G-7 Nations Starting Task of Rescuing Russian Reform

Guided by the failures of the past and haunted by deep concern about an uncertain future, the foreign and finance ministers of the leading industrial democracies begin the daunting task today of cementing a sketchy plan to bail out Russia’s struggling economy and keep its political reform on track.

Stressing the urgency of the mission and alluding to the precarious nature of Russia’s democracy, U.S. Treasury Secretary Lloyd Bentsen said Tuesday that the “representatives of the world’s most powerful and peaceful democracies must act in concert to bolster Russia’s reforms and reformers.”

The goal of the two-day meeting is to produce a detailed plan for aid that will help Russia develop a capitalist economy, without first making it appear to be an embarrassingly weak Third World economic basket case and thus giving ammunition to Russian President Boris N. Yeltsin’s Communist and nationalist opponents, who say he has sold out to the West.

At the same time, the leaders of the Group of Seven nations--Britain, Canada, France, Germany and Italy, as well as the United States and host Japan--must remain sensitive to the economic concerns among their constituents back home: Traditional distaste for foreign aid has grown ever greater as one once-powerful economy after another struggles with recession and voters compete for taxpayer money to fund local needs.

The meetings today and Thursday come on the heels of the Vancouver, Canada, summit conference, at which President Clinton unveiled for Yeltsin a $1.6-billion U.S. program of grants for food purchases and technical assistance, and credits for grain sales and investments.

Now, the Group of Seven is talking about a multinational program that could total $40 billion. Its goals would be both short-term and long-term: to boost Yeltsin’s prospects in an April 25 referendum on his presidency and, over a longer period, to provide loans and standby funds from the International Monetary Fund and other international agencies to help stabilize the Russian economy.

U.S. officials have indicated that Clinton will seek from Congress a further boost in the U.S. contribution. And the United States is seeking to push its allies into additional, individual efforts. To that end, Japan is reportedly about to produce a program valued at $1.8 billion.

Policy-makers here are pointing to some tentative signs of progress in the Russian economy.

While inflation remains a problem in Russia, the policy-makers say, the most recent figures--for March--show prices increasing at 17% a month, still high but down from the rate of 25% the month before and not as close to the sort of politically destabilizing hyper-inflation--50% monthly price boosts, for instance--that is most feared.