Section 4. The Former Soviet Union


1. Domestic Affairs


(1) August Coup d'etat and Dissolution of the Soviet Communist Party

The failure of the August 1991 coup d'etat in the then Soviet Union led to the dissolution of the Soviet Communist Party, the backbone of authority in Soviet society, and changed the fundamental power balance of various internal political forces in the Soviet Union.

This enormous transformation in the Soviet Union is attributed to Perestroika, and particularly Glasnost, started by reformists under the leadership led by the former General Secretary of the Party Mikhail Gorbachev. These policies produced striking results especially in external relations. At the same time, the changes opened a "Pandora's Box," at home, throwing light to various contradictions inherent in the authoritarian Communist Party rule. This only brought about chaos. The reform movements, whose objective was to achieve reconstruction and modernization of the Soviet Union, only helped expose the rigidity of Soviet society, which was unable to absorb any reform movement. They also showed that the Communist Party rule itself, under which any initiative was suppressed, was a major obstacle in revitalizing and modernizing the Soviet society. As a result, social energy had been accumulated against the old system, which was hampering social developments. The centripetal force that bad unified the world's largest nation inhabited by a large number of ethnic groups also significantly diminished. This intensified moves for secession by ethnic groups led by the Baltic coast and Trans-Caucasus region from the Soviet Union (Russia). Among others, General Secretary Gorbachev's failure of consistency and thoroughness in tackling reforms, exemplified by his repeated compromises to both right and left wings in the Party left the reforms unfinished, therefore leaving most strata of the Soviet society strongly dissatisfied.

Under such circumstances, the August coup attempt broke out. Consequently, the authority of the Gorbachev administration and the Soviet Communist Party was totally lost, while moves toward full-fledged democracy intensified. Estonia, Latvia and Lithuania took advantage of the mood to achieve official secession and independence from the Soviet Union in September 1991. Soviet republics other than these three Baltic states also deleted the word "Soviet" and "Socialist" from their names, and declared independence.

Under these circumstances, President Gorbachev concentrated his efforts on maintaining the "Union of Sovereign States" as a loose federal system of various republics with sovereignty.


(2) Establishment of the Common wealth of Independent States (CIS), Dissolution of the Soviet Union and the Birth of the Russian Federation

President Gorbachev's policy to maintain the federation system itself was basically in agreement with Russian President Boris Yeltsin's policy.

However, such policy of the Russian leadership was undermined by Ukraine, whose parliament demanded independence immediately after the August 1991 coup. Its moves toward independence intensified. At the national referendum in December 1991, an overwhelming majority supported the independence declaration, decisively determining the tide for secession and independence.

When Ukraine's independence became fait accompli, the Russian leadership, which had been insisting that "although a union system is needed, a union without the participation of Ukraine is meaning-less," was forced to change its policy. In December 1991, the leaders of the Russian Republic, Belorussian Republic and Ukraine confirmed the dissolution of the Soviet Union and signed the treaty to establish the CIS.

In December 1991 at the Alma Ata Summit meeting, besides the above three countries, the eight other Soviet republics, except for the three Baltic countries and Georgia, participated in the CIS as independent states, and the Soviet Union virtually disintegrated.

In December 1991, the Russian Republic, the union's major constituent, changed its name to the Russian Federation by the decision of the Supreme Soviet.


(3) Discord on Russia's Reform Path

President Yeltsin of Russia declared the end of Communism, and laid a path to be taken by the new Russia on the basis of respect for democracy, rule of law, basic freedom and human rights. He advocated transformation of Russia from a centrally-planned economic system to a market economy by taking radical economic reforms. He also set forth such slogans as "values common to all mankind," "respecting rules of the civilized world," and "law and justice" in the field of foreign policy.

After the failed August coup, President Yeltsin's position, authority and popularity became paramount and he enjoyed tremendous support from the Russian public. Against this background, President Yeltsin proposed drastic economic reforms at the 5th Congress of People's Deputies (Note) held from October to November and at the same time obtained extraordinary power, the so-called "emergency authority" which gave the President powers to execute specific measures for promoting economic reforms and make governmental personnel appointments. He organized a government consisting of radical reformers including Deputy Premier Yegor Gaidar. President Yeltsin, simultaneously serving as Prime Minister, firmly pursued price liberalization, as the nucleus of the reforms in the beginning of 1992.

However, Russia thereafter saw a political situation where the radical reformers were forced to lose ground as a result of continuing confusion and the failure of economic reforms. Little progress was shown in these reforms. Inflation, a sharp drop in production, a widening gap between the rich and the poor and a significant decline in living standards as well as a surge in crime, contributed to the gradual rise of public frustration toward the Yeltsin Administration Against these difficulties, optimism in the Yeltsin leadership which had prevailed in the initial days disappeared. Instead, pressure mainly from managers of state enterprises toward forcing a compromise with reality heightened daily. The parliament, which had given considerable power to the government officials especially over economic reforms, attempted to reinforce its voice and its control over the administration.

In this connection, although Russia advocated the division of the powers (administrative, legislative and judicial), the power balance between the government and the legislative body was unclear because of the inadequate constitutional system. This further complicated the situation. In particular, the government and the legislative body indulged in a power struggle over jurisdiction concerning the abovementioned reforms. The confusion was further complicated by personal struggles. With the falling public support for the Yeltsin administration, supporters for radical reforms in the Congress of People's Deputies and the Supreme Soviet declined. Against this background, the opposition and center forces have increasingly taken the initiative. As a result, confrontation between the parliament and the President is becoming more acute.

This is typically demonstrated by the behavior between the parliament and the President on the Cabinet Act, which is a law setting the extent of authority of the government. This act was drafted in April 1992 at the 6th Congress of People's Deputies. Since then, heated debates took place. In mid-November, the Supreme Soviet took the draft of this act submitted by the President and added a substantial revision that sharply diminished the power of the President. Then, at the 7th Congress of People's Deputies in December, a number of constitutional amendments was adopted in favor of the parliament, tilting the balance between the legislature and administration toward the parliament. In addition, the appointment by President Yeltsin of Acting Premier Gaidar, who had been virtually charged with the drastic reform by President Yeltsin, to prime minister was rejected. Instead, Deputy Premier Chernomyrdin, who was more acceptable to the Civic Union, a middle-of-the road group which was established in June by mainly managers of state-owned enterprises, was elected as Prime Minister. These incidents under-scored the decline of President Yeltsin's charismatic power, as well as his influence and leadership over the parliament.

As a result, the domestic situation in Russia is highly unstable .In the future, many difficulties confront the Yeltsin Administration.


(4) Escalating Ethnic Problems

More than 100 different ethnic groups live in Russia. How the ethnic problems develop will be an extremely important factor for the political stability of the federation. As a result of the dissolution of the one party rule by the Communist party, hostility and discrimination previously suppressed under the strong Communist control are gradually surfacing. In addition, the rapid deterioration in living standards during the process of economic reforms is accelerating the dissatisfaction among ethnic groups living in Russia, prompting their desire to separate from the country.

There are moves for secession and independence among the Chechnya minority ethnic group in the Russian Caucasus, and a territorial dispute between the Ingushia and Northern Ossetian people has developed into armed conflict. Russia has been sensitive to nationalist moves aiming at the expansion of sovereignty of its Tatarstan Republic. This region, with abundant resources and advanced industries, is situated geographically in the center of Russia. The Tartars also exert enormous cultural and political influence over the Turkish and Islamic ethnic peoples in Russia.


(5) Upsurge of Russian Nationalism

In addition to moves by non-Russian ethnic groups within Russia, an upsurge of nationalism in the countries of the former Soviet Union is also strongly heightening the ethnic awareness of the Russians.

Approximately 25 million Russian people live in the non-Russian countries of the former Soviet Union which gained independence recently. The majority of them have lost privileged positions and have no choice but to learn the language, culture and custom of the republics in which they reside.

Among others, the Russian residents in the three Baltic states are deeply dissatisfied with their treatment as "second-class citizens," facing various difficulties in obtaining citizenship and voting rights. The peoples of the three Baltic states have expressed their anger toward the Russian Government for not fulfilling its promise of an early withdrawal of the former Soviet military forces. The Russian forces are withdrawing from this region at a snail's pace. In addition, in the Moldova Republic, which has a history of having been artificially created based on Bessaravia, the domain of former Romania, there is continuous armed conflict between the central government of Moldova and the so-called Trans-Dnester Republic established by forces led by Russian residents. With this historical and cultural background, the Great Russian nationalism has come to the fore, led by the Russian nationalist groups, proclaiming such slogans as "protect the interests of the Russian people" and "protect the Russians, our compatriots."


2. Economy


(1) The Collapse of the Integrated Soviet Economic Space

Many of the constituent republics of the Soviet Union declared their sovereignty in 1990 and rapidly strengthened independence. They began to control their own economies which hitherto had been managed by the Soviet Union Government. From 1991, these moves further strengthened and brought rapid disintegration of the previously integrated Soviet economic space. This collapse became decisive with the failure of the August 1991 coup attempt by conservatives, as described before. Thereafter, the National Economic Management Committee chaired by the then Russian Prime Minister Shiraev was established to maintain the integrated Soviet economic space. Its efforts included concluding the Economic Community Treaty. However, the committee hardly functioned, as the Soviet Union dissolved and the CIS was established in December 1991.

In the meantime, the economic situation of the Soviet Union rapidly deteriorated with the pace of the collapse of the integrated economic space. In 1990, GNP registered the first postwar negative growth, falling 2 percent compared with the previous year. In 1991, it fell sharply by 17 percent. It is pointed out that the most significant factor of such sharp deterioration of the Soviet economy was the collapse of the integrated economic sphere, resulting from the collapse of the industrial linkages among the regions and various industrial sectors of the republics that bad been built under the centrally-planned economic system. Moreover, the fiscal and monetary systems that had functioned to keep the economic space together also lost control, sharply increasing the fiscal deficit. Unrestrained printing of the currency sharply reduced the purchasing power of the ruble, and accelerated inflation to the extreme. Economies of the newly independent republics were forced to start anew facing such a predicament.


(2) Proposals for Drastic Reform

The Russian economy accounted for a major portion of the Soviet economy, therefore, it deteriorated along with the Soviet economic situation. The priority task for President Yeltsin was to fortify the tide of democratization and transformation into a market economy in Russia which had rapidly accelerated after the failed coup d'etat. To this end, it was indispensable to rehabilitate this deteriorated economy. The economy was at such a critical point that the only remaining option was radical economic reform.

President Yeltsin thus proposed drastic economic reforms at the 5th Congress of People's Deputies held at the end of October 1991. The reforms had two main pillars. The first one consists of macro-economic stabilization measures, mainly tight fiscal and monetary policy and price liberalization. The other pillar concerns structural reforms such as privatization of enterprises and land reform. This reform plan rejected the idea of gradual reform and opted instead to introduce a market economy at a stroke. This was similar to the so-called "shock therapy" implemented in Poland in January 1990. This method is politically risky since it leads to considerable pain such as declining living standards, bankruptcies and unemployment. President Gorbachev did not dare cross the line to introduce this method.


(3) Reform Implementation and Developments

In implementing his reform proposals, President Yeltsin set up a reformist government called the "Gaidar team" by appointing Mr. Gaidar, an economist, as deputy premier in charge of the reforms in November 1991. Mr. Gaidar was acting Prime Minister from June to December 1992. President Yeltsin gave cabinet posts to a number of young economists under Mr. Gaidar. He implemented a series of drastic measures including price liberalization in January 1992 as part of the "shock therapy." As a result, prices were basically liberalized except for some products such as energy and staple food. This inevitably led to a sudden surge in prices. The consumer price index rose on average by about 3.5 times in January 1992 compared with December 1991. By March, it had gone up by six times, and by June 10 times.

On the other hand, although wages and pensions also increased, they did not keep pace with the rapid inflation. For example, the average wage in June 1992 was merely about four times that of December 1991. As a result, the standard of living of the people considerably declined, a fact proved by the decrease in real retail sales trading. In the first half of 1992, retail sales fell by 42 percent compared with the same period of 1991. Products began to appear in markets because of price increases, but the ordinary people were unable to afford these highly priced goods. In particular, socially vulnerable citizens, such as pensioners, have been most seriously affected. With the deteriorating living standards, public dissatisfaction also mounted. Strikes in coal mines demanding wage hikes and anti-government demonstrations broke out frequently. Nevertheless, they remained local and sporadic, and did not lead to large-scale social confusion such as the riot as initially feared. This can be attributed to the Russians' traditionally persevering character as well as their preparedness, to a certain extent, for declining living standards amid the economic confusion they had experienced in several previous years.

As a result of the tight fiscal and monetary policies simultaneously introduced along with the price liberalization, investment fell to half of the previous year's level and liabilities among the state-run enterprises in addition to their debts to banks soared to 780 billion rubles by the end of March 1992, and reached 3 trillion rubies by the end of July. As a result, many enterprises suffered from a lack of capital and were forced to suspend operations, or scale down their capacity, thereby increasing "hidden unemployment" in which leave of absence is forced on employees. Accompanied with the diminishing purchasing power, this accelerated falling production. Produced national income in the first half of 1992 dropped by 18 percent, and industrial production fell by 13.5 percent compared with the same period of the previous year.


(4) Confusions of Reforms

Against the backdrop of these economic circumstances, the government's economic policy was criticized by many deputies participating at the 6th Congress of People's Deputies in April 1992. In order to survive the congress and strengthen his own political base, President Yeltsin compromised with managers of state-owned enterprises, who were increasingly dissatisfied. He promised to appoint their representatives to the cabinet as well as directing additional investment to the industrial and agricultural sectors. Since May, the Russian Government adjusted and relaxed its tight fiscal and monetary policies, the major pillars of the reform. Particularly since July 1992, these policies were further relaxed, and massive loans were extended to address the debt problems of state-owned enterprises, and currency issuance and credits were dramatically expanded. Concerned about this situation, then acting Prime Minister Gaidar announced his intention of reversing the trend and again tightening fiscal and monetary policies from September. However, his efforts in this direction were countered by the Supreme Soviet, which is critical of the Government's reform policies. His efforts were also resisted by the Russian Central Bank, which is under the supervision of the Supreme Soviet in addition to the state-owned enterprise forces.

Moreover, the Civic Union, established mainly by the state-owned enterprise forces, began to oppose the Government policy on the reform course. In June 1992, the Government drafted a medium-term reform plan entitled "deepening economic reform program" that gave priority to macroeconomic policies aiming for economic liberalization and stabilization, while adding some microeconomic policies to the radical reform. Yet, this program was virtually shelved in October at the Supreme Soviet. Instead, it was decided that a short-term "Anti-crisis Program" would be formulated. During this period, the Civic Union increasingly criticized the Government's radical reform policies, and proposed its own reform policy placing priority on microeconomic, society-oriented, and governmentally controlled policy. The Government and the Civic Union opposed each other concerning the formulation of this "Anti-crisis Program." Although President Yeltsin ordered the Government to draft a compromise plan of both parties, a satisfactory agreement could not be reached. Without any reconciliation, the debate on the reform policies was left up to the Congress of People's Deputies.

The 7th Congress of People's Deputies of December 1992 adopted a resolution on the progress of the economic reform after debate on the course of the reform. This resolution harshly censured the government's reforms and demanded that it undertake policies placing priority on microeconomic, society-oriented policies and government regulations. In Congress, as mentioned earlier, Deputy Premier Chernomyrdin, who represented the state-owned enterprise forces, was appointed the new Prime Minister and a new cabinet was formed. However, in the new cabinet, most members of the Gaidar team remained in place. And President Yeltsin announced that the previous radical reform policy would continue. Confusion concerning the reform is likely to continue for the time being.


3. Foreign Affairs


(1) Overall Trend

After the failed August coup in 1991, the political base of President Gorbacbev in the Soviet Union weakened and instead the political influence of Russian President Yeltsin strengthened. In this process, the diplomacy of the Soviet Union receded, and diplomacy of the respective republics was vitalized.

Russia, restarted as the Russian Federation with the establishment of the Commonwealth of Independent States (CIS) in December 1991 and the dissolution of the Soviet Union, advocated a democratic state based on "law and justice," and based its diplomacy on cooperation with the industrialized countries which share common values of democracy and a market economy. The major task for Russia is to implement economic reforms toward a market economy and overcome its domestic crisis. Along this line, diplomatic efforts were directed toward obtaining economic cooperation and assistance from the industrialized countries. At the same time, Russia expressed its intention to terminate the economic and military assistance previously supplied to socialist countries. Because a cut in military spending is indispensable in attaining domestic political and economic reforms, Russia indicated a cooperative attitude to arms control and disarmament policies. The Supreme Soviet criticized such a foreign policy that places priority on strengthening ties with the industrialized democracies on the ground that it ignores national interests and only follows in the footsteps of Western countries. On the other hand, Russia exports weapons to such countries as China, India and Iran.

Against the background of such criticism, President Yeltsin emphasized a need for a foreign policy with a "Russian face," although he pointed out that there is no alternative to maintaining friendly relations with the industrialized countries. Thus, he strived to strengthen relations with the East Asian countries and the countries of the former Soviet Union.


(2) From the Failed August Coup Until the Dissolution of the Soviet Union

The failed coup in August 1991 and the dissolution of the Soviet Communist Party undermined the power of the conservatives. Against this background, in September 1991, President Gorbachev announced the intention to initiate negotiating the withdrawal of Soviet military forces from Cuba. He also announced to cease weapons supplies to Afghanistan by both the Soviet Union and the United States. In October 1991, he proposed total abolition of ground deployed strategic nuclear arms. With the weakening strength of the Union, the influence of Russian President Yeltsin increased also in foreign affairs. Indeed, President Yeltsin accelerated the program of national reconstruction toward democracy and a market economy. In spite of the Soviet Union's domestic political and economic predicament, he visited Germany in November, and Italy in December of the same year. Other republics also began to strengthen their relations with Europe and the United States. In October, President Nazarbayev of the Republic of Kazakhstan visited the United Kingdom, President Kravchuk of Ukraine visited France and President Akayev of the Republic of Kyrgyzstan visited the United States.


(3) Russian Diplomacy after the Dissolution of the Soviet Union

Russian diplomacy after the dissolution of the Soviet Union endeavored to secure close relations with the major industrialized countries. At the same time, Russia made efforts to build favorable relations with its neighbors as well as with the unstable countries of the former Soviet Union due to, among others, the need to devote its efforts to domestic reform.


(a) Relations with Major Industrialized Countries

Cooperative relations with the industrialized countries are important for Russia to obtain assistance from these countries in promoting its political and economic reforms. Between the end of January and early February 1992, President Yeltsin visited major Western countries, including the United Kingdom, the United States, Canada and France. In the declaration at Camp David in February 1992, the U.S.-Russia relationship was described as "partnership alliance" based on common values of democracy and a market economy. With France, Russia signed a friendship cooperation treaty which called for improvement and expansion of relations between the two countries.

On arms control and disarmament, Russia made a comprehensive proposal including a large cut in strategic nuclear arms in January 1992, and proposed a U.S.-Russia cooperation on a global scale defense system at the Summit Meeting of the U.N. Security Council in the same month.

President Yeltsin again visited the United States and Canada in June 1992 and agreed with the United States on a large reduction of strategic weapons including abolition of the multi-warhead Inter-continental Ballistic Missiles (ICBM). He also signed a U.S.-Russia Charter to promote bilateral relations based on "partnership and friendship." President Yeltsin met with the leaders of the seven industrialized countries at the G-7 plus one meeting which was held after the Munich Summit in July, and was able to obtain enhanced aid to Russia from these seven major countries.

In November 1992, President Yeltsin visited the United Kingdom and signed the Treaty on the Principles of Relations between the United Kingdom and the Russian Federation, the Agreement on Economic Cooperation as well as the Memorandum of Understanding on a Program of U.K.-Russia Defense Contacts. Russia's attitude of cooperation with the industrialized countries was also demonstrated at the United Nations. It voted for the resolutions criticizing Iraq and imposing sanctions against the new Yugoslavia at the Security Council.


(b) Relations with Neighboring Countries

It has become an important task for Russia to stabilize its relations with the countries of the former Soviet Union in order to devote its efforts to domestic reforms. Through the establishment of the CIS, Russia attempted a gradual strengthening of military, economic and political cooperation including unified control of nuclear weapons and maintenance of the ruble bloc. In military affairs, each country created its own military forces, while Russia concluded a collective security treaty with five other countries of the CIS in May 1992. However, with increasing ethnic strife and growing nationalism in various countries, Russia is faced with the need to solve such problems as the protection of Russians residing outside Russia, and withdrawal or stationing of its military forces in such places as the Baltic states, Trans-Dnester and Tajikistan.

In addition, a new treaty to replace the existing "friendship, cooperation and mutual assistance treaty" was signed with the Central and Eastern European countries and Finland. Moves were also seen toward building cooperative relations with the coastal countries of the Black and Caspian Seas.


(c) Relations with East Asia

In connection with the development of its Siberian and Far East region, Russia is showing great interest in the countries of East Asia, particularly in developing economic links with Japan, China and the Republic of Korea. This is an inevitable consequence of Russia's foreign policy, as its priority shifted from conventional political and military aspects to the economic one.

In its relations with China, although there is disagreement of opinions on some international problems, efforts are being made to maintain stable relations with the neighboring country in its process toward promotion of domestic reforms. President Yeltsin visited China in December 1992 and announced a joint declaration. In addition, the two countries signed a series of agreements on economic, trade, science and technology and cultural matters and indicated that they will develop mutual relations regardless of the differences in their systems and ideologies.

Russia is also attempting to rapidly approach the Republic of Korea to develop close partnership. On the occasion of President Yeltsin's visit to the ROK in November 1992, the Russo-ROK Basic Relations Treaty was signed. On the same occasion, President Yeltsin spelled out Russia's Asia-Pacific policies in his speech to the ROK's Parliament.

In its relations with North Korea, a dialogue was held in January 1991 to review the language of the Soviet-North Korea Friendship and Mutual Assistance Cooperation Treaty which was concluded in 1961.


4. Situations in the Former Soviet Union (except Russia)


4-1. European Region


When Ukraine became independent, the former Communist Party ruling elites, those who advocate nationalism and those who advocate democracy, united to pursue independence from Russia. It has taken a different path from that of Russia, by leaving the ruble bloc and by introducing its own currency. The typical example was the issue of the Black Sea naval fleet. While the compromise was achieved in dividing the Black Sea naval fleet, Ukraine's relations with Russia, nevertheless, remains to be complicated.

The Republic of Moldova suffered major human and material losses from armed clashes on the left bank of the Dnester of Russian residents. Yet, the situation has calmed down after the arrival of peace-keeping forces.


4-2. Trans-Caucasus Region


In the Republic of Georgia, after armed clashes between the factions of President Zviad Gamsakhurdia and Prime Minister Sigua in December 1991 President Gamsakhurdia was ousted in January 1992 and the allied forces of the anti-Gamsakhurdia factions created a military council. Three months later, Mr. Eduard A. Shevardnadze returned to Georgia and became chairman of the National Council which took over from the military council. In the Southern Ossetia, an autonomous state in the north, some demanded integration with North Ossetia, which constitutes a part of Russia. Although the situation is beginning to cool down with the help of peace-keeping forces by Russia, Georgia and Ossetia, the conflict has not been completely settled, including the questions of the legal status of South Ossetia. Armed clashes also broke out between Georgia and the Abkhajia Republic in the northwest. Since a cease-fire agreement had been reached in September 1992, cease-fire agreements have been subsequently reached for a number of times. Yet, fighting persists. Under such circumstances, a parliamentary election and an election to choose its chairman were held in October 1992, and former National Council Chairman Shevardnadze was elected with more than 90 percent of the votes.

In the Republic of Armenia, there is no ethnic confrontation, and President Levon Ter-Petrosyan is secure. Yet, there is a serious shortage of energy because of the declining supply of oil and natural gas. This can be attributed primarily to a railway blockade by Azerbaijan stemming from the conflict between Armenia and Azerbaijan over Nagorno-Karabakh.

In the Republic of Azerbaijan, after the fall of the city of Shusha in Nagorno-Karabakh in March 1992, criticism grew over then President Mutalibov's stance of dialogue with Armenia. President Mutalibov resigned, after being criticized that he was harming national interests. In June, Abulfez Elchibey, described as a moderate belonging to the social-democrat line and supported by the people, was elected as President.


4-3. Central Asian Region

The five republics of Central Asia have yet to show real progress in democratization and economic reforms. Each of them faces deteriorating economies, minority ethnic groups including Russians, high population growth and increasing unemployment. Under these circumstances, the most reform-minded are the Republics of Kazakhstan and Kyrgyzstan.

In Kazakhstan, under the strong leadership of President Nursultan A. Nazarbayev, democratic policies and economic reforms are being promoted. In northern Kazakhstan, there are a large number of Russians in the industrial areas. Attention is being paid to the future treatment of Russian residents and Germans.

In Kyrgyzstan, under President Askar Akayev, a former physicist, was elected with the support of reformists. Under his leadership, Kyrgyzstan has enjoyed relatively stable political and social conditions.

In the Republic of Uzbekistan, President Islam A. Karimov has announced plans for reform modeled after China, indicating a cautious attitude toward political reform.

In the Republic of Tajikistan, the People's Front, the Democratic Party and the Islam Reconstruction Party came to power in May 1992. Since then, confrontation with former Communist Party conservatives intensified and led to repeated armed clashes. Although there were fears of civil war, fighting subsided temporarily as a result of a cease-fire agreement reached by the leaders of municipal governments and political parties in Harak in July. In spite of this agreement, armed groups based in the Kulyab province and Kurugan-Tyube province continued to fight. As a result, President Rakbman Nabiev announced his resignation in September and Chairman Akbarsbo Iskandarov of the Supreme National Council abruptly became acting President. In November 1992, an extraordinary meeting of the Supreme National Council was held. It approved the resignation of acting President Iskandarov and elected Mr. Rafmonov, former Steering Committee Chairman of Kulyab province, as the Chairman of the Supreme Soviet. It also approved a new cabinet in an attempt to bring domestic stability. The countries of the CIS, including Uzbekistan, which are deeply concerned about such a situation, have shown their willingness to intervene in the conflicts in Tajikistan, by, for instance, offering to act as intermediaries.


5. Relations with Japan


(1) Overview

Due to the disintegration of the Soviet Union in December 1991, the need emerged for Japan to build a new relations between Russia, Ukraine and 10 other newly independent states. Apart from Russia, which continued the identical statehood as the Soviet Union, Japan recognized 10 countries (excluding Georgia) as independent states in December. In April 1992, Japan recognized Georgia as a sovereign state. It established diplomatic ties with them one after another before September 1992.

The developments in Russia, such as the failed coup d'etat in August 1991, the dissolution of the Soviet Union and the establishment of the Commonwealth of Independent States (CIS), have major implications for the entire international community including Japan. The Government of Japan strongly supports the various reforms being made by President Boris Yeltsin, the first democratically elected Russian president, who broke with communism and abolished dictatorship in order to build a democratic society, shift to a market-oriented economy, and to realize diplomacy based on principles of "law and justice." Japan has been supporting these reform efforts by extending due assistance in coordination with the international community.

On the other hand, it is also true that 47 years after the war, Russia and Japan have not yet concluded a peace treaty because of the unsolved Northern Territories issue that Russia inherited from the Soviet Union and the relations between Russia and Japan remain in an unnatural condition. In order to normalize relations between the two countries, there is a need for an early conclusion of the peace treaty by settling the Northern Territories issue.

Japan will continue to promote diplomacy based on the "balanced expansion" policy to develop the entire relations between the two countries in a balanced manner, while seeking the complete normalization of Japan-Russia relations through the conclusion of a peace treaty by settling the Northern Territories issue as a priority task.


(2) Peace Treaty Negotiations

After the coup attempt in August 1991, Russia's Acting Supreme Soviet Chairman Ruslan Khasblatov visited Japan in September to indicate a new approach on the territorial issue calling for "law and justice," "overcoming the distinction between the victors and losers of the War," and "not to postpone the solution of the territorial issue." This came in the form of a letter from President Yeltsin. Since then, new developments have been seen on the territorial issue.

In October 1991, Foreign Minister Taro Nakayama visited Moscow and once again emphasized the need to conclude the peace treaty through an early solution to the Northern Territories issue based on "law and justice." A new framework for mutual visits between the northern territories and the Japanese mainland was established through an exchange of notes between the two foreign ministers. Subsequently, the cabinet adopted in October a new guideline for the entry of Japanese citizens to the four northern islands, building on the first guideline in September 1989.

In the meantime, chauvinistic forces opposing the reversion of the Northern Territories to Japan became increasingly active in Russia. Concern about the future also grew among the Russians living in the Northern Territories. It was under these circumstances when President Yeltsin wrote his letter in November addressed to the Russian people. In this letter, he pointed out the need to achieve a final postwar settlement with Japan, in which the solution of the territorial issue should be based on "law and justice." He also expressed his intention to pay heed to public opinion in Russia as well as the concern of the residents on these northern islands.

In December 1991, with the dissolution of the Soviet Union, and the formation of the CIS, it became clear that the peace treaty negotiations were to be continued with the Russian Federation which was the state retaining continuity with the Soviet Union.

In January 1992, the Organizational Meeting for Multilateral Negotiations was held in Moscow to deal with Middle East peace process. On this occasion, Foreign Minister Michio Watanabe met with Russian Foreign Minister Kozyrev and agreed to hold a peace treaty working group in February and a foreign ministerial meeting in March. However, the meeting between Foreign Minister Watanabe and President Yeltsin was canceled because of Russian domestic circumstances.

In January 1992, Prime Minister Miyazawa, who attended the Summit Meeting of the U.N. Security Council in New York met briefly with President Yeltsin and an agreement was reached that President Yeltsin would visit Japan in mid-September of the same year.

In February 1992, in the first Peace Treaty Working Group held in Moscow between Russia and Japan, officials began consultations on the conclusion of a peace treaty and solution of the territorial issue based on principles of "law and justice," with both parties building on the experiences of past working groups.

In March 1992, Foreign Minister Kozyrev paid an official visit to Japan to hold the first Japan-Russia Ministerial Consultation. An agreement was reached to hold regular foreign ministerial meetings at least once a year, to begin mutual visits between the northern territories and the Japanese mainland in April, and to issue a joint compendium on the history of the territorial issue between Japan and Russia.

In April 1992, mutual visits to and from the four northern islands began along the lines of the framework. During 1992, four visits were made from the northern islands and three visits to the islands. As a result, frank dialogue between the Russian residents in the northern territories and the Japanese citizens was realized for the first time in history. This has produced a positive outcome in alleviating concern of the Russian residents in She four islands and promoting their understanding of Japan's standpoint. Also, for the first time, two special visits to the four islands for Japanese press were arranged.

In May 1992, Foreign Minister Watanabe visited Moscow and held two sessions of talks with Foreign Minister Kozyrev. Thus, both sides continued consultations to prepare for the summit meeting between the two leaders in September. Foreign Minister Watanabe also met with President Yeltsin. President Yeltsin for the first time promised complete withdrawal of Russian military forces stationed in the four northern islands in the near future. The specific date of President Yeltsin's visit to Japan was set for September 14 and 15. In addition, Foreign Minister Watanabe met with Vice President A. V. Rutsukoi.

The second Peace Treaty Working Group was held in July 1992 in Tokyo. The discussions covered such topics as the Political Declaration of the Munich Summit, withdrawal of Russian military forces from the islands, and the review of the progress of mutual visits to and from the four northern islands. Also, logistical work on the details of the September summit meeting and drafting of relevant documents were continued.

In the meantime, a clash of positions over the Northern Territories issue intensified in Russia, and a public hearing in the Supreme Soviet was held at the end of July 1992. During this hearing, opposition to the reversion was voiced from various camps, while the Russian Foreign Ministry tried to refute these arguments, referring to the principle of "law and justice," and the common recognition with Japan accrued over recent years.

Apart from these diplomatic contacts, Deputy Prime Minister M. N. Poltoranin and Chief Cabinet Secretary Yu. V. Petrov successively visited Japan in August 1992, and in their meetings with Prime Minister Miyazawa and Foreign Minister Watanabe, the territorial issue was discussed.

In early September 1992, Foreign Minister Watanabe visited Moscow and held three sessions of talks with Foreign Minister Kozyrev as final preparations for President Yeltsin's visit in the middle of the month. Foreign Minister Watanabe asked for political decision at the time of President Yeltsin's visit as he explained Japan's basic thinking over the notion of "balanced expansion" of mutual relations. He also confirmed that if the reversion of the four northern islands is agreed upon, Japan can respond flexibly in terms of the modality and timing of the actual reversion. On his part, Foreign Minister Kozyrev repeated the principles of "law and justice, overcoming the distinction between the victors and losers of the war." Yet, he put more emphasis on economic and other cooperation. Foreign Minister Watanabe also met with Secretary of State G. E. Burbulis, who was also the chairman of the preparatory committee for President Yeltsin's Japan visit, as well as President Yeltsin himself. President Yeltsin suggested that he had prepared 12 different plans but said that he would explain these only in Tokyo, during his meeting with Prime Minister Miyazawa. He also referred to the delay in disbursement of Japan's aid to Russia and Japanese "pressure" on the territorial issue.

On the night of September 9, only four days prior to the visit, President Yeltsin telephoned Prime Minister Miyazawa and said that following the decision of the Supreme Soviet, the Government, and its Security Council, he would postpone his visit to Japan. In this telephone conversation, President Yeltsin explained that this decision to postpone the visit was exclusively due to the Russian domestic situation and he had no complaints against Japan.

On September 23, 1992, Foreign Minister Watanabe met with Foreign Minister Kozyrev in New York while he attended the 47th Session of the U.N. General Assembly. This meeting served to give a fresh start to the relations between the two countries after the postponement of President Yeltsin's visit. An early convening of a vice ministerial meeting and other points were agreed upon. The publication of the joint compendium of documents on the history of the territorial issue between Japan and Russia was also announced.


(3) Assistance to the Former Soviet Union

During the failed coup d'etat of August 1991, reformers led by President Yeltsin triumphed over the conservatives. This gave momentum to reforms toward a market economy and democracy. In foreign affairs, diplomacy based on "law and justice" was advocated. Responding to these policies, countries throughout the world recognized that supporting such reform efforts is an important international responsibility, and offered aid in accordance with their respective situations. In response, Japan decided to provide aid totaling $2.5 billion in October 1991.

In his address at Princeton University in December 1991, U.S. Secretary of State James Baker expressed strong U.S. support for assisting the former Soviet Union. The United States hosted the Conference on Assistance to the New Independent States (NIS) in January 1992. In this conference, five working groups on technical assistance, medical supplies, food, energy and shelter were launched to coordinate assistance. In May, the second conference was held in Lisbon hosted by the European Commission. This was followed in October 1992 by the third conference in Tokyo, hosted by Japan. It was chaired by Foreign Minister Watanabe. Altogether, 70 countries, including the countries of the former Soviet Union, and 19 international organizations joined the Tokyo Conference, which summarized the progress since the Washington Conference, and agreed that aid coordination would be made for each individual country through a consultative group chaired by the World Bank.

At Munich in July 1992, the Meeting of the Heads of Delegation with President Yeltsin was held in the form of G-7 plus one meeting after the Summit. Assistance to the former Soviet Union was one of the main topics. Before the Summit, an aid package totaling $24 billion was announced in April to help improve their international balance of payments and stabilize their currencies. At the Summit Meeting, a three-stage approach was indicated for implementing this assistance. In August, the International Monetary Fund (IMF) extended a loan, and the first stage was realized. Nevertheless, an agreement was not achieved on the reform program with the TMF, and the second and third stages are yet to be implemented.

With a view to assisting the reforms of the countries of the former Soviet Union including Russia, Japan has been formulating aid policies which can be summarized as follows:

First is technical assistance. To help promote a smooth transformation of the countries of the former Soviet Union into market economies, Japan is actively accepting trainees from and sending experts to these countries. (In FY 1991, Japan accepted 130 trainees. Building upon this experience, Japan continued to accept trainees in FY 1992). In July 1992, to secure the safety of nuclear power plants, Japan decided to provide more than $25 million aid, including the invitation for 1,000 trainees over a 10-year period.

Second is emergency humanitarian aid. The countries of the former Soviet Union are faced with severe shortages of medical supplies and food in their transition to market economies. Japan is actively providing emergency aid for humanitarian purposes. It decided to provide \1 billion in December 1990, and food and medical goods of \6.5 billion in January 1992, all as grant aid. This aid was delivered smoothly through the cooperation of the Japan Red Cross. In October 1992, at the Tokyo Conference on Assistance to the NIS, Foreign Minister Watanabe announced emergency humanitarian aid of $100 million.

As regards non-grant assistance, in September 1992, the governments of Russia and Japan exchanged notes for a $100 million Export-Import Bank of Japan (Ex-Im Bank) loan for food and medical supplies announced in December 1990. The abovementioned $2.5 billion aid package decided in October 1991 included a $500 million Ex-Im Bank loan for food and medical supplies and their transport.

Third is assistance to smooth trade and economic activities. In light of the sharp decline in trade between Japan and Russia, because of Russia's domestic economic confusion, Japan announced its readiness to provide an Ex-Im Bank credit of $200 million and trade insurance underwriting of $1.8 billion within the framework of the $2.5 billion aid mentioned above. Within this $1.8 billion, in addition to the investment insurance already made mainly in the Far East region, Japan decided to provide trade insurance for $700 million to the natural gas project in September 1992.

Besides the bilateral assistance, Japan has promoted appropriate assistance in coordination with the international community. Japan decided to contribute $20 million to the International Science and Technology Center established to prevent the outflow of scientists and technical experts of the former Soviet Union related to weapons of mass destruction. 

(4) Economic Relations

Japan's exports to the Soviet Union in 1991 decreased by 17.5 percent from the previous year to $2,114 million, continuing their sharp decline. This can be mainly attributed to the delayed settlement of import payments to Japanese corporations by the then Soviet Union, and its economic confusion in transition to a market economy such as a decrease in oil production, the major source of foreign currency earnings, and the deterioration of external debts. Japan's imports from the then Soviet Union decreased 1.0 percent from the previous year to $3,317 million. The total trade value reached $5,431 million, an 8.1 percent decrease over the previous year, the second successive decrease. As a result, the trade balance continued to register a deficit for Japan of $1.2 billion. According to statistics of the Organization for Economic Cooperation and Development (OECD), Japan was the third largest trading partner of the then Soviet Union among the industrialized democracies in 1991, after Germany and Italy.

Russia-bound exports in January to November of 1992 totaled about $1.05 billion, and imports about $2.04 billion, with total trade worth approximately $3.1 billion.

The problem of delayed payment for imports by the Soviet Union to Japanese corporations, which first surfaced after autumn 1989, continues to be the most significant obstacle to trade between the countries of the former Soviet Union and Japan. As of the end of August 1992, total delayed settlement to 15 Japanese major trading houses and companies, including those credits held by Japanese companies in Europe, had reached approximately $1.5 billion.

As for direct investment in the former Soviet Union, about 60 joint ventures between Russia and Japan were registered in Russia as of April 1992, according to Russian sources. 

(5) Fishery Relations

The so-called Japan-Russia 200-nautical mile negotiations to deter-mine the amount of fishing allowed in the respective 200-nauticalmile fishing zones for 1992 were held in Moscow from December 1991, and those for 1993 took place in Tokyo from December 1992.

Japan-Russia negotiations on anadromous fish to discuss cooperation on preservation and control of these fish that migrate into the waters around Japan were held in Tokyo from March 1992.

In February 1992, the Convention for the Conservation of Anadromous Stocks in the North Pacific Ocean was signed by Japan, the United States, Canada and Russia. It came into effect in February 1993. The Convention banned fishing of anadromous fish in the high seas outside the 200-nautical mile zones, and a long history of Japan's fishing of anadromous fish in the high seas of the North Pacific Ocean ended. 

(6) Cooperation in Science and Technology

With the confusion in the process of the dissolution of the Soviet Union, the meeting of the Japan-Soviet Science and Technology Cooperation Committee scheduled for the fall of 1991 was not held.

To cooperate in alleviating the effects of the Chernobyl nuclear power station accident, Japan invited in October 1991 10 Soviet experts including those from Ukraine and Belorussia to an experts meeting in Tokyo on the basis of the memorandum with the then Soviet Union in April 1991. In October 1992, Japan sent eight experts on radiotherapy to the three affected countries, including Russia, Ukraine and Belorussia, to study the situation and do research on ways Japan might help.


(7) Cultural Exchange

Promoting mutual understanding between the peoples of Japan and Russia through increased cultural exchanges is extremely important in developing relations between the two countries. From this point of view, Japan is giving priority to cultural exchanges with Russia, particularly its Far East region which is geographically close to Japan.

In April 1992, the Japan-Russian Far East Council for Exchange was founded in Tokyo with a view to activating exchanges between Japan and Russia. Its members include the Japanese Government, local autonomies and private entities. In July, a similar organization based in the three regional governments in the Far East was founded on the Russian side. A joint Japan-Russia consultation was held in October, where there were exchanges of opinions on the concrete measures to coordinate the activities of both sides. Thus, the momentum for expanding exchanges has further developed.

In FY 1992, in addition to the regular annual Japan cultural week held in Moscow, a large-scale Japan week was successfully held in Yuzhuno-Sakhalinsk and Vladivostok.

In response to the rapidly growing enthusiasm for learning the Japanese language, Japan is sending teachers, contributing educational supplies and books, as well as assisting Japan research centers. Japan also conducts other cultural events with an emphasis on broad-casting Japanese television programs (Japan Broadcasting Corporation-NHK programs and cartoons "Doraemon"), and movies. 

(8) Humanitarian Aspects

As a result of consultations with the Government of the Soviet Union (Russia) on visits to cemeteries on the four northern islands, all the Japanese requests were met; visiting cemeteries on the four northern islands including Etorofu island was realized for the third consecutive year from August to September 1992, following 1990 and August 1991.

Based on the agreement reached at the time of President Gorbachev's visit to Japan in April 1991 on those who were held in the prisoners of war camps, the Government of Japan (the Ministry of Health and Welfare) began to work on collecting remains of those who died in captivity in the former Soviet Union. In October 1991 and during July and August 1992 in Chita oblast, from July to August 1992 in Magadan oblast, from August to September 1992 in Irkutsk oblast, in Khabarovsk krai in September 1992, and in Primorsk krai in October 1992, remains of 905 bodies were recovered.


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