US Leadership May Be on Line With Russian Aid

WHILE President Clinton is pushing his domestic agenda at home this week, Treasury Secretary Lloyd Bentsen is traveling abroad to bolster what the White House calls its top foreign-policy goal.

Today Mr. Bentsen meets with Russian leaders in Moscow, where he will drive home Washington's commitment to helping their fledgling market economy and press for more reform.

Bentsen's trip comes at a difficult time for Washington's new foreign-policymakers, who have been criticized for wavering in their formation of Bosnia policy. They are also on the defensive about comments from State Department official Peter Tarnoff, who told reporters last week that Washington's deferral to European powers on Bosnia reflects a more isolationist mode of US foreign affairs, one in which the United States is likely to take a back seat on many issues.

Using US initiatives on Russia as a springboard, Secretary of State Warren Christopher has since tried to nullify Mr. Tarnoff's comments. In a University of Minnesota speech, he framed the aid issue in terms of US status around the world: "The need for American leadership is undiminished ... where collective responses are more appropriate, we will lead in mobilizing responses. But make no mistake, we will lead."

While Mr. Christopher underscored the leadership theme some two dozen times during his speech, it is unclear just how much support the Clinton administration can muster, either domestically or overseas, to assist the ex-Soviets.

On Capitol Hill, Mr. Clinton faces stiff opposition to his $1.8 billion Russian aid package. The House Appropriations subcommittee on foreign operations approved the package last week, but committee chairman David Obey (D) of Wisconsin says it will be "a tough sell" to win broader legislative support, especially from the Senate counterpart committee.

Sen. Richard Lugar (R) of Indiana, who has consistently called for more US engagement in Russia, is skeptical about the president's ability to win lawmakers' approval. Mr. Lugar says he cautioned the president not to introduce assistance with a White House economic plan that would run into opposition on its own. But that is precisely what happened, says the frustrated senator. Questioning reforms

In addition to their concerns that Congress cannot afford to send money abroad when Americans face budget cuts and tax hikes, many US legislators remain unconvinced that Russian reforms are serious, and doubt the accountability of the aid recipients. "The Central Bank still rumbles on to its own [anti-reform] tune," printing money and doling it out to failing state-owned enterprises, Lugar says.

Anxious to unlock $3 billion in International Monetary Fund loans and secure more money from the US and other donors, Russian Central Bank chief Viktor Gerashchenko recently pledged to impose tight restrictions on government credits to indebted or insolvent state enterprises.

In Washington last week, Boris Nemtsov, the strongly reformist young governor of Russia's Nizhni Novgorod province, lamented that much of the aid sent to Moscow "gets lost." He lobbied lawmakers to send money and technical help directly to localities. "I would write where every single dollar went," he says.

If support will be tough to muster among US legislators, the challenge may prove more difficult in Europe, where economies are stagnant and near-term recovery prospects are poor.

Clinton administration officials constantly invoke the theme of broader burden-sharing among the world's wealthiest nations. Stepping up coordinated efforts to aid Russia will top the agenda during the meeting of the Group of Seven leading industrialized nations - the US, Britain, Canada, France, Germany, Italy, and Japan - scheduled for early July.

"We in Brussels [at the European Community headquarters] are under enormous pressure from Moscow, Kiev, and Minsk to help put their economies back on track, but we're in a budgetary bind ourselves," says James Elles, a member of the European Parliament's foreign affairs and budget committees.

The new republics need to broker trade agreements and other economic cooperative efforts among themselves, Mr. Elles says. "We must do what we can to foster regionalism and build a union on the other side of the continent, because we can't do it all." European reluctance

The EC allocated roughly $500 million a year for 1992 and 1993 to spend on technical assistance to Russia and other ex-Soviet republics. Elles says his committees have spent the last week examining "the real need to keep a check on where the money is going."

Germany, Russia's largest donor, is not eager to offer more than trade credits and technical help. "In a few weeks [the G-7] will finalize the package for the Russians," says Birgit Breuel, director of the German government's Treuhandanstalt, which by 1994 will have closed down or sold off most eastern German state enterprises.

Ms. Breuel, who is an adviser to Russia, says "a prudent and uncomplicated legal system and a well-organized and trustworthy financial system" are essential to successfully privatize and develop a free market. But moves toward these developments have been sluggish, at best. Observers say that progress is needed before anybody - even the US - champions Russian reforms.