Transcript Luke Lazzari

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
Détente in
tatters
By late 1970s
Soviets believe
“correlation of
forces” moving
against them
1981-1982
1981: Enter
Ronald
Reagan
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
Feb 84:
Andropov
dies. Enter
Konstantin
Chernenko
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: AntiAlcohol
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
Oil Prices
Iran-Iraq War begins
August 1985: Saudi
Arabia doubles oil
production from 2MBPD
to 5MBPD
$120.00
Price of Oil
$100.00
$96
$83
$80.00
$72
$69
$61
$60.00
$50
$48
$40.00
$20.00
$37
$36
$32
$25
$14
$58
$29
$29
$53
$27
$15
$28
$14
$33
$26
$18
$15
$31
$18
$0.00
1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Time
2007 Dollars
Nominal Dollars
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. 1st 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=940DE4D61539F935A35750C0A96E948260&sec=&spon=&pagewanted=all.
•
NIAA: http://www.niaaa.nih.gov/Resources/DatabaseResources/QuickFacts/AlcoholSales/consum02.htm
•
InvestorWords.com. http://www.investorwords.com/2280/hard_currency.html
•
"Soviet Spending for Defense: Trends Since 1951 and Prospects for the 1980s,"
http://www.foia.cia.gov/browse_docs.asp?doc_no=0000496806&title=SOVIET+SPENDING+FOR+DEFENSE:+TRENDS+SINCE+1951+
AND+PROSPECTS+FOR+THE+1980S+(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&copyright=0&release_dec=RIPPUB&classification=U&showPage=0001