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Gorbachev Bids Goodbye to Unrestrained Capitalism


Former Soviet President Mikhail Gorbachev says the U.S. is getting a double dose of comeuppance with the swirling financial crisis and escalating violence in Afghanistan.

Although such former Warsaw Pact nations as Hungary and Latvia are in serious financial trouble, Gorbachev rejected concerns that one or more of them could be forced to drop out of the European Union. He also denied a claim by former U.S. Secretary of State James Baker that the U.S. never vowed not to expand NATO into Eastern Europe.

The 78-year-old Gorbachev made the remarks in an interview at a "Reconciliation Forum" hosted in Washington by the American Business Council, which also was to feature Archbishop Desmond Tutu. This year coincidentally marks the 20th anniversary of the first irreparable cracks in the Soviet Bloc, symbolized by the November 1989 fall of the Berlin Wall. Gorbachev himself stepped down in December 1991, just as the Soviet Union itself ceased to exist.

On a speaking swing through London and the U.S., Gorbachev is making much of comparisons with the current challenges to the Western economic system.

A "force-fed&quot American consensus

In a visit on Mar. 12 to the Evening Standard newsroom in London, Gorbachev stood on a box and addressed a farewell to unfettered capitalism. "We need to find a new model of capitalism, taking the best of the old model and the best of socialism," he said. He followed with an op-ed on Mar. 17 in the International Herald Tribune, writing: "The so-called Washington Consensus…was force-fed to the world."

In the Mar. 20 interview with BusinessWeek, Gorbachev continued to explore the theme of an evolving hybrid global economic system. When asked if the financial crisis was a comeuppance to the U.S., he said simply: "I believe so." Questioned further, he said, "There is no doubt that we need a new type of economic governance in the world. They have been working on the basis of principles developed almost a century ago. I think there will no longer be one country like the United States or a group of countries, as it has been, taking all the decisions. There can be no Politburo in the world now."

Gorbachev said, "You have to account for the differences between countries based not only on their economies, but on their cultures, on their different levels of development."

A familiar quagmire in Afghanistan?

In a deeply humiliating event for Moscow, Gorbachev withdrew Soviet troops from the country's own decade-long war in Afghanistan just over 20 years ago, on Feb. 15, 1989. In October 2001, the U.S. attacked Afghanistan in order to depose the Taliban, which had been harboring Osama bin Laden, and violence has worsened over the last year as the Taliban has regrouped.

Gorbachev said that—as he himself experienced—he sees no military solution for the U.S. in Afghanistan. He advised Washington to launch political talks with the various Afghan factions and with the country's neighbors as a prelude to military withdrawal. "It is clear that the current approach will not produce a solution in Afghanistan," he said.

Again, Gorbachev sees the turn of events as the U.S.'s just deserts. "Who created the Taliban? Saudi Arabia financed it with the political support of the United States," he said, sipping tea with lemon and honey.

After the Soviet Union broke up, almost the entire Warsaw Bloc—in addition to the former Soviet Baltic countries—swarmed into the European Union and NATO. Russian Prime Minister Vladimir Putin regularly complains about NATO's expansion, asserting that the West promised not to absorb any former Soviet allies.

Did the West lie about NATO growth?

In Moscow to speak at a conference, however, Baker denied Putin's assertion. "Not only did the Soviets not insist on that position at the time, but they actually agreed to a written treaty that expanded NATO eastward to include all of East Germany," the former Secretary of State was quoted in a Reuters report.

But Gorbachev said that either Baker or the reporters covering him have it wrong. He said both Germany and the U.S. said explicitly that NATO would not expand even "one meter." Said Gorbachev: "It was Bush. It was Jim Baker. It was [German Chancellor Helmut] Kohl" who issued the promise."

Today some of those countries, including Hungary, Latvia, and Romania, are in deep economic trouble. International bankers, including World Bank Chief Robert Zoellick, have suggested that the problem is so serious that such nations could find themselves unable to continue as members of the EU. France and Germany have rejected calls that they bail out their East European partners, saying any such aid should be coursed through the International Monetary Fund.

Gorbachev said that in fact EU countries should directly help the ailing East European countries. "The worse possible outcome," he said, would be if the ailing nations were forced to leave the EU. He dismissed such an exit as not "a practical possibility."

LeVine is a correspondent in BusinessWeek's Washington bureau.

LeVine is a correspondent in BusinessWeek's Washington bureau.

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