Soviets Get Bush Pledge of Help for Perestroika : Summit: The U.S. leader links his plan to Moscow's new foreign policy and its support for gulf moves.


Soviet President Mikhail S. Gorbachev, faced with a reeling economy and plummeting popularity at home, won a commitment from President Bush on Sunday for potentially vital U.S. assistance to underwrite his reform program.

"I am very much interested in assisting to be sure that perestroika is successful," Bush told a news conference after a day of talks with Gorbachev.

Bush linked his proposal, which he said would be divulged in detail at a joint session of Congress on Tuesday, to the dramatic changes in Moscow's foreign policy and the virtual Soviet-American alliance in confronting Iraq for its invasion and seizure of Kuwait.

"Given the common stand of the Soviet Union and the United States have taken at the United Nations, it seems to me we should be as forthcoming as we can in terms of economics, and I plan to do that," Bush said.

The President said that the United States, faced with a roughly multibillion-dollar budget deficit, is not in the position "to write out large checks" but could provide other forms of assistance, perhaps government-guaranteed credits and technical aid.

Gorbachev, however, told the same news conference that the Soviet Union would not tie its foreign policy to Western rewards.

"It would be very oversimplified and very superficial to judge that the Soviet Union could be bought for dollars," Gorbachev said.

Speaking later in an interview on Soviet television, Gorbachev described his talks with Bush as a breakthrough that will spell relief for his beleaguered economy.

"The American Administration and political circles in the United States have passed through a certain stage in their thinking, and we were quite satisfied with their approach," he said. "They believe, first of all, that the world community is planning and will strive to cooperate with the Soviet Union to help solve its problems faster."

As Bush and Gorbachev were meeting, a delegation of 15 prominent American businessmen, led by Commerce Secretary Robert A. Mosbacher, arrived in Helsinki en route to Moscow for discussions with Soviet leaders on concrete ways that U.S. industry can assist Soviet economic modernization.

Gorbachev said the group would discuss energy development, exploitation of mineral resources and increased U.S. investment.

He also said Bush had promised to clear legal obstacles toward joint Soviet-American development of a new civilian aircraft. "This will be a huge, large-scale project that could turn into very big business," he said, adding that it involved conversion of the Soviet warplane industry to peaceful production.

Bush also pledged that the United States would remove many of the restrictions that now limit Western technical cooperation with the Soviet Union, Gorbachev told Soviet television.

At their first summit at Malta last December, Bush offered Gorbachev extensive U.S. technical assistance to revitalize the Soviet Union's backward economy as it shed almost seven decades of central planning and opened itself far wider to foreign investment.

As Bush envisioned it, the U.S. assistance would focus on improving the efficiency of the whole Soviet economic infrastructure, from transport and communications to retail distribution and banking.

The transfusion of U.S. managerial know-how and technical expertise would, Bush said at Malta, help speed the transformation of the Soviet economy toward one based on the market forces of supply and demand and entrepreneurship.

But in the nine months since the two presidents' Malta meeting, the Soviet economy has deteriorated at an even faster pace, and the government can no longer ensure the supply of even such staples as bread.

Gorbachev's own political position has been undercut as a result; a recent opinion poll showed that his popularity had dropped far below that of Boris N. Yeltsin, the president of the Russian Federation, who advocates faster and more radical reforms.

The Soviet president, speaking with reporters at the end of August, acknowledged that in the face of growing popular discontent, his reforms are now in their most difficult phase--they must be implemented immediately or fail completely.

Anxious to return to Moscow, where his economic program is under attack from both radicals such as Yeltsin and Marxist-Leninist conservatives, Gorbachev left Helsinki on Sunday evening, earlier than planned.

A Soviet broadcast journalist said that the president had revised his schedule in Helsinki because the national legislature, the Supreme Soviet, is opening today, with the central issue before lawmakers being the rescue of the economy.

Two rival programs have been put forward--one favored by Prime Minister Nikolai I. Ryzhkov that would provide for a step-by-step reshaping of the economy, and another, advocated by Yeltsin and his numerous allies, that would rapidly sell off state assets and let prices float to achieve the transformation in only 500 days.

Gorbachev had originally been expected to present his version to the Supreme Soviet, but he decided instead to send it first to the legislatures of the country's 15 constituent republics this week for debate and possible amendments.

Gorbachev is hoping that a consensus will emerge on the program and popular backing grow if the local legislatures are given the right to approve or modify it.

His goal, advisers have said, is to obtain approval this month before the Soviet government's 1991 annual budget and economic development plan are decided.

Bush's offer of U.S. assistance, whatever form it may take, greatly strengthens Gorbachev's hand. The Soviet leader favors the faster approach of Yeltsin but shares some of the concerns of Ryzhkov about moving too fast.

With Bush's pledge, Gorbachev can now argue that his country will have the support it needs and ease the fears of his countrymen that economic reform will inescapably mean unemployment, higher prices and harder times.

But Bush made it clear that he was not talking about large-scale financial assistance. He specifically referred to the Mosbacher delegation, which would put private business in the lead of any American aid program.

Joined by Secretary of State James A. Baker III, the group of business executives led by the secretary of commerce will spend five days in top-level discussions with Gorbachev, Ryzhkov, Yeltsin and other Soviet officials in Moscow and Leningrad. The delegation includes 15 executives of some of America's largest corporations.

Bush said he and Gorbachev had had "a good, long discussion" about the Soviet economic reforms. He indicated that he felt the Kremlin leadership should move even faster and more boldly toward a market economy, but he nevertheless reiterated his support for Gorbachev and his program.

Baker said later that the two presidents had agreed to push negotiations on an investment treaty and resolving old debt claims. The Bush Administration was also awaiting Soviet action on free emigration so that it could present the new trade agreement to Congress for approval.

"We did talk about the steps that need to be taken for us to be a position to assist economically, that is through technical economic cooperation and otherwise," Baker said on the CNN program, Newsmaker Sunday.

The United States has opposed extensive Western financial aid to the Soviet Union, arguing that most of it would be wasted because of the sheer inefficiency of the economic system.

France, Italy and West Germany have nevertheless provided large credits to finance increased Soviet purchases of not only industrial products but also consumer goods.

They and other members of the Group of Seven, the major industrialized democracies, urged Bush to rethink the U.S. position, warning that time was running out for Gorbachev to show his people that economic reform will give them a better life.

But the leaders of the Group of Seven, meeting in July, did agree to ask the International Monetary Fund, the World Bank and the Organization for Economic Cooperation and Development to prepare a study of the Soviet economy, making recommendations for reform and establishing criteria for Western economic assistance.

That study is to be completed by the end of the year.

Gorbachev, commenting on Bush's pledge, welcomed it as a "normal element of new cooperation in trade" and a reflection of improved Soviet-American relations.

But sensitive to the possible criticism at home that he had sold out Soviet foreign policy for Western assistance, Gorbachev said, "I wouldn't want President Bush's reply to give rise to the opinion that the Soviet Union is going to align a certain sum with a certain behavior."

Baker also denied any linkage between the offer of U.S. assistance and Soviet foreign policy concessions. "It's not a question of saying in any way--never even a suggestion--that if you agree to a strong statement on the Persian Gulf, we will be more forthcoming economically," he said on CNN. "Not even a hint of that ever entered into the discussions."



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