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America and Russia, long competitors in space exploration, are now partners in space development. On the eve of the 25th anniversary of the Apollo moon landing, America's great victory in the space race, the House of Representatives has endorsed the Clinton Administration's vision of partnership with Russia in building an international space station.

The future of the American space program now depends on the future of the Russian space program, and Russia itself. Unfortunately, the path ahead will not be easy. I recently spent ten days in Moscow, and saw first-hand many of these difficulties.

The apparent deterioration at the Institute for Space Research (IKI), formerly headed by noted scientist Roald Sagdeev, is astonishing. Offices are unlit, and the hallways are lit by only the barest minimum of lights needed to find ones way. This cavernous structure has the air of an abandoned ship, with a few remaining passengers a crew reluctant to depart their sinking vessel. While the Institute was never a beehive of activity (in common with most large agencies), it now appears largely deserted. Given these conditions, the recent decision to delay the launch of a robotic Mars probe by two years, from 1994 to 1996, must come as no surprise.

The Mir space station mission control center is only activated during those periods when the ground center is in contact with Mir. As soon as contact is lost, the control center is closed up and the personnel immediately scatter, returning to their primary employment -- the moon-lighting jobs on the side which are their primary source of income.

At first glance, all of this would seem disturbingly symptomatic of uncontrolled institutional disintegration, calling into doubt the ability of the Russians to fulfill their commitments to the space station partnership.

Fortunately, these are the results of an intentional policy which has been systematically implemented throughout large sectors of Russian society. Beginning last year, the core skilled and professional personnel at major aerospace institutions were encouraged to find outside sources of income. Today, much of the workforce has at least two jobs: an official position, which provides institutional identity but not much money, and one or more entrepreneurial jobs which provide the bulk of their income.

Russians from all walks of life are now charged with an entrepreneurial enthusiasm which must be seen to be believed. Although I went to Russia to discuss policy, few discussions concluded without a review of immediate money-making opportunities, all of which were interesting, and some of which were quite attractive.

Thus many of the large Soviet-era institutions have transformed themselves into "virtual organizations" -- the latest Western management craze. They are able to call upon a large pool of talented personnel if the need or opportunity arises, without having to support the full cost of these personnel.

But the transformation to modern business practices remains dangerously incomplete. The primary Russian contractor on the space station, NPO Energia, is making laudable progress toward privatization. But upper management remains committed to the traditional Soviet-era management style of secrecy and exclusion of outside supervision. Managers at Energia and other Russian aerospace companies appear eager to join the world marketplace, but they have yet to learn that private ownership is but one element of contemporary economic competitiveness. Modern computer networks are breaking down authoritarian structures in American companies, and the ultimate success of Russian reform will depend on emulating this trend toward openness.

Inadequate supervision ("failure to penetrate the contractor" in NASA parlance) contributed to the initial problems with the Hubble Space Telescope. More recently, NASA's Jet Propulsion Laboratory had an inadequate understanding of the failed Mars Observer spacecraft built for it by Martin Marietta. As long as traditional Soviet-style managers remain so intensely devoted to avoiding oversight by external agencies, similar problems appear inevitable on the space station.

Another challenge facing these institutions is the fact that raw material and energy prices have been decontrolled, and risen to world market prices. During the Soviet era, prices were kept artificially low, and these institutions and their facilities are predicated on cheap raw materials, energy and electricity. The lights are out at the Space Institute (and elsewhere) because they can't pay their electric bill, a not uncommon phenomenon.

But energy prices are not the only ones which are approaching world levels.

Today the dollar buys nearly 2,000 rubles, whereas a year ago it bought fewer than 1,500 rubles. Thus I was startled to learn that hiring a car and driver for a day would cost not the $25 of a year ago, but $45. I was initially wary that enterprising Muscovites were trying to take advantage of someone with more dollars than sense, I soon discovered to my surprise that indeed, the dollar today is worth only half what it was a year ago.

The battered Russian economy is recovering. Oranges are sold on every street corner, and consumed by one and all. I was repeatedly stuck in heroic traffic jams near the Kremlin, which put the gridlock of mid-town Manhattan to shame. The Space Research Institute may be largely abandoned, but the hold-outs are all coming to work in cars than pack its diminutive parking lot.

While there was every reason to hope that the temporary over-valuation of the dollar in Russia would eventually subside, there appears to have been little anticipation that the devaluation of the dollar would come so soon or on such a scale. The declining purchasing power of the dollar has been obscured by the continuing and inexorable decline of the dollar-ruble exchange rate, which as with many other Russian statistics fails to capture the most important aspect of the situation.

Though the declining value of the dollar is widely appreciated in Moscow, there appears to be an almost complete unawareness of this development in Washington. Upon my return I queried dozens of officials throughout the government, almost all of whom were entirely oblivious to this momentous development.

Discussions of joint projects over the past several years were predicated on the temporary undervaluation of the ruble relative to the dollar, which rendered Russia an extraordinarily inexpensive labor market. Commercial and other joint projects which seemed quite attractive a year ago must now seem less certain. The just-concluded space station negotiations reportedly were complicated by Russia's demand that the $400 million payment for joint space activities agreed to last year be doubled to $800 million. Further requests for more money for less work may be anticipated as the Russian economy continues to recover.

These challenges will pose unique difficulties in the years ahead. But the future of the American space program, and the future of our relations with Russia, depend on meeting these challenges. Surely the agency that first landed humans on the Moon is adequate to this task.

President Kennedy confronted a Soviet adversary with a race to the Moon, and America won this competition. President Clinton entered office committed to transforming our relationship with Russia to one of partnership, building a cooperative framework in which both countries can benefit. Four decades of Cold War consolidated a vast superstructure of adversarial institutions, such as NATO and various arms control arrangements, which will take years to transform.

But just as cooperation between France and Britain on the Concorde supersonic transport paved the way for British integration into the European Community, cooperation on the space station will pave the way for integration of Russia into the community of industrial democracies.

1. John Pike is the Director of the Space Policy Project of the Federation of American Scientists, in Washington, DC.