WASHINGTON - President Bill Clinton arrives in Vancouver on Saturday for his first summit with President Boris Yeltsin armed with some tough demands, a fistful of promises and new ideas to help the stricken Russian economy, but less than $2 billion in new U. S. aid to help pay for them.
And little of that money will go to the Russian government. In a bold new strategy, Clinton is pledging full political support for Yeltsin and the reform movement. But the new U. S. economic help is being strictly targeted at Russian businessmen and regions directly, deliberately avoiding the Russian government and bureaucracy that Yeltsin nominally runs.
"We must insist on commensurate Russian reforms", Clinton stressed Thursday at the Annapolis Naval Academy, signaling that he will demand a renewed commitment to privatization and reform, and a strict new discipline on the Russian Central Bank, which the White House blames for the hyperinflation now stalking the economy.
The new U. S. president has thrown the full prestige and credibility of his new administration into a bid to "strike a strategic alliance with Russian reform". Calling this "the great security challenge of our age", Clinton has launched a political appeal to persuade a skeptical American people that their interests are irrevocably engaged in Russia's fate.
"We must look beyond the Russia of today and see her potential - a vast market for American goods and services", Clinton announced in a major policy statement Thursday.
"Russia's anti-democratic demagogues must not prevail", he went on. It was the most powerful and impassioned speech of his presidency so far.
Clinton's advisers wrote the tough language demanding Russian reform into his Annapolis speech at the last minute Thursday after hearing of Prime Minister Viktor Chernomyrdin's new attack on the Chubais privatization program as akin to Stalin's ruthless collectivization of the land in the 1930s.
Hoping to rally the other Group of Seven nations to an international aid effort worth over $20 billion this year when G-7 finance ministers meet in Tokyo on April 14, Clinton will tell Yeltsin that the new American aid he brings to Vancouver will be "a catalyst" for the greater international effort. The G-7 will also be asked to build a safety net for Russia's unemployed and pensioners, to buy social peace amid economic dislocation.
The Yeltsin summit is the first big test for an American president inexperienced on the world stage. and while he insisted that the stakes could not be higher, Clinton will not be taking any new American money to Vancouver, but an unimpressive $1. 5 billion in ragtag gleanings from various budgets to finance an imaginative array of new aid ideas and projects.
Seventy-five percent of this will be distributed directly to Russian small businesses, entrepreneurs, banks and privatized industries in a policy that sets out to bypass the cumbersome and corrupt Russian government bureaucracy. and three-quarters of the money is to be spent outside Moscow.
"With last year's aid programs, we learned how not to do it", said a top Clinton aide who has taken a leading role in the U. S. summit planning. "We must be able to do what we say we will, to deliver what we promise. and too many Russians now associate economic reform with hardship. We have to change that perception".
The new policy of modest sums, but carefully targeted, stems from Clinton himself. He has stressed at every planning meeting that he wants to offer Yeltsin only programs that can be delivered at once with funds already at the disposal of the White House and that can have a swift and visible impact on a wider Russian population grown skeptical of Western promises.
"This is not a one-shot deal. We are in this for the long haul", a senior administration official told reporters in a White House briefing this week. "The bilateral offers we will make this weekend are more closely linked than ever in the past with the multilateral package of the G-7 and the international financial institutions".
The biggest financial commitment - but still dependent on congressional approval, and this not an explicit part of the Vancouver package - is for a special $2-billion credit to be chanelled through the U. S. Export-Import Bank, and targeted at the Russian energy sector.
Discussions are still under way at the White House about the possibility of combining this with a barter program under which the U. S. government subsidizes American oil corporations to provide technical and management expertise, and is then reimbursed in oil deliveries, to be deposited in the U. S. Strategic Petroleum Reserve.
Clinton will offer Yeltsin a special housing fund to build new accommodation in Russia for Russian troops still stationed in the Baltic states.
While about $100 million has been earmarked for this, arguments are still going on in the White House between those who say this money should be spent on American-made prefabricated housing, and those who say it would be cheaper and more effective to buy materials and build on the spot with U. S. engineers supervising Russian labor.
Clinton also plans $225 million in privatization support, including help for Russian firms with management training. There will be an enterprise fund of $50 million this year, growing to $300 million within three years, to provide venture capital for new Russian companies. An energy fund of $36 million will finance U. S. expertise to help reopen Russia's 30, 000 idle oil wells.
And little of that money will go to the Russian government. In a bold new strategy, Clinton is pledging full political support for Yeltsin and the reform movement. But the new U. S. economic help is being strictly targeted at Russian businessmen and regions directly, deliberately avoiding the Russian government and bureaucracy that Yeltsin nominally runs.
"We must insist on commensurate Russian reforms", Clinton stressed Thursday at the Annapolis Naval Academy, signaling that he will demand a renewed commitment to privatization and reform, and a strict new discipline on the Russian Central Bank, which the White House blames for the hyperinflation now stalking the economy.
The new U. S. president has thrown the full prestige and credibility of his new administration into a bid to "strike a strategic alliance with Russian reform". Calling this "the great security challenge of our age", Clinton has launched a political appeal to persuade a skeptical American people that their interests are irrevocably engaged in Russia's fate.
"We must look beyond the Russia of today and see her potential - a vast market for American goods and services", Clinton announced in a major policy statement Thursday.
"Russia's anti-democratic demagogues must not prevail", he went on. It was the most powerful and impassioned speech of his presidency so far.
Clinton's advisers wrote the tough language demanding Russian reform into his Annapolis speech at the last minute Thursday after hearing of Prime Minister Viktor Chernomyrdin's new attack on the Chubais privatization program as akin to Stalin's ruthless collectivization of the land in the 1930s.
Hoping to rally the other Group of Seven nations to an international aid effort worth over $20 billion this year when G-7 finance ministers meet in Tokyo on April 14, Clinton will tell Yeltsin that the new American aid he brings to Vancouver will be "a catalyst" for the greater international effort. The G-7 will also be asked to build a safety net for Russia's unemployed and pensioners, to buy social peace amid economic dislocation.
The Yeltsin summit is the first big test for an American president inexperienced on the world stage. and while he insisted that the stakes could not be higher, Clinton will not be taking any new American money to Vancouver, but an unimpressive $1. 5 billion in ragtag gleanings from various budgets to finance an imaginative array of new aid ideas and projects.
Seventy-five percent of this will be distributed directly to Russian small businesses, entrepreneurs, banks and privatized industries in a policy that sets out to bypass the cumbersome and corrupt Russian government bureaucracy. and three-quarters of the money is to be spent outside Moscow.
"With last year's aid programs, we learned how not to do it", said a top Clinton aide who has taken a leading role in the U. S. summit planning. "We must be able to do what we say we will, to deliver what we promise. and too many Russians now associate economic reform with hardship. We have to change that perception".
The new policy of modest sums, but carefully targeted, stems from Clinton himself. He has stressed at every planning meeting that he wants to offer Yeltsin only programs that can be delivered at once with funds already at the disposal of the White House and that can have a swift and visible impact on a wider Russian population grown skeptical of Western promises.
"This is not a one-shot deal. We are in this for the long haul", a senior administration official told reporters in a White House briefing this week. "The bilateral offers we will make this weekend are more closely linked than ever in the past with the multilateral package of the G-7 and the international financial institutions".
The biggest financial commitment - but still dependent on congressional approval, and this not an explicit part of the Vancouver package - is for a special $2-billion credit to be chanelled through the U. S. Export-Import Bank, and targeted at the Russian energy sector.
Discussions are still under way at the White House about the possibility of combining this with a barter program under which the U. S. government subsidizes American oil corporations to provide technical and management expertise, and is then reimbursed in oil deliveries, to be deposited in the U. S. Strategic Petroleum Reserve.
Clinton will offer Yeltsin a special housing fund to build new accommodation in Russia for Russian troops still stationed in the Baltic states.
While about $100 million has been earmarked for this, arguments are still going on in the White House between those who say this money should be spent on American-made prefabricated housing, and those who say it would be cheaper and more effective to buy materials and build on the spot with U. S. engineers supervising Russian labor.
Clinton also plans $225 million in privatization support, including help for Russian firms with management training. There will be an enterprise fund of $50 million this year, growing to $300 million within three years, to provide venture capital for new Russian companies. An energy fund of $36 million will finance U. S. expertise to help reopen Russia's 30, 000 idle oil wells.
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