It is difficult not to feel one has seen it all before as one watches the Western response to the request of the new Russian and Union governments for economic assistance. The ‘grand bargain’ has been dusted off the shelf on the Russian side and the more impressionable commentators again reminisce about the Marshall Plan. But those most directly briefed by the American and British administrations warn that little more cash can be expected than that already promised. In this area, at least, it seems that everything has changed in order for it to remain the same.

In London at the Group of Seven meeting and at his summit with Bush, Gorbachev displayed his customary skill in extracting a public-relations victory. But despite all the polite communiques he achieved no ‘grand bargain’. The modest deal actually achieved bartered away surplus Soviet missiles in return for third-class ‘associate membership’ of the rich men’s club. On 3 September Yeltsin called for massive reductions in missile stocks and indicated that Russia might take unilateral action to bring their stockpile down to 5 per cent of its previous level; meanwhile spokesmen for the new Soviet and Russian governments once again pointed to their urgent need for large-scale economic assistance. If the new Russian and Union governments carried out far-reaching nuclear disarmament this would be an extremely welcome development and they would earn huge moral credit for it. There might even be some grudging increase in help from the West but its scale would be likely to remain modest.

For Russia’s good it must be hoped that Yeltsin will not be as fixated on all things Western as Gorbachev has been. Yeltsin is going to discover that the American and British governments will not commit serious resources to helping Russia and other former Soviet republics. Instead the latter’s interests, properly understood, now lie in a ‘grand bargain’ with their neighbours to the East—Japan and China.

Even if the Western powers wished to put together a ‘Marshall Plan’ for Russia, and had no other urgent calls on their resources, they would be unable to do so because they simply don’t have the spare cash. The German government does genuinely want to help, and has done as much as it can, but the costs of unification and the unpopularity of raising taxes rule out assistance on the scale requested by Russian economists. Relaxation of the restrictions on trade would be welcome but of little short-term significance to an economy in free fall.

Unable to give anything more substantial, the West continues to offer advice instead. It aspires to teach Moscow how to transform and dynamize a vast bureaucratized economy sprawling over a continent. Bush, Major and their economic officials light-mindedly insist that the Russian mastodon must begin to scamper like a free-market greyhound. Some Russian economists, looking nervously at the first fruits of laissez faire shock therapy in Eastern Europe, are reluctant to attempt wholesale privatization. If we leave aside oil and other natural resources, Russian economic assets have no market value. The introduction of free-market conditions would therefore swiftly lead to sale of the oil, and other valuable resources, to foreign investors while the rest of the economy would subside into chronic dislocation and Russian workers would experience mass unemployment.

If Gorbachev and Yeltsin really wish to transform the Soviet economy then they should be sending their advisers and experts on study tours to China not the United States. And if they are looking for the funds needed to finance the transition to market viability then they should make a grand bargain with Tokyo not Washington. The only real cost here will be to Russian national pride. Russian leaders, who see no humiliation in being patronized by Bush and Major, may be frightened of seeming to defer to Orientals.

With the Soviet Union in full disintegration it would be bizarre indeed if the Russian leaders still draw the line at handing back the Kurile Islands to Japan. Throwing diplomatic niceties to the wind, the Japanese government has made it crystal clear that Moscow could have anything it wanted in return for the Kuriles. Perhaps the military still baulk at responding to such appeals. Yet in any rational calculus it makes no sense to poison relations with Japan for the sake of islands of no economic value and of vanishing military significance. Any deal on the islands could be accompanied by guarantees that they be demilitarized and that Soviet/Russian access to the Pacific be unaffected. (It should be noted that the Kuriles are part of the Russian Republic, meaning that under the old Union their seat of local republican government was in the Russian White House in Moscow, many time zones away.) Within days of the defeat of the coup the Japanese government sent a high-level emissary to Moscow to restart negotiations, so conceivably we will soon learn of some progress towards a deal on the Kuriles.