Prologue by Dr. Vlad E. Genin

"No people had suffered and sacrificed like the Russians. No state, no nation had ever gone through trials on such a scale and retained its coherent structure. The vast machine creaked and groaned. But it still worked. One more effort and victory would come..."

Winston S. Churchill, The World Crisis (1916-1918)

This book addresses a vital issue for the entire civilized world: the importance of successful conversion of Russian defense enterprises. Had this book had been written when the 1980s were becoming the 1990s, and everything seemed so promising in Russia, there would have been little to say about the many tragic failures in Russian reforms, and the subsequent chaotic socioeconomic conditions. But in fact, this book is being published, at the start of a new century, at a time when the future of Russia is still highly unpredictable. The Russian strategic arsenal includes 1,397 launchers with 6,546 warheads. Among them there are 756 intercontinental ballistic missiles with 3,590 warheads. But missiles are only delivery vehicles. They are able to deliver different warheads, including nuclear, chemical and biological ones, which are capable of destroying whole countries.

During the past few years, conditions have been so unstable that no one can tell whether there will be a recovery or ongoing social and economic catastrophes, a return to military confrontations, or the limitation of individual rights and freedoms. This book is intended to give the reader insight into why defense conversion is so important, not only to the future of Russia, but to the rest of the world as well.

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The concept of peace on our long-suffering planet is based upon several major issues, one of the most important of which is disarmament. In the recent past, the Soviet Union's military aspirations shocked the world. In the mid 1980s, the country made a choice: to move toward a civilized society, a free market economy, and global peace.

Disarmament entails defense conversion. This process, for which the new Russia, the West, Eastern Europe, and others had high hopes, was supposed to convert Russia's huge, militarized economy into a civilian economy.

As planned, conversion of the Russian defense industry - Military Industrial Complex (MIC) could have been one of the greatest victories of the Russian people. It was meant to help reduce the threat of a new, devastating war; to ensure peace on Earth; and to help the Russian people to achieve western living standards.

However, Russian defense conversion, as a full-scale process, did not take place, which contributed to Russia's deepest social and economic crisis, and the threat of worldwide proliferation of the most dangerous nuclear, chemical, and biological weapons. The fate of this noble process was a tragedy, primarily for those previously involved in the defense sector. What happened instead was "headlong conversion", the results of which can be felt across Russia, from the Baltic Sea to the Pacific Ocean. Its devastating consequences can be seen when we look at empty, frozen, gradually deteriorating former defense plants, once the flagships of the Russian industry, and when we visit poverty-stricken cities where we see the misfortune of millions of former engineers and workers.

Ask any sensible honest Russian today whether it was worth it to work hard your entire life, sacrificing everything for the sake of communist dogma, and remaining poor, bringing your children and grandchildren into the world with no hope for a better future, all in the name of "proletarian hegemony"[3] over all countries and people? Tragically, "No," is the answer from any Russian, any citizen of the great country that gave birth to such outstanding people as the founder of the Russian Academy of Science Lomonosov and the chemist Mendeleev, the inventor of the radio Popov and the pianist Gilels, the mathematician Lobachevsky and the first rocket and Sputnik designer Korolev, the poet Pushkin and the artist Repin, the composer Tchaikovsky and the cellist Rastropovich, the helicopter designer Sikorsky and the outstanding nuclear scientist and great human rights activist, Nobel Laureate Sakharov.

Ask any ordinary Russian mother what she dreams about at the beginning of the new century and the new millennium. Unfortunately, first of all, she hopes not to curse herself for bringing her children into this world. She hopes not to turn gray over humiliating problems such as a house with no heat, a shortage of food and clothes, a lack of medicines and linens in hospitals. She dreams about just being a woman and a mother, to give all the warmth of her heart to her children. The warmth that lights our lives even today brings back memories about the dearest mom in the world. Ask mothers who became "stalkers" in the former secret "closed cities" of the defense industry. Or ask those who live in the horrifying "radioactive zone" and who have to relive the nuclear tragedies of the Urals, Siberia, and Chernobyl over and over again along with their children. Ask them what they need: nuclear missiles or "clean" food, guns or butter?

Since the dawn of time, it has been inherent in human nature to build. Hopes and expectations motivate people to build homes, create the family hearth, cultivate gardens, and produce food, clothes, computers, cars, and children's toys--everything that is most welcome in every house. Now people are mastering the new, boundless world of cyberspace--a planet called Internet with its new global markets and unlimited opportunities.

Nevertheless, humankind continues to fight. Some have fought to plunder and enslave other nations, like Napoleon and Hitler. Some have fought their own people, like Stalin, who was the architect of the ideals of the Gulag--the network of Northern concentration camps where millions of Russians were shot or worked like slaves and died from the cold and diseases. Others have fought to liberate their motherland from fascism, like the Soviet soldiers during WWII. Some have fought to export the dictatorship of a dying communist dogma, as deceived and maimed Russian youth did in Afghanistan. Others have fought to protect the ideals of common humanitarian values, humanity, and human rights. Even today NATO, Russia, and Ukraine use armed forces to protect a fragile peace in the Balkans, in the heart of what seemed to be "Europe Undivided"[4], as the only recourse to halt the legacy of dictatorship: new, metastasizing, inhuman national conflicts that challenge humankind. They took up arms against the shameful crime of genocide, which we promised in Nuremberg, after the end of WWII, would never happen again, but which unfortunately repeated itself in the last year of 20th century, even as everyone believed that the century had, at last, become civilized.

Every civilized country should have as many weapons as is necessary for its defense. Russia is no exception. The central issue is whether the purpose of the weapons is to protect everything that was built over the centuries-people's values, rights, and homes--or to destroy them.

Russia has one of richest military arsenals in the world. Today Russian intercontinental ballistic missiles are more powerful than before, while Americans lead the pack in home theaters and Internet electronic commerce systems. Unfortunately, history is repeating itself. Forty-one years ago American leaders discussed a similar problem with Russian leaders: "Isn't it better to talk about the relative merits of washing machines than the relative strengths of rockets? Vice President Richard Nixon asked during the "kitchen debate" in Moscow in 1959. Both Nixon and Khrushchev knew that Soviet rockets were more powerful, while the Americans had a clear lead in washing machines". [5] Nikita Khrushchev, First Secretary of the Central Committee of Communist Party of the USSR was accompanied by his successor-to-be, Leonid Brezhnev, who before and during his 18-year leadership orchestrated an unprecedented arms race, and who finally, in his last years, began to put forward peaceful initiatives to the West.

Russia is not only a well-armed country, but also one of the world's major manufacturers and exporters of weapons. The Soviet defense industries worked not so much for the idea of national defense as for the notorious idea of "world domination by the proletariat dictatorship", a myth that, over the decades, was thoroughly propagated by all Russian textbooks and by word of mouth. This myth was created by generations of communist leaders to satisfy their geopolitical ambitions. In the bottom of their hearts, many of these leaders and their comrades in arms did not believe in this myth, but they were too cowardly to admit it.

Russia no longer needs as many weapons as its defense industries are capable of producing. The Russian government has been experiencing financial difficulties in buying its army even a minimal quantity of necessary arms. The industry's conversion to civilian applications did not happen. The only way the defense industry envisions the full utilization of its unconverted industrial potential is through exporting its military output. But to whom? This is the most critical question. The historical records of Russian weapons exports include terrorist and undemocratic regimes as buyers. One hopes that selling weapons to terrorists is not a political aspiration of the new leaders of the new Russia. Nevertheless, the defense industry can no longer afford to remain in its present uncertain, degrading situation; meanwhile, influential voices are calling for Russia to fill a fruitful niche in the overseas weapons markets. They say that creating a mechanism for filling this niche will help feed hungry Russia.

The political agenda of the founders of Soviet communism (and Stalinism in particular) and their successors included the task of the country's defense, along with several other major issues extremely important to their ideological ambitions for international domination. They started the unprecedented arms race and the idea of expanding the Soviet Union's international influence by creating and supporting the "camp" of procommunist regimes. Besides the 15 republics of the Soviet Union, this camp included the countries of Eastern Europe and Cuba. Among the camp's allies were numerous countries in Asia, Africa, South America, and the Middle East, as well as terrorist groups in different parts of the world.

The economic foundations of socialism were not based on humankind's natural aspirations to be free, to create a better life, or even become wealthy. The wealthy life promised by communist ideologists after the "victorious procession of communism" [7] was merely a utopian dream. This is why, in order to maintain the ideals of communism, ideologists imposed on the Soviet republics and the members of the socialist camp a myth about the Soviet way of life, the main principle of which was "Lenin's modesty".[8] The camp was surrounded by a solid iron curtain, which prevented the people from seeing how much better life was in the civilized world. They were not allowed to compare the two standards of living, to recognize their poverty.

Looking at photos of ordinary Russian people taken between the 50s and 60s, one sees warm-hearted people, more than modestly dressed, who seriously believed in a better and brighter future. These well-educated people were selflessly building a communistic society. They lived their lives not only without cars, but also often without TVs, refrigerators, or stylish Western clothes. Many families lived in multi-family apartments with a communal kitchen and bathroom. At the time, such poverty was called "a modest life without the "Western grimace"[9]. The command propaganda for the "modest" way of life was an absolute necessity, and was forced upon the populace.

In order to implement a dictatorial political order; frighten political enemies; strengthen communist ideology; and support socialist countries, "third world" nations, and terrorist organizations, many weapons and, accordingly, a huge and a very expensive defense industry were needed. The ineffective socialist economy was not able to provide the necessary funds. The only way was to seize people's resources and pay only pennies for their labor.

During the years of the USSR existence, the country was proud of the skyrocketing development of its "industrial defense potential" in the North and Siberia. However, nobody knew then the real price - the hundreds of thousands of human lives the dictatorship sacrificed for the construction of the Belomor Canal, the Gulag factories/concentration camps, and the new defense plants in remote areas that were built on the bones of political prisoners, mostly innocent people arrested during the years of Stalinism. Even later, in the 1970s, one could see in documents for defense plant construction projects, particularly the passages on human resources, the ominous words: "This part of the industrial facilities will be built by a spetskontingent [special contingent, i.e., prisoners]."

During the "victorious" decades of Soviet existence, the Soviet people sincerely admired its flourishing achievements in science, culture, and art, and its unique achievements in space exploration. The country was proud of the unprecedented mass construction of five-story apartment buildings, started by Khrushchev, which provided millions of people with small yet private, and nearly free apartments.

One can see the change in the Russian people themselves, in what they want for their lives. During the last decade, Russian society has become dramatically stratified. Some people, such as the so-called "New Russians", have become enormously wealthy, while most of the population has lost its middle-class status and some have become extremely poor. But when Russian young people are asked whether they miss the "modest" life of their parents in 1950s and 1960s, the answer is "no". Moreover, the same points of view are kept by top modern communist ideologists. Is the military jacket of "the proletarian father," Stalin, still in fashion among them? No. After tasting the Western lifestyle, didn't these modern ideologists of communism, ultra-nationalism, and reactionary anti-capitalism reject "Lenin's modesty", which they had formerly promoted for a long time? Are they full of contempt for American computers, Italian furniture, Spanish interior accessories, or late-model German Mercedes and Audis, to which they prefer the "modest" domestic full-size Volga cars or ZIL limos? No, they are normal people with normal human desires. The expression "social being determines consciousness," uttered sarcastically by the USSR propaganda, became revered among legislators in the Russian Duma, the Ukrainian Verkhovna Rada, and government offices in Minsk, Chisinau and other capitals of former Soviet republics. The Western lifestyle, which is one of the main achievements of the 20th century, is no longer fantastic or unattainable. It has become a life goal for all Russian people, including politicians of all temperaments and ideologies.

This is a result of half a century of life with no devastating world wars, the opening of the iron curtain to make contact with the West - values which must be protected. The anathematization of these ideals would be the most serious crime against humanity, the end of civilization.

Russia was the cornerstone of the huge Union of the Soviet Socialist Republics. However, this "brotherhood of socialist countries" was built on the sands of myth. For seven decades, propaganda glorified "the unified family of the Soviet people". In the 1960s, the "Moral Code of the Soviet Builder of Communism" was written, according to which "one person to another is friend, comrade, and brother," while in actuality, nationalism was Soviet state policy.

The fifteen Soviet republics were proclaimed "sisters". A unique sculptural fountain created by a talented artist was erected in Moscow, in the center of the VDNKh, Russia's main exhibition park in honor of all the republics of the Union. Fifteen female figures danced in a circle, symbolizing the eternal friendship of the fifteen sister republics of the USSR. The "eldest sister" Russia danced along with her sisters Latvia, Moldavia, Belorussia, Kyrgyzstan, Tajikistan, Lithuania, Estonia, Ukraine, and others... The Russian people could not have imagined that all these "sisters" hated the Union ferociously. They did not know then that many of the republics had been forced to join the Union against their will. The Baltic States, the Western regions of Ukraine, Belorussia, and Moldavia were occupied by the Soviet Union before the beginning of World War II as the result of an ominous deal between Stalin and Hitler. It turned out that during all these years the republics had not wanted to live under the same roof with their eldest sister Russia in the household called the USSR. They wanted to live independently, although on pain of death these republics, particularly their leaders, swore an eternal allegiance to the Union, to the "unified family". But secretly they waited for the day when they would be able to run away from home.

That day finally came. The final accord was played in 1991 in the quiet coolness of the Belorussian Belovezhskaya Puscha - a virgin forest, where the leaders of Russia, Ukraine and Belorussia signed the death sentence for the USSR as a unified state. Its family disintegrated completely. The Soviet family was formally replaced only by the name Commonwealth of Independent States (CIS) and subsequently, Newly Independent States (NIS).

If the political leaders of the former republics did not want to join the Soviet Union, this raises the question of whether the effort and the resources spent on the unprecedented development of the world's largest defense industry, on the production of huge amounts of weapons, on the creation of the gigantic Soviet Army in order to fulfill the country's "international duty", and on the latest, most devastating war in Afghanistan, were justified? The answer is "no."

Since the Soviet Union did not bring any benefits to the former republics, they feel no gratitude towards it. It was a very painful and hard lesson for the USSR and its successor, Russia. But it is a fact.

Do the former republics of the USSR recall today the years of their existence in the "unified family" as years of happiness? No. Do they want to become "sisters" again? In most cases, no, despite the fact that independence has not made peoples' lives better.

Are the former members of the "socialist camp"--Hungary, the Czech Republic, Poland, Romania, Bulgaria, and others-grateful to the USSR for the use of tanks to "protect" the communist ideals in these countries in 1956 (the occupation of Hungary) and in 1968 (the occupation of Czechoslovakia)?

Did these civilized European States really need the USSR and the "senior comrades" from the Soviet Politburo? No. Not yesterday, not today. Ask former "comrades" from Vietnam, Chile, China, and other Asian, African, and South American countries: do they feel nostalgia for the USSR? Their response will also be "no".

So why then, if nobody wanted it, did the USSR have to spend the lion's share of the gross national product to process so much more iron ore than it actually needed, to smelt so much metal, to build so many defense plants, to produce so many missiles, cannons, tanks, ships, aircraft, and guns? Why was it necessary to spend billions on military science, to form countless top-secret research institutions, laboratories, experimental plants, and "special defense departments" of the USSR Academy of Science and its branches in all the republics? It is hard to believe this was all created for a "dowry" for each formally independent sister-republic, which was to leave the family nest sooner or later. Thus, the construction of this huge military machine-the defense industry, the army, and their infrastructure-was in vain.

After the spring of 1985, the people of the new Russia learned a great deal about their tragic and contradictory history. Undoubtedly, today is not the Stalinist or post-Stalin era. Since Gorbachev's glasnost, the people of Russia have learned to understand how the civilized world does everything. First of all, they have learned to hate war.

In today's world without informational borders, it is almost impossible to delude people with simplistic images of external enemies. The people are quite capable of evaluating everything themselves. Russians, being a wise nation, have learned during the last decade how to walk the thin line between protecting their values and infringement on somebody else's. They understand perfectly well how much weaponry is necessary to maintain peace and how much is needed for bloody military conquests. They learned at last how the countries of Western Europe, thanks to the Marshall Plan, rose from the ashes of World War II and built a new life for their people.

A decade and a half has passed since Mikhail Gorbachev, the first President of the USSR, began perestroika, when progressive Russian people could see on the horizon the dawn of a much better life. This was the start of a new and very promising stage of cooperation between West and East. In this torrent of bright changes and big hopes, conversion of the Soviet military-industrial complex looked like a natural, logical part of the bigger reform process.

In 1988, conversion, after Gorbachev's famous announcement about its beginning, sounded like a new spring, full of life and hope. People hoped that all these political changes would bring them prosperity, and were confident that their children would have a much better life. People hoped that the last stretch of the path to a better life and happiness would soon be finished.

They did not know that the legacy of the Soviet Union-a planned economy, with its heavy burden of military expenses-was terminally ill, and the end was near. Nobody told the people what the upper echelons already clearly understood: that the country could not go on this way any longer. Very few knew that the defense industry was the heart of the country's militarized economy. The weak, sickly militarized economy urgently needed to be treated with simultaneous economic reforms and defense conversion.

The unprecedented deep political and economic reforms and defense conversion started by Boris Yeltsin, the first President of post-USSR Russia, merged to form a unit. Russia has been striving to make the transition to a free market economy that would introduce the democratic attitudes that it has yet to fully experience. However, the shift from a predominately military-industrial complex to a civilian industry-based economy was attempted too early, before many needed economic and political factors were in place.

Russia's top defense industry executives did not have a clear vision of the future of the industry in conjunction with market-based economic reforms. Neither was it clear who needed Russia's grossly hypertrophied "defense potential", the pride of some officials even today. Its enterprises were founded within the context of a planned economy, and built on the principles of gigantism. Its huge plants are almost impossible to transform into new, flexible manufacturing divisions, with small business units. Nobody in Russia suggested either an effective, realistic method for defense conversion, or a feasible plan with practical workable solutions and steps. Officials produced radically different diagnoses of the situation in the defense industry. Accordingly, different treatments were prescribed. It is well known that when a patient is misdiagnosed with two entirely different ailments and receives two completely different treatments, the results can be terrifying. The prescribed type of conversion, which had no concrete plan, no basis in analysis of international experiences, and incomplete financial and technological support, resulted in another "headlong" conversion marathon.

Today the frozen defense industry is suffering horrible pains. Common sense suggests that without a correct diagnosis and a new effective treatment, the illness will become incurable. The "headlong" conversion that contributed to the defense industry's problems could lead to total and irreparable deformities, which will be devastating for Russia, and will compromise stability in the rest of the world.

"Headlong" conversion brought tremendous social problems. Many citizens who formerly worked in the Russian defense industry, including the once-prosperous "closed cities", are now practically unemployed. No jobs, no incomes. Racketeering, banditry, robbery, theft, and contract killings of politicians, businessmen and bankers are flourishing. The list of new professions in Russia now includes "bodyguard" and "killer", i.e., hit man. Just recently, such societal and medical problems as drug addiction, prostitution, and diseases, including long forgotten tuberculosis, were added to wide -spread alcoholism.

The hardships people are suffering constitute a tragic paradox of the new Russia. The essence of this paradox is that while progressive, fundamental reforms of the country's political and economic systems were taking place, the population was becoming more and more impoverished. While considerable arms reductions have become a reality, thanks to new political thinking in the country and the international peace process, decreased government military orders and the huge financial deficit have forced many defense enterprises to virtually halt both military and civilian production.

History shows that similar crisis situations provide the most fertile soil for the rise of dictatorships, as in Germany of the 1930s. Its motto was a flourishing economy and the victory of the Third Reich. Its means to that end was aggression and violence. Russian Communists and ultra-nationalists, as successors of the Soviet regime, sometimes call for similar means. To overlook the danger of a repetition of that combination of motto and means is to ignore history's lessons. Passivity and inertia would be the best lubricants for guaranteeing such a repetition. As history demonstrates, the price of stopping such movements once they are well begun can be extremely high. And that price will be reckoned not only in hard currency, commodities, and lost opportunities, but also quite probably in human lives.

Many years have passed since the conversion process began, and everybody in Russia is tired of hearing the word "conversion". It has been consigned to oblivion, and the new term restrukturizatsiya (restructuring) has come into use in Russia. But is it indicative of a new, systematic approach to the problems facing the MIC, or is it just a deceptive word that marks the abandonment of the idea of conversion? In Russia today, there are numerous objections to defense conversion. They have been increasing as the economic crisis and its negative consequences deepen. After many failed, mismanaged attempts at "command conversion", quite a few directors of unconverted, "forbidden" defense enterprises, who oppose reforms, are lobbying for the renewal of military procurement orders. They have no other choice than to "restart" their plants and move toward profitability, offering paying jobs to their employees. It is unfortunate that for many of them it no longer matters whether they produce pharmaceuticals or biological weapons, precision machine tools or millions of new guns. Weapons would actually be the best choice for them, since they can produce weapons perfectly, with no need to meet urgent technological and business challenges.

Again and again, communists and ultra-nationalists remind the world of their existence. Their goal is to revive dogmas rejected by the world, without making any constructive efforts to help Russia to overcome the present crisis. They claim they can feed the people of the country and eliminate unemployment through the export of Russia's most advanced weapons. To whom are they going to sell them? It does not matter. Any band of terrorists will do, as long as they can "add fuel to the fire", leading the world to the brink of a new devastating world war, which will write off the bills accumulated by their own unfortunate people.

As in the Cold War era, communists and ultra-nationalists are again blaming the notorious West for all the economic and social disasters in Russia, the country that departed from the shore of "poor" socialism, but which has not yet moored at the "rich" shore of capitalism, as promised by the reformers. It is still easy for ordinary, impoverished Russians to direct their hatred towards the West.

And again, as at the beginning of perestroika in 1985, the world is waiting for the word from the new leaders of Russia, particularly its new President Vladimir Putin, whose historical mission is to make a final choice regarding the future of the country's defense industry. A lot will depend on what the defense industry looks like in the first few years after 2000 and beyond: what will the new Russian politicians and the world community make out of it, and will this industry produce weapons or civilian products in the future?

The first alternative is a new, intensive round of logically organized conversion, which will dramatically decrease military production and transform Russia from an arms supplier to a real Motherland for its own people. One of the main issues of conversion is how to restructure the industry, eliminate all excessive production facilities, and re-tool the remainder for civilian use. And of course, Russia will not be able to cope with this task without the help of Western countries.

The second alternative is to switch back to the production of huge amounts of weapons, and to sell them to dangerous terrorist regimes. But then it will be extremely difficult to stop the dangerous consequences of this course of action. If weapons are sold to terrorists today, tomorrow they may be used against their producers. The latest examples of this are the deadly terrorist acts with hundreds of casualties in several Moscow residential areas and other regions of Russia in 1999.

Russian history shows that it is possible for a country to provide weapons to half of the world, yet not be able to feed its people. Will the country be able to feed its increasingly hungry population in the future by selling weapons? This is a big question.

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We trust that this book will contribute to a better understanding of the history of Russian defense conversion and its future prospects. It will help to shed light on specific issues, implications, and tragic political, economic, and social consequences of mismanaged defense conversion processes, which are causing Russia and her people to suffer. We hope that the new Russian leadership and the world community understands the need to resolve the present problems and ordeals in Russia, the severity of which could lead to global instability, military confrontations, terrorism, and threats to international security.

We hope that Western society will gain a better understanding of the importance of increasing support for these Russian defense conversion ideals, on behalf of both Russia and the entire world. Russia's problems have already crossed the country's borders, "contaminating" other regions. When everything is collapsing in a country with a full arsenal of deadly weapons, it is no time to be a silent witness. It is an issue of vital importance to the whole world.