Soviets appeal for aid with winter ahead Foreign minister calls U.S. a 'friendly ally'

Baker due in Moscow THE SOVIET CRISIS

September 09, 1991|By Frank Starr | Frank Starr,Chief of The Sun's Washington Bureau

WASHINGTON -- Expressing an urgent need for economic aid, the new Soviet foreign minister, Boris Pankin, said yesterday that it was his country's goal to "emerge as a peaceful and friendly ally of the United States and of the rest of the world."

Citing instructions from President Mikhail S. Gorbachev and the just-dissolved Congress of People's Deputies, Mr. Pankin said the Soviet Union would remain "loyal to its international commitments and treaties," including prompt withdrawal of troops remaining in Germany and Poland.

He said that he was giving these assurances during a Cable News Network interview "to calm down public opinion and . . . to create a framework in which the Soviet Union will be able to interact freely with other countries."

Such interaction includes the visit starting tomorrow to Moscow of Secretary of State James A. Baker III, to whom Mr. Pankin expects to make an urgent appeal for emergency supplies of food and medicine for winter, for technical help in establishing the machinery of a free-market economy, and for investment credits for industrial projects.

Mr. Pankin, 60, former head of the Communist Party newspaper Komsomolskaya Pravda in its reformist days and former ambassador to Sweden and Czechoslovakia, drew attention to himself during last month's coup attempt when he issued a statement from his embassy in Prague denouncing the putsch.

Mr. Gorbachev tapped him to become the third Soviet foreign minister in a year after the second one, Alexander A. Bessmertnykh, resigned amid doubts about his role in the coup.

Expressing hope for a wide-ranging discussion during his talks with Mr. Baker, Mr. Pankin said that "we'll probably talk about very close economic interaction between our two countries . . . with the goal to promote the democratic processes in this country."

In separate television interviews yesterday, economists and trade specialists from the United States, the Soviet Union and Europe all expressed a sense of acute urgency in a need to establish economic machinery to handle both emergency humanitarian aid before winter and longer-term rebuilding of a market economy to replace the Soviet system.

Paul Krug, a vice president of Continental Grain Co., said that shipments already paid for and currently being loaded in New Orleans would "come to a halt" soon if adequate credits are not arranged.

"The Russian contacts that we have say that they need more grain now . . . if they can get the credits. In order to have a smooth supply of this grain reach the Russian people over the whole course of the coming winter, those shipments should start pretty soon," he said.

The New York Times reported yesterday that no U.S. or foreign bank had yet come forward to claim the $315 million in agricultural loan guarantees authorized by President Bush two weeks ago in response to urgent Soviet appeals.

U.S. and foreign banks have been unwilling to accept Soviet credit, even under a $600 million U.S. guarantee of 98 percent of the principal and the first 4.5 percentage points of interest, because of political instability and uncertainty about the continued existence of Soviet agencies undertaking the debt. Four European banks, under pressure from their governments, did underwrite some sales, under the $600 million guarantee.

"If credit were not a problem," Mr. Krug said, he expected that Soviet buyers would import 40 million tons of grain this year, much of it from the United States. He said early indications were that Soviet farmers face "one of their worst crops on record."

Equally urgent, economists said, is a need to establish long-term market structures in the Soviet republics.

Jeffrey Sachs, the Harvard University economist who designed Poland's rapid conversion to a market economy, cited a need to get goods into shops "and get the chaos ended, even when there is no clear understanding of the precise measures. . . . What's needed most right now is to let go. It's to stop all the controls."

Help from the International Monetary Fund and World Bank in Eastern Europe has not been forthcoming, Mr. Sachs said, and an unwillingness to accept growth of individual wealth after decades of communism also have hampered reform.

He added, "I think there is only a very short space of time in which it will be possible to carry out the reforms."

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