TIME: Almanac 1993/TIME Almanac 1993.iso/time/072991/0729000.000

Text File | 1992-08-28 | 8.4 KB | 174 lines

                                                                                WORLD, Page 26

SOVIET UNION 

Helping Him Find His Way


Forced to settle for sacks of advice instead of money at the
London parley, Gorbachev promises to apply those ideas at home

By BRUCE W. NELAN -- Reported by James Carney and William Mader/
London and Dan Goodgame with Bush


    Ordinarily, diplomatic protocol prevents hosts from
lecturing guests on how to manage their affairs at home. But the
summit meeting in London last week was far from ordinary. The
leaders of the world's seven biggest industrial democracies, the
so-called G-7, did not mince words when Mikhail Gorbachev
arrived to appeal for Western assistance.

    George Bush and his colleagues told the Soviet President
that his reforms had not gone nearly far enough, and he seemed
to take their words to heart. Just before returning to face his
critics in Moscow, he conceded to a British television
interviewer, "We still have a lot to learn about living in a
democratic framework." He agreed Western money alone could not
rescue the Soviet Union. "We will have to do the work
ourselves," he said. "But we need the help of the West to get
the job done."

    Like a guest invited for coffee but not for dinner,
Gorbachev appeared ill at ease when he arrived for his
postconference session with the Western leaders. His face was
pale and rigid as he plodded wearily into Lancaster House, a
19th century mansion where the summiteers had met. During the
four-hour meeting, Gorbachev and the Seven exchanged vague but
optimistic pledges. The Soviet Union would continue its promised
transition to a free-market democracy, and the West would help
it along with good advice, technical assistance and, if all went
well, possible economic aid in the future.

    If that was a less bankable outcome than Gorbachev had
hoped for, it was at least a proof of his international stature,
which could give him comfort back in Moscow. He had been treated
with great respect, and his seat at the table of the mighty was
more than symbolic: the Soviet Union's links with the G-7 and
such world financial institutions as the International Monetary
Fund and the recently created European Bank for Reconstruction
and Development now seem permanent.

    To crown his pilgrimage, Gorbachev struck a deal with
George Bush on the last issue holding up the START treaty that
will cut the number of strategic nuclear weapons on each side
to 6,000. The Soviets now have 10,180, and the U.S. has 9,251.
While the treaty does not slash the arsenals by as much as
Washington originally hoped, it is the first such agreement that
will actually reduce the stocks of existing weapons. The treaty
will be signed during Bush's visit to Moscow at the end of this
month.

    The East-West encounter in London might have gone awry had
there not been some final-hour course corrections. Moscow had
startled the G-7 several weeks earlier when Gorbachev and some
of his economic advisers began speculating about obtaining
billions of dollars in aid from the West to support Soviet
progress toward a market economy. When Western capitals quickly
became noisily negative, the Kremlin backed off, saying
Gorbachev would not be asking for any specific amounts of cash.

    Then, the week before the summit, Gorbachev sent a 23-page
letter to the leaders of the U.S., Britain, France, Germany,
Italy, Japan and Canada, telling them the time had come for the
"Soviet Union's organic incorporation into the world economy."
He buttressed his letter with a 31-page document outlining areas
of the Soviet economy in which the West was invited to invest.
Even the German government, more eager than any of the others
to offer Moscow solid support, agreed with Washington, Tokyo and
London that Gorbachev's promises were too general. They focused
on creating a "mixed economy" rather than a free market that
could pull the U.S.S.R. out of its accelerating collapse.

    Officials in the Soviet advance party were still talking
in ominously demanding terms when they landed in London before
the summit. Gorbachev's personal envoy, Yevgeni Primakov, told
British Prime Minister John Major that Moscow expected "grants,
debt relief, investment." If they were not forthcoming,
Primakov warned reporters, Gorbachev's position might be
endangered and there would be "a risk of social uprising, of
civil war." Deputy Prime Minister Vladimir Shcherbakov claimed
that "there could be turmoil in the whole world."

    The Western response to the letter and the dire
predictions was still "no sale." Faced with the G-7 decision
that no hard cash would be offered yet, the Soviets shifted
gears. "It would be naive," spokesman Vitali Ignatenko assured
reporters, "to say that we expect President Gorbachev to come
away with black limos filled with money." Soviet Ambassador to
Britain Leonid Zamyatin passed the word that Gorbachev was
reworking his economic reform plan.

    Gorbachev's two-hour presentation was "impassioned and
eloquent,'' according to a British official, but was only "an
expanded version of what we had been given on paper." Even so,
both Bush and Major said they had been convinced that
Gorbachev's commitment to economic reform was now irrevocable.
Bush pledged the G-7 would "try to help in every practical way."

    What the Seven offered in their six-point response was
practical measures, specifically aimed at solving the Soviet
Union's problems rather than bailing the country out. The
remedies include unprecedented special association with the IMF
and the World Bank, which will provide the Soviets with access
to expert advice on creating a convertible currency and a
market-oriented economy but not access to money; loans are
available only to full members.

    The Seven said they would provide technical assistance in
developing the Soviet transport network, legal and banking
systems, energy resources and food production. They also offered
to help convert Soviet military industries, which, according to
some estimates, still account for about 20% of the gross
national product, to civilian production. The G-7 chairman --
Major until the end of the year, then German Chancellor Helmut
Kohl -- will visit the U.S.S.R. "to keep in close touch" with
the progress of reforms.

    It was a sensible list of steps, but the Soviets were
visibly disappointed. They are now fully aware of how skeptical
the West remains about their reform plans. They are on notice
that they cannot expect large-scale aid and investment until
they translate their words into action. In a separate session,
the Western finance ministers told Primakov that the Soviets
would have to "earn" future aid by proving the reality of their
economic transformation. Complained a senior Soviet diplomat:
"It is humiliating. They talked like bankers."

    Or perhaps like professors, since many of the Western
leaders believe the Soviets, Gorbachev included, do not fully
understand what they are trying to do. "Every time we see him,
we're reminded how profoundly ignorant of basic economics
Gorbachev is," says a senior White House official. "He studied
Marx and Lenin, and he still has a lot of trouble with the idea
of private property." Says a British expert: "He mistakes some
adjustments, some tinkering, for economic reforms." The Western
conclusion, however, is that Gorbachev deserves help and advice,
not scorn.

    Gorbachev must now decide how radical he is prepared to be
in transforming his country's economy. Until he does so, he
cannot expect the West to bankroll his efforts. He is still
trying to have it both ways, an economy with both market forces
and central control. In the coming months the G-7 countries
will keep tabs on how reform is moving and consider whether
they will be able to put some money where their advice is. The
knowledge that the West is watching may help steel Gorbachev's
own resolve to push for significant changes.

    While the Soviet President did not return to Moscow with
sacks of money, he achieved something perhaps equally dramatic.
He dispersed the cloud of suspicion that had always shrouded
Moscow's dealings with the Western democracies. By sitting down
at the negotiating table with the leaders of the West and by
seeking membership in the leading capitalist institutions,
Gorbachev announced that the Soviet Union's ideological
isolation from the rest of the civilized world is over.