Yeltsin Finds Himself on Edge Of World Sandbox

Full admission to Group of Seven eludes Russia despite economic progress in last year

DESPITE the Chechen war and economic problems, Boris Yeltsin is more determined than ever to become a full-fledged member of the world's most prestigious rich men's club.

The Russian president will join world leaders today and tomorrow at the annual summit for the Group of Seven (G-7) leading industrial nations, which opened yesterday in the Canadian city of Halifax.

But while President Yeltsin, eager to be a full partner with the West, has trumpeted the gathering as a political "Big Eight" economic "Seven-and-a-Half," Russia is still far from gaining the global acceptance it needs to join.

"Although the Russian president intends to 'join discussions on globally strategic problems,' it is difficult to imagine what that really means in practice," political analyst Sergei Strokan wrote in this week's Moscow News.

"The conscious desire of both sides to forget about growing divisions between Russia and the West (Chechnya, NATO expansion, selling reactors to Iran, the battle for influence in the post-Soviet space) ... and enter 'common political discussions' is the most we can count on in Halifax," he wrote.

Yeltsin first formally attended political consultations last year at the G-7 summit in Naples, Italy. His presence marked a victory for Russia, which has consistently fought to be treated as an equal in international affairs.

But even then, Russia knew that it was not likely soon to gain full membership in the organization, which includes the United States, Britain, France, Germany, Japan, Canada, and Italy.

While Russia has certainly come a long way from the days when it was reduced to a begging role at previous G-7 summits (it received $43 billion in aid following the 1991 G-7 meeting in Tokyo), it is still far from being a great economic power.

Rich in resources, Russia is economically stronger and politically more stable than it was last year. But it has yet to come to terms with inflation and relies heavily on loans from the West, including a recently approved $6.8 billion stand-by loan from the International Monetary Fund (IMF).

Deputy Prime Minister Anatoly Chubais told a news conference last week that Yeltsin will ask at the summit for trade restrictions against Russia to be suspended, and for increased access to IMF and World Bank funds.

"Russia at Halifax will not only make proposals with a Russian dimension but also [about] several economic issues of global significance," he said. "This gives us the right to have our way at the international meeting."

The Russian leader will also seek a long-term deal with the so-called Paris Club of creditor states to reschedule payment of debts it took over from the Soviet Union in Halifax, according to Alexander Livshits, Yeltsin's top economic adviser.

"Russia does not only owe, it is owed," Mr. Livshits told Russian Television Wednesday during an upbeat pre-summit TV special titled "Seven-and-a-Half or Eight?" He said Yeltsin will seek a new role for Russia as a creditor state within the Paris Club, reflecting the billions of dollars it is owed by other countries, especially former Soviet states.

Although the Russian media has played up the "Group-of-Seven-and-a-Half" idea, officials in the United States have sought to play it down.

They have not wanted to appear to lend too much support or economic aid to the country that sent thousands of troops to Chechnya last December, when the Northern Caucasian republic's three-year effort to gain independence from Russia escalated into a brutal all-out war.

Russia has spent roughly $1 billion during the war, and increased military expenditures could ruin the budget and cause a surge in inflation, politicians here have warned.

Western officials say Moscow will have to answer blunt questions about Chechnya in Halifax. While Russian soldiers have captured almost all Chechen territory during the six-month struggle, the war seems far from over.

On Wednesday, armed Chechen fighters attacked the southern Russian town of Budennovsk next to the Chechen border, taking at least 200 people hostage and killing at least 36 (See related story at left).

The attack could not have been better timed for Yeltsin. While Chechen leader Dzhokhar Dudayev has denied any connection with raid, it has given Yeltsin ammunition to defend the Kremlin's military action in the region as a simple crackdown on terrorists.

"The crime committed in Budennovsk should open the eyes of foreign politicians who failed to realize the true reasons for the Chechen tragedy and chose to lecture Russia, instead of supporting it in its struggle against separatism and organized crime," read a statement issued by Russia's foreign ministry on the eve of the Halifax summit.

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