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Text File | 1994-05-02 | 17KB | 329 lines

<text> <title> U.N. Aid to Russia. Presidential Candidate Bill Clinton </title> <article> <hdr> Foreign Policy Bulletin, May/June 1992 U.N. Peacekeeping And Aid To Russia. Presidential Candidate Bill Clinton, April 1, 1992 </hdr> <body> Presidential Candidate Bill Clinton's Foreign Policy Association Speech, New York, April 1, 1992 (Excerpt) We need to respond forcefully to one of the greatest security challenges of our time: to help the people of the former Soviet bloc demilitarize their societies and build free political and economic institutions. We have a chance to engage the Russian people in the West for the first time in their history. The stakes are high. The collapse of communism is not an isolated event; it's part of a worldwide march toward democracy whose outcome will shape the next century. For ourselves and for millions of people who seek to live in freedom and prosperity, this revolution must not fail. I know it isn't popular today to call for foreign assistance of any kind. It's harder when Americans are hurting, as millions are today. But I believe it is deeply irresponsible to forgo this short term investment in our long term security. Being penny wise and pound foolish will cost us more in the long run in higher defense budgets and lost economic opportunities. Supporting a Democratic Russia What does a democratic Russia mean to Americans? Lower defense spending. A reduced nuclear threat. A diminished risk of environmental disasters. Fewer arms exports and less proliferation. Access to Russia's vast resources through peaceful commerce. And, the creation of a major new market for American goods and services. As I said at Georgetown [University] last December, "We owe it to the people who defeated communism, the people who defeated the coup. And we owe it to ourselves...Having won the Cold War, we must not now lose the peace." Already, chaos has threatened to engulf Russia. Its old economy lies in ruins. Staples remain scarce, and lawless behavior is spreading. The immediate danger is not a resurgence of communism, but the emergence of an aggressively nationalistic regime that could menace the other republics and revive the old political and nuclear threats to the West. Boris Yeltsin has embarked on a radical course of economic reform; freeing prices, selling off state properties, and cutting wasteful public subsidies. Hopes for a democratic Russia ride on these efforts, which must produce positive results before economic deprivation wears down the people's patience. I believe America needs to organize and lead a long-term Western strategy of engagement for democracy. From Russia to Central Europe, from Ukraine to the Baltics, the U.S. and our allies need to speed the transition to democracy and capitalism by keeping our markets open to these countries' products, offering food and technical assistance, helping them privatize key industries, converting military production to civilian uses, and employing weapons experts in peaceful pursuits. Make no mistake: Our help should be strictly conditioned on an unswerving commitment by the republics to comprehensive economic reform and on continued reductions in the former Soviet nuclear arsenal. Russia faces two economic challenges. The short term challenge is to stabilize the economy and stem hyperinflation, so that Russia doesn't go the way of Weimar Germany. The long term challenge is to build a market system from the ground up--to establish private property rights, create a banking system, and modernize its antiquated capital stock, which outside the defense sector lags behind world standards. Russia is intrinsically a rich country. What it needs is not charity but trade and investment on a massive scale. What the major financial powers can do together is help the Russians help themselves. If we do, Russia's future holds the possibility of a stronger democracy rather than a resurgent dictatorship, and a new American market rather than a new American nightmare. We should look at this assistance not as a bailout, but as a bridge loan, much as a family gets from the bank when it buys a new house before selling off their old house. I propose that the U.S. must take the lead in putting together a bridge loan to help Russia make the transition from its old system to its new economy. We must have no illusions: The West cannot guarantee Russia's prosperity. Even with our help, the future of Russia and the other republics is uncertain. But, we can give President Yeltsin's reforms and Russian democracy a fighting chance. The West should establish a $6 billion fund to help stabilize the Russian ruble. Without this fund the ruble will continue to lose its exchange value, and inflation will continue to soar. America's share would be about $1 billion, in the form of a loan, not a gift. In return, Russian leaders have to agree to tough conditions. They must rein in public spending and stop excessive printing of money. A fund of this kind is like a net for acrobats: By building confidence, it reduces the chance it will ever be used. Russia also needs to import food, medicine, and the materials required to keep the economy functioning. According to the IMF, which has just endorsed Russia's economic reform program, that country needs a minimum of $12 billion in financial assistance in 1992 to do so--primarily in the form of loans. Without this Russia faces more than a 20 percent drop in GNP in 1992, a bigger drop than America suffered in any year of the Great Depression. This assistance should be carefully aimed at those sectors where it can do the most good, and should come from the Western democracies, including Japan, and perhaps also from other countries like Saudi Arabia, Kuwait, South Korea and Taiwan. The U.S. share of these loans would be roughly 10 percent. Finally, it is also crucial to give Russia some breathing space for servicing its external debts, at a time when it doesn't have the money to stabilize its currency or import goods. Taking the Political "Flak" Let me be clear: Our nation can afford this. This is not an exorbitant price to pay for a chance to create new American markets and anchor a revitalized Russia firmly in the democratic camp. The amount of money we need is available from defense and other foreign aid savings that the end of the Cold War makes possible. If Boris Yeltsin and his economic advisors stay the course, the chances are good that Russia will be in a position to pay us back in full by the latter part of the decade. Nevertheless, passing such aid will require an act of political will by Congress and the President, and the kind of leadership from the White House we have not previously seen. I also strongly support fulfilling the commitment America has made to our share of the IMF quota increase. Of a total increase of $60 billion, our share is 19 percent, or roughly $12 billion. But we are not talking about giving the $12 billion away. It is like a line of credit in a cooperative bank, and we earn interest on it. The quota increase was voted two years ago. It was necessary to help emerging democracies in Eastern Europe. It is all the more urgent now, with Ukraine, the Baltics, and other newly independent nations whose economic fate depends on it. Every other country in the IMF has agreed to pay their share, except the U.S. Why? Because our President has not taken the lead in persuading the Congress to authorize the necessary funds. We need a President who doesn't mind taking a little flak to seize this moment in history. At the same time, we should encourage private American investment in the former Soviet Union. The newly independent republics, after all, are rich in human and natural resources. One day, they and Eastern Europe could be lucrative markets. But