Energy and Repression

The Soviets were free to choose the date of ordering their Polish viceroy into action; and they waited until the last of the big dupes, France, had signed to finance their $15 billion/3,600 mile gas pipeline to West Europe [AtE Dec 81].

This was probably not accidental, for the Soviets have troubles beyond Poland. The country with more oil in the ground than Saudi Arabia and as much gold as South Africa is short of two things: energy and hard currency. And the shortage of the latter has become acute.

The USSR now owes the West G$17.9 (gigabucks - billions), yet desperately needs more hard currency, not least for subsidizing the convertible funds of its colonies, which owe the West another G$60 or more (biggest subsidies go to Poland and Cuba - G$1.9 each, and Vietnam -- G$1).

Unable to manufacture goods that could compete with those produced in a free economy, the Soviets get their foreign currency by selling oil, gold and diamonds. When OPEC doubled prices in 1979, it not only taught the world to practice conservation and pushed Europe toward coal and nuclear, but the resulting oil glut cut into Soviet earnings of foreign exchange. To make more oil available for export, they had to reduce the supplies of cheap oil to their East European colonies by 10%, risking fresh outbursts of discontent: Hungary's growth rate will be reduced by 66%, and Czechoslovakia, with an expected growth rate of 0.3%, is about to become a model state for the Sierra Club.

Even the halfwits of the Carter administration managed to shoot a hole into Soviet currency reserves: the post-Afghanistan grain embargo cost the Soviets more than G$5 in cash paid to grain traders in France and Argentina.

The outlook for the Soviets would be grim indeed, were it not for their unfailing saviors, the "useful idiots" (as Lenin called them) in the West. This, alas, includes not only the West European appeasers, but also the US State Department. Declaring Poland in default of its debts, says Haig, would "bring down the temple of Western unity" (and, we might add, crack the Liberty Bell), quoting every expert in the banking world, but not a Solidarity flyer smuggled out of Poland in January: "Free peoples of the world: give us your full support in our struggle for human rights... Do not believe in the good sense of your bankers. They were naive enough to place $27 billion of your money in the hands of a corrupt and incompetent regime." [Free Nation, London, February 1982.]

General Electric's M$175 contract for compressors for the Soviet gas line was canceled by denial of an export license as part of the US sanctions imposed after the Soviets bludgeoned Poland into line. European firms cannot build them under license, which binds them to US export regulations. Thus, the Soviet pipeline cannot be built if the State Department takes the course at which it usually excels: sit and do nothing. Instead, it has proposed to exempt European licensees from the sanctions [Wall St.J., 2/4/82].

Right now, they are screaming about El Salvador, sending "fact-finding" troupes who will duly report that the country is not ruled by Thomas Jefferson. And Haig will admit, apologize, explain, refute, concede, and compromise.

What foreign policy needs is what energy, the environment, industry, and business need: men who do not fight on their opponents' premises, but stand on their own ground.

The country needs a Secretary of State who has the guts to say: "The government of El Salvador is in the front line of the fight for human rights, for it is standing up to the Cuban tentacle of the Soviet Union -- the tyranny that abolishes humans along with their rights.