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America From Abroad : Rich Uncle Sam Is Poor Kin, East Europeans Say : New democracies find there's no check in the mail to aid their struggling economies.

December 04, 1990|CAROL J. WILLIAMS | TIMES STAFF WRITER

BUDAPEST, Hungary — Foreign Trade Minister Bela Kadar returned to Hungary in a nervous fluster from his most recent U.S. visit. American banks and investors, he informed his worried countrymen, seem to be writing off Eastern Europe as a bad risk.

In neighboring Czechoslovakia, a much-touted visit by President Bush lifted spirits only fleetingly on the first anniversary of the "Velvet Revolution." Deflated crowds dispersed in silence after learning there was little money inside the Americans' birthday card.

Romanians, still struggling for stability a year after the bloody revolt that toppled their repressive regime, complain of American stubbornness in refusing to reward the democratic advances they believe they've made.

From Poles stung by the rigors of economic "shock therapy" to Bulgarians who fear they are being punished for endorsing the socialist status quo, East Europeans are swiftly forming a consensus that rich and mighty America is letting them down.

Americans cheered on last year's revolutions that routed communism from most of the bloc, promising to guide the way out of the economic quagmire left after 40 years of dictatorship.

But the United States is now absorbed with its own budget troubles and distracted by the threat of war in the Persian Gulf. Concern for the needs of Eastern Europe has dissipated, adding to the region's fears of an uncertain future.

Few politicians are overtly critical of the American government, for fear of alienating the sources of support they are still hoping to tap. But an atmosphere of disappointment is palpable, even among the American diplomats and businessmen who are dishing out the help.

"It's fair to say there are many more plans than realities," one U.S. attache observed on the subject of aid to Eastern Europe. He blamed a looming recession and the huge budget deficit for limiting American help to good intentions.

Much of the letdown stems from misunderstandings about the kind of assistance Washington promised. While U.S. officials usually spoke of technology transfers and sharing of expertise, East Europeans envisioned treasure chests to modernize industry and cushion the transitional blows.

The $938 million allocated by Congress over the next three years, predominantly to Poland and Hungary, is, in East European minds, a disappointingly small share of the $14 billion pledged collectively by the so-called "Group of 24" wealthy industrial nations.

Moreover, most of the U.S. money is going for intangibles like loan guarantees to private investors and salaries for American consultants whose advice is not always heeded. Emergency medical supplies and environmental cleanup have also soaked up some of the funds, helping the region to avoid new disasters but hardly slowing the gallop of prices creating a new class of poor.

Government officials have lobbied for an East-Bloc Marshall Plan that would underwrite economic recovery the way U.S. funds helped Western Europe rise out of the rubble of World War II.

But the United States has lost much of the financial and industrial clout it wielded after the war, and conditions in Eastern Europe differ too sharply from those in which the Marshall Plan got its footing.

Bush has generally promoted self-help projects for the new democracies, as well as U.S. volunteer programs to bring American know-how and the English language to the region.

Few promises of direct financing have been made, providing no solid ground for complaints they were unfulfilled.

Yet Czechoslovaks seemed to have been expecting more than moral support when Bush visited on Nov. 17. Many grumbled over the President's humble offering of a $60-million fund to encourage private enterprise--a pittance compared to the aid destined for Hungary and Poland.

Hungarian officials have carefully avoided appearing ungrateful, as their state has enjoyed the lion's share of U.S. private investment in Eastern Europe. About two-thirds of the $1 billion poured into Hungarian ventures comes from American firms, although the pace of investment has slackened noticeably since Iraq's Aug. 2 invasion of Kuwait.

Trade and Industry Minister Peter Akos Bod explained the current slowdown as an understandable case of U.S. recession jitters. Other officials, however, lament what they see as a sudden chill that has followed "Danube Fever"--the harried quest for investment opportunities that early this year drew hordes of U.S. businessmen to the East.

"They are afraid that the whole region will collapse and bury the Hungarian economy with it," Kadar, the foreign trade minister, said of U.S. bankers after his October visit to Washington, New York and Los Angeles. He said Hungary will have to set itself above the pack and regain the trust of American investors.

U.S. investment in Poland has likewise been hesitant, as Warsaw works out the mechanics of restoring private enterprise.

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