NEWS ANALYSIS : Aid to Russia Is Doomed to Fall Short : Transitions: Even $100 billion from the West cannot cure an economic system left a shambles by 70 years of communism.

As the Western donor nations work to help Russia and the other Soviet successor states rebuild their shattered economies with a package that now totals about $100 billion, three facts are clear:

* The task of breathing new economic life into the former Soviet Union presents a challenge far tougher than that faced by those who used the Marshall Plan to pull a shattered Western Europe out of the ashes of World War II.

* In a region plagued by political instability and awash in nuclear missiles, the stakes are far higher for humankind.

* No matter how much money is thrown at the problem, it will never be enough.

“What is happening here is a transition greater than has ever occurred anywhere,” commented James A. Norris, director of the U.S. Agency for International Development office that opened recently in Moscow.

The success and speed of this transition hinges in part on the West’s ability to effectively transfer the experience and ideas needed to make a market economy run.

The sums involved are smaller than they seem.

Nearly half the $100 billion, for example, has come in the form of export and other credits--credits that may increase Moscow’s ability to import badly needed Western goods but that also add to a hard-currency debt that the Soviet successor states already find hard to service.

The estimated $3 billion spent on emergency food aid, although badly needed, will also have negligible impact on the long-term structural changes required for the region to become globally competitive and economically successful.

Other programs are completely unrelated to the core task of injecting new life into an economic system that has been left a shambles by 70 years of communism.

Germany, by far the largest single donor nation, has provided a total of $24 billion for the withdrawal of Russian forces from eastern Germany and to write off a large Soviet trade deficit with the area at the time of German unification. By contrast, Bonn has allocated less than $1 billion for programs aimed directly at economic restructuring.

Still, Germany remains the key player in transferring the basic free-market skills that the region so desperately needs to rebuild.

German technocrats, for example, now advise Russian President Boris N. Yeltsin’s team on reforming an administrative system that, at the time of the Soviet Union’s demise, sported no fewer than 900 ministries and lesser bureaucratic authorities.

Wolfgang Kartte, former chief of the German Monopolies Commission, has an office in Yeltsin’s White House and advises the new government on competition policy, economic restructuring and support for small-scale industry.

He oversees a project to privatize five major state combines in the city of Vladimir, 125 miles east of Moscow, by turning the plants over to their existing directors in a kind of management-employee buyout.

The plan, Kartte said in an interview, is based on lessons learned during the privatization of east German industry, in which a key factor for success has been a young, highly motivated management team that is willing to learn--no matter what their previous background. “In each case, they (the Russian managers) are people who came to us,” said Kartte. “We didn’t have to convince them of anything.”

The German Savings Bank Foundation is also helping the former Soviet system of savings banks, known as Sberbank, expand into commercial activities.

Although Russians sometimes find it hard to accept that the Germany they helped defeat in war 47 years ago is the same Germany that now helps them, it remains an unavoidable fact.

“Germany is a model for us,” commented Vladimir A. Serdyukov, a member of the Russian Parliament.

While the German experience in rebuilding its formerly Communist eastern region may contain valuable lessons for those working here, it also carries a depressing message: Initial Western estimates of the costs and time needed to revive a Soviet-style centralized Communist economy were hopelessly optimistic.

Bonn has failed to generate any real revival in the east, despite spending well in excess of $200 billion in the past two years--and that in a region one two-hundredth the size of the former Soviet Union, with a population only slightly larger than that of greater Moscow and a tradition of economic competition far stronger and more recent than in Russia.

Serdyukov contends that his countrymen have an inherent feel for the role of the market, but others note a Russian tendency to expect government to control rather than just regulate markets.

“Many are convinced of its (the free market’s) benefits but have no idea how it works,” said Hermann Behrendt, a former West German retailing executive who last year directed the privatization of eastern Germany’s wholesale and retail trading sectors and now works with a German-backed program to do the same in greater Moscow. “I’ve heard committed free marketeers here exclaim that it’s just not possible to expose weak industries to the ravages of raw competition.”

The pressure on Russian politicians to produce short-term results from a process that by its nature requires years--if not decades--to develop constitutes a major stumbling block to genuine reform.

Also hampering the privatization effort are widespread corruption, an absence of capital and a serious shortage of goods that often precludes the freedom of choice inherent in a competitive market.

Sometimes conditions make it impossible to know where to begin.

Those looking into privatizing Moscow’s electric utilities, for example, discovered that there were neither meters to monitor consumption nor a tariff system worth the name, and that heating and hot water were delivered free to all city residents.

While eastern Germany received the entire commercial underpinning and legal framework on which a market economy rests with the July, 1990, German currency union, Russia and other Soviet-successor states must build these services from scratch.

Adding to the problem, the largest single technical assistance program--a $1.9-billion European Community program--has been plagued by delays.

Many projects funded by $520 million in technical aid agreed on by the EC’s member states in December, 1990, are only now getting under way.

In the program’s single largest sector, energy--in which $150 million is scheduled to be spent on planning and advising in such designated areas as nuclear reactor safety and energy conservation--Russian authorities have submitted 250 proposals, but not a single contract has been signed.

Meanwhile, the community’s follow-on $650-million technical assistance package for the present year is also running behind schedule.

American technical aid, although smaller in size ($652 million), has arrived more quickly, in part because of a decision to permit U.S. federal agencies, such as the Treasury and Agriculture departments, to work directly with former Soviet authorities.

Ranging from a model farm near St. Petersburg to an agricultural extension service in Yerevan, U.S. funds are earmarked for a series of projects aimed at transferring know-how in a variety of fields, including energy utilization, privatization and health care.

Although the Western help actually aimed at rebuilding the economies of the former Soviet Union remains small, aid officials note that it is structured for maximum impact.

“It’s an impressive amount of money when you realize it’s not going for hardware but for technical support, advice and training,” said Norris.

“This country has tremendous problems, but it also has a rich corps of skilled people.”