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Baker Prefers 'Step-by-Step' Soviet Aid

Economy: Spurning calls for a 'big bang' injection of funds, he calls on Moscow to make major political and legal reforms.

June 07, 1991|DOYLE McMANUS, TIMES STAFF WRITER

COPENHAGEN — Secretary of State James A. Baker III, in the Bush Administration's most detailed response yet to Soviet pleas for Western economic aid, warned Thursday that Moscow must enact major political and legal reforms before the United States will help reshape its moribund economy.

Baker specifically rejected the proposal of some American and Soviet economists that the West should attempt to remake the Soviet economy through a massive aid package, saying a slower "step-by-step approach" is more "realistic and workable."


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Addressing a meeting of the foreign ministers of the 16 North Atlantic Treaty Organization countries, Baker spoke only hours before the British government announced that it has invited Soviet President Mikhail S. Gorbachev to present his economic reform plans to President Bush and other leaders after the Group of Seven economic summit next month.

A Bush Administration official at the conference said Baker's comments on the Soviet economy were "put forth partly to affect other people's thinking" as the meeting with Gorbachev approaches.

There was no immediate response from the Soviet government to the British invitation, which Gorbachev had solicited.

Prime Minister John Major proposed that Gorbachev be invited to meet the leaders of the world's seven major industrialized democracies at the conclusion of their summit in London. Major's office said a formal invitation will be issued only after the other members of the Group of Seven--Canada, France, Germany, Italy, Japan and the United States--agree to the idea.

In his speech to the NATO ministers, Baker said: "The Soviets must find the will to open the way to a new future. They must start with self-help.

"If they do, we will support them," he said, adding, "I don't honestly think we can catalyze Soviet reform through a 'big bang' approach."

Aides said that was a reference to the proposals of some U.S. experts that Western countries should attempt to jump-start sweeping economic reforms in the Soviet Union with an aid program as large as $50 billion per year.

Baker aides refused to specify any economists by name, but the term 'big bang' has been used by Harvard economics Prof. Jeffrey Sachs, who successfully advised the government of Poland to try that approach and has called for a similar effort in Moscow.

Baker suggested six economic reforms and four political reforms that the Soviet Union should implement to transform its economy.

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