Bentsen, on Russia Visit, Says He’s Pleased With Pace of Privatization

U.S. Treasury Secretary Lloyd Bentsen, on a whirlwind visit to Moscow, pronounced himself delighted Friday by the pace and scope of the Russian privatization program but urged the government to act quickly to squelch raging inflation.

“While progress has been made on stabilization, I’m concerned about prices continuing to rise too quickly,” Bentsen said, adding that without a stable monetary base, Russia’s other reforms cannot succeed.

However, Bentsen assured the Russians that the aid package promised by President Clinton at the Vancouver, Canada, summit is on track. He also pledged to present a good report card on Russian progress at the Group of Seven meeting of the major industrialized nations in Tokyo in July, when a further aid package of $2 billion--including $500 million from the United States--will be discussed.

Bentsen’s trip comes on the eve of a constitutional conference at which delegates picked by President Boris N. Yeltsin will attempt to hammer out a legal blueprint for post-Communist Russia.

“I recall the stories of the difficulties that our Founding Fathers had back in 1789 with their Constitution,” Bentsen said. “But that effort was worth it. It ushered in an era of democracy for the whole world. And I hope that the document produced here has that kind of results for Russia.”

Due to Yeltsin’s hectic schedule, the president’s planned meeting with Bentsen on Friday was tentatively rescheduled for this morning.

The Treasury secretary’s visit comes as the plummeting ruble has crashed through the symbolic level of 1,000 to the dollar.

When the Soviet Union collapsed in December, 1991, the ruble was trading at about 130 to the dollar.

At Friday’s auction, the ruble sold for 1,072 per dollar, but in street transactions the dollar fetched 1,200 rubles.

Inflation, which hit 2,600% last year, is estimated at 669% through April. The average Russian monthly salary is now worth about $23.

Bentsen came to Moscow at the invitation of Deputy Prime Minister Boris G. Fyodorov and met with the pro-Yeltsin officials responsible for the privatization program. He did not see Russian Central Bank Chairman Viktor V. Gerashchenko, faulted by many Western economists for inflationary policies.

The Treasury secretary toured a newly privatized food storage and refrigeration facility in Moscow that employs 600 people, lunched with private businessmen and noted with surprise that 5% of Russian industry was privatized in April alone.

“I think there is momentum under way for economic change that cannot be reversed,” he said.