Washington Urged to Help Ex-Soviet Republics

POLITICIANS and analysts here and abroad are pressing Washington policymakers to look beyond their election-year "America first" perspective and help avert a crisis in the former Soviet Union.

The issues are familiar. Russian President Boris Yeltsin is being threatened by a widening group of anti-reformers; he continues to warn Western supporters of his plight. United States, European, and Japanese leaders, together with the International Monetary Fund (IMF) and the World Bank, have pledged $24 billion to help, but - a year later - have failed to follow through.

Critics like former President Richard Nixon once again charge that the Group of Seven (G-7) wealthiest countries - the US, Britain, Canada, France, Germany, Italy, and Japan - are too consumed with their own affairs to pursue trouble-shooting abroad.

Global financial organizations have imposed impossible conditions on the struggling reformers, they say, and the international resolve to help has simply not been there.

"There has been a devastating lack of action so far," says James Elles, a conservative member of the European Parliament and spokesman for its finance committee. The European Community (EC) is too distracted by its own political and monetary problems to step out front, he says, while "Japan is sitting on its bank accounts." The US, he says, is the only country with the "political oomph" to act.

Robert Strauss, who until this week was the US ambassador to Russia, returned to Washington with a sober view of the Russian economy and the lack of momentum for a cooperative aid approach.

At a Monitor breakfast on Wednesday, he ticked off some of the basic macroeconomic problems that he says have worsened since he took up the Moscow post last year: the Russian bureaucracy "does not function," corruption is endemic, industrial and agricultural production have plummeted, no safety net exists for the unemployed, and the central bank is recklessly bailing out failing enterprises. "That's the glass half-empty," he says.

Ambassador Strauss adds that the success of American ventures in Russia, the well-trained local work force, and the establishment of small free-market entrepreneurs help make "the glass half full." To help ensure stability, Western aid is imperative, Strauss says.

If would-be donors are waiting for a stronger commitment to reforms, they should take a closer look, says Anders Aslund, director of the Stockholm Institute for East European Economics and one of the chief advisers to Mr. Yeltsin's deputy prime minister, Yegor Gaidar.

The Russian government is making progress in curbing the flow of money, Mr. Aslund says. Last week, for example, a credit commission was formed, headed by Mr. Gaidar, to check all credit demands from the central bank. "It means a lot of demands are rejected," Aslund says.

Enterprises with tax debts must now use central bank credits to pay them off; the money goes directly to state coffers. Russia is also curtailing credits to other republics. These and other measures, including bringing the reckless central bank under Yeltsin's control, mean a far more responsible monetary policy, he says, adding that Gaidar will next devise a plan to stabilize the currency.

Aslund is very anxious about the local challenges to Yeltsin's reform program and the tepid international response. Rich nations are hiding behind the IMF, which they expect to assume the risks and responsibility of aid, he charges. But the fund is moving very slowly, he says, and there is no G-7 pressure to forge ahead.

"The IMF can hardly make a massive effort with limited resources and nine people dealing with Russia," Aslund says. Since the "Europeans and Japan are looking for every excuse not to get involved," the US must take the lead, he says.

Strauss says the US should concentrate on diffusing Russia's military time bomb by targeting money for the construction of housing for returning soldiers.

Sen. Richard Lugar (R) of Indiana and Sen. Sam Nunn (D) of Georgia are in Russia and other former Soviet republics this week to continue an aid-for-arms-reduction dialogue they started with the newly independent governments last spring.

They will lobby President-elect Bill Clinton to adopt their plan for a 20-year, $5.5 billion to $6 billion US-funded program to purchase uranium from Soviet missiles now collected on Russian territory.

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