Alcohol Oil and the End of the Cold

Alcohol, Oil, and the End of the Cold War LCDR Luke Lazzari

Thesis • Gorbachev’s anti-alcohol campaign and the steep drop in oil prices created an economic crisis for the Soviet Union. • This economic crisis was a key factor influencing Gorbachev’s decision to exit the Cold War

Introduction • • What was the Cold War? When did it end? Timeline of events Effects of anti-alcohol campaign and drop in oil prices • Conclusion

The End of the Cold War • • Disintegration of USSR in December 1991? Sometime in 1989? Mikhail Gorbachev’s 1988 speech to the UN? December 1987: Washington Summit and signing of the Intermediate Nuclear Forces (INF) Treaty – – Abandonment of Marxist/Leninist idea of class struggle Elimination of entire class of missiles (really two). First time Soviets agreed to intrusive verification of a treaty

Timeline of Talks and Some Key Events 1972 ABM Treaty and SALT Enter Detente 1977 -1980 1977: Soviets begin deployment of SS-20’s in E. Eur. 1979: Invasion of Afghanistan 1979: Jimmy Carter signs and then abandons SALT II ratification efforts 1981 -1982 1981: Enter Ronald Reagan proposes “zero option, ” START Nov 82: Leonid Brezhnev dies. Enter Yuri Andropov 1983 -1984 Jan 83: Reagan signs NSDD 75 Mar 83: Reagan announces SDI Nov 83: Soviets walk out of INF talks Détente in tatters Feb 84: Andropov dies. Enter Konstantin Chernenko By late 1970 s Soviets believe “correlation of forces” moving against them Nov 84: Reagan reelected 1985 Jan: SECSTATE Shultz and Foreign Minister Gromyko create framework for future talks Mar: Chernenko dies. Enter Mikhail Gorbachev 1986 Apr: Chernobyl 1987 Feb: International Disarmament Forum in Moscow Feb: Oct: Reykjavik Summit stalls on SDI Yakovlev Memo to Gorbachev May: Rust lands Cessna in Red Square Apr: Anti. Alcohol Campaign decision made Sep: Gorbachev backs away from INF Treaty Nov: Geneva Summit. Dec: Washington Summit, INF Treaty signed

Anti-Alcohol Campaign • Begun in April 1985 – Cut Vodka production by half by 1987 • Reasoning: – Part of the “struggle for communism” • Advice against 1984 1985 1986 1987 Tax Revenue (B Rubles) 36. 7 33. 3 27 29. 1 Tax Revenue (% of GDP) 4. 8 4. 3 3. 4 3. 5 Retail Sales (% of GDP) 6. 9 6. 1 4. 6 4. 4

Oil Prices 1977 -1989 Iran-Iraq War begins August 1985: Saudi Arabia doubles oil production from 2 MBPD to 5 MBPD

Oil and the Soviet Union and perestroika • Oil was the number one source of hard currency – West bought only 6% of Soviet produced equipment • USSR was the world's largest importer of grain, which was bought with hard currency. Total Oil Sale Revenue 1984 1985 1986 1987 % of GDP 4. 04 3. 63 2. 82 2. 76 In B Rubles 30. 9 28. 2 22. 5 22. 8

Conclusion • The overall state of the Soviet economy was the major reason behind perestroika and Gorbachev’s desire to exit the Cold War. • The anti-alcohol campaigns and drop in oil prices exacerbated the structural flaws of the Soviet economy and made negotiating an end to the Cold War imperative.

References • Gaidar, Yegor. Collapse of an Empire: Lessons for Modern Russia. Washington, D. C. : Brookings Institution Press, 2007. • Malia, Martin E. The Soviet Tragedy: A History of Socialism in Russia, 1917 -1991. New York: NY: Free Press, 1994. • Matlock, Jack F. Reagan and Gorbachev: How the Cold War Ended. 1 st ed. New York: Random House, 2004. • Norman A. Graebner, The National Security: Its Theory And Practice, 1945 -1960 (New York: Oxford University Press, 1986), p. 55. • Reed, At the Abyss, p. 227. • Phillip Tauban “Gorbachev Is Feeling the Heat From the South, ” March 6, 1988 http: //query. nytimes. com/gst/fullpage. html? res=940 DE 4 D 61539 F 935 A 35750 C 0 A 96 E 948260&sec=&spon=&pagewanted=all. • NIAA: http: //www. niaaa. nih. gov/Resources/Database. Resources/Quick. Facts/Alcohol. Sales/consum 02. htm • Investor. Words. com. http: //www. investorwords. com/2280/hard_currency. html • "Soviet Spending for Defense: Trends Since 1951 and Prospects for the 1980 s, " http: //www. foia. cia. gov/browse_docs. asp? doc_no=0000496806&title=SOVIET+SPENDING+FOR+DEFENSE: +TRENDS+SINCE+1951+ AND+PROSPECTS+FOR+THE+1980 S+(SOV&abstract=&no_pages=0052&pub_date=4/1/1982&release_date=1/29/2001&keywords=S OVIET+ANALYSIS|SOVIET+MILITARY+ANALYSIS|SOVIET+ECONOMIC+ANALYSIS|ECONOMIC+MILITARY&case_no=CSI-200100002©right=0&release_dec=RIPPUB&classification=U&show. Page=0001