Gorbachev’s Japanese investment trip - 19 April 1991

On Wednesday, in Tokyo, Mr Gorbachev did not so much address the Japanese parliament, the first Soviet leader ever to do so, he was begging, beseeching, imploring his audience, let's not lose time, don't hold back from taking part in these great projects!

And what are these great projects?

They all come down to one operation required of the Japanese, to bail out a bankrupt communist state. Of course Mr Gorbachev didn't say it quite that way. He pointed to a vision which the Japanese could turn into reality of throbbing modern factories, a great range of domestic appliances, a wealth of electronics and other consumer goods, and together the two countries could produce timber, natural gas, oil, et cetera, et cetera. And how were the Japanese supposed to join in these great projects? They were to put up the money. Vast sums in investment.

Here in fact was a communist leader, in much trouble, speaking at this point for we are not sure how many of the Soviet peoples, begging the most conspicuous and aggressive of capitalist nations to rescue the Soviet Union from collapse. Or in Mr Gorbachev's all but declared purpose to save it for communism. With a little sharper writing of Mr Gorbachev's speech and a little more swollen rhetoric, it could have been a scene from a novel by George Orwell, if he'd lived long enough to know that by 1984 the world had not succumbed to totalitarian slavery.

Considering the joyful domestic scene Mr Gorbachev was conjuring up, Soviet households humming with every sort of electric gadget, bursting with crammed refrigerators. This would be of course, after the ordinary families had been well supplied with bread and soap. Contemplating Mr Gorbachev's vision, it was hard for American on lookers not to think back to an earlier scene between a Soviet leader and a Western statesman, especially since this very scene had been played over last Sunday evening, to illustrate a point Mr Richard Nixon was making in a long political interview.

By way of identification, I ought to remind latecomers that Mr Richard Nixon is a former American president. The man I talked about in 1974 – he had just, in shameful circumstances, resigned from the presidency – I talked about as a character of Shakespearean complexity and pathos, pitiable, sympathetic and gone for good. I was wrong. Mr Richard Nixon is now America's foremost elder statesman. He has just returned from a magisterial visit to the Soviet Union and several Western capitals. His advice is much sought and cherished by leaders of every political stripe.

Well, the scene recalled by Mr Gorbachev's forward-looking picture of the prosperous Soviet family and its humming electronic household was a scene in Moscow in, I think, 1958, between Mr Nixon who was then vice-president of the United States and Mr Nikita Khrushchev who was, without any challenge, the leader of not only the Russians but of all the Soviet peoples.

Mr Nixon was being politely shown around what we should call, maybe used to call, an "ideal homes exhibition." Proudly Mr Khrushchev steered Mr Nixon to an ideal kitchen, the well-equipped kitchen that one day sooner or later, would be available to the average Soviet family. In those days – indeed, until barely two years ago – the Soviets allowed you to see on television only what they had filmed. They clearly had filmed the kitchen meeting between the two leaders not as something which regrettably had to be shown, but as a dazzling revelation to the West of what a Soviet home might come to look like.

The pathetic giveaway was that that kitchen was itself, by Western, and especially by American standards, pathetic. Like an American kitchen of say 1910. Though even at that, I don't remember seeing the good old American icebox, which winter and summer in every part of the country, the iceman came two or three times a week to refill.

Mr Nixon, then the dark-haired 45-year-old vice-president, tried to hide his amusement at the demonstration of this bare, rudimentary electric kitchen. He couldn't restrain himself completely. He had the gall to say smilingly, to Mr Khrushchev, that every American family of modest means had a kitchen, at the very least as good as, better than this relic from a Mack Sennett comedy. He didn't say Mack Sennett, I'm saying it. He implied, trying very hard to imply without scorn, that here was another example of how very far behind the Soviet Union was in what were then known as domestic utensils, in, we should say, consumer goods in general.

Mr Khrushchev exploded in sudden anger – he was a great finger-wagger and he wagged away in Mr Nixon's face like a metronome. "Let me tell you," he ranted. "You may think you're far advanced, but five years from now, we overtake you. You," with gestures, "will be here. We will be reaching for the ceiling, there!" Then Mr Khrushchev dissolved his sudden fury in a bout of staged laughter, and Mr Nixon staged a hearty response.

Mr Khrushchev had the rude candour to mention then, and at a later time, that soon the Soviet Union would bury the Americans. It was taken by people easily inflamed, to mean physical burial in warfare. Later Soviet leaders explained good-naturedly that Mr Khrushchev had meant bury economically.

So now here we are, 33 years later, and the Soviet leader, perhaps I should say "a" Soviet leader is ravishing the Japanese parliament with a picture of a great social project. The project is to give the ordinary Soviet citizen something like the choice in consumer goods that the Americans and the Japanese have today. Mr Gorbachev says the Soviet Union can't possibly afford this project itself. "There are," he said, "stormy times and the Soviet economy faces disintegration. There is much social instability which accompanies the painful transition from one type of economy towards another".

The New York Times says, not in quotation markets, market economy. I didn't find the actual phrase in Mr Gorbachev's speech. No doubt he has used it and will again, but he's made it clear to his own supporters and to the hardliners who are said to back him, that however full-blown a market economy there comes to be, it must be run by the Communist Party. This, I believe, is at the core of his conflict with Mr Yeltsin and others.

And also, I don't find in his Tokyo speech any mention of the dreaded word "communist". However, the Japanese knew well what they were being asked to do: finance the transition, that's what. They were not impressed. The law makers praised his sincerity. When he was done, he went on to talk to 600 business leaders. Before he started, the president of the largest Japanese trade group warned Mr Gorbachev not to expect much because the economic conditions and the infrastructure, in your country, are not there. Not enough. Another tycoon said afterwards that you couldn't expect foreign investment from a country whose official bureaucracy is in chaos.

Several of them noted discreetly that Japan and the Soviet Union are still officially at war over the ownership of several islands to the north of Japan, in the Kuril chain. For most of the past 200 years they were Japanese territory but in August 1945 when the United States dropped the bomb on Hiroshima, Stalin thought that was a tactful time to declare war on the Japanese. And he seized these islands. A week or so later, the Second World War was over, and among the prizes that passed to the Soviet Union were the islands.

Japan and the Soviet Union have never signed a peace treaty because they still dispute who has the right to them. In delicate discussions about their fate, Mr Gorbachev conceded – it's the first time I believe a Soviet leader has gone so far – conceded that it might have been a mistake to seize the islands. But, he said, by this time, the Russian people at any rate, if not all the Soviet citizens, think of them as their own.

I don't gather from the reports that the Kuril Islands and Mr Gorbachev's hopes for a massive loan were discussed as a quid pro quo. The Japanese business leaders, at any rate, politely pointed to a more obvious obstacle to Japanese investment: the Soviet Union owes Japan $400 million in payment for Japanese imports. Of course in the contemporary world the fact that you owe someone a million dollars is no handicap to cadging another million. Indeed, it can be a help. Your prestige is in direct proportion to the size of your debt. It's only if you owe somebody $200 and you can't pay it that you run the risk of a stretch in the pokey.

By the way, we recently here were permitted to ponder the interesting ordeal of a tycoon of splendid proportions who is pressed for money. On several large properties he owns, hotels and the like, he's two or three billion dollars in debt to the bank. Therefore the bank has made him another loan, of say half a billion, so he can pay the interest on his original loans. Meanwhile the bank has been very tough on him. They've reduced his living allowance to $10,000 a week.

Perhaps Mr Gorbachev should put up for sale the Kuril Islands he doesn't own, say $400 million. Then he'd be ready to tap the Japanese for a couple of billions investment in the great social project he says is under way in his country.

So far, the Japanese, either in business or in parliament, are resistant to this approach.

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