U.S. and Allies Agree to a Quick $3 Billion for Russia

The United States and other major economic powers have agreed to extend Russia a quick $3 billion in long-term loans as soon as the government of President Boris N. Yeltsin takes initial steps to bring inflation under control, senior Clinton Administration officials said Monday.

The new loans, which could begin to flow from the International Monetary Fund within two months, are a key part of a multinational aid package of about $40 billion that the world’s seven leading industrial powers plan to announce in Tokyo this week.

In addition, Secretary of State Warren Christopher said the Administration plans to announce new proposals for direct U.S. aid to Russia beyond the $1.6 billion promised last week, “aid that will go right into the bloodstream of the (Russian) economy.”

Senior officials who spoke aboard Christopher’s airplane on its way to Japan said they hope the IMF loans, which are designed to reach the Russian government unusually quickly, will bolster Yeltsin in his campaign for support in an April 25 referendum.

“We hope this will encourage the reform effort, both before the referendum and beyond,” a senior Treasury official said. “The main thing is the unusual speed with which this money will be made available.”

The official said the only condition for the release of the money is a serious effort by Russian authorities to bring inflation under control by slowing their grants of credit. Western economic authorities have frequently pointed to the Russian Central Bank’s practice of granting easy credit to state industries as an important cause of the runaway inflation that has exceeded 30% per month.

The $3 billion, which will be made available in two equal parts, is Russia’s share of a new IMF fund of up to $7.5 billion that will also be available to Ukraine, other former Soviet republics and even such countries as Vietnam, as long as they move their Communist economies toward a Western, free-market model.

Christopher said he hopes this week’s meeting of foreign and finance ministers from the Group of Seven--the United States, Japan, Germany, France, Italy, Britain and Canada--will “highlight the importance of the economic and political reforms in Russia . . . (and) provide support for Yeltsin’s courageous efforts.”

None of the money will actually be in Russia in time for the April 25 referendum, but officials said they hope its availability--and its linkage to an anti-inflation policy--will at least encourage support for the politically embattled president.

The officials acknowledged that Yeltsin’s chances in the referendum remain unclear and said they are trying to assemble an aid package that will continue to encourage reform in Russia--no matter what happens on April 25.

That’s when Russian voters will be asked whether they have confidence in Yeltsin and in his economic policies and whether they want early presidential and parliamentary elections.