Testimony of Roald Sagdeev

University of Maryland

Before the Subcommittee on Space and Aeronautics

Hearing on H.R. 1883, Iran Nonproliferation Act of 1999

July 13, 1999


Testimony to the Sub-Committee on Space and Aeronautics

"H.R. 1883, Iran Non-Proliferation Act of 1999"

Dr. Roald Sagdeev, University of Maryland

I would like to commend the drafters of the legislation for raising a number of very important issues and I am pleased to be here today to offer my perspective on these vital questions. As a whole I support this bill, H.R. 1883 with reservations on Section Six, which I will explain after I put this problem in some context.

Before coming to the United States ten years ago I served as Director of the Space Research Institute and was responsible for the Soviet Union's planetary probes of Venus, Halley's Comet and the Martian atmosphere. During that time I also served as both a scientific expert and an advisor to President Mikhail Gorbachev and Eduard Shevardnadze during critical years that brought the end of the Cold War. I am proud that over the last two decades I have been involved in working on arms control and non-proliferation issues and recently I served as a member of the Carnegie Commission on Preventing Deadly Conflicts and the Canberra Commission on Nuclear Weapons. Both groups advocated strong measures for implementing the non-proliferation regime.

It is difficult for all of us sitting in this room to visualize the changes that have taken place in the former Soviet Union since the days just before the collapse of the country. In

the last ten years industrial production has dropped more than 50%, a figure that is twice the magnitude of America's great depression. Total cash receipts in 1997, available for all purposes, were the equivalent of $30 billion, not enough money even remotely to provide the services that might meet the needs of a society of 150 million people. No democratic tax reform could produce adequate receipts from an economy in which more than 70% of its transactions take place in barter. Under excruciating fiscal pressure, the Russian government has tried to sustain minimum consumption for their population by borrowing, but with recent defaults their ability to continue to do so is drastically curtailed. The Russian government now pays approximately 48% of its budget for servicing its debt-much of which is from the Soviet era. And, according to experts, one internal Russian source projects that not long after the turn of the century Russia could owe as much as $200 billion with debt servicing requirements claiming 73% of expected government revenues.

In contrast to the days when my institute organized the international encounter with Halley's comet, many of the enterprises that produced hardware for that historic achievement are now in dire straits. Enterprises that employed whole cities and produced world class science and engineering have all but shut their doors. Not surprisingly the Russian government has been deeply concerned about the collapse of this high technology sector, especially as we enter the new millennium when such industrial capability, it is acknowledged, will be crucial. Despite its concern for both the state of its high tech industry and its long term cooperation with the West in this field, the central government no longer has the tools at its disposal to be a completely effective a partner.

The Russian government has acknowledged its reduced ability to both invest in this high tech sector and even to control the activities of it. Nevertheless, recognizing concerns about the proliferation question, the Russian State Duma approved legislation on export controls and this March the Russian government increased the number of space companies to be supervised by the Russian Space Agency (RSA) from 40 enterprises to 350. It now remains to be seen if RSA and the Russian government can more effectively address this national and international problem. As their record unfolds, no one should excuse non-proliferation violators but, at the same time, relying innuendo will never suffice for hard evidence of wrong doing. Financial and personnel resources for policing Russia's new export policy are scarce and attempts to isolate Russia from international scientific cooperation will work against the goal of strengthening the non-proliferation regime. Despite the enormous obstacles facing the Russian space program, their contribution to the International Space Station has been acknowledged. The Russian aerospace industry has delivered the integrated experience of the Soviet and then Russian space programs in such a vital are as running long duration human flights and providing the technical means of supporting this program. Furthermore, cooperation with the international community, and specifically with the United States, has provided badly needed contracts that have enabled scientists who micht have otherwise worked on military contracts to concentrate on civilian research and developments outcome that is fully in the spirit of the Nunn-Lugar program.

While it is important that we emphasize non-proliferation in this and in other bills--and we maintain these efforts as a major international goal-- the United States must avoid such elements of legislation that will prove to be counterproductive in the way it chooses to address the problem.

Section Six is inconsistent with the Nunn-Lugar Approach to Sensitive Technology

I believe that measures suggested by Section Six-- to penalize the Russian space agency and the companies it supervises-- is in striking conflict with the Nunn-Lugar approach. The emphasis in this section is not on engagement, as a way to stem the potential for proliferation, but on penalization and disengagement. Emphasis on sanctions is suggested even when there is only the slightest hint of a violation, indeed even when the alleged violations have nothing to do with the Space Station.

Section Six singles out the International Space Station while major contracts -the bulk of those to Russian Space industry-- are exempt. This approach does not as much exact overall economic sanction as it victimizes the Space Station.

The bulk of the money given as contracts to Russian space industry has nothing to do with the International Space Station and according to the draft resolution is exempt from any penalty. Congress is singling out the International Space Station, which at best can be a source of only $100 million dollars a year to Russian contractors, as projected by

NASA experts. Outside of the Space Station project, American clients are providing

contracts for almost $500 million. Furthermore, a recent evaluation by the Director of the Russian Space Agency projects that the net contracts for space services in the year of 2000 will be $1.5 billion, most of the money coming from other leading space powers (in the form of commissioning of Russian launchers). Instead of penalizing potential violators of the non-proliferation regime by singling out the Space Station, we are going to penalize the United States as the leader of the project and damage the United States' credibility with its other international partners, in Europe, Japan, and Canada.

In addition, NASA, in its contingency plan, envisages providing Russia with additional contracts to procure the services of the Russian launch and delivery vehicles: Soyuz/Progress. According to Section Six, these contracts could be the first to be canceled. I believe it is inconsistent to single out this particular technology with penalizing measures while we continue to expand the usage of other launch vehicles. (Proton, Zenith, and other commercial launches constitute by far the bulk of the contractual money the Russian space industry this getting from the United States.)

In conclusion, it seems to me that we are faced with two choices. We can either engage the Russian space industry and keep it firmly locked in the western international system, or we can adopt punitive actions as the predominate instrument of policy. But if United States still intends to provide the leadership in the International Space Station program, a project initiated in Washington, we should not victimize this project and its participants-from Europe Japan and Canada-- who have already invested heavily in this endeavor.

Even more important, from a non-proliferation standpoint, keeping Russian space industry as active partners of the United States and the West is the only way we can secure transparency and openness over time. Given the catastrophic decline in Russia's industrial base, it is at the bottom with no place to go but up. Our concern should be that if the United States doesn't engage the Russians in that journey upward, someone else will.