ABSTRACT
Conversion of the defense sector is only a specific instance—albeit a particularly crucial one—of a process of conversion” that needs to take place in many sectors of Russia’s economy. Conversion has most often been treated as an enterprise-specific task. Yet, the record of success in the West using this approach to conversion is spotty at best. Excessive reliance on plant-level, project-by-project conversion in the majority of defense enterprises may be a disservice not only to the larger national purpose behind the conversion effort but to former arms producers themselves. A broader application of the term “conversion” would be to consider it as an economy-wide phenomenon. The type of conversion most typically found in the West is for alternative employers to bid away underutilized resources. This is not now a realistic option in many areas of Russia, yet the less that plant-level conversion proves practical, the more that regional economic development becomes an issue. There is a potential conflict of economic and political interests between current enterprise management and local government authorities; the degree of actual conflict will depend upon how quickly the already existing enterprises operating within the current industrial structure can help bring about the larger purpose sought by central policymakers. There are several areas where the activities of private Western business interests, in looking after their own interests, may also contribute in a profound way to easing the course of conversion. It is possible that in several ways Western business interests could help to reconcile the divergence in conversion objectives 768between enterprises and governments. The enhancements direct investment may bring to the conversion process will not stem from charitable instincts. Western businessmen will remain true to their own self interest. But in doing so, they are likely to magnify their contribution to the conversion process at both the level of the enterprise and of the larger economy, particularly at the regional level.
