U.S., Allies Try to Assemble $40 Billion in Russian Aid

The United States and its allies, seeking to boost Russian President Boris N. Yeltsin’s chances of success in his April 25 referendum, are trying to assemble a multinational aid package of $40 billion or more that can be unveiled next week, senior Western officials said Friday.

But the package has not been completed, and some officials said it remains unclear whether the informal target of $40 billion can be reached by Thursday, when Secretary of State Warren Christopher, Treasury Secretary Lloyd Bentsen and their foreign counterparts end a two-day meeting in Tokyo.

“There’s still some work to do,” a senior U.S. official said. “And $40 billion is an awful lot of money. It’s a lot easier to get the number up to $30 billion or so.”

Senior officials made clear that they hope the aid package will be big enough to have an impact on public opinion in Russia in time for the referendum, scheduled to be held two weeks from Sunday.

“There’s no secret to the fact that the clock is ticking up to the 25th of April,” a senior State Department official said.

President Clinton and his top advisers believe the outcome of the referendum will be key to the West’s hopes for continued reform in Russia, aides said. If Yeltsin wins, they contended, he will be able to take control of Russia’s balky Central Bank and press forward with real economic change. But if he loses, the balance of power will swing toward his rivals in the Congress of People’s Deputies, who already have done their best to slow down the reforms.

Accordingly, next week’s Tokyo meeting of the Group of Seven industrial powers--the United States, Japan, Germany, France, Italy, Britain and Canada--is being designed for its short-term political impact in Russia as much as for any long-term economic effect.

“It’s all wound up in the status of President Yeltsin,” the State Department official said. “If he gets a great vote of confidence on the 25th of April, I think he’ll be able to achieve things that he can’t now achieve.”

So far, offers of increased Western aid have gotten a mixed reception in Russia. Yeltsin came home from his Vancouver summit meeting with Clinton trumpeting the President’s promise of $1.6 billion in U.S. aid as a triumph. But the newspaper Pravda, which favors the opposition, derided the aid as only $10.98 per Russian.

The multinational package being readied for the Tokyo meeting is much larger but also less concrete.

Clinton’s package of direct aid included such tangible programs as housing for demobilized Russian army officers and start-up loans for new private businesses. The projected Tokyo fund of $40 billion includes those small programs, but its core is made up of loans and standby funds from the International Monetary Fund and similar institutions to help Yeltsin stabilize the entire Russian economy.

A senior Treasury official promised that the package will be “impressive” and said it will be unlike any foreign aid effort the West has ever mounted. “This is probably the greatest economic reform task the world has ever faced,” he said.

“This is not a situation in which support can be delayed until every ‘i’ is dotted and every ‘t’ is crossed,” he added, noting that the IMF and other institutions are readying their parts of the package at unusual speed.

In a significant concession to Russia’s needs, he said, the IMF will make credits available on a step-by-step basis, rewarding Moscow with new loans after each individual step toward reform. Usually, the IMF requires a country to implement a series of sweeping and often painful economic measures before it releases significant credits.

Reflecting the importance of the referendum, the Treasury official refused to criticize Yeltsin for his economic campaign promises, even though some appear to conflict with the West’s demands for tougher anti-inflation measures.

Yeltsin has promised, for example, to index the balances in Russians’ savings accounts to keep up with high inflation; the Treasury official said that is merely an attempt to make up for excessively low interest rates.

The Tokyo package may include about $10 billion in loans from international financial institutions, a $6-billion ruble stabilization fund, $16 billion in debt relief and more than $5 billion in direct aid from several countries, officials said.

To reach those totals, the IMF is scrambling to finish work on a new credit fund of up to $7.5 billion, and U.S. diplomats are pressing other countries from Argentina to Saudi Arabia to weigh in with new aid programs.

Japan is preparing an offer of as much as $2 billion in direct aid, and the United States may announce some new aid programs to help encourage others to pitch in, officials said.

The largest single part of the package--the debt relief of $16 billion--consists of payments of principal and interest that Russia’s major government lenders agreed to defer last month.

Some officials have said that it may be deceptive to include those in the total, since Russia had already stopped making those payments on its own.

But other officials, seeking as big a number as possible, have argued for counting debt relief as part of the package.

Times staff writer John M. Broder contributed to this report.