because they are written on paper. They will come into being only because the participants calculate that in the net it is to their benefit that these principles should be implemented. Therefore, what I have suggested very briefly in three areas seems to me absolutely essential in order to have even the opportunity to attempt to deal with these issues by communication, negotiations, and agreement.

Senator PERCY. Thank you very much.

Senator GLENN. Thank you.

U.S. SHOULD NOT BE MISLED BY SOVIET TACTICAL MANEUVERS

Ambassador Kennan wrote that we should not be misled by tactical maneuvers by the Soviets. Do you think détente, as it has been practiced, has been such a maneuver or was it really a commitment they were just unable to keep?

Mr. SONNENFELDT. I think détente, as they have attempted to practice it, has been a way by which they sought benefits at the least possible price to themselves. They don't want war.

Senator GLENN. You have said that there is a new opportunity now for coherent economic policies by the West and in its dealings with the Soviets. What U.S. actions can generate that kind of coherence and how would we use it?

Mr. SONNENFELDT. We have taken a whole series of actions in recent weeks to curtail our economic and commercial activities with the Soviet Union in the aftermath of Afghanistan. Some other actions were taken previously because of the trials of dissidents and so on.

It seems to me that before these restrictions are taken off seriatim or because of political pressures or because of some gesture that the Soviets may make, we ought to have a much clearer understanding of where we want to go in our economic relations with the Soviet Union.

CUTOFF OF PETROLEUM TECHNOLOGY AND EQUIPMENT

Senator GLENN. Let me ask some specifics here. These, it seems to me, are very basic policy decisions as to what kinds of things we would cut off because, while we know from some of the things I said a while ago and some of the testimony we have had before this committee, some of it in closed session, they are becoming even more vulnerable energywise than we are and it may lead them into some international activities that would be very, very bad for everyone concerned.

So the question is, do we help them with their energy situation so they don't do the other things, or do we make it tougher for them? Now that is some very nitty-gritty type policy. For instance, the petroleum equipment, know-how, and long-term U.S. denial supported by other Western countries would force a more rapid decline in oil production and reduce potential for stemming a decline in the late 1980's or beyond.

Would you favor a cutoff of the latest petroleum technology and equipment?

Mr. SONNENFELDT. This situation poses real dilemmas. My view, in brief, is that we should consider selling oil drilling technology to the Soviet Union. We could even act positively on some of the export licenses. But we should do any of these things only under the condition

that we reach a clear and enforceable understanding with the Soviet Union that its behavior in the energy field is going to be one of restraint and responsibility. That is to say, we should not go into a situation where we provide assistance to them through technology and yet have absolutely no assurance that they won't come out into the world market and disrupt it anyway.

Senator GLENN. I agree with you completely, if there was a way of doing that. I think what you propose may be so difficult it is wishful thinking. I don't know how we would enforce that particular situation. The alternative is that if we do help them raise their standard of living, improve their balance of trade, and give them more hard currency by doing this, we are, in effect upgrading their military and they may become more adventurist-good news and bad news, and that is the bad news. Our denial of credits to them, boycotting the Olympics, I guess these are minor compared to the longer term economic development, but they all fit in that same pattern.

Mr. SONNENFELDT. I think pattern is the word. One of the regrettable effects of the Jackson-Vanik amendment was to take the Government out of credit policy. Consequently American credits to the Soviet Union have been essentially a matter of commercial decisions by our banks and I think that that is a bad way to proceed. The Olympics are a slightly different case. I happen to agree with the President's view that it would be inapporpriate to have the Olympics in Moscow. I have always opposed having the Olympics in Moscow. I think these economic issues are not balanced but what may make the difference in deciding one way or the other is to have an agreement as to a national strategy on this matter. As a rule of thumb, it would be in our interest if the Soviets did become more dependent on the world economy, but only if this were a real dependence; that is to say, if there is a threat of withdrawal.

Senator GLENN. This was in effect the Kissinger theory, the winding of webs, and if you tie them up enough they won't become unraveled. Either we didn't tie them strong enough or we didn't have enough webs.

Mr. SONNENFELDT. We did poorly in putting the policy into practice.

Senator GLENN. I wanted to read a couple of other things into the record just so we will have them:

Many analysts believe that Soviet oil production is today at peak levels of 12 million barrels a day and will soon be declining. Oil exports account for more than 36 percent of their foreign exchange earnings. The Soviets provide other Communist countries with 2 million barrels a day. The Western World receives 1 million barrels a day from the Soviets. The Soviet domestic economy consumes 9 million barrels a day.

If the Soviet oil production declines, they could be in for some real problems. They may have to stop exporting oil to the West and increase demand for supplies from the Persian Gulf. They would lose a lot of the hard currency they need to buy grain and U.S. technology, including badly needed oil field equipment. They may have to cut back oil deliveries to Eastern Europe and risk political unrest. They may have to cut back their own consumption and risk a serious decrease in the standard of living of the Soviet citizen.

Now in addition to that, some of the other problems they are having within their economy that have been going downhill are, at least to some extent, the grain crop was worse last year, the worst since 1975 mainly as a result of drought. Their industry has not been going ahead on their current plan due to transportation snarls and some raw material shortfalls. The consumer has been losing ground as a result of crop failures, less housing construction, and production of household goods.

The potential for turnaround is somewhat bleak with oil production peaking this year and expected to go into sharp declines, and the substitution of other fuels too slow and costly to be much help before the late 1980's. A slowdown in available labor, and capital resources to worsen with no slowdown in the military spending in sight for the next few years, but their farm output still at the mercy of weather conditions.

The impact of U.S. grain tax falling squarely on Soviet consumers the 1-year embargo would force per capita meat consumption down to the level of the early 1970's. The prolonged denial of Western grain would severely curtail the livestock program in 1981-85.

The impact of other sanctions depends on the extent of participation by other suppliers and the duration of embargoes.

Petroleum equipment and know-how: Long-term U.S. denial supported by other Western countries would force more rapid decline in oil production and reduce potential for stemming decline in the late 1980's or beyond.

Steel products and equipment: Long-term Western embargo would impede Soviet efforts to modernize steel industry, and interfere with pipeline construction.

Credits: Long-term Western denial would limit Soviet purchases to what they could pay for from current earnings, which will fall with oil output.

Boycott Olympics: Would humiliate Soviet leadership and deprive U.S.S.R. of prestige and propaganda opportunities.

All of these things impact on the internal Soviet condition right now. I just wanted to get those into the record here.

I would make one other comment before we leave. I believe Ambassador Kennan indicated a $5 billion supply of U.S. arms to Pakistan. Staff indicates that our U.S. arms supply to Pakistan between 1955 and 1966 was approximately $900 million and our total since that time. was $90 million, so that would be $990 million total since 1955. So I wanted the record to show that. I don't know what the source of Ambassador Kennan's figures might be. Staff might want to query him on that as to what his figures were. That is a pretty big discrepancy. We will speak with him on where he got that $5 billion figure.

Do any of the staff members have additional questions for Mr. Sonnenfeldt?

Thank you very much.

Mr. SONNENFELDT. Thank you.

Senator GLENN. We have kept you here a long time and we appreciate your forbearance.

The committee will stand in recess.

[Whereupon, at 1:10 p.m., the committee adjourned, to reconvene at 10 a.m., Tuesday, March 18, 1980.]

U.S. SECURITY INTERESTS AND POLICIES IN

SOUTHWEST ASIA

WEDNESDAY, FEBRUARY 20, 1980

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

Washington, D.C.

The committee met, pursuant to notice, at 9:38 a.m., in room 4221, Dirksen Senate Office Building, Hon. Frank Church (chairman of the committee) presiding.

Present: Senators Church, Pell, Biden, Stone, and Percy.
The CHAIRMAN. The hearing will please come to order.

OPENING STATEMENT

On January 20, the Committee on Foreign Relations agreed to initiate a comprehensive study of U.S. foreign policy and national security interests. The purpose of this study will be to identify key foreign policy and national security issues the United States will be facing in the near and long term. Essential to this examination will be the consideration of realistic policy options open to the United States in protecting our vital interests.

Today, the committee opens hearings which specifically will focus on the Persian Gulf. The non-Communist industrialized world depends upon the Persian Gulf for 40 percent of its oil supply. Any disruption or reduction in current oil production there will have severe consequences for the United States and its principal allies.

In the final analysis, oil defines the economic interest of the United States in the Persian Gulf. Under any plausible scenario, our country, the countries of Western Europe, and Japan will remain dependent upon the Persian Gulf for crude oil supplies for at least this decade and probably for much longer. The challenge is to fashion a policy that minimizes the vulnerability of the United States and its allies that is inherent in this dependence.

The first day of these hearings will focus on determining the importance of Persian Gulf oil to the Western World.

President Carter has stated that the United States would repel any attack against our vital interests in the gulf by any means necessary, including the use of military force. It is incumbent upon the Foreign Relations Committee, as part of its oversight responsibilities, to assess realistically any assertion by an American President that would involve the potential use of force.

Yet, what has to be weighed is the importance of the gulf's oil to the West against the dangers which would attend any move to assure