Strauss puts faith in Russia's future

February 20, 1992|By Will Englund | Will Englund,Moscow Bureau

MOSCOW -- This is Robert S. Strauss, the optimist, speaking:

"Things are going to be worse next winter than they are today. There's no reason they should be any better. It will be terribly hard."

Optimist?

Mr. Strauss, the U.S. ambassador to Russia, couches his optimism in terms of expecting the very worst. But because he believes that democratic Russia can probably survive the very worst, he has faith in the future here.

"I expect the tolerance of people will be greater, for one thing. And I am more certain than I have ever been that they are going to make it here," Mr. Strauss said in a meeting with U.S. reporters yesterday.

"Things may be worse than they were six weeks ago," he said, "but they're not nearly as bad as I thought they would be six weeks ago."

Public reaction to the sharp price increases and other economic reforms of President Boris N. Yeltsin's government has been less "emotional and intense" than he had feared. The army has not stirred up trouble. Mr. Yeltsin's standing "seems to be very high."

And there are the barest signs that the government might be on the right track. Call it the faint-glimmer-of-hope school of thought.

Mainly, the ruble is growing stronger. After plummeting since the fall, its value has climbed back from 130 to the dollar to 90.

And rubles are growing scarce. Banks have run out, and people are desperate to find them -- which indicates that the government has finally stopped printing them as fast as it could.

Imports are way up and exports are down -- which the economic reform team led by Yegor Gaidar sees as good news, at least for the short term. It means that the high prices in Russia are actually luring goods into the country -- a complete reversal of past trading practices.

But there's still a way to go, Mr. Strauss said. Russia needs real help from the West, he said -- not charity but technical assistance and "prudently structured credits."

So far, the West has provided Russia with countless diplomats' visits and symbolic food aid for a country that's not going hungry.

"Yeltsin can't live on conversational support," Mr. Strauss said. "He needs tangible support. And I think he's going to get it."

What kind of support? Paul A. Volcker, former chairman of the Federal Reserve Board, might get involved in advising the Russian Central Bank. The Union Pacific Railroad, which has already sent consultants to Poland, says it could help Russia straighten out its rail distribution problems in less than a year. Certain unprofitable oil wells could be made profitable very quickly with Western technology.

Then maybe some lawyers to help Russia build some sort of legal structure for business to operate in. At this thought, Mr. Strauss brightened.

"If you take 500 lawyers out of our government and put them in this government," he said, "it will be one of the great advances of all time, for both countries."

But there's still some business spirit lacking here, he said. Sausage goes on sale for 170 rubles a kilogram (2.2 pounds); after three days when nobody's bought it at that price, it's thrown out.

"I'd like to find somebody just to open a dozen grocery stores out here," Mr. Strauss said. "What a difference that would make, once people could see it.

"You don't have to do everything as big as all outdoors. If they want a partner, I'll go into business with them. I'll put up the money. "

But what is Russia getting itself in shape for? The punishing unemployment and even higher prices that lie ahead as market reforms plunge deeper through the economy.

Three million to 6 million people may be thrown out of work this year, Fyodor Prokopov, a deputy minister of labor and employment, said yesterday.

About 95 percent of retirees receive less than the subsistence level, another official said.

"I don't know how they'll weather that," Mr. Strauss said, sounding more curious than pessimistic. "But the stakes are so high. The West can't afford to sit back."

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