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MARCH 2017




I had the honor to be the minister

counselor for economic and commercial

affairs at U.S. Embassy Moscow from

1988 to 1991. The December


Service Journal

and other coverage of the

25th anniversary of the end of the Soviet

Union prompt me to write this letter.

First of all, as head of the embassy’s

Economic and Commercial Section

(ECON), and having been on the ground

during most of the final years of the

Soviet Union, I must take issue with

Mikhail Gorbachev’s recent scape-

goating of the West’s failure to provide

expected “vital aid” as a significant factor

in the USSR’s downfall (in an interview

with the Associated Press on Dec. 12.)

Secondly, I feel obligated to make

a few comments on reporting from

Embassy Moscow during this critical

period of history, as well as on the fire at

the embassy in March 1991.

Economic Reform Efforts

Mr. Gorbachev’s conspiratorial

assertions that we on the ground were

gleefully rubbing our hands as the Soviet

Union was unraveling are simply not

true. At the U.S. embassy, we obvi-

ously were against communism,

but were ever mindful that we were

dealing with the country possessing

the most nuclear weapons in the

world. Provoking uncontrollable

instability would have been irratio-

nal on our part, and dangerous to

the United States.

Furthermore, for many years

there were sustained efforts by

the United States, international

financial institutions and many other

entities to search for a viable reform path

for Gorbachev’s



ing). U.S. Embassy Moscow was part of

that economic reform effort, bringing in

many top economic and financial experts

to render advice.

Ambassador Jack Matlock supported

and encouraged our efforts. For example,

I initiated the visit of then-Chairman of

the Federal Reserve Alan Greenspan for

that purpose, and also brought in John

Phelan, chairman of the New York Stock

Exchange, who led a heavily attended

seminar that essentially explained what a

stock exchange is.

My team and I spent countless

hours with top Soviet economic figures

such as Viktor Gerashenko, Leonid

Abalkin, Oleg Bogomolov, Nikolai Petro-

kov, Stanislav Shitalin, Yegor Gaidar,

Prime Minister Valentin Pavlov and

many others. Never once did we seek to

undermine their reform programs, but

instead ensured that Washington under-

stood what was going on, conveyed their

requests and provided them access to

many of our top economic experts.

During this period, however, it was

the titanic, cumulative rot and the

grotesque inefficiencies of the old Soviet

command economy that were most

important—and habitually understated

in later chronicles. After all, the Soviet

economic system was designed first and

foremost as a primary instrument for

political control—not as a blueprint for

constructing, nurturing or modernizing

an economy.

Vladimir Lenin believed that it was

necessary for the state to control the

commanding heights of the economic

Retired FSO John W. Blaney was appointed U.S. ambassador to Liberia in 2003, and received

the Secretary’s Distinguished Service Award for his critical role in ending that country’s civil

war. In addition to service in Moscow, he had previously served as chargé d’affaires in South

Africa, director of the Office of Southern African Affairs at State and deputy U.S. representa-

tive to the United Nations Economic and Social Council. He authored and was a negotiator of

the U.S.-USSR Nuclear Risk Reduction Centers Agreement and worked on the START and INF

agreements. He also served in the Bureau of Economic Affairs and at the U.S. Treasury Depart-

ment, as well as on Capitol Hill. Since retiring from government service, he has worked as a

Wall Street adviser and for Deloitte. He began his career as a U.S. Army officer.

For the Record:

On the 25th Anniversary

of the Fall of the USSR


Please enjoy this brand-new

feature, which we are calling

“Letters-Plus,” a place for longer

responses to articles or issues

raised in the


. A submission

will qualify to run in this department

if it adds to overall knowledge and

history of the subject.

Here, for the first edition of


is a response to the

December focus on “The New Rus-

sia at 25” from Ambassador (ret.)

John W. Blaney.