Gorbachev to State His Case for Aid From the West : Soviet Union: He accepts invitation to address G-7 leaders in London. He vows not to ‘blackmail’ or beg.

President Mikhail S. Gorbachev, accepting an invitation to address the leaders of the Group of Seven major industrial democracies, said Saturday that he would neither try to “blackmail” them nor beg for aid but would argue the Soviet Union’s case for broader cooperation with the West as it builds a market economy.

Gorbachev, sketching the approach he will take with Western leaders following their summit in London next month, said he would lay out the steps that the Soviet Union will take to transform its centrally planned economy into one based on market forces and entrepreneurship and seek the West’s support.

“No decisions will be made there on the sums (of assistance to the Soviet Union) or on anything very concrete,” Gorbachev said in a television interview. “This will be a political and economic talk on how we would further build our cooperation.”

The Soviet leader will be seeking Western backing for a seven-year reform program drawn up with the advice of American economists that, step by step, would free prices from state control, reduce the massive budget deficit, convert military industries to civilian production and undertake the privatization of state-owned enterprises.

The Soviet Union will need from $20 billion to $30 billion in foreign loans, trade credits and capital investment each year through most of the program to underwrite the changes, according to economists who have helped draft it.

The Group of Seven summit, for which Gorbachev received his invitation Saturday from the British ambassador, Roderic Braithwaite, will discuss the Soviet needs as one of the items on its agenda and then, after formally adjourning, will hold a working meeting with Gorbachev.

“There will be a serious and responsible conversation, and their interest is natural,” Gorbachev said. “If we are talking about new forms of cooperation, they want a concrete program. What are the components of this decisive stage of reforms? We will inform them of our concepts--and tell them where we need cooperation the most.”

Gorbachev acknowledged that he was not, as he had sought to do two years ago, going as a full participant in the meeting but to address it.

“I go not as a member of G-7--this is not a G-8,” he said. “They will discuss their agenda, as is their tradition. . . . Then we will have a working meeting where I will lay out my considerations.

“I will have something to say about my vision of the current stage of cooperation between the Soviet Union and these developed countries.”

The Group of Seven includes Britain, Canada, France, Germany, Italy, Japan and the United States. The European Community also attends. British Prime Minister John Major is the host for this year’s summit, July 15-17, in London.

Apparently stung by criticism at home that he had reduced the Soviet superpower to the status of an international beggar in seeking Western assistance and by attacks from abroad that he was using the threat of an end to perestroika and a return to the Cold War to get it, Gorbachev sought to portray his efforts as “a search for a balance of interests in cooperation.”

“This does not mean that somebody has to put another on his knees or dictate something to him,” Gorbachev said.

He dismissed such suggestions, nearly as widespread here as they have been abroad, as “lightweight and irresponsible.”

“We say that we ought to find more concrete forms of cooperation at this stage of deep changes,” Gorbachev replied.

The Soviet leader stressed that he would go to London with “a common position” worked out with the country’s political leaders, including Boris N. Yeltsin, the newly elected president of the Russian Federation, and the heads of other Soviet republics.

But the seven countries whose leaders he will be addressing differ sharply among themselves on how much economic assistance should be given to Moscow.

Germany, fearing the direct economic, social and perhaps political impact of a Soviet collapse, has already provided $37 billion since 1989 and favors more. Japan, on the other hand, has argued that a sound financial structure must be established so that Western assistance will not be wasted and only reluctantly agreed to listen to Gorbachev’s plea.

President Bush said on Friday that it would be difficult for the United States to make a large contribution to any Western aid program for the Soviet Union. “We’re not rolling in cash,” he said. “We’ve got big deficits. We’ve got enormous problems ourselves, and my first interest is the American people.”

Speaking with reporters aboard Air Force One en route to a weekend in California, Bush indicated that Western leaders might agree at their London summit to underwrite a Soviet reform program but would insist on a firm, irrevocable timetable for reforms.

“There’s a recognition on all sides that the best way to assist the whole reform process is to move to reform itself,” Bush said. “But in terms of this whole reported megabuck package, I think we’ve got a lot of discussion to do. . . . The reforms have to be detailed before blank checks are written, and even then it would be difficult.”

Prime Minister Valentin S. Pavlov, interviewed by the Soviet government newspaper Izvestia on Saturday, made a similar point. “The main condition for receiving aid is that we have to carry out reforms,” he said.

Arguing the case for foreign investment in such key industries as energy and petrochemicals, despite the break that this would represent in traditional Soviet policy, Pavlov said, “We do not make a secret that we plan to modernize . . . but it is one thing to do this in 10 years and another, with their help, in five.

“We are ready to share the surplus with them,” Pavlov said. “If we transferred our power industry to modern methods of operation, we would pay for the services of our Western partners with the resources we saved. In this sense, we are ready to attract foreign capital, not loans but capital, because with investment comes not only money and equipment but management, technology and interest.”

The head of the bank established to help guide and finance the transition of Europe’s socialist states to market economies said after meeting with Gorbachev and other Soviet officials here Saturday that the country would need far more money than the West so far has been willing to commit.

Jacques Attali, president of the European Bank for Reconstruction and Development, said he would be canvassing the leaders of the Group of Seven before their London meeting to give them an assessment of Soviet reform efforts and suggestions on how they should help.

Attali said he hopes that the severe limit imposed on his own bank’s lending to the Soviet Union--only 6% of its capital of $11.5 billion, or a maximum of $690 million--will be lifted and that the Group of Seven summit in London can reach a broad agreement on underwriting the Soviet Union’s reform program.

“The reforms are going in the right direction, but it is very important now to clarify a number of items,” Attali said, noting Soviet plans for privatizing state-owned companies, making the Soviet ruble convertible into other currencies and balancing the powers of the central government and constituent republics in a new federal system.

“These are changes that I hope would continue as rapidly as possible so the Soviet Union finally reaches stability in society, in its economy,” he added.