Brady Optimistic on Aid to Russia Despite Turmoil : Economy: But U.S. Treasury secretary warns that confidence in Moscow’s policies is a precondition.

U.S. Treasury Secretary Nicholas F. Brady said Tuesday he is confident Russia will get the billions of dollars it needs in Western assistance despite the political and economic turmoil here this week.

But Brady warned Russian politicians who are determined to slow the country’s forced march to a free-market economy that international confidence in Moscow’s policies is a precondition for the $24 billion in Western aid planned for this year.

“The matter of world confidence in a reform program here in Russia is one that is very important in terms of the transfer of money to this country,” Brady said, reaffirming the West’s support for President Boris N. Yeltsin’s besieged government and its accelerated transition to a market economy.

“The changes in the economic reform program were a step backward in generating that confidence.”

But Brady said that the West remains optimistic, viewing the criticism of the government program as natural in a democracy and remaining confident in the Yeltsin Cabinet’s ability to see it through.

“We still have--and I am sure the members of the Group of Seven (leading industrialized countries) will too--complete confidence in the fact that this will get sorted out quickly enough to allow the aid package to go forward,” Brady said, anticipating that the agreement struck by Yeltsin with the Parliament on Tuesday afternoon will hold.

While Brady was at pains to avoid embroiling himself, the United States and the West in Russia’s rough-and-tumble politics, he wanted to remind opposition politicians that their actions this week--increasing government spending, indexing pay to match inflation, authorizing more bank credits--could undermine the government’s reforms and thus affect assistance to Russia.

“If it were the same or roughly the same economic program, we would still have that basic confidence,” Brady told a journalist, “but the steps taken this week were steps backward. That should be understood.”

The West views the clash between Yeltsin’s Cabinet and lawmakers in the Congress of People’s Deputies, the national Parliament, over economic policy and the division of governmental powers as part of “the Russian brand of democracy,” Brady continued.

“Coming from democracies ourselves, we understand the process, and we would not intervene--this is their business,” he said. “But there is a question of international confidence in reforming societies, and the guidelines for the reform process are reasonably well known as they are set out by the International Monetary Fund, the World Bank, the Group of Seven.”

Brady met for more than an hour with Yegor T. Gaidar, the beleaguered first deputy prime minister and the government’s principal economic strategist. However, his expected appointment with Yeltsin was canceled as the president continued his negotiations, ultimately successful, to save the Cabinet and its reform program.

Gaidar said Brady had been polite but direct in expressing concern over the parliamentary setbacks for the reforms.

“He told me about the concern among the Group of Seven countries about possible destabilization of our financial situation,” Gaidar said. “Mr. Brady informed me that no one . . . will give us a kopek without a responsible economic policy.”

Gaidar and other members of Yeltsin’s reformist Cabinet had announced Monday that they were resigning unless Parliament reversed decisions blocking their radical approach toward a market economy and reaffirmed Yeltsin’s authority to introduce those changes by decree. The Cabinet said it would withdraw its resignation after a compromise was reached with Parliament.