The odd couple - US economic support for Russia - Editorial

National Review, April 26, 1993

The Clinton - Yeltsin Summit in Vancouver was, as the pundits remarked, the first super-power summit at which economic relations dominated and military issues took a back seat. That is one benefit from the collapse of Soviet Communism. On the other hand, it's wise to keep an eye on a liberal Democratic President when he starts proposing social "investment" programs for the Russians. NR is friendly enough to the new Russia to hope that we're not inflicting on them the kind of statist nonsense they've just risked their lives to get away from.

With some reservations which we discuss below, we believe the Administration's aid program deserves cautious support. The $1.6 billion in short-term U.S. aid is in the main earmarked for specific purposes and projects that relate to goals we have a stake in - dismantling nuclear weapons, promoting foreign and local private investment, lifting trade barriers, restoring Russia's collapsing oil and gas industry, teaching business management and entrepreneurship, building housing for military families withdrawn from Eastern Europe and the Baltic nations, and extending humanitarian assistance (such as food and medicines).

But some things seem to be boondoggles, such as subsidized grain sales. We wonder whether sending Russians to Harvard Business School will help them or set them back. And in general we doubt the ability of the U. S. to ensure that the money will be spent as arranged - for instance, the funds going to help the oil industry, which is inconveniently situated in areas controlled by local authorities hostile to radical reform. We need to know what is going on in the Russian provinces. This is no time to save a small sum by getting rid of Radio Liberty and Radio Free Europe, when they might provide us with the information to save much more.

But we must also consider the costs of not giving aid to President Yeltsin. Pay no heed to the journalistic cliche that to support Boris Yeltsin is to repeat George Bush's mistake of clinging too long to a doomed Russian leader. The simple difference is that Yeltsin deserves support, whereas Mikhail Gorbachev, toward the end of his rule, did not. Gorbachev's opponents were democrats; Yeltsin's opponents represent the forces of retrenchment if not reaction - foreign and military policies much more troublesome for us, and economic policies that would perpetuate stagnation and crisis. So long as President Yeltsin is there pursuing conciliatory policies, it would be absurd not to back his efforts. Our conclusion is that the package is on balance worthwhile precisely because it is modest and sensibly targeted.

The Vancouver Summit was also preceded by a decision by Western creditor governments to reschedule Russia's debts (most of which were incurred by Gorbachev's Communist regime). It is to be followed in mid April by a Tokyo meeting of the G-7 industrial democracies to coordinate a larger Western aid package. We welcome the principle that our allies should share this burden - as presumably will the Germans, who pay the lion's share. Again, however, we are skeptical of the proposed "stabilization" fund - if only because Mr. Clinton's assurance that it will be available only under stringent conditions is considerably weakened by his attack on the International Monetary Fund for withholding earlier funds when the Russians failed to meet those very conditions. No general financial assistance should be given to the central government until after reforms have been put into effect.

Mr. Clinton should not oversell the aid package by claiming that it's all that stands between us and World War III. There are issues, however, on which the United States must engage in the world in its own interest, to try to prevent new disasters that could cost us much more down the road. The proposed $1.6-billion package is a modest effort for our $6-trillion economy. Conservatives should not squander the Cold War victory that they contributed so much to winning.