force, as well as the pursuit of a democratic and peaceful solution of the situation. In addition, the coal miners' strikes that had sporadically taken place since the end of 1990 began to have a strong political feature in mid-March, leading to demands for President Gorbachev's resignation. Hoping to settle the situation, the President met with the representatives of coal miners in Kuzbas, Donbas and elsewhere at the beginning of April 1991. Although he indicated his understanding of the demands made by coal miners arising from the deteriorated social and economic situation and appealed for restraint in their political demands, the coal miners' striking committee continued the strike, demanding the resignation of President Gorbachev.

In Minsk, the capital of the Belorussian Republic, strikes triggered by the price rise of April 2 spread, also loudly demanding the resignation of President Gorbachev. And as the strike in Minsk turned into a general strike on April 10, the antagonism of the public mounted, forcing the Gorbachev Government to fall into further difficulties.

To overcome such political and economic crises, President Gorbachev met on April 23 with the representatives of the nine Republics including President Boris N. Yeltsin of the Russian Republic, signing a joint statement indicating mutual intentions to compromise. With this meeting, President Gorbachev changed his political course from confrontation to that of cooperation with the liberals. The joint statement agreed on (1) joint steps between the Federal Government and Republics to overcome the crisis, (2) an early conclusion of the new Union Treaty, (3) promotion of economic reforms and (4) suspension of political and economic strikes. Based on this agreement, President Yeltsin himself visited striking mines to end the coal miners' strikes.

The conservative camp revolted against such a shift in direction by President Gorbachev. They demanded the resignation of Gorbachev from the position of General Secretary in the Central Committee Plenary Meeting of the Communist Party held on April 24 and 25. Although the General Secretary at one point indicated his willingness to resign, as a result of deliberations in the Plenary Meeting, a motion not to place this demand on the agenda was approved by a vote of 322 to 13. The Soyuz, a group of the conservatives in the Congress of Peoples' Deputies, attempted to convene the Congress to dismiss the President in May but had to give up the idea. Such plans of the conservatives suffered a temporary set back.

However, the moves of the conservatives have activated since. In the presidential election of the Russian Republic in June, the conservatives nominated former Federal Premier Nikolai Ryzhkov and made full-scale campaigns to support him under a scheme to prevent the election of Chairman Yeltsin to the presidency of the Republic. However, Chairman Yeltsin won by an overwhelming majority (obtaining 57.3 percent of the votes) and the conservative Communist group was defeated (Ryzhkov received 17.3 percent of the votes).

A referendum, held simultaneously with the election, to change the name of Leningrad to its former name of St. Petersburg was approved by 55 percent of the voters, symbolizing the departure of the public from the Communist Party.

The conservatives, who had been dealt a blow by the overwhelming victory of Chairman Yeltsin, attempted to rollback the reforms won by the liberals, amid the further intensification of the economic crisis for which the government's response was questioned. Federal Prime Minister Valentine Pavlov demanded in the Supreme Soviet on June 21 that the additional power given to the President in September 1990 on economic reforms had not been fully utilized and that this power should be transferred to the Federal Cabinet. This demand invited the protest of President Gorbachev and a motion to terminate the deliberations was approved by a vote of 262 to 24. It was extraordinary that the confrontation between President Gorbachev and Prime Minister Pavlov surfaced in such a form.


(2) Creation of a New Political Organization

Amid such a conservative orientation of the Communist Party and the increasing departure of the citizens from the Party, nine leaders, including former Foreign Minister Shevardnadze, Chief Presidential Advisor Alexander Yakovlev, Moscow Mayor Gavriil Popov, Russian Republic Premier Ivan Silaev and President Arkady Voljsky of the League of Scientific and Industrial Associations left the Party. On July 2, they made an appeal for the congregation of all democratic reformist forces under a new political organization to launch democratic reform campaigns.

The appeal called for many of the democratic forces and sympathizers in the Communist Party to participate in this campaign. It also supported the joint statement of April 23 and announced the objectives of political and economic reforms and the maintenance of federation of various ethnic sovereign authorities. Furthermore, former Foreign Minister Shevardnadze announced his resignation from the Communist Party on July 3 and Yakovlev announced his resignation as Chief Presidential Advisor on July 27.

The Central Committee Plenary Meeting of the Soviet Communist Party was held on July 25 and 26 concerning these changes within the Party. In the Meeting, no demand for the resignation of General Secretary Gorbachev was submitted as observed in the April Plenary Meeting, and a draft for the new Party Guideline was adopted by an overwhelming majority. It was also decided to hold an ad hoc Party Congress either in November or December.

The Plenary Meeting also adopted a special statement which indicated a negative view on the decree of the Russian Republic President of July 20 which prohibited organizing activities of political parties in national institutions, organizations and enterprises. The participants in the Meeting requested the Union Constitutions Surveillance Commission and the Union President to decide the constitutionality of the decree made by President Yeltsin.


(3) Ethnic Problems and the New Union Treaty


(a) Ethnic Problems

Ethnic problems have intensified in the three Baltic countries, Moldavia and in the Caucasus regions. It is particularly notable that six Republics - the three Baltic countries, Moldavia, Georgia and Armenia - stepped up their efforts to leave the Union and become independent, such as refusing to participate in the national referendum on the drafting of the new Union Treaty and the maintenance of the federal system.

In the Republic of Moldavia, the Turkish population in the south declared the creation of the "Republic of Gagauz" in August 1990 and the Russian population in the northeast declared the establishment of the "Pri-Dnestr Republic" in September. While the Republic of Moldavia issued a statement nullifying these declarations, there were armed conflicts between the Moldavian police force and the Russian voluntary soldiers in the "Pri-Dnestr Republic" in November. According to the local authorities' report, six died and 30 were injured.

In Georgia, a non-Communist government was born through a democratic election in which several political parties participated in October 1990. In November, the Republic declared its secession from the Union and non-participation in the New Union Treaty, adopting a National Independence Declaration in April 1991. Stimulated by the independence of Georgia, the South Osetiya Autonomous Province within the Republic declared on December 1990 the creation of the South Osetiya Democratic Republic within the Soviet Union." The Georgian Government nullified this declaration and armed clashes occurred frequently in the autonomous state between the Georgian police and South Osetiyan residents and heavy casualties were reported.

In the Nagorno-Karabakh Autonomous State, the conflict that began in 1988 between Armenians and Azerbaijanis continued and many died in armed clashes.


(b) New Union Treaty

President Gorbachev proposed during the Communist Party Congress of July 1990 the introduction of a loose federal system as a solution to the ethnic problems and also presented his plan for quickly formulating and concluding the New Union Treaty which will serve as the framework for the solution.

On November 23, the Presidential draft of the New Union Treaty was submitted to the Supreme Soviet. After deliberations, a decision concern in g the general concept of the New Union Treaty and its procedures was adopted in the Congress of People's Deputies in December. The decision stipulated the formation of a drafting committee to formulate the New Union Treaty and the work was to begin on January 1, 1991. But, the six Republics with the strongest desire for independence from the Union announced that they would not participate in drafting the Treaty. The drafting was basically completed on March 3, and the Union Council basically approved the Treaty Proposal on March 6. The Council submitted the draft to the Supreme Congress of each Republic. However, the controversy over the distribution of power between the Union and the Republics and jurisdictional questions were not settled and the proposal was not approved. 

Under these circumstances, President Gorbachev held a national referendum concerning the maintenance of the federal system on March 17. While 76 percent of the voters supported the system, the approval rate in big cities like Moscow and Leningrad was little more than 50 percent. 

Based on the results of this national referendum, President Gorbachev agreed to an early conclusion of the New Union Treaty in a joint statement with the nine Republics and pushed forward the task of reviewing the draft Treaty. Consequently, with the exception of the Ukraine, eight Republics approved the draft of the new Treaty with some conditions.


(4) Coup d'etat and Its Failure

Amid such complications, the conservatives, who strengthened the sense of crisis, resorted to a number of measures on August 19, the day before the scheduled date for the Russian Republic to sign the New Union Treaty. They kept President Gorbachev under house arrest and announced that Soviet Vice President Gennadi Yanaev had become the Acting President; they established a national committee on the state of emergency, consisting of eight members including Vice President Yanaev, Prime Minister Pavlov, KGB Chairman Vladimir Krychkov, Defense Minister Yazov, Deputy Chairman Bakhilanov of the National Defense Council and Interior Minister Boris Pugo. Thus, a coup d'etat, in effect, took place.

Against this force, the anti-coup group centering on Russian Republic President Yeltsin congregated in the parliament building, called the "White House," of the Russian Republic, claiming the above measures illegal and resolutely resisted the coup. On August 21, the coup instigators resorted to force, resulting in several deaths. However, in this process, part of the military and KGB sided with the Republic. Coupled with splits in the military and KGB, which the coup instigators had expected to form the very core of the coup, the active resistance of the public against the use of force by the coup d'etat group led the coup leaders to dissolve the national committee on the state of emergency on August 21, only three days after the coup. All eight members of the Committee were ordered to be arrested and one committed suicide.

President Gorbachev, after returning to Moscow, met with Russian Republic President Yeltsin and eventually asked for the dissolution of the Central Committee of the Communist Party on the grounds that the Committee had not taken countermeasures against the coup. He also announced his resignation as the General Secretary of the Party.

The moves toward democratization and liberalization made after the failure of the coup d'etat were similar to the historical changes seen in Central and Eastern Europe since 1989. One similarity was the mass participation, such as the victory meeting in Moscow in which about 100,000 citizens participated and removed the statue of Dzerzhinskii, the father of the KGB. Another similarity is the crumbling power of the Communist Party. After the coup failure, the move toward independence in the three Baltic countries gained momentum and active discussion has taken place on the review of the draft Union Treaty and even on the functions of the "Union of the Sovereign States." On the other hand, the Soviet Union as a whole contains such destabilizing factors as the delicate relations between the Russian Republic, which has dramatically strengthened its influence since the coup failure, and other republics and the economic situation, in particular the food and energy situation in the coming winter. The Soviet reforms that started in 1985 when General Secretary Gorbachev made his debut are now at another historical turning point.


(5) Economy


(a) Economic Performance

The Soviet economy deteriorated rapidly in 1990. Even according to Soviet statistics, GNP dropped by 2 percent compared with the previous year and mining and manufacturing production declined by 1.2 percent, which was the first negative growth in the postwar years. This deteriorating trend accelerated in 1991. During the first half of 1991, GNP dropped by 10 percent compared with the first half of 1990. All of the other major indicators also declined considerably, such as a 6 percent drop in mining and manufacturing production.

Production of consumer goods, one of the greatest issues, increased by 4.4 percent in 1990 over the previous year. Because demand grew at a much higher pace, the shortages of goods continued to worsen. A rationing system became the norm in daily necessities. By Autumn of 1990, the situation was such that even cigarettes and bread were in short supply. By the first half of 1991, production of consumer goods declined by 3 percent, further intensifying the acute shortage of goods. On the other hand, the monetary income of people grew by 17 percent in 1990 and by 43 percent in the first half of 1991. Such a disequilibrium of goods and currency created enormous demand that could not be satisfied (Note) and intensified inflation. In addition, as the value of the ruble fell, people rushed to buy up goods, exchanging increasingly useless money to store up goods. This further accelerated the disappearance of goods. Furthermore, payments in kind became prevalent among corporations, which was another impediment to normal economic activities.


(b) Trends in Economic Reforms

When he launched perestroika, President Gorbachev had thought that the economy could be reformed within the framework of the centrally controlled economic system. However, since all of the attempts had failed, he decided during the latter half of 1989 to shift the orientation of the reform to create a market economy. Responding to this decision, the Union Government submitted to the Supreme Soviet a draft proposal with a schedule to shift to a "regulated market economy" by 1995. The proposal was not accepted and was returned for reconsideration.

On the other hand, with the support of Boris Yeltsin, Chairman of the Russian Supreme Soviet, the Russian Republic adopted in July 1990 a 500-day Plan (initially 400 days) which was a radical economic reform plan of its own. Considering such initiatives of the Russian Republic, President Gorbachev met with Chairman Yeltsin on August 2, 1990 to draw up a plan to transform the Soviet economy into a market economy. It was agreed that the Union and the Russian Republic would undertake a joint task, establishing a joint task force headed by President's Council Member Shatalin. The group worked on the basis of the 500-day plan and submitted a reform proposal (the Shatalin Plan) which incorporated most of the thinking of the 500-day Plan at the end of August 1990.

The Union Government, against such an initiative, reviewed under Prime Minister Ryzhkov the reform proposal which had been returned by the Supreme Soviet and drew up its own reform plan, the Government Plan. The Government Plan aimed to attain the transformation into a market economy gradually, over a span of about five years, and rejected the radical ideas represented by the Shatalin Plan. President Gorbachev commissioned Chairman Abel Aganbegyan of the Market Economy Transformation Evaluation Committee to formulate a compromise plan incorporating the two other plans (which became known as the first Presidential Plan) and submitted it along with the other two plans to the Supreme Soviet. 

Since the first Presidential Plan incorporated almost all of the Shatalin Plan, it met with a strong resistance from the Union Government and the conservative camp. It was not adopted. President Gorbachev thus formulated a basic direction on stabilizing the economy and transforming it into a market economy which was a compromise between the Shatalin Plan and the Government Plan (the second Presidential Plan). It was finally approved by the Supreme Soviet in October 1990.

Thereafter, President Gorbachev and the Union Government have taken various measures such as raising deposit interest rates, reforming both wholesale and retail prices and suspending the circulation of currencies with large denominations. But, no visible improvement is seen. For instance, a measure was taken on April 2 to raise retail prices by 60 percent on the average, which slightly rectified the distorted pricing system of the past. But it did not rectify the market disequilibrium. Since another measure was taken simultaneously to provide compensation for 85 percent of the loss of the citizens incurred by the price raising, it did not contribute much to a reduction of the fiscal deficit.

Meanwhile, it became necessary to stop the accelerated economic deterioration at an early point and to take emergency measures to overcome the economic crisis. For this reason, the Union Government began in April the formulation of a program to overcome the crisis. After several setbacks, a program proposal was submitted to the Supreme Soviet on June 17. The draft program defines stabilization of the economy within a year or two as the most important task. Toward that goal, while strengthening the transformation to the market economy, on the one hand, it also contains control measures to quickly stabilize the economy, on the other. Thirteen Republics participated in the formulation of this program, of which 10 Republics signed the program agreement on July 9, making the program effective on that day. However, in signing the agreement, the Republics of Russia and the Ukraine attached a condition on the right to levy taxes. And the three Baltic Republics, Georgia and Moldavia did not sign the program.


(c) The London Summit and Assistance to the Soviet Union

The rapid deterioration of the Soviet economy and stagnation in the forthcoming reforms further deepened the apprehension of the Western industrialized nations. The greatest focus of the July London Summit was on the Soviet economic reform and the question of support by the Western industrialized nations. President Gorbachev was invited to London and had a meeting with the Summit participant (G-7) leaders of the West after the Summit. Based on the previously mentioned program to overcome the crisis, President Gorbachev had expressed his intention to cope with the economic reform by sending a message to the seven leaders, immediately before the London meeting, incorporating a statement concerning support from the West.

Two essential points were confirmed in the Summit discussion concerning promotion of the Soviet reforms and assistance from the West. First is the necessity of self-help efforts by the Soviets themselves for carrying through the dramatic reforms. The other is the indispensability of considering the political context of implementing the "new-thinking" diplomacy throughout the world. In addition, the importance of technical assistance as a specific measure of assistance was again pointed out. In the meeting between the seven leaders participating in the London Summit and President Gorbachev, the leaders conveyed their perspective to the President and announced the six assistance measures to the Soviet Union which the G-7 as a whole can specifically extend to the Soviet Union. These were establishing special association between the Soviet Union and the World Bank and the IMF; intensifying technical assistance in energy, defense, conversion, food dsitribution, nuclear safety and transport; and others.


2. Foreign Affairs

The Soviet Union has taken the policy of developing the so-called "new thinking" diplomacy which is a flexible foreign policy not constrained by ideology, in order to create a favorable international environment to pursue domestic reforms. In the past year, the country played an important role in terminating the postwar division of Europe and the East-West confrontation by concluding the Treaty on German Unification, signing the Conventional Forces in Europe (CFE) Treaty, taking coordinated action with Western countries on the Iraqi invasion of Kuwait and establishing diplomatic relations with the Republic of Korea. However, amid the deteriorating domestic situation, such as the intensifying economic crisis and ethnic disputes, criticism against the "new thinking" diplomacy mounted among the conservatives. The resignation of Foreign Minister Shevardnadze who was the proponent of the "new thinking" diplomacy and the suppression of the Baltic countries by the use of force in January 1991 cast uncertainty about the direction of the "new thinking" diplomacy. Nonetheless, a cooperative diplomatic posture has again been seen as represented by the settlement of the question of the Soviet violation of the CFE Treaty.

On the other hand, the issue of supporting the intensifying economic crisis in the Soviet Union rapidly emerged during the London G-7 Summit in July.


(1) Relations with the United States and the West European Countries

The United States and the Soviet Union maintained cooperative relations during the latter half of 1990, such as the joint action on the Iraqi invasion of Kuwait and the signing of the CFE Treaty in November. In 1991, there was a concern of a stalemate in the relationship between the two countries due to the use of force by the Soviet military in Lithuania and Latvia in January, the question of the Soviet violation of the CFE Treaty, and the postponement of the U.S.-Soviet Summit meeting scheduled for February.

However, since the Foreign Ministerial meeting in Moscow in March, consultations between the two Foreign Ministers have become active concerning the issue of peace in the Middle East, as well as arms control and disarmament negotiations. In the Foreign Ministerial meeting held in Lisbon in June, the discord on CFE negotiations was removed, and it was agreed to accelerate the Strategic Arms Reduction Treaty (START) negotiations. 

The pending issues on START were finally settled in the U.S.-Soviet Foreign Ministerial meeting held in Washington in July and in the U.S.-Soviet Summit meeting at the London Summit. As a result, another summit meeting was held in Moscow at the end of July and the START Treaty was finally signed. 

Moreover, bilateral cooperative relations were maintained concerning the settlement of regional conflicts. Currently, holding the Middle East Peace Conference co-sponsored by the United States and the Soviet Union and suspending the weapon supplies by the United States and the Soviet Union to Afghanistan remain as pending issues.

In its diplomacy toward Western Europe, the greatest concern of the Soviet Union in the past years was how to cope with the German unification issue. In July 1990, when Chancellor Helmut Kohl of West Germany visited the Soviet Union, the two countries agreed on the conclusion of a comprehensive agreement between Germany and the Soviet Union after the German unification, announcing a joint statement which stated that unified Germany can choose freely and voluntarily the alliance it belongs to. In September, Foreign Minister Shevardnadze attended the Foreign Ministerial Conference of the two Germanies and four allied occupation powers (the so-called "two plus four" negotiations) held in Moscow and signed with other countries a treaty concerning the final settlement of the German question. In addition, two treaties were signed by Germany and the Soviet Union in October. One concerned the withdrawal of Soviet forces from German soil and the other was on transitional measures setting a schedule that withdrawal of Soviet forces from German soil was to be made in stages and completed by the end of 1994. It was also agreed that Germany will provide in grants and loans a total of 15 billion deutschemarks for the withdrawal cost from 1991 to 1994. President Gorbachev and Chancellor Kohl signed the German-Soviet Good Neighbor Partnership Cooperation Treaty in November when President Gorbachev visited Germany. In 1991, Germany has continued to show a positive stance on assistance to the Soviet Union.


(2) Relations with Central and Eastern Europe

The collapsing process of the socialist regimes in Central and Eastern Europe has become increasingly clear. The withdrawal of the Soviet forces stationed in the Central and Eastern European countries began. The Warsaw Treaty Organization, which had contested with NATO in the postwar years, as well as COMECON, were dissolved.

The Warsaw Treaty Organization decided during the summit meeting held in Budapest in February 1991 to dissolve the military organizations, such as the United Command and the United Staff, by the end of March. Moreover, the summit meeting of the Organization held in Prague in July 1991 passed a resolution on the invalidity of the Warsaw Pact. With this, the Warsaw Treaty Organization, which had played a crucial role in the East-West confrontation in postwar Europe since its birth in 1955, came to an end.

The Soviet forces that were stationed in Hungary and Czechoslovakia completed the withdrawal within the deadline (June 1991) set by the agreement signed in 1990. As for the Soviet forces in Poland, negotiations for withdrawal began with Poland in November 1990.

Furthermore, in the COMECON plenary meeting held in Budapest in June 1991, inter-governmental resolutions on the dissolution of the organization were signed.


(3) Relations with Asia 

China and the Soviet Union have developed bilateral relations which were normalized during the visit of President Gorbachev to China in May 1989, through Foreign Ministerial consultations on bilateral issues, as well as on the issue of the Iraqi invasion of Kuwait. In May 1991, General Secretary Jiang Zemin became the first high-ranking leader of the Chinese Communist Party to visit the Soviet Union in 34 years. During the visit, an agreement was reached concerning the China-Soviet eastern borders, excluding Heyshars Island. In addition, Deputy General Secretary Iwashiko visited China in February 1991, Deputy Prime Minister Masuryukov and Foreign Minister Bessmertnykh in March, and Defense Minister Yazov in May.

Moreover, in September 1990, negotiations on the mutual reduction of forces on the China-Soviet borders and on confidence building measures began.

The Republic of Korea and the Soviet Union established diplomatic relations at the Foreign Ministerial meeting held in New York in September 1990. President Roh Tae Woo visited the Soviet Union in December, and in April 1991, a meeting between President Gorbachev and President Roh took place on Cheju Island. North Korea became antagonistic because of these developments and relations between the Soviet Union and North Korea have cooled off.


(4) Relations with the Middle East

Concerning the Iraqi invasion of Kuwait, the Soviet Union, from the beginning of the invasion, endorsed all of the resolutions of the U.N. Security Council and criticized the Iraqi invasion. However, around January 15, the deadline for the withdrawal of Iraqi troops from Kuwait, the Soviets launched independent diplomacy. Special Envoy Evgeniy Primakov was sent to Iraq in an attempt to avert the use of force by the multinational forces and President Gorbachev met with Iraqi Foreign Minister Abdul Aziz. It is considered that this initiative took place against the background of the fear by the Soviet Union that it would lose its foothold in the Middle East as a result of military action under U.S. leadership or of the rising criticism from the conservatives gaining power inside the Soviet Union of the cooperative line with the United States. However, Moscow ultimately maintained its position firmly that the responsibility for the military sanctions against Iraq lies on the Iraqi side, and the cooperative steps with the West were taken considering long-term interests.

The Soviet Union meanwhile improved relations with Israel and the Gulf countries. It restored diplomatic relations with Saudi Arabia and established diplomatic relations with Bahrain. In March 1991, Turkish President Turgut Ozal visited the Soviet Union, signing the Good Neighbors Cooperation Treaty between the two countries. In May, Foreign Minister Bessmertnykh visited Syria, Jordan, Israel, Egypt and Saudi Arabia. He agreed during the Foreign Ministerial meeting with Israel, held in New York in September 1990, to exchange consulates. In April 1991 Prime Minister Pavlov of the Soviet Union and Prime Minister Yitzhak Shamir of Israel held the first Prime Ministerial meeting since the breakdown of diplomatic relations in 1967. 


3. Relation with Japan


(1) Overview

President Gorbachev's visit to Japan in April 1991 was the first visit by the head of state to Japan throughout Russian and Soviet history. Japan had prepared seriously for the visit, trying to make it an occasion for a dramatic improvement in and normalization of Japan-Soviet relations. For instance, Regular Foreign Ministerial Consultations were held seven times since the first visit by Foreign Minister Shevardnadze in January 1986. And the Peace Treaty Working Group met seven times after the second visit by the Foreign Minister to Japan in February 1988. Moreover, in May 1989, Japan proposed an expanding equilibrium of Japan-Soviet relations as a whole, placing top priority on the problem of the conclusion of the Peace Treaty including the settlement of the Territorial Issue. Furthermore, in order to transfer know-how that can be useful for Soviet economic reforms, many Soviet missions for economic survey were received and Japanese experts were also sent to the Soviet Union to render technical assistance for perestroika. Also, humanitarian support was decided to be provided, such as \2.6 billion in medical equipment to the areas affected by the accident of the Chernobyl nuclear power station, \1 billion in food and medical items and $100 million in loans for food.

Against the background of such serious efforts to improve Japan-Soviet relations, President Gorbachev visited Japan. Aiming to accomplish normalization and dramatic improvement of Japan-Soviet relations at the earliest date, very frank and thorough discussions were conducted concerning fundamental issues of the relations between the two countries, including the Northern Territorial Issue. While no solution was found on the Northern Territorial Issue, it was articulated in the joint Japan-Soviet statement that the Northern Territories are the subject of a territorial problem to be solved in the Peace Treaty. It was also agreed that accelerating preparatory works for concluding the Peace Treaty, including the solution of the Territorial Issue, is of primary importance. Moreover, on the future development of Japan-Soviet relations as a whole, the concept of an expanding equilibrium, which Japan had proposed in the past, was sufficiently reflected in the joint statement. The concept is to pursue progress in relations in other fields, while addressing the conclusion of the Territorial Issue as the top priority. Based on this concept, 15 documents were drawn up, including the agreement concerning those persons detained in Soviet camps for prisoners of war, the agreement concerning cooperation related to technical assistance for the reform efforts to transform the Soviet economy into a market-oriented one and the memorandum concerning cooperation to alleviate the effects on the health of the local population by the accident of the Chernobyl nuclear power station.

While the President's visit to Japan did not bring about a breakthrough for the normalization and dramatic improvement of the bilateral relations, it provided an extremely important occasion to pursue a dramatic improvement in the Japan-Soviet relationship.

Moreover, along with these efforts to improve bilateral relations, Japan endeavored to initiate dialogues with the Soviet Union on broad international problems and to expand areas of cooperation internationally. In particular, on the occasion of the visit of Foreign Minister Shevardnadze in September 1990, the joint statement on the Gulf situation was issued, concerning the situation which represented a crisis for the international community as a whole. Furthermore, hours were spent on profound exchange of views between the Foreign Ministers of the two countries in order to deepen mutual understanding concerning problems of peace and prosperity of the Asia-Pacific region. The Japanese Government proposed policy planning talks between the Foreign Ministries of the two countries to further continue and strengthen such dialogues. In December 1990, the first policy planning talks were held. During President Gorbachev's visit to Japan in April 1991, a memorandum was drafted concerning governmental consultations and it was agreed to begin a consultation on Asia between the Foreign Ministries of the two countries.

Amid these efforts by Japan and the Soviet Union intended to dramatically improve relations between the two countries, the coup d'etat of August 19 took place. Japan expressed strong regret over the series of measures taken to acquire governance such as the dismissal of President Gorbachev, the declaration of the state of emergency and the use of force as incompatible with a process based on democratic principles. The Japanese Government announced the suspension of assistance to the Soviet Union. In particular, when suppression began with the use of force on the evening of the 20th to the morning of the 21st, the Chief Cabinet Secretary Misoji Sakamoto issued a statement criticizing the action and demanding its immediate suspension. The Government also consulted closely with the other leaders of the G-7 Summit countries. In addition, Prime Minister Toshiki Kaifu talked on the telephone with President Yeltsin of the Russian Republic during the coup and with President Gorbachev afterward. After the political change, Deputy Vice Minister of Foreign Affairs Kunihiko Saito visited the Soviet Union to consult with the leadership of the Soviet Government and the Russian Republic on the new situation and on the future development of Japan-Soviet relations.


(2) Peace Treaty Negotiations

The negotiations to conclude the Japan-Soviet Peace Treaty by settling the Northern Territorial Issue were conducted through the Foreign Ministerial negotiations on the Peace Treaty as well as through the Peace Treaty Working Group at the Vice Ministerial level. On the occasion of President Gorbachev's visit to Japan, Prime Minister Kaifu and President Gorbachev held six sessions of meetings.

In the fifth (August 1990) and sixth (November 1990) Working Group meetings on the Peace Treaty, historical and legal arguments were submitted by both sides on the jurisdiction of the four Northern Territories as well as on the concept of the Peace Treaty. As for the concept of the Peace Treaty, some common ground was found on basic understandings. On the Territorial Issue, however, while the Soviet Union stated that adjustments were necessary from a geographical viewpoint between both countries, the gap between the respective positions on the jurisdiction of the islands remained wide apart.

Foreign Minister Taro Nakayama, who visited the Soviet Union in January 1991, strongly demanded a political decision on the part of Soviet Union during his meeting with Foreign Minister Bessmertnykh, stating that Japan had no intention of postponing the settlement of this problem, that both Japan and the Soviet Union must now show courage to make a political decision to construct Japan-Soviet relations that would answer the interests of the peoples of both countries and that can contribute greatly to the peace and stability of the world. Foreign Minister Bessmertnykh, however, did not refer to any specific points, simply quoting a statement by President Gorbachev that it was necessary to solve all of the problems in the bilateral relationship through mutual compromise and to pursue the Peace Treaty. In his meeting with President Gorbachev, Foreign Minister Nakayama stated his expectations of a Presidential decision, but the President only stated, "The Japan-Soviet relations are extremely complicated, no matter which angle it is seen from, and it is necessary to think about it realistically. It is not an issue to which an immediate solution can be found."

In the seventh Working Group meeting held in Moscow in February 1991, as a continuation of the previous Working Group meeting, views were exchanged concerning the substance of the Peace Treaty and the items to be addressed, while further discussions on the legal and historical aspects of the Territorial Issue were continued. Whereas the Government of Japan repeatedly stressed its basic stance that the settlement of the Territorial Issue was the most important item to be addressed in the Peace Treaty, the Soviet Government only reiterated its position that some geographical dimension could be written into the Treaty. Thus, no substantive progress was made on the Territorial Issue.

In March 1991 Foreign Minister Bessmertnykh visited Japan and conducted further talks with Foreign Minister Nakayama. The Japanese Foreign Minister once again demanded a political decision from the Soviet Union for the settlement of the Territorial Issue, stating "The first visit to Japan in history by the Soviet President should become an occasion to accelerate negotiations for the Peace Treaty and to bring about a prospect for the conclusion of the negotiations. At this stage, what we need is a political decision to conclude our work for the Peace Treaty." But Foreign Minister Bessmertnykh merely stated that both sides should make it a precondition to search for a mutually acceptable solution.

During the April 1991 visit of President Gorbachev to Japan, the leaders of the two countries met six times over 12 hours, far exceeding the three meetings initially scheduled, to conduct very candid and thorough discussions on the problem of the conclusion of the Peace Treaty, including the resolution of the Territorial Issue. The Japanese Government had done its best in these negotiations, standing persistently on the position that radically improved Japan-Soviet relations achieved through the realization of the return of the four islands and the conclusion of the Peace Treaty is extremely important for the peoples of both countries. In the meetings, Prime Minister Kaifu described in detail the historical background of the Territorial Issue. He stated that Habomai and Shikotan had already been promised to be returned to Japan in the 1956 Japan-Soviet Joint Declaration and that the real core of the Territorial Issue were Kunashiri and Etorofu. He thus confronted President Gorbachev with a demand to confirm Japanese sovereignty over these islands. President Gorbachev, however, only elaborated his own historical argument and the meetings did not bring about a breakthrough in the settlement of the Territorial Issue.

Nevertheless, it was clearly confirmed in the joint statement for the first time in a Japan-Soviet document that the four Northern Islands of Habomai, Shikotan, Kunashiri and Etorofu were the subject of a territorial dispute to be settled in the Peace Treaty. In addition, it was stressed that accelerating the completion of the preparations for the Peace Treaty is of primary importance.

Furthermore, the Soviet side proposed an exchange scheme between Soviet citizens living on the four islands and the Japanese nationals, opening a way to allow the latter to visit the four islands without a visa, and the reduction of the Soviet armed forces stationed on the four islands. The Japanese side agreed to discuss these problems further in the future talks.

In June 1991 the 8th Peace Treaty Working Group met in Tokyo. Based on the results of the Japan-Soviet Summit, the Japanese side insisted that the attainment of a genuine normalization of Japan-Soviet relations and the qualitative transformation of the bilateral relations are essential and that for this purpose the conclusion of the Peace Treaty, the unsolved issue of the postwar era, was necessary. The Soviet delegation agreed that giving an impetus to the task to conclude the Peace Treaty is of utmost importance, as pointed out by item 4 of the joint statement. However, whereas the Japanese delegation continued to demand a political decision from the Soviet side on the settlement of the Territorial Issue, the Soviet delegation only indicated its preparedness to continue the discussion on the problem of demarcation of the territory. Consultations concerning the exchange scheme with the four islands, which had been stipulated in the joint statement in April, began officially at this Working Group meeting.

In September 1991 the Russian Republic, which was rapidly expanding its influence over Japanese policy within the Soviet Union, sent Acting Chairman Ruslan Khasblatov of the Russian Supreme Soviet to Japan to hold discussions with Prime Minister Kaifu and Foreign Minister Nakayama. In these meetings Mr. Khasblatov conveyed a letter from President Yeltsin of the Russian Republic to Prime Minister Kaifu. He also conveyed the following points: (1) the differentiation between the victorious and defeated countries in World War II should be abandoned, (2) the settlement of the Territorial Issue should be based on law and justice, and (3) the period of reaching such a settlement through five stages as proposed by President Yeltsin in January 1990 should be shortened. Such stance of not delaying the settlement of the Territorial Issue and seeking its early solution based on law and justice is highly appreciated in Japan.


(3) Economic Relations

Japan's exports to the Soviet Union stood at $2,563 million (a 16.8 percent decrease from the year before) since exports were affected by the delayed settlement of import payments by the Soviet Union. Because Japan's imports from the Soviet Union grew by 11.6 percent over the previous year to $3,351 million, the total trade value reached $5,914 million, a 2.8 percent decrease over the previous year. Thus, a high level of trade was maintained albeit slightly lower than the 1989 figure. According to Soviet statistics, Japan is its fourth largest trading partner among the industrialized countries, following Germany, Italy and Finland. For the first time since 1974, the Soviet Union recorded a trade surplus with Japan amounting to $790 million.

Itemwise, whereas Japan's major export products of steel and chemical products greatly declined, exports of electric appliances, construction and mining machines, automobiles and food increased. Imports from the Soviet Union substantially increased centering on nonferrous metals, fish and petroleum products, although imports of timber, which had traditionally been a major import item of Japan from the Soviet Union, and cotton, which had increased largely in 1989, were reduced.

As for the problem of the delayed settlement of import payments to Japan by the Soviet Union, which surfaced around the Autumn of 1989, the total delayed payments to 15 major Japanese trading companies as of the end of June 1991 reached approximately $483 million, becoming an impediment for expanding Japan-Soviet trade.

In the first half of 1991, whereas Japan's exports to the Soviet Union stagnated at $1,061.46 million (a 20.2 percent drop compared with the same period in 1990), imports from the Soviet Union were favorable at $1,682.23 million (a 16.9 percent increase). It appears difficult to expect progress in Japan-Soviet trade in 1991 under the present circumstance when there is no sign of a solution to the problem of delayed payments by the Soviet Union for imports from Japan, and the Soviet domestic economy is in chaos and import control measures are taken.

As for direct investment in the Soviet Union, since the Council of Ministers' decision was implemented in January 1987 concerning the establishment of joint ventures in the Soviet Union, 34 Japan-Soviet joint venture companies appear to have been registered as of the end of September 1990 in the Soviet Union centering on the fields of service, fishery and lumber.

As for assistance to the economic reforms in the Soviet Union, Japan has taken the position of supporting the right direction of perestroika, including democratization, liberalization and transformation to a market economy. Since accepting the first Soviet economic reform survey mission in November 1989, Japan has provided active technical assistance to Soviet efforts toward transforming its economy into a market-oriented one, including dispatch of Japanese experts and the acceptance of Soviet experts to study in Japan. During President Gorbachev's visit to Japan in April 1991, the agreement was signed concerning technical assistance by Japan for the Soviet reforms aimed at making the transformation to a market economy. The Government of Japan will continue to actively take such appropriate assistance measures for the Soviet reforms.

As for the legal framework of economic relations between the Soviet Union and Japan, several measures were taken during President Gorbachev's visit to Japan in April 1991. They include the signing of the agreement on Japan's technical assistance for the Soviet market reform efforts, the trade payment agreement covering 1991 to 1995, the exchange of notes concerning trade in consumer goods with the Soviet Far East and the issuance of the joint statement concerning the mutual holding of exhibitions and fairs. In addition, notes were exchanged concerning the opening of a new air route between Nagoya and Moscow as well as between Niigata and Irkutsk. Another note was exchanged concerning the substantial expansion of the right of passage through Soviet air space by Japanese airliners.

As for the food shortage that had become acute at the end of 1990 in the Soviet Union, Japan decided in December to extend humanitarian assistance consisting mainly of grants of food and medical items amounting to \1 billion through international institutions, a government cooperation program for humanitarian assistance made by the private sector and the loan of up to $100 million extended by the Export-Import Bank of Japan to purchase food.


(4) Fishery Relations

The so-called Japan-Soviet 200-nautical-mile negotiations, held to decide the amount of fishing allowed in the respective 200-nautical-mile fishing zones for 1991, began on December 10, 1990 in Tokyo and an agreement was reached on December 24. The fishing quota was decided at 182,000 tons for the non-compensatory portion (the same as in 1990) and 35,000 tons for the payable portion (applicable only to Japan and the same as in 1990).

As for the so-called Japan-Soviet negotiations on salmon and trout for 1991 concerning the fishing on the high seas by Japanese fishing boats of salmon and trout originating in the rivers of the Soviet Union, the Soviet Union continued to insist on a large reduction in fishing based on the 1988 statement of the complete suspension on the high seas by Japanese fishing boats. The agreement was made on the total fishing volume of 9,000 tons (11,000 tons in 1990) and the fishery cooperation expenditures of \2,835 million (\3,150 million in 1990).

During the visit of President Gorbachev to Japan, a joint statement was issued concerning the promotion of cooperation in the fishery industry and both sides agreed on stable progress in future cooperation.


(5) Cooperation in Science and Technology

The Japan-Soviet Scientific and Technological Cooperation Committee met in November 1990. It was decided to expand and rearrange the eight areas of cooperation agreed on in 1989, that the cooperation program for 1991 covered nine areas: agriculture and forestry, nuclear fusion, radiology medical care, undulatory gears, environmental preservation, earth science, life science, marine science and space. In April 1991, the Japan-Soviet Environmental Protection Agreement was signed in order to jointly cope with global and regional environmental problems. Also signed was the Japan-Soviet Nuclear Power Agreement centering on cooperation in the field of safety for nuclear power stations, under which cooperation on exchanging experts and information will progress hereafter. Moreover, a memorandum was signed between the two countries to cooperate on the alleviation of health effects of residents affected by the Chernobyl nuclear power station accident, especially on dosimetry, diagnosing hypothyroidism and leukemia, and data management.


(6) Cultural Exchange

In September 1990, based on the agreement reached during the January 1990 visit to the Soviet Union of Shintaro Abe, former Secretary General of the Liberal Democratic Party, a large-scale Japan Cultural Week was held in Moscow. In addition, a Japanese Language Survey Mission was sent to Moscow and Leningrad to survey Japanese-language education in the Soviet Union in December. Moreover, in January 1991, based on the recognition that relations between the Soviet Far East and Japan will become important in the future, a Japanese Language Survey Mission was sent to three cities in the Soviet Far East and a Japanese film festival, photo exhibition and lectures took place.

In the Second Japan-Soviet Cultural Exchange Committee held in March 1991, cultural exchange programs were drawn up for fiscal 1991 and 1992. The two sides exchanged views concerning cultural exchanges between the two countries and preparations for President Gorbachev's visit to Japan.

During the Presidential visit, an exchange of notes on making the cultural exchange program effective and a memorandum on exchange and cooperation in the field of preservation of cultural assets were signed and a joint statement was issued on the Contemporary Japan Research Center to be set up in Moscow.


(7) Humanitarian Field

As a result of negotiations with the Soviet Union, an agreement was reached on visiting cemeteries on Etorofu Island, to which the Soviet Union had objected until then. Thus, in August and September 1990, visits to cemeteries on all four Northern Islands, including Etorofu, were realized for the first time since the visits to cemeteries in the North were allowed in 1964.

At the time of President Gorbachev's visit to Japan, an agreement was concluded on those Japanese who had been held in Soviet camps as prisoners of war following World War II. This agreement provided a framework for settling the problems related to the Japanese held in Siberia. The problems included the submission of a list of names of the deceased, information on their burial cites, the return of bones and visits to cemeteries which the Japanese Government had consistently demanded of the Soviet Government. Through this agreement, those problems that had not seen much progress are expected to be solved steadily.

After concluding this agreement, the Soviet Union submitted 38,647 names of those who died during captivity.



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Note :The report compiled at the end of 1990 by four international institutions including the International Monetary Fund estimated demand at 250 billion rubles.