Russia's message to U.S.: Less talk, more money

April 02, 1993|By Will Englund | Will Englund,Moscow Bureau

MOSCOW -- No matter what happens at this weekend's summit in Vancouver between Boris N. Yeltsin and Bill Clinton, it's going to be easy for Mr. Yeltsin to come out of it looking bad.

If, in the eyes of Russians, he wins promises but little or nothing of substance from President Clinton, then he has clearly failed.

But if he gets major financial support, it could look as if the West is preparing to play a more active role in internal Russian affairs -- and then Mr. Yeltsin's enemies would be leaping all over him.

The president must appear to be gaining significant aid, but on his own terms.

And the best thing for the United States to do, says Pyotr Gladkov, of the USA-Canada Institute here, would be to commit itself to substantial assistance while passing on the horn-blowing.

"Less talk. More work," says Mr. Gladkov. "No political commentaries. No declarations. Just substance." After a visit to Washington, Andrei V. Kozyrev, the Russian foreign minister, said much the same: Russia does not need advice as much as it needs actual dollars.

Mr. Yeltsin is coming off a particularly difficult month. The Congress of People's Deputies met twice in March -- the first time in an attempt to limit his powers and the second time in an attempt to throw him out of office. The second session ended in stalemate, with a decision to hold a referendum April 25 that will most likely solve nothing because of the voting rules.

The battle in Russia comes down to one between Mr. Yeltsin's reform-minded government and the hostile legislature, which would like to take control of Russia's economic structures, on the other.

Neither side is strong enough to impose a solution. Both sides accuse the other of wrecking the economy.

After surviving a move to impeach him earlier this week, Mr. Yeltsin has emerged with his political standing somewhat enhanced -- but he's now heading for a referendum in just three weeks' time that could prove to be a tar pit for him.

What he wants from his two days in Vancouver is specific and concrete -- something to show the folks back home.

* Mr. Yeltsin will press Mr. Clinton to agree to a restructuring of Russia's $80 billion debt, with some being written off and interest payments on the rest being postponed.

* The Russian president would like U.S. guarantees for private investors, to encourage concrete projects in regions all over Russia.

Such an approach would bypass government bureaucracies, and it recognizes that direct financial aid from the U.S. and other governments can never provide all that Russia needs.

President Clinton has talked about a $700 million package, but it will take many billions, wisely spent, to put Russia on its feet.

* A ruble stabilization fund was estimated to require $6 billion last year; now it will take $10 billion, but Mr. Yeltsin will be asking Mr. Clinton to sponsor such a fund along with the other major Western countries.

"Without it, it will be very difficult to keep the ruble's value, and without that we will have hyper-inflation," says Mr. Gladkov.

Neither Mr. Clinton nor any other Western leader will hand over the money as long as the Russian central bank, which is in the hands of the parliament, keeps issuing trillions of rubles.

But if Mr. Yeltsin can win support for the actual use of such a fund, then he will have what Mr. Gladkov calls a "mighty weapon" in his battle to take control of the bank and cut off the flow of rubles.

* Mr. Yeltsin would also like the United States to contribute to a social safety net that would directly help those people who have been hurt by Russia's severe economic dislocations.

What Mr. Yeltsin doesn't need is the kind of showy support that some Washington officials have been suggesting.

The United States already has Peace Corps volunteers here in nTC several cities who are supposed to be teaching Russians how to run their businesses. This program, devised under James A. Baker III, the former secretary of state, misses the point that the profit motive is universal (or nearly so) and that what Russia really lacks is a check-clearing system, contract law and private land ownership. None of these is obtainable through the Peace Corps.

Now some in Washington are reportedly urging a new influx of farmers and business people to teach Russians American ways. Many here would see that as unnecessary and an obtrusive reminder of American feelings of superiority.

And that's not a small issue.

During last month's Kremlin crisis, one hard-line member of the Russian Congress, Iona Andronov, accused Mr. Yeltsin of being Mr. Clinton's puppet, and sarcastically thanked the U.S.

president for not ordering the arrest of Mr. Yeltsin's foes in the legislature.

Indeed, Mr. Yeltsin's allies say he has reason to feel let down by the U.S. side. Western nations promised $24 billion in assistance last year, of which the Russians calculate $11.9 billion actually materialized -- and much of that was in the form of grain credits that contributed to the foreign debt.

Mr. Yeltsin's Cabinet embarked on its severe economic reforms, Mr. Gladkov says, partly in the expectation that Western aid was coming. Its failure to arrive helped to make things worse.

"I think this has been a devastating year for the economy, and I'm glad Yeltsin finally started to talk about it," says Georgy Arbatov, head of the USA-Canada Institute.

Mr. Arbatov says Mr. Yeltsin's government had adopted an International Monetary Fund policy that was designed for Third World countries.

"This was a devastating policy," he said. "It was forced on him. Yeltsin trusted the West."

Now, says Mr. Gladkov, helping Russia will cost more than it would have a year ago, "because the situation in Russia has deteriorated a lot, both economically and, more importantly, politically."

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