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RUSSIA IN CRISIS

Clinton Says Reforms Must Precede Aid

Summit: Yeltsin's ability to gain Duma's support for a new government is crucial, he declares.

September 03, 1998|ELIZABETH SHOGREN and TYLER MARSHALL and RICHARD C. PADDOCK | TIMES STAFF WRITERS

MOSCOW — With no immediate help to offer, President Clinton ended his summit in Moscow on Wednesday with promises of strong support for Russia's collapsing economy--but only if this nation's leaders take the herculean steps necessary to put reforms back on track.

"I believe whether you succeed and how long it takes you to succeed in restoring real growth to the Russian economy depends upon President Yeltsin's ability to persuade the Duma [the lower house of parliament] to support his formation of a government which will pursue a path of reform," Clinton said at a joint news conference with Boris N. Yeltsin, the Russian leader.

In that case, the world community will step in and "help deal with some of the fallout . . . of the reform process," Clinton said.

But if "other political forces" in Russia block Yeltsin's efforts, Clinton warned, "even less money will come into Russia and even more economic hardship will result."

In their fifth summit, the leaders also signed agreements on issues such as arms control and heralded those steps as signs that the U.S.-Russian partnership remains vital.

During the news conference, Yeltsin refused to do any more than hint at his country's desperate economic conditions and his plans to hurdle the difficult political obstacles before him. The Duma on Monday rejected his nominee for prime minister, Viktor S. Chernomyrdin, and has threatened to do so again now that Yeltsin has resubmitted the nomination.

Clinton, who is on a weeklong foreign trip, left early today for Northern Ireland, where he is to offer encouragement to the peace process there. First Lady Hillary Rodham Clinton had preceded him from Moscow, arriving in the British-ruled province Wednesday.

Navigating the summit proved extremely challenging for Clinton and his team because the meetings came in the middle of cascading economic problems in Russia, whose banking system is in shambles and currency in free fall.

During his two days in Moscow, Clinton tried to offer some hope to the Russian people and the international markets, which had plunged in part due to Russia's crisis. The ruble, Russia's currency, declined again Wednesday, trading at 12.8 to the dollar. Last week it was trading at 7.86 to the dollar.

"My belief that Russia will get back on its feet is based on my observation that in Russian history, every time outsiders counted the Russian people out, they turned out to be wrong," Clinton said. "This is a very big challenge, but a country that rebuffed Napoleon and Hitler can surely adjust to the realities of the global marketplace."

Clinton praised Yeltsin for reaffirming his commitment to economic reform and stressed that under the rules of the global economy, Russia has no choice but to make progress in several key areas in order to stabilize its economy and gain the confidence of international investors. The steps include implementing a strong and fair tax code, collecting taxes more efficiently, reforming the country's financial institutions and reducing the governmental budget deficit.

The White House will resume pressure on the International Monetary Fund to send the next installment of its $22.6-billion loan to Russia once Yeltsin's government has "adopted a program that sets them in the right direction," one senior White House official traveling with the president said.

Russia's collapsing economy and the intense political warfare between Yeltsin and his opponents in parliament make getting to that point very difficult.

In the news conference, Yeltsin made it clear that Russia understands it must rely on itself to solve its problems, and he urged the U.S. media not to spread the misinformation that Russian officials "count solely on support from the West."

Since the collapse of the Soviet Union in 1991, Russia has relied heavily on the United States and other Western nations for assistance in transforming its formerly centrally planned system into a free-market economy.

U.S. and Russian officials said the lack of headline-grabbing agreements at the summit did not decrease its importance.

"Perhaps the meeting was not so rich as regards the number of documents signed, but its political importance for the two presidents can hardly be overestimated," said Yeltsin's spokesman, Sergei V. Yastrzhembsky.

"I think that it has been true for a long, long time that the drama of superpower summits has given way to the routine of working through issues that occupy the bilateral relationship that we have with the Russian Federation," White House Press Secretary Mike McCurry added.

The documents signed by the two sides at the conclusion of the summit included:

* A commitment by each country to remove about 55 tons of plutonium from its weapons-grade plutonium stocks. The amounts, enough to arm large numbers of ballistic missiles, equal about a quarter of Moscow's total weapons-grade material and half the U.S. stockpile.

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