RECENT events in the Soviet Baltic republics may soon force Mikhail Gorbachev's hand in defining a domestic policy so far marked more by uncertainty than the vision he has shown in foreign affairs. An enlightened domestic strategy could reinforce, rather than unravel, a union which comprises the patchwork quilt of Soviet nationalities. Mr. Gorbachev's efforts may have exhibited flexible ingenuity in foreign eyes, but it is clear that he has painted himself into a corner, somewhere just off the coast of the Baltic Sea. His latest dilemma, created by rampant nationalism, could yet provide the greatest United States opportunity in terms of encouraging Gorbachev to pursue a deliberate but cautious policy of economic and political devolution within the Soviet state.
The general secretary's four-year-old strategy of reform has unwittingly created a pressing nationalities problem which has enlivened a widespread human rights campaign. Indeed, at every turn Soviet citizens are making demands on the state and on each other. Demonstrations for basic needs and freedoms have now become part and parcel of emboldened independence movements.
More significant is the politicization of human rights along ethnic lines. The policy of glasnost released the ``Captive Mind'' as described by Polish writer Czeslaw Milosz. It created an ideological vacuum, as it brought into question the authority of the state. As a result, human nature dictated the need for a substitute authority. For the long-oppressed Soviet peoples, ethnic identity is the logical choice.
For the tiny Baltic republics, only 50 years a part of the Soviet Union, the Supreme Soviet is indulging nationalism at the expense of an institutionalized program of perestroika. Soviet leaders have accorded the republics of Estonia, Latvia, and Lithuania an unprecedented degree of economic autonomy in a program that is to begin Jan. 1, 1990. This program, albeit ill-defined, will certainly include a freer hand in regulating local enterprise and privatizing much of local agriculture.
By recognizing the Balts' right to set economic policy for themselves, the central government has tacitly endorsed a measure of political self-rule for this small, Western-oriented region, that is not accorded to other republics. Estonia capitalized on its new-found latitude by passing a voting law effectively discriminating against newer residents in the republic - namely, ethnic Russians. The ethnic Russians in turn staged a series of strikes, mostly in the Estonian capital of Tallinn.
When an independent-minded culture such as that represented by Estonia poses a threat to the core Soviet populace - ethnic Russians - the increasing tendency will be for the latter to look to the central state to protect their basic rights from a perceived rival (and ``foreign'') authority. This could become a pattern of conflict among ethnic groups that long have been part of the USSR.
Although the Baltic republics are exceptional, they are nonetheless seen as a testing ground of tolerance for other ethnically rooted independence movements, such as those in Byelorussia, Moldavia, Georgia, and the Ukraine. The Soviet regime is trying to decipher the human rights conundrum posed by these movements, and is looking westward for help.
The occasion for this will come in September, when Secretary of State James Baker and Foreign Minister Eduard Shevardnadze meet in Wyoming. There they will sign a bilateral agreement on issues ranging from the rule of law to the rights of workers and minorities. Discussions will extend well beyond the traditional topics of emigration and political prisoners. This reinvigorated, US-Soviet dialogue could prove invaluable to both sides, by giving US officials a formal means to counsel the Soviets in ways to pursue their reformist agenda with levelheaded restraint. American policymakers could also use this forum to impress upon the Soviets that, despite the obstacles to peaceful, short-term change, violent government repression and counter-reform is the least desirable response to internal instability.
The crackdown in China and subsequent international opprobrium have not gone unnoticed in the USSR. Economic sanctions and denial of multilateral loans to China underscore that that benighted regime is again isolated both politically and economically. It is important to recall that eventually joining the global economic system is the linchpin of Gorbachev's foreign and domestic policy. Mishandling the Baltic crucible would seriously hamper this strategic goal.
Human rights as an ethnic cause is now taking primacy because perestroika has not yet acquired - if it ever will - a legislative, union-wide foundation. Gorbachev, a student of law, understands that economic reform is meaningless without this juridical base. But reforms sanctioned beyond the reach of political expediency threaten the survival of the Communist Party system.
US policy must therefore endorse Gorbachev's leadership as providing the only realistic hope of transforming this system into a more tolerant, decentralized type of federation. But glasnost so far has failed to sway the millions of lower-level, party apparatchiks who fiercely reject notions of change that threaten their privileged positions.
With US political support, Gorbachev's reform from above could do more than stir passions from below.