High Costs of Empire Sink Soviet Union

THE Soviet Union was guided by ideology and geopolitics, not economics, as it built its empire, a flaw that doomed it from the start, political experts say.

"It was counterproductive from the beginning," Oleg Bogomolov, director of the Russian Academy of Sciences' Institute of Economic and Political Studies, said of the Soviet client-state policy. "It may have been justified ideologically but it was never justified economically."

The list of Soviet client states started with Mongolia in 1921 and gradually grew to encompass Eastern Europe, North Korea, and Cuba by the early 1960s. By the 1970s and '80s, the list expanded to include such states as Vietnam and Afghanistan in Asia; Syria and Iraq in the Middle East; Angola and Ethiopia in Africa; and Nicaragua and Grenada in Latin America and the Caribbean.

Statistics on financial outlays by the Soviet Union to the client states are unreliable, but amount to at least $40 billion over the last several decades, Mr. Bogomolov estimates. But much of the Soviet aid to friendly, so-called socialist countries came in the form of military weaponry, for which expenditure figures were sketchy at best. And even for other forms of aid, experts say, the data is unreliable because of the secrecy associated with the Communist system.

"Nobody kept accurate records of both military and economic aid," says Yelena Aryefieva, a researcher at Moscow's Institute for World Economics and International Relations. The statistics also don't accurately reflect the immense costs incurred by the Soviet Union by buying products, such as Cuban sugar, at prices several times higher than the world rate, while selling commodities to the client states, including oil and gas, at artificially low prices, she adds.

For all the money spent on its client states, the Soviet Union received little in return. But economic returns were never the driving force behind Soviet foreign policy. Most important were the principles of Marxism-Leninism, which ideologically bound Moscow to give assistance to other states seeking to "throw off the shackles of capitalism."

Moscow also felt compelled to take on foreign responsibilities due to the geopolitical chess game it played against the United States following World War II. "Military doctrine also played a role in the Soviet relations with Socialist countries," Bogomolov adds. "Because of the confrontation between the Soviet Union and the West, the Soviet side was concerned about surrounding itself with a protective layer."

In spite of all the ideology involved in its relations with its client states, the Soviet Union did receive a few notable economic benefits, primarily from Eastern Europe. For example, rail cars produced in the former East Germany and Ikarus buses from Hungary are widely used throughout the country. And though the cost was exorbitant, Cuban sugar is essential in a nation that has a population with an almost insatiable sweet tooth. Beginning of the end Beginning of the end

Some experts point to the 1979 invasion of Afghanistan as the beginning of the end of the empire. Moscow's first large-scale entanglement in a colonial war underscored many of the inherent weaknesses in Moscow's imperial policies.

"It was not in line with our economic capacities or resources," Bogomolov says, referring not only to the Afghan invasion, but also to the Soviet proxy fights in Ethiopia and Angola during the 1970s and '80s.

"It was one of the causes of the further deteriorating of the economic situation [in the Soviet Union] in that it was very expensive for us without receiving any benefits," he says.

The Afghan war also exposed the ineptitude of a decisionmaking process, which was in the hands of a few ill-informed old men in the Communist Party Politburo, says Yuri Gantkovsky, an Afghanistan expert at Moscow's Institute for Oriental Studies. "The decision to invade was the result of the weakness of the Soviet state machine - incorrect information, a lack of analysis, and generally a poor decisionmaking process," Mr. Gantkovsky said.

As the country slipped deeper into economic chaos, the imperial ties with the client states started giving way, and finally the Soviet Union itself disintegrated last year.

Russia, the self-proclaimed heir to the Soviet Union, has adopted a vastly different approach toward the outside world. With the cold war over, Moscow has cut off virtually all foreign aid and all but abandoned many of its traditional allies in the developing world. Mutually beneficial economic relations are now the foundation of Russian foreign policy.

The oil-rich Persian Gulf states have moved up in Russian's foreign policy priorities. Moscow is particularly anxious to find new markets for its arms industry and is hoping the Gulf States will buy at bargain prices the military equipment that the Soviets used to give away to their client states. So far, however, the Gulf States have been reluctant to purchase Russian-made arms.

At the same time, countries built up by Moscow to act as a buffer against the United States during the cold war are now faced with a bleak future. Cuba and Mongolia, for example, have lost their strategic importance and their aid has been cut off. The Soviet Union pumped more than $1 million a day into Cuba in 1985, and gave Mongolia more than $370 million between 1986 and 1990, Bogomolov estimates.

Not only is Cuba's sugar industry threatened by the loss of favorable trading conditions with Moscow and the need for hard currency to buy goods, so are the island's nickel exports. The Soviet Union and Eastern Europe were once the major consumer of Cuban nickel, but purchases of the metal dropped more than 25 percent last year, according to the Itar-Tass news agency. Political embarrassment

In addition, Cuba's and North Korea's continued adherence to orthodox Communist principles has become an embarrassment to Russia, which is seeking Western help to rebuild its own shattered economy. As a result, Russia is distancing itself from its two former allies.

"It makes no sense for us to continue to aid Cuba," Bogomolov says. "From a moral and political viewpoint, the regime [of Fidel Castro] is as unacceptable to us as it is to the United States."

Many Russian experts, including Bogomolov, say the reorientation of Russian foreign policy was long overdue. But others, including Ms. Aryefieva, criticize Russia's new thinking. They add Russia has an obligation to continue some sort of aid, arguing that Moscow's policies helped cripple local economic development so that many former client states are incapable of competing in the international market.

"It would be a tragedy to abandon the third world countries when we could do something to save them," Ms. Aryefieva says.