After the USSR: Parallels and Pitfalls for the UK

The history of the division of the assets and foreign debt of the former USSR – a political union dominated by one large country, possessing nuclear weapons and a permanent seat on the UN Security Council – provides useful parallels and precedents of how the same might be done in the event of Scotland leaving the UK.

But, more importantly, the process offers examples of possible pitfalls for Scotland (and England) to avoid. Russia has fought open or proxy wars with three former USSR republics (Ukraine, Georgia, Moldova), while three others (Estonia, Latvia, Lithuania) are now members of an opposing military alliance (NATO), which sees Russia as a threat.

This deterioration in relations can be traced back to the mechanism used to divide up the former union’s assets and liabilities. Initially, in 1991, all former republics of the USSR were regarded as successor states (albeit with varying “weights” of importance). But in early 1992, for various reasons, Russia unilaterally declared itself to be the continuation of the USSR. This caused a series of problems, particularly with Ukraine, the effects of which are still being felt today.

The lessons for a newly independent Scotland are that, rather than “withdrawing from the UK” following a yes vote (leaving the rUK as the continuation of the UK), we should instead seek to gain our independence via the dissolution of the Acts of Union in Parliament and revert to the situation as it was in 1707. This would leave two successor states – the Kingdom of Scotland and the Kingdom of England – rather than the continuation of the same UK state which has fought so bitterly and so long against Scottish self-determination.

The creation of two new (or, rather, old) successor (or original) states would be much healthier in the long run, both for Scotland and for England. Indeed, there are just as many arguments for Scotland, rather than England, being regarded as the “continuation of the UK” and inheriting its seat at the top table (these factors include total land and sea area, presence of natural resources, GDP per capita, balance of payments, EU membership, physical control of nuclear weapons).

How the USSR Was Split Up

After the collapse of the USSR in the immediate aftermath of the failed military coup of August 1991, the newly independent republics came to an agreement similar to what many envisage happening to the UK in the event of Scottish independence. Each state agreed to assume a proportional share of the foreign debt of the USSR and to receive, in compensation, a similar share of the assets of the USSR.

A formula was devised to calculate the relevant share of each new republic. This formula was based on four criteria – the percentage share of the exports, imports, GDP and population of the USSR (between 1986 and 1990). The result was a weighted percentage given to each republic, ranging from Russia (61.34%) and Ukraine (16.37%) to Turkmenistan (0.70%) and Estonia (0.62%).

In this way, each of the fifteen new republics (including Russia) was considered a successor state to the USSR. The three Baltic nations (Estonia, Latvia, Lithuania), however, considered that they had been illegally incorporated into the USSR and refused to join this agreement. They went their own way as non-successor states, leaving the twelve others to divide up the former Soviet Union’s assets and liabilities.

But the Treaty on Succession to the USSR’s State Debt and Assets was almost immediately overturned by three unilateral events on the part of Russia in the winter of 1991/92. This resulted in Russia now acquiring the status of the continuation of the USSR – rather than being one of fifteen successor states (albeit with a 61.34% share of the assets and liabilities).

In December 1991, the international community decided that Russia should inherit the former seat of the USSR on the UN Security Council and all other international organisations. Then, in January 1992, the Russian Foreign Ministry laid claim to ownership of all Soviet embassies and consulates in foreign countries (and, in this way, all foreign Soviet property; the USSR did not own any overseas territories).

Finally, in February 1992, the bank which had been overseeing the payment of Soviet debts (Vneshekonombank of the USSR) was taken under the jurisdiction of Vneshtorgbank of Russia and subject to Russian law. This meant that Russia now controlled all the bank deposits of the former USSR – and was also responsible for all its foreign debt.

The eleven other republics had little option but to go along with this decision (the economic situation at the time would have made it impossible anyway for some states to service their share of the USSR debts). Any specific issues arising over the process were regulated by a series of bilateral agreements, signed between Russia and each of the other republics between November 1992 and December 1993.

The one sticking point was Ukraine, which refused to recognise Russia as the single continuation of the USSR and Russia’s corresponding claims on all Soviet assets and liabilities. To this day, Ukraine continues to insist on its 16.37% share of the foreign property of the former USSR, leaving many overseas assets in legal limbo.

Nuclear Weapons

One of the reasons why the international community supported Russia’s decision to become the “continuation” of the USSR was the little matter of ten thousand nuclear warheads pointing at North America and Western Europe. This side-story of what happened to the USSR’s nuclear arsenal after 1991 provides another possible parallel for the UK following Scottish independence.

After the USSR was formally dissolved on 26 December 1991, four new nuclear powers (instead of one) appeared on the world map – Russia, Belarus, Ukraine and Kazakhstan. Moreover, in terms of the numbers of nuclear warheads, Ukraine and Kazakhstan immediately occupied third and fourth place (respectively) after the United States and Russia, boasting stockpiles larger than the three other members of the “nuclear club” combined (Britain, France and China).

The international community was opposed to the appearance of new nuclear states, which went against the Treaty on the Non-Proliferation of Nuclear Weapons. The United States, which had signed the Strategic Arms Reduction Treaty (START) with the USSR on 31 July 1991 – three weeks before the failed military coup – was particularly keen to see all Soviet nuclear warheads transferred back under the sole control of Moscow.

Not without foreign diplomatic pressure, Kazakhstan and Belarus quickly announced their desire to pursue non-nuclear status and removed all tactical warheads to Russia by March 1992. Ukraine did the same by May 1992, when all three countries signed the Lisbon Protocol to START, agreeing that all their remaining strategic nuclear weapons would be either destroyed or transferred to Russia.

But Ukraine then began dragging its heels, demanding additional security guarantees, military aid and financial compensation. The result was the Budapest Memorandum of 5 December 1994, which provided security assurances of the territorial integrity of Ukraine, Belarus and Kazakhstan (this treaty was violated by the Russian seizure of the Ukrainian territory of Crimea in 2014).

The process of removing all the remaining nuclear warheads, missiles and strategic bombers from Ukraine and Belarus took five years (until the end of 1996). Ukraine believed that it had been short-changed in terms of the financial compensation ($276 million when it might have received $10 billion) and even Belarus later regretted that it had been so quick to give up such an important international “bargaining chip”.

Paths Open to Scotland

So which of the four paths is Scotland going to follow? Will we be like the three European-orientated Baltic nations, who stated that they were “southern Scandinavians” and simply walked away from the USSR – reverting to the independent states they had been in 1940, before their undemocratic incorporation into a union with their larger neighbour?

Following this scenario, Scotland would simply become the continuation of the previously independent Kingdom of Scotland, which existed for almost a thousand years until 1707. This is not so difficult to imagine, as we are still basically the same country, with the same physical territory, languages, laws, legal and education systems.

Or will we be like the ten republics who agreed to the “zero option” of no share of the common assets in return for starting afresh with no foreign debt – in order to allow the rUK to be the sole continuator state? Or will we be like Ukraine, which disagreed to Russia becoming the continuation of the former union and has, as a result, experienced sour relations with its neighbour ever since?

Or could – daring thought – Scotland play the role of “Russia” and the state which inherits the union’s seat on the UN Security Council and other international organisations? The idea is not so fantastic as it first sounds. There are many areas in which Scotland would outweigh the rUK in terms of economic, political, geographical, military and geopolitical clout.

Scotland is proportionally richer than the rUK, with a higher GDP per capita (we are a net contributor to the UK budget). Scotland is wealthier in natural resources, controlling 90% of the UK’s fresh water, 96.5% of the crude oil production, 92% of the hydroelectricity, 81% of the untapped coal reserves and 65% of the natural gas production. We also have 25% of the tidal energy, 25% of the wind power and 10% of the wave energy in the whole EU (and two-thirds of its total oil production).

Many accustomed to BBC weather charts or simplified maps think that Scotland is smaller in size than England and Wales. But Scotland’s territorial area is not just 80,000 square kilometres of land (48%). There are also 88,450 square kilometres of sea area (52%). In fact, if you add the sea area out to the 200 nautical mile limit, over which we have rights of exploration and exploitation, Scotland increases in size by 600%.

Unlike the rUK, Scotland is a net exporter and would have a very healthy balance of payments. The (suppressed) McCrone Report of 1975 had this to say about an independent Scotland: “The country would tend to be in chronic surplus to a quite embarrassing degree and its currency would become the hardest in Europe, with the exception perhaps of the Norwegian kroner.”

Scotland would likely have membership of the European Union. We would start life as a newly independent nation with physical, if not operational, control of nuclear weapons. All these are weighty arguments showing that Edinburgh has just as big a claim as London – if not more – to the UK’s seat on the UN Security Council when the two original members of the bipartite union go their separate ways.

Outrageous? Possibly. But it beats being told by foreign-based media and political parties that we are “too wee, too poor and too stupid” and “not genetically programmed to make our own decisions”. And wouldn’t it be lovely to see Scotland’s UN ambassador Alex Salmond place a veto on Westminster’s next military adventure...

Back to 1707

The point of this article is not how to wangle a permanent seat on the UN Security Council (an independent Scotland would still have a chance to be one of the ten non-permanent members elected for a two-year term). The main conclusion to be drawn from the story of the end of the USSR is how vitally important it is, for future relations, to prevent one single nation from being seen as the continuation of the previous union.

Russia currently has very bad relations with four of its western neighbours which were once fellow members of the same union (Ukraine, Lithuania, Latvia and Estonia). Ukraine is virtually in a state of warfare with Russia, while the three Baltic nations are now members of NATO and regard Russia as a potential military threat. But it was not always like this.

In 1990, when the Baltic nations first declared independence from the USSR, they were warmly supported by the Russian republic (RSFSR) and its president Boris Yeltsin (as opposed to the common Soviet president Mikhail Gorbachev). Back then, all fifteen republics were straining to be free of a moribund union epitomised by corruption, cronyism, disastrous economic policies and a lack of human and civil rights.

The breakdown in mutual relations can be traced back to the point when Russia went from being a fellow successor state of the USSR to the official continuation of the Soviet Union. When Russia took control of all the USSR’s foreign assets and bases in 1992, it also inherited the entire baggage of Soviet foreign policy, history and geopolitical strategy.

While relations with England are unlikely to descend to the same level as those between Ukraine and Russia, there is much potential for acrimony. The secret redrawing of Scotland’s maritime border in 1999, for example, awarding over 15,000 square kilometres of sea area – along with seven oilfields – to England. And who needs a Zhirinovsky when we have our own hotheads suggesting English planes bombing Scottish airports?

Like the desire of Ukraine and the Baltic states to turn their backs on Russia and embrace European values, there is also likely to be an “ideological” struggle between two rival economic strategies in a post-indy Britain. If Westminster continues neoliberal “austerity” economics, it is unlikely to wish success on an independent Scotland harnessing its oil wealth to implement Scandinavian-style, social-democratic policies.

London’s long-standing bitterness at all historical attempts by Scots to reassert their sovereignty will surely continue if Scotland breaks away and Westminster continues to head the same (rump) state. It will be much healthier in the long run, for both sides, to dissolve the bipartite union of 1707 and revert to being two new (or, rather, old) successor (or original) states – the Kingdom of Scotland and the Kingdom of England (it will be up to the Welsh and the Northern Irish to decide their own roles in the latter).

So the lesson for Scotland, following a yes vote, is that, rather than “withdrawing from the UK” (leaving the rUK as the continuation of the UK), we should instead seek to implement independence via the dissolution of the Acts of Union. This could be done by the SNP at Westminster or by the SNP-Green majority at Holyrood – either employing the British constitutional point that the 59 Scottish MPs at Westminster represent the “considered will of the people of Scotland” (Lord Cooper, 1953) or by repealing the Union with England Act passed in 1707 by the Parliament of Scotland (which was reconvened, in the famous words of Winnie Ewing, in 1999).