Russians Doubt Willingness And Capacity Of West to Help
AS Western aid donors gather today in Tokyo to discuss new assistance to the former Soviet republics, there is a growing feeling here that the West cannot and will not help Russia out of its deepening economic crisis.
"We could express gratitude to the West for its support," Russian President Boris Yeltsin told a meeting of senior Foreign Ministry officials on Tuesday. "At the same time, we have every reason to express dissatisfaction as well. Words are obviously at variance with deeds. All declarations about the support for the Russian reform are being translated into action at a very slow pace."
Western aid has been a key part of the economic strategy of Prime Minister Yegor Gaidar, the architect of Russia's radical market reforms. He argued that aid and integration into Western financial institutions such as the International Monetary Fund (IMF) would hasten the pace of change and help cushion its painful impact on the population.
"Gaidar's government argued that if we follow this path, the West, the United States first of all, will help us," comments Viktor Kremenyuk, deputy director of the USA-Canada Institute. "That didn't happen. This has created disillusionment."
Russian officials privately complain that they have seen little of the $24 billion in Western aid pledged to help Russia by the Group of Seven leading industrial nations at their summit last July.
"Nothing out of the $24 billion was disbursed," said Jacques Attali, head of the European Bank for Reconstruction and Development, "because all that was only part of an election campaign. International hypocrisy is gigantic," he said at a symposium in Paris Oct. 25, according to Reuters, in an apparent swipe at President Bush.
The trickle of aid has only fed the angry anti-Western pronouncements of those in Russia who are critical of Mr. Gaidar's reforms. By cooperating with United Nations trade embargoes against countries such as Yugoslavia, Libya, and Iraq, Russia "lost $18 billion a year," Vice President Alexander Rutskoi told factory workers last week in the northern Russian town of Petrozavodsk. "This is more than Russia receives as aid."
Deputy Prime Minister Alexander Shokhin, who leads Russia's delegation to the international conference on aid to the former Soviet republics in Tokyo today and tomorrow, has called on the IMF not to be too strict in conditions for handing over the outstanding $3 billion of a $4 billion standby loan. (Japan to aid Central Asia, Page 3.)
"The question is whether the IMF will support reforms in Russia or give communists the chance to prove their slogans were right, that cooperation with the IMF led the country into a dead end," Mr. Shokhin told reporters during a meeting with industrialists last Sunday, according to news agency reports.
Russia, a senior official admitted, will have difficulty meeting the IMF's targets for controlling inflation and the budget deficit. The IMF says monthly inflation must be in single figures by the end of the year and the budget deficit less than 5 percent of gross national product.
"If the IMF acts with excessive harshness, then the communist-patriots will have been proven right," Shokhin warned. "Then there will be a threat to reforms and democracy in Russia."
THE newly formed National Salvation Front, an alliance of former Communists and Russian nationalists, attacks the government for following the dictates of the IMF and foreign businessmen. "This may bring about a situation when Russia will lose its statehood and become a place for ecologically dirty technologies, a dump for radioactive wastes, a supplier of raw materials, in short a backward region of the world which will be allowed only to service the more developed countries," the Front declared in an o pen letter Oct. 21.
But there is already considerable evidence that the Gaidar government has started to lose faith in Western aid as its savior. The country can no longer rely on Western credits but must look to its own internal resources, Russian Minister for Foreign Economic Relations Pyotr Aven told the Interfax news agency on Tuesday. Mr. Aven, who is the chief negotiator for Russian efforts to postpone debt payments to the West, said Russia should stop borrowing from the West, with the exception of credits to buy grai n.
Aven criticized the West for insisting on repayment of the past Soviet debt at levels that are beyond Russia's resources. "The West has an inadequate idea of the situation in Russia, even though its economic decisions have a major impact on this country," he told Interfax.
Aven is due to meet today in Paris with Western creditors to seek another postponement of payments on the estimated $70 billion in former Soviet debt which Russia has inherited. Russia was due to pay back $9.8 billion this year but can only pay $2 billion to $2.5 billion, Aven said. Next year, Russia will only be able to pay about $3 billion out of $30 billion due for repayment, he added.Russian officials also complain that the West imposes trade restrictions that block potentially lucrative export marke ts. Instead of aid, Russia prefers open trade, Shokhin told the Japanese news agency Kyodo on the eve of the aid conference. As an example, he called for a lifting of Western barriers to Russian space technology and uranium fuel for nuclear power stations. He argued that Russia could earn $1 billion a year in the global communication satellite market.
There also is a palpable economic nationalism creeping into the Gaidar government's policies on foreign investment. In two recent cases, the government has decided to give preference to Russian conglomerates bidding against major foreign firms to develop raw materials deposits - in one case, a huge gas deposit in the Arctic; and in another, one of the largest undeveloped copper deposits in the world, located in the Chita region of Siberia.