*EFS352   02/03/93 *


(Reform "proceeding unevenly.")  (630)

By David Pitts

USIA Staff Writer

Washington --  Russia is in a "transitional period."  Prospects for

continued progress "are reasonable, but dangers abound," George Kolt, a

Russian specialist with the National Intelligence Council, part of the

Central Intelligence Agency (CIA), said February 3.

Testifying before the Senate Armed Services Committee, Kolt said the breakup

of Russia "is a possibility and a danger, but I don't think it's a

probability."  The "greatest fault line is along ethnic lines," he noted.

"There remains a possibility that it could revert to dictatorship or go

into chaos," he added.

Kolt said U.S. as well as foreign intelligence sources indicate reform in

Russia is "proceeding unevenly."  On the plus side, he said:

-- 47,000 private businesses employing 20 million people have been created

-- about one third of the work force.

1- Political differences have been largely resolved "through compromise."

-- A "new system of justice is being constructed."

-- "Gradual integration" with the West is taking place.

On the negative side, Kolt said:

-- There is "rising inflation and the real danger of hyperinflation."

-- The current constitution is an "unworkable hybrid" that is distorting the

political process.

-- A commercial code "has not been fully developed" and the concept of

private property is not fully understood.

-- "Rising crime" threatens social stability.

Kolt said there is disagreement in the intelligence community about a number

of these issues.  Some analysts say President Yeltsin's idea for a

political referendum "is risky."  If it fails, they say it could damage the

move toward reform.  Others think the gamble is worthwhile, Kolt remarked.

Analysts also disagree about the wisdom of shock therapy versus a slower,

more conservative reform process, Kolt noted.  In particular, they disagree

about what is the greater danger in the Russian economy -- hyperinflation

or unemployment, Kolt added.

Asked to predict developments in 1993, Kolt said he thought the decline in

Russia "would continue -- maybe bottoming out at the end of the year.  The

seeds of recovery are there.  But that could change if hyperinflation sets

in," he remarked.

Lawrence Gershwin, a specialist on the Russian military with the Council,

said that Russia, after the Strategic Arms Reductions Talks (START) treaty

reductions go into effect, will have "a smaller, but relatively modern

strategic force."  Its composition will shift away from MIRVED ICBM's

toward ballistic missiles aboard submarines, he added.  He said he expected

the Russians to deploy "a new submarine capable of carrying ballistic

missiles some time after the turn of the century."

"Moscow is now more interested in cooperation with the West on ballistic

missile defense, but remains opposed to space-based weapons," Gershwin

noted.  As far as the safety of the Russian arsenals is concerned, Gershwin

said, "It is sustaining stresses it was not designed to withstand."  In

addition, nearly 3,000 strategic warheads "still remain outside Russia.

Even if all goes well, it will take the rest of the decade to get them

back," he added.

David Armstrong, a specialist on conventional forces with the Council, said

Russia continues its withdrawal from Eastern Europe and its downsizing of

its military forces.  The currently authorized strength is 2.2 million; 1.5

million is projected by 1995.  This contrasts with four million in 1988, he


There was also some discussion at the hearing of the former Yugoslavia.

Kolt was asked whether Russia would use its veto power in the U.N. Security

Council to oppose military intervention there.  Kolt responded: "Russia has

voted for sanctions (against Serbia).  But there is increasing concern in

the Russian government about where events are heading."  There "may well be

a Russian veto," he remarked.