Turn to West Hopeful Sign For Russia

After frightening the world earlier this year with a political surge by nationalists and the sacrifice of top reformers from the government, Russia appears to have taken a strong turn toward strengthening its ties with the West. The ink barely had time to dry on Russia's agreement to enter the Partnership for Peace before Prime Minister Viktor Chernomyrdin in Washington on Thursday signed the long-awaited Sakhalin-2 energy deal and witnessed the signing of $820 million in World Bank loans. Meanwhile in Moscow, the Economics Ministry announced the creation of a new Foreign Investment Council headed by Chernomyrdin and designed to improve Russia's investment climate.President Boris Yeltsin completed the barrage Friday by putting pen to a 10-year Partnership and Cooperation Agreement with the European Union, under which Russia and the EU could make steps toward free trade by the end of the century.And on July 9, Yeltsin will head off to Naples, where he will seek to increase Russia's role in the Group of Seven industrialized nations.This new Westward thrust could not have been better timed. At no period in the history of its reforms has Russia's need to bolster its image as an economic partner been more imperative.First, many foreign investors have begun to sour on the prospects of making money in Russia's volatile legislative climate. Perpetual changes in tax policy, most notably the well-trumpeted extension and subsequent partial withdrawal of a 23 percent value-added tax on certain forms of foreign investment, as well as pervasive crime and high overhead costs, have gained Russia a reputation as a profit wasteland for all but those few who can thrive on chaos.Second, the voucher program, the compromise stage of privatization designed to create a base of popular support for painful economic reforms, ends next week, making way for the real sell-off to begin. If Russia fails to attract interest from foreign investors in what remains to be sold, the chances of gaining the necessary capital and expertise to turn privatized enterprises around will be slim.This week's events demonstrate that Russia recognizes its situation and has the capacity to improve it. With all the accords, the loans and the new council, however, the most difficult part is not the intention but the implementation of change. That will take years, because in Russia's political climate, good intentions can blow away as easily as the poplar seeds, or pukh, that are now floating through Moscow.