Assistance to Russia and Other New Independent States of the Former 
Soviet Union

Material Relating to the Vancouver Summit and Tokyo G-7 Ministerial 
Meeting, April 1993

Vancouver Summit:
1.  Vancouver Declaration -- President Clinton,  Russian President 
2.  New Democratic Partnership Between The United States and Russia -- 
President Clinton,  Russian President Yeltsin 
3.  Fact Sheets:  Vancouver Summit -- US Assistance to Russia
4.  Fact Sheet:  Safe, Secure Dismantlement (SSD) Initiatives With 
Belarus, Kazakhstan, and Ukraine
5.  Fact Sheet:  START I and NPT (Lisbon Protocol)
Tokyo G-7 Ministerial Meeting:
6.  News Conference of April 12 -- Secretary Christopher 
7.  International Community Should Provide Russia "Help for Self-Help" 
-- Japanese Prime Minister Miyazawa
8.  Bilateral and Multilateral Aid for Russia -- Secretary Christopher,  
Treasury Secretary Bentsen
9.  G-7 Chairmen's Statement on  Support for Russian Reform
10.  Supporting Russia's Historic Struggle -- Secretary Christopher,  
Treasury Secretary Bentsen
11.  US Must Lead a Strategic Alliance With Post-Soviet Reform -- Strobe 
12.  Assistance to Russia and the  Foreign Affairs Budget -- Secretary 


Vancouver Declaration 
President Clinton, Russian President Yeltsin
Text of joint statement released by the White House, Office of the Press 
Secretary, Washington, DC, April 4, 1993

Having met in Vancouver, Canada on April 3-4, President Bill Clinton of 
the United States of America and President Boris Yeltsin of the Russian 
Federation declared their firm commitment to a dynamic and effective 
U.S.-Russian partnership that strengthens international stability.   The 
two presidents approved a comprehensive strategy of cooperation to pro-
mote democracy, security, and peace.  President Yeltsin stressed his 
firm commitment to fostering democratization, the rule of law, and a 
market economy.  As the United States moves to reinvigorate its own 
economy, President Clinton assured President Yeltsin of active American 
support for the Russian people as they pursue their own chosen course of 
political and economic reform.

The Presidents agreed on a new package of bilateral economic  programs 
and measures to address Russia's immediate human needs and contribute to 
the building of necessary structures for successful transition to a 
market economy.  They recognized the critical importance of creating 
favorable external conditions in which the Russian economy can realize 
its maxi-mum potential.  In this connection, the Presidents expressed 
their determination to promote access to each other's markets, 
cooperation in defense conversion, removal of impediments to trade and 
investment, and resumption of U.S. food exports to Russia on a stable 
long-term basis.

President Yeltsin informed President Clinton about the Russian program 
of economic reforms.  In particular, President Yeltsin stressed such key 
questions of the Russian reform as the necessity of combatting inflation 
and achieving financial stabilization by improvement of the banking 
system.   He also emphasized the importance of privatization, 
encouragement of entrepreneurship, structural policy, and social 
support.  In this context, the Presidents discussed the role of the 
international community in supporting specific elements of the reform 

The Presidents agreed that Russia's harmonious integration into the 
community of democratic nations and the world economy is essential.  
They therefore called for accelerated G-7 development of substantial and 
effective new economic initiatives to support political and economic 
reform in Russia.  In this connection, the Presidents welcomed the 
extraordinary meeting of the foreign and finance ministers of the G-7 
countries and the Russian Federation scheduled for April 14-15 in Tokyo.  
Presidents Clinton and Yeltsin also expressed their satisfaction with 
the successful conclusion of negotiations in Paris on the rescheduling 
of the international debt of the former USSR.  The United States 
announced its support for Russia's intention to become a full member of 
GATT [General Agreement on Tariffs and Trade] and to begin, in the near 
future, official talks on the conditions of Russia's accession to GATT.

The Presidents agreed to give fresh impetus to development of the U.S.-
Russian relationship in all its dimensions.  To coordinate and direct 
this effort and to activate a comprehensive and intensive dialogue, they 
agreed on measures to improve the mechanism for mutual consultations.  
In particular, working groups will be set up involving high-level 
officials of both governments with broad authority in the areas of 
economic and scientific and technological cooperation.  The Presidents 
agreed to establish a United States-Russian Commission on technological 
cooperation in the fields of energy and space.  They intend to designate 
Prime Minister Chernomyrdin and Vice President Gore to head this 

The leaders of the United States and Russia attached great importance to 
the prevention of the proliferation of weapons of mass destruction and 
their delivery systems.  They reaffirmed their determination to 
strengthen the Nuclear Non-Proliferation Treaty (NPT), make it 
universal, and give it an unlimited duration.  The Presidents stressed 
their expectation that all countries of the former USSR which are not 
already NPT members will promptly confirm their adherence to the treaty 
as non-nuclear weapon states.  They urged the Democratic People's 
Republic of Korea to comply fully with its IAEA [International Atomic 
Energy Agency] safeguards obligations, which remain in force, and to 
retract its announcement of withdrawal from the NPT.

The Presidents agreed that efforts of the United States and Russia will 
be directed toward the entry into force of the START I Treaty and the 
ratification of the START II Treaty as soon as possible.  They affirmed 
that the United States and Russia intend to cooperate, on the basis of 
their mutual interest, in environmentally safe elimination of nuclear 
forces pursuant to relevant arms control agreements, in construction of 
a storage facility for nuclear materials and in the controlling, 
accounting, and physical protection of nuclear materials.  The United 
States reiterated its readiness to provide assistance to Russia for 
these purposes.  The Presidents called for prompt conclusion, on 
mutually acceptable terms, of the negotiations on an agreement on the 
conversion and sale for peaceful purposes of nuclear materials removed 
from nuclear weapons.

The Presidents underscored their determination to broaden interaction 
and consultations between Russia and the United States in the areas of 
defense and security.  They instructed their Ministers of Defense to 
explore further possibilities in that direction.

The Presidents noted the progress achieved at the recent United States-
Russian talks on chemical weapons in Geneva.  They welcomed the progress 
made in preparing the protocols necessary to submit the "Agreement on 
Destruction and Non-Production of Chemical Weapons" of June 1, 1990, for 
approval by the legislative bodies of the Russian Federation and the 
United States.  They also welcomed progress achieved in developing 
agreement on the preparation and implementation of the second phase of 
the Wyoming Memorandum of Understanding of September 23, 1989, regarding 
a bilateral verification experiment and data exchange related to 
prohibition of chemical weapons.

The Presidents agreed that it is necessary to achieve the earliest 
possible resolution of questions about cooperation in non-proliferation 
of missiles and missile technology in all its aspects, in accordance 
with the principles of existing international agreements.  They also 
decided to work together to remove obstacles impeding Russia's access to 
the global market in high technology and related services.  The 
Presidents agreed that negotiations on a multilateral nuclear test ban 
should commence at an early date, and that their governments would 
consult with each other accordingly.

Mindful of their countries' responsibilities as permanent members of the 
UN Security Council, the Presidents affirmed that U.S.-Russian 
cooperation is essential to the peaceful resolution of international 
conflicts and the promotion of democratic values, the protection of 
human rights, and the solution of global problems, such as environmental 
pollution, terrorism, and narcotics trafficking.  The United States and 
Russia stressed their determination to improve the effectiveness of 
peacemaking and peacekeeping capabilities of the United Nations, the 
CSCE [Conference on Security and Cooperation in Europe], and other 
appropriate regional organizations.

Recognizing that the problem of mistreatment of minorities and ethnic 
communities is increasingly a source of international instability, the 
Presidents stressed the critical importance of full protection for 
individual human rights, including those of ethnic Russian and all other 
minorities on the territory of the former Soviet Union.  They affirmed 
their commitment to the peaceful resolution of conflicts in that region 
on the basis of respect for the independence, territorial integrity, and 
security of all member states of the UN and the CSCE.

The Presidents announced their intention to expand and improve their 
joint work in the area of environmental protection.  They agreed to 
coordinate on joint ecological measures to be taken and research to be 
done, and on support for financing agreed programs.  The Presidents 
agreed that the level of mutual openness achieved makes it possible to 
proceed with new forms of cooperation in science and technology, 
including programs in the field of outer space.  The two countries will 
further develop bilateral cooperation in fisheries in the Bering Sea, 
the North Pacific, and the Sea of Okhotsk, including for the purpose of 
preservation and reproduction of living marine resources and of 
monitoring the eco-system in the Northern Pacific.  The Presidents 
further agreed to expand significantly their contacts, exchanges, and 
cooperation in the areas of culture, education, the humanities, and the 
mass media.

The joint efforts of both countries have succeeded in establishing a new 
character for Russian-American relations.  The Presidents reaffirmed the 
principles and provisions of the Camp David Declaration of February 1, 
1992, and the Charter of U.S.-Russian Partnership and Friendship of June 
17, 1992, as a basis for relations between the two countries.

Presidents Clinton and Yeltsin expressed their deep appreciation to 
Prime Minister Mulroney and the people of Canada for hosting their 
meeting in Vancouver.  With a view to accelerating the development of 
U.S.-Russian partnership, the Presidents agreed to meet regularly at the 
summit level.  President Yeltsin invited President Clinton to visit 
Russia.  President Clinton accepted the invitation with appreciation. 


New Democratic Partnership Between The United States and Russia
President Clinton, Russian President Yeltsin
Opening statements at news conference following the US-Russian summit in 
Vancouver, Canada, April 4, 1993

President Clinton:   Good afternoon.  I have just completed 2 days of 
intensely productive discussions with President Boris Yeltsin.  I want 
to join him in thanking Prime Minister Mulroney and the people of Canada 
for their hospitality.  The beauty of Vancouver has inspired our work 
here, and this weekend I believe we have laid the foundation for a new 
democratic partnership between the United States and Russia.

The heroic deeds of Boris Yeltsin and the Russian people launched their 
reforms toward democracy and market economies and defended them 
valiantly during the dark days of August 1991.  Now it is in the self-
interest and the high duty of all the world's democracies to stand by 
Russia's democratic reforms in its new hour of challenge.

The contrast between our promising new partnership and our 
confrontational past underscores the opportunities that hang in the 
balance today.  For 45 years we pursued a deadly competition in nuclear 
arms.  Now we can pursue a safe and steady cooperation to reduce the 
arsenals that have haunted mankind.  For 45 years our nation invested 
trillions of dollars to contain and deter Soviet communism.  Now the 
emergence of a peaceful and democratic Russia can enable us to devote 
more to our own domestic needs.

The emergence of a newly productive and prosperous Russia could add 
untold billions in new growth to the global economy.  That would mean 
new jobs and new investment opportunities for Americans and our allies 
around the world.  We are investing today not only in the future of 
Russia but in the future of America as well.

Mr. President, our nation will not stand on the sidelines when it comes 
to democracy in Russia.  We know where we stand. We are with Russian 
democracy.  We are with Russian reforms.  We are with Russian markets.  
We support freedom of conscience and speech and religion.  We support 
respect for ethnic minorities. We actively support reform and reformers 
and you in Russia.

The ultimate responsibility for the success of Russia's new course, of 
course, rests with the people of Russia.  It is they who must support 
economic reforms and make them work.  But Americans know that our nation 
has a part to play, too, and we will do so.

In our discussions, President Yeltsin and I reached several important 
agreements on the ways in which the United States and the other major 
industrialized democracies can best support Russian reforms. 

First are programs that can begin immediately.  I discussed with 
President Yeltsin the initiatives totaling $1.6 billion intended to 
bolster political and economic reforms in Russia.  These programs 
already are funded.  They can provide immediate and tangible results for 
the Russian people.

We will invest in the growth of Russia's private sector through two 
funds to accelerate privatization and to lend to new small private 
businesses.  We will resume grain sales to Russia and extend $700 
million in loans for Russia to purchase American grain.  We will launch 
a pilot project to help provide housing and retraining for the Russian 
military officers as they move into jobs in the civilian economy.

Because the momentum for reform must come upward from the Russian 
people, not down from their government, we will expand exchanges between 
American farmers, business people, students, and others with expertise 
working directly with the Russian people.  And we agreed to make a 
special effort to promote American investment, particularly in Russia's 
oil and gas sectors.  To give impetus to this effort, we will ask Vice 
President Gore and Russian Prime Minister Chernomyrdin to chair a new 
commission on energy and space.

Second, beyond these immediate programs, the President and I agreed that 
our partnership requires broader perspectives and broader cooperative 
initiatives, which I will discuss with the Congress when I return home.  
We expect to do more than we are announcing today in housing and 
technical assistance, in nuclear safety and cooperation on the 
environment, and in important exchanges.

Third, this challenge we face today is clearly not one for the United 
States and Russia alone.  I have asked our allies in the G-7 to come 
forward with their own individual bilateral initiatives.  Canada and 
Britain have already done so, and I expect others to follow.    
President Yeltsin and I also discussed plans for the G-7 nations to act 
together in support of Russia's reforms.  The foreign and finance 
ministers of the G-7 are meeting in Tokyo on April 14-15.  Coordinated 
efforts are required to help Russia stabilize its economy and its 

The President and I agreed that Russia and the G-7 nations must take 
mutually reinforcing steps to strengthen reform in Russia.  And those 
will be announced on April 14-15.

Beyond these economic initiatives, the President and I discussed a broad 
agenda of cooperation in foreign affairs.  We reaffirmed our commitment 
to safe dismantlement and disposal of nuclear weapons.  We discussed the 
need to strengthen the Non-Proliferation Treaty (NPT) and to assure that 
Ukraine, along with Belarus and Kazakhstan, ratify the START Treaty 
[Strategic Arms Reduction Treaty] and accede to the NPT as non-nuclear 
weapons states.  I stress that we want to expand our relationships with 
all the new independent states.

We also agreed to work in concert to help resolve regional crises, to 
stem weapons of proliferation, to protect the global environment, and to 
address common challenges to international peace, such as the tragic 
violence in Bosnia, advancing the promising peace talks we have co-
sponsored in the Mideast, and continuing our cooperation to end the 
regional conflicts of the Cold War era.

Many of the dreams Americans and Russians hold for their children and 
for generations to come rest on the success of Russia's reforms and, 
thus, on the long-term partnerships between our two nations.  Our new 
democratic partnership can make a historic contribution for all humanity 
well into the next century.

Both of us know that it requires effort and vigilance to make progress 
along the path toward democracy's ideal.  And I believe we both see 
those ideas as rooted deeply in the human spirit.

I think of the words of one of the great poets of democracy within our 
own country, Walt Whitman.  In a poem about crossing the East River in 
New York where the Brooklyn Bridge now stands, he commands:  Flow on, 
river; flow on.  Of course, the river hardly required his permission.  
It has flowed on for centuries, and will continue to, whether old Walt 
Whitman decree[s] it or not.  Yet, he bellowed his enthusiastic support 
for the river's timeless journey.

Russia's struggle for democracy and America's support are much the same.  
We know that the attraction to freedom that animates democracy flows 
powerfully through the human spirit like a river.  Our words do not 
cause that river to flow, and history has now proven that in the long 
run no tyrant can cause the river to stop.  Yet, we bellow our support 
because it is right and because democracy's river can carry both our 
nations toward a better future.

As we have looked out across the Pacific to the shores of Russia and its 
far east, over the last few days we have committed ourselves anew to 
that journey.  I now return to the United States with a reaffirmed 
commitment to that course and a determination to engage Members of 
Congress in both parties and the American people in a rededication to 
the prospect that a successful and strong and democratic Russia is very 
much in the best interest of America and the world.

President Yeltsin:  First of all, I should like to thank you, Mr. 
President, for your kind words addressed to Russia.  I should like to 
thank Canada's Prime Minister, Mr. Mulroney, for the excellent way in 
which this summit of two Presidents of two great powers was organized.  
I'd like to thank the people of Vancouver for being so hospitable, for 
having so warmly welcomed our delegations and us personally, the 
Presidents.  I should like to thank the journalists, who, it seems to 
me, kept a round-the-clock watch at their posts.

I am fully satisfied by the results and by the spirit and atmosphere of 
my encounter with President Bill Clinton.  It was, in all senses, out of 
the ordinary.  But it was made extraordinary by processes transpiring in 
the United States and Russia, conditioned by [the] very special 
relationships developing between ourselves and Mr. Bill Clinton.  We met 
for the first time yesterday, but became partners back at that meeting 
in Washington.

When Bill Clinton became President, we rapidly established good working 
contacts over the telephone.  We candidly discussed the most intricate 
issues and stated at the outset that there would be [no] pauses in our 
dialogue and that we would rapidly manage to find time to meet and 
establish that right at the beginning, as I say, several months ago.

We had no right to further postpone an encounter in the face of this 
world emerging from a wounded past, its thoughts preoccupied by what has 
occurred in two great countries, the United States and Russia.  We 
immediately found common language in Vancouver, probably because we're 
both businesslike people and, at the same time, to some extent, 
idealists both.

We also believe that freedom, democracy, and freedom of choice for 
people are not mere words and are prepared to struggle for our beliefs.  
We understand that everything that happens in the world is interlinked; 
that cooperation is not concession-making, but a vital necessity, a 
contribution to our future.

At previous meetings, the nation's leaders discussed primarily the 
disassembly of confrontational structures; but here in Vancouver, we 
talked about building the new, laying the foundations of a future 
economy.  This was the first economically oriented meeting of the two 
great powers.  We adopted some signal decisions in the interests of the 
people of the Russian Federation, in the interests of the people of the 
United States of America, in the interests of the world's people.

We decided to eliminate discriminatory limitations on trade with Russia.  
We, in fact, said that we were simply hurt. Russia had embarked upon the 
path of democracy, whereas America was still treating us as though we 
were a communist country.  In fact, we're struggling against communism.  
I stated that quite clearly, and Bill Clinton agreed.  We are prepared 
to compete, but compete honestly.  We decided to alter our approach to 
trade in Russian uranium, space technology, [and] access to Russian 
military technology.  We decided to do away with the Jackson-Vanik 
amendment and to resolve other legislative issues.

There is considerably greater interest on the part of American investors 
in the fuel sector in Russian space technology.  We decided to cooperate 
in this area and decided to join forces, the US and Russian 
Administrations. . . .  Bill Clinton's economic package is predicated on 
the fact [that] America wishes to see Russia prosper with a blooming 
economy.  America intends to support Russian entrepreneurs, particularly 
small and medium farmers, Russia's youth.  It's going to cooperate in 
housing construction for the military and in other areas.  All of this 
is in support of Russian reforms, a part of the strategic form of 
cooperation between us, stressed Bill Clinton.

The figure that reflects that cooperation is $1.6 billion.  We're 
looking forward to other steps to be undertaken by the United States of 
America and other major industrial countries to support real reform in 

The linkage between that set of measures and other political measures 
was avoided.  Of course, military and political problems could not [be] 
skirted.  We discussed what might be done to see to it that all 
participants in the Bosnian conflict support the UN position.  Here, our 
positions match as to the main points.  

We devoted quite a lot of attention to problems of non-proliferation.  
We decided to extend our agreements on the avoidance of accidents, such 
as the near accident involving submarines very recently.  We decided to 
strengthen cooperation between various areas of the military.  All of 
this is reflected in the Vancouver Declaration [and] some of the 
principal elements of that declaration.

Members of our delegation felt that the US side did not appreciate that 
support for Russia had to be timely.  Our partners make it their goal to 
support Russia's reforms, which are not yet yielding major results as 
far [as] ordinary Russians are concerned.

The meeting in Vancouver signals a shift from general assurances of 
support to Russia to pragmatic, specific, nitty-gritty projects.  What 
we see dominating here are economic and not military strategic issues. . 
. .

Another very important result is that we, with President Bill Clinton, 
did establish some pretty close personal contacts.  Bill Clinton is a 
serious partner.  He is prepared to tackle the major problems 
confronting our two countries in the interest of our two countries, in 
the interest of all free people throughout the world.  I have invited 
Bill Clinton to visit Moscow, to render us an official visit at a time 
convenient to him.  (###)


Fact Sheets:  Vancouver Summit--US Assistance to Russia 

On April 3-4, 1993, President Clinton met with President Yeltsin in 
Vancouver, Canada.  At the summit, President Clinton announced a package 
of US assistance for Russia totaling $1.6 billion for projects 
announced, expanded, or obligated after January 20, 1993.  Grant 
assistance (food, technical cooperation, and Nunn-Lugar) totals $691 
million, while $700 million is in Food for Progress credit sales, and 
$232 million is in Export-Import Bank and Overseas Private Investment 
Corporation credits.

Following are fact sheets on the seven areas of assistance, released by 
the White House, Office of the Press Secretary, in Vancouver, Canada, 
April 4, 1993.

Humanitarian/Health Assistance And Food Sales

To respond to the need for humanitarian food and medical assistance and 
to help develop the proper infrastructure for health care delivery, the 
United States will provide grant food and medical assistance, health 
technical assistance, and concessional sales of US agricultural 
commodities to Russia.

Grant Food Assistance.  The United States will provide an additional 
$194 million in grant food aid to Russia, bringing total grant food 
assistance for Russia to $425 million in FY 1993.  This is provided 
under the Section 416(b) and Food for Progress programs administered by 
the US Agriculture Department.  Some of the commodities will be provided 
directly to the Russian Government for direct distribution or sales to 
needy individuals, while other commodities will be auctioned on private 
commodities exchanges.  A certain amount of the commodities will be 
provided through American and Russian private voluntary organizations.  
($194 million)

Food for Mothers and Children.  The United States will provide infant 
formula, whole fat milk, cereals, and nutritional powdered beverage to 
needy infants, children, and mothers in Magadan, Khabarovsk, and 
Vladivostok.  ($10 million)

Medicines and Medical Supplies for Russian Hospitals.  The United States 
will provide medicines and medical supplies to hospitals in the Moscow 
area and medical supplies to hospitals and clinics in the Magadan region 
of the far east.  ($15 million)

Medical Partnerships.  In an effort to increase contacts between 
American and Russian medical professionals, the United States will 
establish an additional four Medical Partnerships in Russia over the 
next several months.   This will make a total of nine partnerships in 
Russia.  ($3 million)

Health Care Finance.  An integral part of transition to a market economy 
will be the reform of the health-care system.  To assist in this 
transition, the United States will work with the Russian Government to 
promote private health care alternatives.  The United States will 
provide training and seminars and seek to establish replicable models of 
health care finance in reform-minded communities of Russia.  ($2.5 

Food for Progress Credit Sales.  The United States will make available 
$700 million in agricultural credit sales to Russia under the Food for 
Progress program.  These sales are an interim measure designed to 
restore Russia's access to US agricultural markets for grains and other 
commodities in the short term.  The commodities will be delivered for 
the next several months, until Russia's domestic harvest begins to 
become available.  ($700 million)

Total, Humanitarian/Health Assistance and Food Sales: $924.5 million.

Private Sector Development

The US private sector assistance program supports Russia's historic 
transition to a market-based economy, expanded trade and investment 
opportunities, and emergence of an indigenous private sector.  US 
assistance reinforces Russia's strategy to transfer state assets to 
productive private sector use and to catalyze small and medium business 
development to create  jobs.  Where possible, the US assistance program 
links American businesses with Russian counterparts to transfer skills 
and create lasting market relationships.

Russian-American Enterprise Fund.  The Fund will target loans and 
investments to create and expand small and medium enterprises.  It will 
support Russian businesses and joint ventures with US firms that 
disseminate Western business expertise and practices.   Loans and 
investments will seek to increase employment, develop capital markets, 
generate foreign exchange, encourage private foreign investment, and 
support privatization.  The Fund also will seek to demonstrate that good 
business investments are compatible with sound environmental practices. 
($50 million)

Privatization.  This is the driving force behind economic reform in 
Russia.  The initiative reinforces nearly every aspect of the 
privatization program that is giving all Russians their first 
opportunity to become private shareholders.  US assistance supports 
enterprise auctions; privatization manuals; public education on private 
ownership; and legal, economic, and logistical advice to local 
privatization committees.  Technical assistance for investment funds, 
stock exchanges, prudent regulation, and business support organizations 
will help create a fair and competitive marketplace.  ($60 million)

Bankers Training.  A modern banking system and stable financial markets 
are indispensable to enterprise restructuring.  Officials of US 
commercial banks, the Federal Reserve Bank of New York, and other 
specialists will train at least 250 Russian banking executives.  
American experts will work with Russian counterparts to introduce 
deposit mechanisms for business and household savings, functioning 
checking accounts, interbank credit and reserve lending systems, and an 
auction market in government securities that will facilitate relatively 
non-inflationary financing of public deficits. ($5 million)

Fiscal Sector Reform.  Effective decentralization and privatization will 
require new tax and expenditure systems for local and regional 
governments.  Technical assistance in the fiscal area will help local 
and regional governments design and implement fiscal structures, 
including revenue systems needed to finance social services and other 
budgetary requirements currently financed by state enterprises.  
Assistance will start with Moscow oblast (state) and will be targeted at 
regions making significant privatization progress.  ($4.4 million)

Russian-American Agribusiness Partnership.  This program pairs US 
agribusinesses with Russian partners to help private farmers, 
enterprises, and reform-oriented institutions create a market-driven 
food system.  Technical assistance and training by US agribusinesses 
will help break bottlenecks between producers and consumers and create 
efficient input delivery systems.  US agribusinesses will introduce US 
standards for harvesting, processing, and distribution.  Under the 
project, they will invest about $60 million of their own funds.  ($20 

Farmer-to-Farmer Program.  This activity will link over 300 American 
volunteer farmers with farmers in Russia in order to provide direct, 
practical agricultural marketing experience and expertise.  These 
volunteers will build on the work of 80 volunteers already in Russia.  
Their technical knowledge will help new private farmers learn the skills 
needed to operate in a market economy, improve crop quality, reduce 
losses, and respond to consumer demand.  ($5 million)

Eurasia Foundation.  The Foundation is a new, independent grant-making 
and technical assistance fund established with US Government financing. 
It will encourage collaboration with and contributions from private 
funding sources.  The Foundation will support innovative, field-based 
programs throughout the former Soviet Union in areas such as management 
training, economics education, public policy advice, independent print 
and broadcast media, and science and technology development. ($4 million 
for Russia)

Total, Private Sector Development:  $148.4 million.

Democracy Corps Initiative

Russia is embarking on the transformation of its political and legal 
framework from an authoritarian foundation to one based upon the rule of 
law, with emphasis on rights and responsibilities of individuals, 
popular participation in political and economic decision-making, open 
competition among interest groups, governmental accountability, 
transparency of political and legal processes, and predictability in 
social and economic relations.

To assist this process, President Clinton is mobilizing the Democracy 
Corps, a broad coalition of American people and institutions devoted to 
expanding the momentum for democratization in Russia.  As the 
coordinator for all US assistance efforts with the former Soviet Union, 
Ambassador Tom Simons will oversee Democracy Corps activities in Russia.  
Specific US Government-funded activities in 1993 will include:

Democracy Summer.  The summer of 1993 will be designated Democracy 
Summer, with the start-up of a $25 million program of people-to-people 
contacts between Russians and their American hosts.  About 3,000 
Russians will be brought to the United States for exchanges and training 
in 1993.  Two kinds of contacts are envisioned:

--  Exchanges.  Exposure of Russians to life in a democracy can foster 
grass-roots understanding and attitudes supportive of democratic 
development.  About 1,700 high school students will arrive this summer 
for a variety of programs.  More than 300 will participate in short-term 
thematic group projects in areas ranging from culture and the arts to 
youth leadership.  Some 650 students will participate in year-long 
exchanges during the 1993-94 school year, and 750 students will 
participate in month-long school-to-school linkages.  About 450 
undergraduate and 200 graduate-level Russian students will receive 
training in economics, business, public policy, government, education, 
and law.  About 200 government officials and professionals will 
participate in short-term education programs designed to introduce them 
to their American counterparts.

--  Training.  In addition to exposure to democratic systems, visits by 
citizens of Russia to the United States can demonstrate US methods of 
solving technical, managerial, and other problems that are key to 
Russia's successful adoption of a free market system.  About 400 
Russians will be brought to the United States for study tours and short-
term training programs in key technical areas, such as banking, energy, 
environment, health, and agriculture.

Rule of Law.  These programs will mobilize a broad range of US legal 
resources to assist the Russian reform of their legal structure to 
reflect democratic and free market principles and to institutionalize 
support procedures and practices in the areas of commercial law, 
criminal law and procedure, and legal education.  In particular, the 
United States will directly support President Yeltsin's legal 
experiment, an innovative plan to advance legal reform, including the 
creation of a jury system in five regions.  ($5 million)

Effective Local Governance.  The United States will assist reform-minded 
local governments in generating, managing, and expanding financial 
resources in ways which foster the private provision of social services 
and broad private sector growth.  The first two cities targeted are 
Moscow and Nizhny Novgorod.  ($7 million)

Strengthening Civil Society.  The United States will mobilize private US 
organizations (political and civic organizations, free trade unions, and 
advocacy groups) to work closely with counterparts in Russia--reformers, 
grassroots organizers, regional interests--to expand their participation 
in Russian political processes and in the dialogue on economic reform.  
($2 million)

Strengthening Independent Media.  This program will allow the US media 
and journalists to share techniques and business and managerial skills 
essential for functioning of a free and open democracy.  ($2 million)

Developing Russian Volunteer-ism.  A broad array of US private voluntary 
organizations will assist private Russian groups to meet emerging social 
service needs during this period of economic dislocation.  ($4 million)

Developing University Partnerships.  The United States will mobilize US 
educators to develop linkages and exchanges between American 
universities and partner universities in Russia that focus on areas 
critical to the creation of free market and democratic institutions.  
The Administration will establish an American institute at the Institute 
of Foreign Languages in Nizhny Novgorod for study of American studies 
and language.  ($3 million)

Total, Democracy Corps Initiative:  $48 million.

Energy and Environment Initiative

This initiative will assist in the transformation of the Russian energy 
economy into a market-oriented, end-use efficient, and environmentally 
protected system.  Reform of the energy sector is essential to the 
viability of the overall reform program, particularly enterprise 
restructuring and the overall macroeconomic balance.  Structural reform 
of this sector should help remove some of the worst environmental 
excesses, by eliminating obsolescent production techniques and 
encouraging energy efficiency.

This initiative represents a balanced approach targeted on several 
critical leverage points.

Gas/Oil/Coal Production and Delivery System Improvement.  US assistance 
will promote efficient use of gas and oil.  Reform in these areas will 
increase hard currency exports and, in the long run, provide alternative 
fuel sources needed to decommission unsafe nuclear reactors.  In 
addition, US programs will promote coal mine safety, productivity, and 
cleaner coal technologies.  Funding will include engineering and 
financial analyses to help catalyze and accelerate substantial loans 
from the World Bank and the European Bank for Reconstruction and 
Development to revamp production, transmissions, and distribution 
systems.  ($10 million)

Efficiency and Performance Improvement.  This program will focus on 
improving energy efficiency in  electric power, refineries, industries, 
and residential buildings.  Funding also will support the Moscow Energy 
Efficiency Center, which provides information on technology available 
from US companies as well as training.  ($2 million)

Pricing Policy and Institutional Reform.  Market-driven approaches for 
energy supply and demand balance in Russia will be introduced.  The 
program will focus on privatizing energy supply entities, supporting 
reform of the price and tariff structure, and improving institutions to 
raise efficiency standards and introduce a regulatory framework.  ($5 

Nuclear Power Plant Safety and Regulation.  The United States will fund 
short-term operational safety improvements, risk reduction measures, and 
regulatory assistance for nuclear power plants.  ($15 million)

Environmental Policy and Technology Cooperation.  This program will 
assist in the development of clearer national environmental policies and 
programs.  The United States will implement high-impact demonstration 
projects to reduce severe pollution problems, including minimizing use 
of ozone-depleting substances.  The first activity will focus on air 
pollution control in the Volgograd region. ($5 million)

Environmental Non-Governmental-Organization Consortium.  The United 
States will mobilize a consortium of public and private sector actors to 
strengthen collaboration between American and Russian NGOs.  The 
consortium will finance joint US-Russian NGO projects that promote 
community environmental quality initiative, resource conservation, 
public awareness, and training.  ($1 million)

Total, Energy and Environment Initiative:  $38 million in 1993.

Officer Resettlement Initiative

The United States and the West have a historic opportunity to facilitate 
the return of troops to Russia by providing housing and job retraining 
for Russian officers who are being demobilized and returning to Russia.  
This initiative responds to a direct appeal from the Government of 

This initiative will focus on facilitating the resettlement of officers 
who are being demobilized upon return to Russia.  In addition to 
building houses for these returning officers, it will provide employment 
retraining.  Specifically, it will on a demonstration basis:

--  Build 450 houses within 12-16 months for officers who are being 
demobilized and returning to Russia; and
--  Provide employment training for the participating officers to 
facilitate their transition to civilian life.

Houses will be built in areas where local authorities are committed to 
market economic reforms.  These sites also will be selected based upon 
availability of land, adequate infrastructure, and proximity to good 
transportation routes.  To the extent possible, we will seek to use 
local labor and locally available materials in the construction of these 

Providing housing and job retraining for troops returning to Russia is a 
visible sign of Western support for the Russian people and the Russian 
Government.  The United States will seek to encourage other donors to 
implement similar or complementary programs.  The United States also 
will seek to expand this initiative in the future.

Total, Officer Resettlement Initiative:  $6 million in fiscal year 1993.

Trade and Investment Development Program 

US bilateral trade with Russia is only $3.4 billion, and even though 
American companies are the largest investors in Russia, total US 
investment is estimated at only $400 million.  A significant expansion 
in bilateral trade and investment is among the best ways to assist 
Russia in making the transition to market democracy.  Creating the 
necessary business climate is a task that basically rests with Russia, 
but the US Government can play a catalytic role in helping to remove 
obstacles blocking projects already under discussion, improve the 
environment for business, and develop the commercial infrastructure.

Business Development Committee.  President Clinton is making bilateral 
trade and investment growth with Russia a major priority.  
Implementation is centered in the US-Russia Business Development 
Committee (BDC), co-chaired by Secretary of Commerce Ron Brown and 
Deputy Prime Minister Shokhin.  Secretary Brown will travel to Moscow to 
begin the process in May.  The BDC will be the primary vehicle to help 
identify and remove impediments to trade and investment, remove barriers 
to specific US investment projects, press for Russian Government policy 
reforms, and improve the commercial infrastructure for bilateral 
commercial growth.   The BDC meeting will focus on eliminating obstacles 
to investment in the energy sector, and will include a high- level 
session of the Defense Conversion Subcommittee.

Generalized System of Preferences.  President Clinton seeks to extend 
the Generalized System of Preferences (GSP) to Russia to provide duty-
free treatment for a broad range of Russian exports.  More than $440 
million of Russian goods would benefit.

GATT.  The United States will support Russia's application to become a 
member of the General Agreement on Tariffs and Trade (GATT) and will 
help build the institutions necessary for Russia to become a full GATT 

American Business Centers.  The Administration will open four American 
Business Centers in Russia this year to help American and Russian 
companies do business with each other and to serve as business 
incubators.  ($3 million)

Export Control Development.  Technical assistance will be provided to 
Russia to improve its export controls development.  An effective Russian 
export control system would allow the sale of higher levels of 
technology to Russia to assist the reform and modernization of the 
Russian economy.  ($2.2 billion)

Eximbank Loan.  The Export-Import Bank of the United States has just 
completed an $82 million loan to finance the sale of Caterpillar 
pipeline construction machinery for Gazprom.  This equipment will be 
used on construction of a gas pipeline in the Yarnal Peninsula region of 
Russia.  ($82 million)

OPIC Investment Support.  The Overseas Private Investment Corporation 
(OPIC) has approved its first loan and major insurance coverage to a 
private commercial venture in Russia, a $150 million package consisting 
of a $50 million loan guarantee and $100 million in investment insurance 
coverage to support Conoco's $300 million Polar Lights project.  ($150 

TDA Feasibility Study Grants.  The US Trade and Development Agency (TDA) 
is granting $1.4 million for oil and gas feasibility studies, as part of 
a package of TDA grants totaling $3.8 million.

Special American Business Internship Training (SABIT).  A total of 300 
additional internships with American companies are being created for 
business executives, entrepreneurs, and scientists under the Commerce 
Department's highly successful business internship program.  This 
doubles the number of Russians who will acquire on-the-job experience in 
a market economy.  ($2 million).

Total, Trade and Investment Development Program:  $243 million.

Safe, Secure Dismantlement (SSD) Initiatives With Russia

The Nunn-Lugar legislation, as amend-ed, provides up to $800 million 
from the Defense Department to assist in the safe and secure 
transportation, storage, and dismantlement of nuclear, chemical, and 
other weapons and to establish safeguards against their proliferation.

The United States has pledged at least $400 million in Nunn-Lugar 
assistance for Russia.  Previously, the United States signed an umbrella 
agreement that provides the legal framework for provision of assistance 
and seven implementing agreements providing up to $150 million in 
assistance.  These agreements provide for:

--  Armored blankets to enhance the safety and security of weapons and 
fissile material during transport;

--  Safety and security enhancements for rail cars used in transporting 
nuclear weapons and fissile material;

--  Emergency response equipment to upgrade capabilities to respond in 
case of a nuclear accident;

--  Transportation and storage containers for fissile material removed 
from dismantled nuclear weapons;

--  Assistance in the design of storage facility for fissile material;

--  Assistance in chemical weapons destruction; and

--  Establishment of a science center to employ former weapons 

Last week in Moscow, the United States concluded three additional SSD 
agreements that provide up to:

--  $130 million to assist in the elimination of strategic nuclear 
delivery vehicles--ballistic missiles, submarines, and heavy bombers.  
This assistance will help defray the costs to Russia of carrying out 
reductions in these forces.

--  $75 million to procure construction and operating equipment for a 
fissile material storage facility.  These funds are designed to permit 
Russian plans for warhead eliminations to continue on schedule.

--  $10 million in assistance to help establish national and facility-
level systems for material control and accountability and for physical 
protection of civil nuclear material.  Such systems will help to guard 
against the potential loss or proliferation of nuclear material.

Total, Security Assistance:  $215 million.

These agreements demonstrate the importance the Clinton Administration 
attaches to the SSD program as an integral part of its broad policy of 
cooperation and partnership with Russia.  (###)

US Assistance to Russia
($ million)
Humanitarian/Health Assistance and Food Sales
   Grant Food Assistance                                               
   Food for Mothers and Children                                   10.0
   Medicines, Medical Supplies for Russian Hospitals      15.0
   Medical Partnerships                                                    
   Health Care Finance                                                       
   Food for Progress Credit Sales                                    

Private Sector Development
   Russian-American Enterprise Fund                              50.0
   Bankers Training                                                           
   Fiscal Sector Reform                                                      
   Russian-American Agribusiness Partnership               20.0
   Farmer-to-Farmer Program                                           
   Eurasia Foundation                                                        

Democracy Corps Initiative
   Democracy Summer                                                     
   Rule of Law                                                                    
   Effective Local Governance                                             
   Strengthening Civil Society                                             
   Strengthening Independent Media                                 2.0
   Developing Russian Volunteerism                                  4.0
   Developing University Partnerships                               3.0

Energy and Environment Initiative
   Gas/Oil/Coal Production and Delivery System 
   Efficiency and Performance Improvement                        2.0
   Pricing Policy and Institutional Reform                            
   Nuclear Power Plant Safety and Regulation                    15.0
   Environmental Policy and Technology Cooperation           5.0
   Environmental Non-Governmental Organization

Officer Resettlement Initiative
   Russian Officer Resettlement                                             

Trade and Investment Development Program
   American Business Centers                                               
   Export Control Development                                              
   Eximbank Loan                                                               
   OPIC Investment Support                                             
   Trade and Development Agency Grants                            3.8
   SABIT Program                                                                 

Security Assistance
   Strategic Nuclear Delivery Vehicle Dismantlement        130.0
   Nuclear Warhead Storage Facility                                   
   Nuclear Materials Accountability and Control                 10.0



Fact Sheet:  Safe, Secure Dismantlement (SSD) Initiatives With Belarus, 
Kazakhstan, and Ukraine
Fact sheet released by the White House, Office of the Press Secretary, 
Vancouver, Canada, April 4, 1993.

Belarus, Kazakhstan, and Ukraine (along with Russia) have been certified 
by the Secretary of State as meeting the eligibility requirements for 
assistance under the Nunn-Lugar legislation.  The United States has, to 
date, notified the Congress of approximately $40 million in proposed 
Nunn-Lugar obligations to the four states.

Belarus.  The United States has signed three implementing agreements 
with Belarus providing emergency response equipment to enhance 
capabilities to respond to the consequences of a nuclear accident, a 
continuous communications link (CCL) to allow the transmission of data 
and notifications under the INF [intermediate-range nuclear forces] and 
START [Strategic Arms Reduction Treaty] agreements, and assistance and 
training to help establish an effective export control system.  These 
agreements total $8.3 million in assistance.

In the wake of Belarus' ratification of the START and NPT [Non-
Proliferation] Treaties, the United States has recently proposed to 
Chairman Shushkevich the outlines of an additional assistance package 
which could include up to $65 million in Nunn-Lugar funds for things 
such as defense conversion and missile site cleanup.

Kazakhstan.  The Congress has been notified of $14.5 million in proposed 
Nunn-Lugar obligations for Kazakhstan.  These funds would provide a 
government-to-government communications link, emergency response 
equipment, [and] assistance and training in establishing an export 
control system as well as a system for the material control and 
accountability and physical protection of civil nuclear material.

These agreements were discussed with a Kazakhstani delegation in 
Washington last month.  The US objective is to sign these agreements 
during a return visit to Almaty in late April, after they have been 
reviewed by the Kazakhstani Government.  The US also hopes to discuss 
Nunn-Lugar assistance in other areas, including the dismantlement of 
strategic nuclear delivery vehicles.

Ukraine.  The United States has agreed to provide Ukraine at least $175 
million in Nunn-Lugar assistance, assuming it ratifies START and adheres 
to the NPT.  The Congress has been notified of $27 million in proposed 
Nunn-Lugar obligations for Ukraine.  Proposed agreements would provide a 
government-to-government communications link, emergency response 
equipment, assistance and training in establishing an export control 
regime, and a material control and accountability and physical 
protection system for civil nuclear material.  In addition, the US is 
establishing a Science and Technology Center in Kiev.

Ukraine has not yet signed an umbrella agreement providing the legal 
framework under which Nunn-Lugar assistance can be provided.  No 
implementing agreements can be signed until this Kiev assistance in 
strategic nuclear delivery vehicle dismantlement, which would take up 
the bulk of the $175 million being pledged.  This agreement would not be 
signed until Ukraine has ratified START and the NPT.  (###)


Fact Sheet:  START I and NPT (Lisbon Protocol)
Fact sheet released by the White House, Office of the President, 
Vancouver, Canada, April 4, 1993.

In signing the Lisbon Protocol, Belarus, Kazakhstan, Ukraine, and Russia 
became parties to START [Strategic Arms Reduction Treaty] in place of 
the USSR; Belarus, Kazakhstan, and Ukraine also committed themselves to 
adhere to the Non-Proliferation Treaty [NPT] as non-nuclear states "in 
the shortest possible time."

The status of each of the parties with respect to fulfilling their 
Lisbon commitments is as follows:

--  Belarus has voted both to ratify START and to accede to the NPT as a 
non-nuclear weapon state.

--  Kazakhstan ratified START but has not yet acted on NPT.

--  The Ukrainian legislature has begun debate on the two treaties but 
has not completed its action.

--  Russia has ratified START but has also said that the treaty could 
not enter into force until the other three fulfill all of their Lisbon 

--  The US Senate gave its advice and consent to ratification of START  
last October.

The United States has continued to work hard to get START and NPT in 
place.  The United States has offered substantial financial and 
technical assistance toward easing the other parties' dismantlement and 
destruction burdens and is also prepared to offer Belarus, Ukraine, and 
Kazakhstan certain security assurances.

While the United States has been concerned about the delays in Ukraine, 
the US looks forward to its prompt action on both treaties and also 
expects Kazakhstan to accede to the NPT as a non-nuclear weapon state in 
the near future.  (###)


News Conference of April 12
Secretary Christopher
Opening statement at news conference en route to Anchorage, Alaska, 
April 12, 1993

This visit should be put in the broader context of three important parts 
of the framework of US foreign policy in the Clinton Administration.  I 
made some notes here, as you can see, because I wanted to be able to 
record for you some of the feelings that I have as I go into Tokyo.

As I say, I think that this visit has to be put in the context of these 
three key parts of our framework.  First,  that our fundamental 
overriding goal around the world is to promote democracy, human rights, 
and free markets.  Nowhere is this issue more trenchantly involved than 
in the case of Russia, and I will come back to that in just a moment.  
Second, we want to remain a Pacific power and are determined to shoulder 
our responsibility in this area.  And, third, in the new era, the 
economic aspects of our relationship with Japan must be addressed with a 
new intensity.

In this context, let me mention some particular aspects of the meetings 
in Japan.

First, they will certainly highlight the importance of the economic and 
political reform in Russia--and, as we have been trying to do over the 
last several weeks--will provide support or are intended to provide 
support for Yeltsin's courageous efforts.  

Second, as President Clinton emphasized the last few days, we are now 
moving to a new stage--the multilateral stage--in which we intend to 
build on the momentum created in Vancouver and in the related bilateral 
endeavors that have gone forward since Vancouver.  

Third, in a multilateral sense, we expect substantial additional support 
for the multilateral institutions--the World Bank, the EBRD, the IMF.

The particular kinds of aid that we expect to come forth in this meeting 
and in those arenas are cooperative assessed assistance to stabilize 
inflation, structural reform in energy and agriculture, and support for 
privatization, that is, lending support for private business through 

We think that this meeting can provide joint action for the G-7 to 
maximize the efforts of each of the countries and, I want to say that I 
have a positive feeling about the results that will come out of the 
bilateral efforts in Tokyo.  Clearly, this is a cooperative effort that 
will need the assistance of Russia and, for that reason, of course, it's 
essential that Russian Finance Minister Fyodorov and Foreign Minister 
Kozyrev are arriving tomorrow to join in the discussions with the G-7 
Foreign Ministers and Finance Ministers.  And, as hosts, the Japanese 
will undoubtedly play a particularly important role--they are not only 
hosts, but they are the chair of the G-7 this year, and they have played 
a major role in organizing these meetings and will continue to play a 
major role as we move through the remainder of this year.

Now, beyond these multilateral efforts, I'd like to mention the 
bilateral efforts that have gone on in the last several days since 
Vancouver.  First, as you know, a number of countries have indicated 
additional bilateral support for Russia--the United Kingdom, Canada, 
Germany--and we expect that this trip, or even before we arrive, there 
may be indication of further bilateral efforts or assistance by Japan.  
As you know, in Vancouver, President Clinton indicated that the United 
States would be considering additional bilateral assistance based upon 
his conversation with President Yeltsin.  Consultations on those 
additional bilateral efforts are going on actually as we are flying.  
President Clinton was necessarily diverted from those consultations for 
a couple of days over the weekend, but we are back at that effort now, 
and I think we can expect to hear something from that, although I'm 
going to be a little uncertain about the exact timing as to when that 
will emerge.

Finally, in addition to the multilateral efforts of the G-7 and the 
bilateral efforts, this trip inevitably has some US-Japan bilateral 
aspects to it.  I'll be  meeting as soon as we arrive tomorrow--almost 
as soon as we arrive--with the new Foreign Minister Muto, and I'm 
looking forward to that.  And, then on the following morning, I'm going 
to be received by Prime Minister Miyazawa, and those meetings will 
obviously have significance as preludes to President Clinton's meeting 
on Friday with Mr. Miyazawa.

Once again, I stress the importance of the US-Japan relationship and the 
very significant role that Japan is going to be playing in these 
meetings.  One point I'd want to make about this is that these meetings 
should certainly not prejudice Japan's position with respect to the 
Northern Territories.  Japan has cooperated by putting that issue to one 
side, but the United States continues to support the Japanese position, 
and nothing in these meetings should prejudice the Japanese position on 
that subject.

With respect to the Japanese bilateral, I'd come back to the two points 
that I made at the beginning, and that is that the United States will be 
affirming or stressing its intention to remain a Pacific power and to 
shoulder our responsibilities in that regard and the second is that the 
economic aspects of the US-Japan relationship must be addressed with new 
intensity in this current period.  (###)


International Community Should Provide Russia "Help for Self-Help"
Japanese Prime Minister Miyazawa
Address before the G-7 ministerial meeting, Tokyo, Japan, April 14, 1993

It gives me great pleasure to welcome you all to this G-7 joint 
ministerial meeting on assistance to Russia.  As the chair of the coming 
G-7 summit in July, Japan convened this meeting in the belief that a 
great deal is at stake not just for the Government and people of Russia 
but also for the international community as a whole.

In the course of my political career spanning some 40 years, I have 
witnessed the world rise from the ashes of World War II; then languish 
under the strains of the Cold War confrontation; and, finally, begin to 
move toward the attainment of the universal values of freedom and 
democracy.  Russia today embodies this great historic change now taking 
place.  The success of Russia's reform efforts--political reform toward 
pluralistic democracy, economic reform toward market economy, and 
foreign policy reform to become a constructive partner in the 
international community--is crucial in achieving peace and prosperity of 
the world.

Russia is now at a critical juncture, with the reform efforts under the 
leadership of President Yeltsin facing tremendous challenges both 
politically and economically.  It is incumbent upon the international 
community to send a clear message that it expects Russia's reforms to be 
pursued irreversibly.  The G-7 countries, who share major 
responsibilities for securing peace and prosperity of the world, must 
take the lead in rallying the international community in support of the 
reforms in Russia as well as in other reforming countries.

In the final analysis, it is the Russians themselves who can make their 
own reforms work.  The task of the international community is to help 
ease this sometimes painful transition for the Russian people by 
providing the necessary "help for self-help."

Considerations for Assistance

With this in mind, I would wish to outline the three principal 
considerations which should guide our endeavors.

Firstly, our assistance should meet the true needs of the Russian 
people.  It is the commitment and will of the Russian people themselves 
that really count for the success of their reform efforts.  Therefore, 
they are the ones who should be the target of our assistance.

Secondly, our assistance should encourage the Russian will to sustain 
the process of transition toward market economy.  Competitive markets 
required for fostering small businesses, banking systems for providing 
capital to entrepreneurs, and education and training schemes for 
nourishing management ability are some of the examples of those 
institutions.  Our assistance should aim at providing the Russian people 
with the instruments to carry on their reforms toward market economy and 

Last but not least, our assistance should be closely coordinated through 
constant consultations among the major donors and international 
organizations as well as close contact with Russia so that our combined 
efforts can produce the maximum results.  The G-7 countries should play 
a leading role in this respect, and today's meeting is expected to mark 
an important step forward in this process.  Japan has been actively 
playing its part in such coordination:  It was in this very room that I 
opened, last October, a conference to coordinate the international 
assistance to Russia and other new independent states.

Japan's Assistance to Russia

Here, let me touch upon Japan's cooperation to Russia.  Bilateral 
assistance which Japan has announced hitherto shall be steadily 
implemented.  I should like to take this opportunity to announce Japan's 
new assistance package to Russia which totals $1.82 billion, comprising 
$320 million in grant [assistance] and $1.5 billion in loan 
[assistance].  Japan's grant assistance of 37.44 billion yen, which is 
approximately 320 million in dollar terms, will be as follows:

Firstly, the grant for emergency assistance is $100 million.  This 
includes provision of foodstuffs and medicaments.  The proceeds of the 
sale thereof will further benefit the Russian people through 

Secondly, the grant for human resource development is $90 million.  This 
comprises a wide range of technical assistance and exchange programs so 
as to pave the way toward a market economy.

Thirdly, the grant for fostering small and medium-sized enterprises is 
$30 million.  Assistance to the Far Eastern International Center for 
Small and Medium Sized Enterprises is a case in point.

Fourthly, the grant for dismantling nuclear weapons is $100 million.  
This applies to Russia as well as other new independent states. 

Japan's loan assistance comprises the following: 

Firstly, Japan is ready to underwrite trade insurance totaling $1.1 
billion, with appropriate cooperation on the part of Russia.  This will 
be focused on the reconstruction of the energy industry, a main source 
of foreign exchange receipt for Russia.

Secondly, Japan is ready to extend an Eximbank loan of $400 million in 
total to appropriate projects focusing on the fields of energy and of 
small and medium-sized enterprises.

Fostering small and medium-sized enterprises is essential for Russia's 
transition toward a market economy and will be an important topic for 
this meeting.  Japan will actively take part in the studies for 
establishing international schemes for the support of these enterprises.

Let me conclude by expressing my ardent hope that this meeting will 
carry us forward--in translating our deliberations into actions, thus 
equipping us with the actual multilateral  framework and measures of 
assistance to Russia--toward the Tokyo summit in July.  I hereby 
reconfirm Japan's determination to fulfill its role of the G-7 summit 
presidency, building upon the fruits of this meeting.  (###)


Bilateral and Multilateral Aid for Russia
Secretary Christopher, Treasury Secretary Bentsen
Opening statements from news briefing, Tokyo, Japan, April 14, 1993

Secretary Christopher:  We've had a full day.  I might tick off some of 
the things that I've been doing, and then Secretary Bentsen will do 
likewise for himself.

We met together this morning with Prime Minister Miyazawa and had a good 
session with him in which we foreshadowed to some extent the meeting 
with President Clinton this Friday, and we also talked about both the 
bilateral and multilateral aid packages that both countries would be 
working on.

At noon today, I met with the G-7 foreign ministers, and we touched on 
several of the major topics that are political topics around the world.  
We had extensive discussions of North Korea, of Bosnia, of Cambodia, and 
of the Middle East peace process.

Now we have just gone into the first session of the G-7 ministers, both 
finance ministers and foreign ministers, with respect to aid to--
cooperation with--Russia.  We've had, so far, the political discussion 
and some discussion of bilateral aid.  One of the striking things is 
that each of the ministers who spoke talked about the need to have aid 
that was down-to-earth, that would reach the Russian people--aid that 
was certain to be felt on the ground among the people.  I think there 
was a strong consensus of opinion there that it was important to aid 
President Yeltsin.

I made the point that President Yeltsin was far superior to any of his 
likely successors in terms of commitment to the market process.  His 
successors, if there were to be successors, would probably be less 
committed to the market reform process and in favor of slower reform, 
which probably wouldn't work.  His likely successor, if he were to lose, 
would be not nearly as likely to be in favor of the ratification of 
START II.  His likely successor would be not nearly as committed to 
democratic reform in the sense that he probably would be in favor of the 
present parliament, which is an undemocratic parliament.  There is a 
whole series of reasons why President Yeltsin is far more likely to be 
attractive to the West, including the fact that his successor would be 
much less likely to maintain a constructive, benign foreign policy.

With respect to aid, Secretary Bentsen is going to outline the 
multilateral aid that the United States will participate in.  I touched 
briefly on the bilateral aid.  With respect to that, let me say that 
President Clinton has approved an additional package and is now 
consulting with Congress on that.  We'll not be able to tell you today 
the amount of that new package, because it is not ready for announcement 
until tomorrow.  I know that's frustrating to you, but I can tell you 
that it's a substantial package.  It has some very interesting new ideas 
in it.  It involves a privatization fund to which the United States will 
make a contribution, and we'll be asking other nations in the G-7 to 
contribute to a privatization fund, which will be extremely important in 
privatizing the major Soviet industries.

Another of the new ideas is the creation of a fund for dismantling the 
Soviet nuclear arsenal to which the United States will make a 
significant contribution, and we are asking our G-7 allies to do 

That has been the essence of the discussions so far; but I do want to 
ask Secretary Bentsen to tell you about the full day that he has had and 
to make some comments, if he would, on the meeting with Prime Minister 
Miyazawa, where he played a very significant role.

Secretary Bentsen:  Thank you very much.  I have met with most of you 
earlier.  So I won't have a lot to add to it other than to say that in 
my meeting with the Finance Minister, Mr. Hayashi, we went at length 

--  Their supplemental budget and what kind of a stimulus it would be to 
the economy here;

--  How important it was that we try to work down that deficit in trade 
that we have with Japan;

--  That it be an ongoing effort carried out year after year until we 
get these benefits more in balance amongst the participating countries;

--  That we felt that creating demand within Japan was one of the best 
ways to approach this;

--  That if we did not see these benefits brought more in balance over a 
period of time, that that could have a deteriorating effect on the 
relationship with other countries;

--  That it was important that they keep that as a primary objective in 
seeing that they achieve a better balance of those benefits;

--  That, otherwise, you would see around the world an increase in 
protectionism; and

--  That that would be something that none of us want.

With Mr. Miyazawa, the Prime Minister, in that situation we were talking 
about the utilization and the conversion of the facilities that you have 
available now for energy--for the export of oil and gas:

--  You have approximately one-seventh of the wells in Russia that are 
closed down for lack of parts;

--  You have pumps that don't work in the transmission lines to give you 
the appropriate pressure; and

--  You have the flaring of gas--all wasteful practices.

Here you can have a conversion of a resource to hard currencies rather 
quickly.  And we were talking about how important it was that we work 
together to see that that was done.

The other thing that we were discussing with him--as Secretary 
Christopher has stated--was the privatization fund as proposed by the 

--  With the United States committing to some $500 million if the other 
$1.5 billion was raised; and

--  That that would be supplemented also by the World Bank and by the 
European development bank by another $2 billion--that would be our 
anticipation of what we'd be striving for that would result in co-
financing for those major industries.

The problem you have--some of those major industries are the only 
industry in the region, and the amount of jobs you are talking about is 
sometimes as much as 20,000 and 50,000 employees.  So it is crucial to 
that region.  In addition to that, it provides many of the social 

So what you have seen is the [Russian] Central Bank trying to keep them 
going in a non-productive way for products that were not selling to try 
to help them in that conversion--when you are going to see a lot of 
unemployed people, when you want to see retraining done.  It's important 
that we make that kind of conversion--to help them to bring that about.  
Otherwise, you are not going to see the kind of help that we should get 
out of the Central Bank.

What you are seeing today at that Central Bank is an expansion of credit 
to those industries and, in addition to that, a pumping out of rubles to 
the point now that the entire domestic production of Russia is 
equivalent--if you put it in dollars--to about $75 billion.  If you look 
at the average wage now, in dollars, you are getting down to as much as 
$39 a month.  So you can see [that] it has to be brought under control.

We are encouraged by the fact that Deputy Prime Minister Fyodorov thinks 
that he has reached an agreement with the Central Bank where you will be 
able to slow down that fantastic expansion of credit that will result in 
an inflation rate of some 25% a month, bordering on hyper-inflation.  If 
you want to destroy a country, destroy its currency.  (###)


G-7 Chairmen's Statement on Support for Russian Reform 
Text of the Chairmen's Statement of the G-7 Joint Ministerial Meeting 
and the Following Meeting With Russian Ministers, Tokyo, Japan, April 
15, 1993

1.  Introduction

At the request of the Heads of State and Government of the seven major 
industrialized countries and of the President of the EC Commission, and 
in the process of preparation of the Tokyo Summit, Foreign and Finance 
Ministers of G-7 countries and representatives of the European Community 
met in Tokyo April 14, 1993 to discuss support for reform in the Russian 
Federation.  Prime Minister Kiichi Miyazawa of Japan opened the meeting, 
which was chaired jointly by Kabun Muto, Minister for Foreign Affairs of 
Japan and Yoshiro Hayashi, Minister of Finance of Japan.

On April 15, 1993, the Ministers met with Mr. Boris Fyodorov, Deputy 
Prime Minister and Finance Minister of Russia, and Mr. Andrei Kozyrev, 
Foreign Minister of Russia for an extended discussion of the economic 
and political situation in Russia and to review how the international 
community could best support Russia's reform program.  Our Russian 
colleagues reaffirmed the determination of President Yeltsin and his 
government to move forward with reform.  They welcomed our determination 
to support the reform process in ways which complement the efforts of 

2.  Support for Russia's reform process with the aim of building a 
democratic society, establishing a market economy and improving the 
welfare of its people under the leadership of President Yeltsin

Russia has made courageous and extraordinary progress in the last two 
years.  Russian reform and progress towards democratization are 
essential to world peace.  We want to see a democratic, stable and 
economically strong Russia, firmly integrated into the community of 
democratic states and into the world economy.  We are confident that the 
G-7 and Russia will continue to cooperate constructively and responsibly 
in international affairs.

The Russian people themselves must bear primary responsibility for 
economic and political reform.  The development of a market economy in 
Russia will be a long, arduous undertaking which will require difficult 
adjustments by the Russian people.  We assure the Russian people of our 
support in coping with the inevitable hardships of the transition 
period.  We remain resolved to work with Russia to develop lasting 
cooperation based on the principles of partnership and help for self-
help laid out at the Munich Summit.  Our assistance will be pragmatic, 
visible, tangible and effective, tailored to Russian absorptive capacity 
and phased with the progress of reform.

We welcome the recognition by the Russian government that both monetary 
stabilization and further structural reform, including privatization, 
are critical.  A positive environment for private reinvestment, 
including a proper legal and administrative framework, is crucial for 
the transformation of the economy.  Better access to export markets is 
indispensable to structural reform in Russia.

3.  Bilateral and Multilateral Actions

We have agreed on a series of multilateral actions which are closely 
interlinked with our bilateral efforts, as described in the Annex.  
Close coordination amongst our countries and the international 
organisations as well as close contacts with the Russian authorities 
will be necessary.

Russia is currently experiencing a particularly difficult situation.  We 
are also mindful of the challenging tasks facing other economies in 
transition.  They too can continue to rely on our support.

The success of the Russian reform program is in the interest of all 
countries.  We encourage others to contribute to the actions we have 
taken today.

4.  Next Steps

Our meeting in Tokyo has helped lay the foundation for the meeting to be 
held with President Yeltsin in July in Tokyo.  The Heads of State and 
Government of the seven major industrial democracies and the President 
of the Commission of the European Communities will continue to pay close 
attention to developments in Russia.  They look forward to a fruitful 
review in July.

Annex:  Support To Be Provided to Russia

1.  Support by the IMF for Macroeconomic Stabilization

Progress towards macroeconomic stabilization, especially the reduction 
of Russia's high rate of inflation by bringing monetary and credit 
expansion under control, is of paramount importance to the success of 
Russia's economic reforms.  

We encourage the IMF to play a more active role in this area, and we 
agree that IMF should be prepared to provide tangible support for the 
steps towards stabilizations.

(a)  We warmly welcome the proposal to create a new IMF Systemic 
Transformation Facility which could help countries in transition and 
provide Russia with up to $3 billion in financial support made available 
in two tranches.

We urge that the first tranche be disbursed when Russia makes a 
political commitment to adopt an appropriate adjustment policy, as 
indicated by a policy statement.

The second tranche should be disbursed when there has been satisfactory 
policy implementation with a focus on monetary policy measures to 
contain inflation, paving the way for a stand-by arrangement.  

(b)  The IMF and Russia are strongly encouraged to develop a stand-by 
arrangement of up to $4.1 billion in more intensive support for economic 
stabilization, on the basis of a comprehensive macroeconomic 
stabilization program, as soon as possible and in any event before 
October 1, 1993.

(c)   We reaffirm our commitment to make available the currency 
stabilization fund of $6 billion to boost confidence in the rouble 
market, once macroeconomic conditions have stabilized.

2.  Support by the World Bank For Structural Reforms

(a)  Structural reform measures are essential for building a market 
economy and can most effectively be implemented in the context of 
macroeconomic stabilization.

(b)  The World Bank as a provider of long term support is well 
positioned to take the lead in supporting Russian structural and 
sectoral reform.

(c)  We urge the Russian authorities to improve their cooperation with 
the World Bank and to accelerate their efforts to utilize existing 
support by drawing down funds under last year's import rehabilitation 
loan, and to conclude the negotiation of the $500 million oil sector 
loan, which carries an additional $500 million co-financing, as rapidly 
as possible.  

(d)  We back the World Bank's efforts to increase support for structural 
and sectoral reforms in parallel with the IMF's new Systemic 
Transformation Facility, including a second critical imports loan.  We 
welcome the World Bank's willingness to pro- vide, for the coming 15 
months, up to $4 billion in new commitments in the form of loans to 
support investment, the strengthening of institutions, and reform in 
several key sectors such as energy, agriculture and housing which will 
directly benefit the Russian people.

3.  Support Mainly Through the EBRD for Small and Medium Sized 

(a)  Small and medium sized enterprises are crucial for the development 
of a private sector in Russia.  The EBRD should have a key role in this 

(b)   We ask the EBRD to establish, in close cooperation with us, a $300 
million fund financed half  with its own funds to promote Russian small 
and medium sized enterprises.  We invite other countries to contribute 
to this fund.  We also request the EBRD to prepare the ground for 
creating a Russian Bank for small and medium sized enterprises.

4.  Support for Privatization Of Large Enterprises

One of the crucial areas of structural adjustment in Russia is the 
restructuring and the privatization of large scale enterprises.  We 
agree to set up a working group to explore how best to assist this 
process including possibly by combining bilateral and International 
Financial Institutions resources, with a view to reporting at the Tokyo 

5.  Debt Rescheduling

We welcome the agreement between 19 creditor countries and Russia on the 
rescheduling of the debts of the former Soviet Union, concluded at Paris 
on April 2, 1993, which represents a support of over $15 billion and 
which puts a heavy burden on creditor countries' budgets.  The relief 
will substantially ease balance of payments constraints in the present 
stage of the reform process and paves the way for maintaining 
creditworthiness and for new capital inflows.

6.  Export Credit Agency Activities and Cooperation

(a)  The activities of the ECAs represent a major source of financing in 
our support for Russia.

(b)  It is important to ensure that their ECA financing supports 
Russia's structural reforms especially industrial restructuring in such 
key areas as energy.

(c)  To this end, it is highly desirable that there be opportunity for 
cooperation between the World Bank and the ECAs.

(d)  We are confident that the ECAs can provide export credits and 
guarantees for viable projects in an amount in the range of $10 billion.

7.  Expansion of Trade

Improvement of access for Russian products to international markets 
strongly reinforces Russian structural reform.  We intend to take 
measures to further open our markets.  We will work with the Russian 
authorities for Russia's full integration into the international trading 
system through membership in the GATT.

Existing trade regulations in the area of advanced technologies 
(including COCOM-related regulations) should be gradually liberalized, 
provided that Russia establishes effective export controls.

8.  Energy Sector

We urge the rapid creation, in Russia, of an environment which 
encourages private investment and trade in the energy sector.  In step 
with this, we intend to encourage relevant companies in our countries to 
expand their investment in Russia's energy sector.  We emphasize the 
importance of an early conclusion of the Energy Charter Treaty.

9.  Nuclear Safety

(a)  Recent incidents highlight the urgency of achieving improved safety 
of nuclear power plants in Russia.  This requires in the first place 
resolute action from Russia itself.  We are committed to cooperate 
through the full and timely implementation of the multilateral program 
of action agreed at the Munich Summit.  Concrete projects for safety 
improvements need to be undertaken without delay.

We will work through the improved G-24 coordination mechanism to achieve 
early and significant safety gains.  We also emphasize the importance of 
fully utilizing the Nuclear Safety Account managed by the EBRD in 
pursuing this aim.  We call upon the international community to 
contribute to the Account.  We emphasize the importance of close 
coordination between the EBRD and the G-24 in the operations of the 
Nuclear Safety Account.  We will examine appropriate measures with our 
Russian colleagues on the basis of the World Bank and IEA studies and 
will carry forward the process initiated at Munich at the forthcoming 
Summit in Tokyo.

(b)  Ocean dumping of radioactive waste is a matter of great concern.  
We agree that this should be studied further.

10. Dismantling Nuclear Weapons

The importance of assistance to dismantling of nuclear weapons and the 
disposition and control of fissile materials derived from them is 
recognized as an issue relating to the security of the whole world.  
National cooperation with Russia in this area constitutes a part of 
multilateral efforts.  Some G-7 countries are already working with 
Russia.  We agree to consider how this work could be furthered and how 
other countries could be involved in these efforts.

11. Science and Technology

(a)  With respect to the International Science and Technology Center, 
whose establishing agreement was signed last November, we stress the 
importance of necessary procedures to be taken in Russia to enable the 
International Science and Technology Center to commence its activities 
at the earliest possible date.

(b)  We see possibilities to proceed with new forms of cooperation in 
science and technology, including programs in the field of outer space.

12. Food and Medical Assistance

We are now providing food and medical assistance and remain ready, as in 
the past, to consider additional support in case of emergency.

13. Technical Assistance

We stand ready to assist Russia in attracting a broad flow of know-how 
and experience to benefit concrete projects and individual enterprises 
in the regions and localities.  Teams of experienced advisors should 
engage in long-term cooperation on the spot and more Russians should 
come to our countries for training.  The Russian Government should 
strengthen its ability to direct technical assistance to where it is 
needed.  We urge the World Bank to activate without delay and make full 
use of the Consultative Group process agreed at the Munich Summit in 
order to achieve a more effective coordination.

14. Bilateral Cooperation

We welcome the recent decisions of G-7 countries to increase their 
bilateral support.  Our bilateral efforts are an integral part of our 
common strategy to assist Russian reforms.  We stand ready to continue 
our bilateral efforts, which are closely linked with and complement the 
above outlined actions program.

15. Support Implementation

Recognizing that the greater efforts to improve the effectiveness of our 
support are needed, we will work urgently to ensure such support is 
implemented as efficiently as possible.  To that end we will seek, in 
close consultation with the Russian authorities and relevant 
international organizations, to establish arrangements to facilitate the 
use of technical cooperation and financial support, and to cooperate 
with the Russian authorities in removing bottlenecks so as to improve 
the efficient implementation of support.  (###)


Supporting Russia's Historic Struggle
Secretary Christopher, Treasury Secretary Bentsen
Opening statements at news conference, Tokyo, Japan, April 15, 1993

Secretary Christopher:  When I arrived here in Tokyo, I said these 
meetings would be critical, that we were here on a noble mission to 
determine how the world's industrialized democracies can best help unite 
behind and how we can support the historic struggle of the Russian 
people to build a free society and a vibrant market economy.  Our 
deliberations over the last 2 days have been true to this mission.  
We've united behind reform in the new Russia.  The degree of unanimity 
among the group that was meeting has been really quite remarkable.

We would particularly like to thank the Japanese Government for its 
excellent organization of these meetings and for its leadership at the 
conference.  Japan's role in this effort, as in so many other issues 
that will affect the future of the world, has been critically important.

For the first time in its history, the G-7 foreign and finance ministers 
have met to discuss a single issue:  the struggle of the Russian people 
to create a democratic future.  Our meeting itself is a remarkable 
symbol of the progress we have made in creating a new relationship with 
Russia in just a few short years.

We came to Tokyo out of convictions that the United States and its 
allies must stand squarely in support of the democratic political and 
market economic reform in Russia.  I know that President Clinton felt 
strongly, as did his G-7 colleagues, that we simply could not wait for 
the annual summit in July to act decisively on behalf of the reform 
government in Moscow and to give support to the reformers throughout 
Russia at this critical time.  I believe that we have met this challenge 
and that we've had a very successful conference. 

The United States is pleased with this conference's single greatest 
achievement, the agreement among the G-7 countries, Russia, and the 
major industrialized financial institutions--that is, the IMF, the World 
Bank and the EBRD--for a new and substantial multilateral package of 
economic support for Russian reform.  We've divided our labors here 
today, as we did during the course of the conference.  Secretary Bentsen 
will discuss this critical and most significant achievement, and I'll 
discuss briefly the political context and the bilateral aspects.

As you know, at the Vancouver Summit, President Clinton announced that 
the United States will provide $1.6 billion in targeted, concrete 
assistance to Russia.  After consultation here with our allies, with the 
Russian Government, and with the Congress, the President has decided 
it's in the interests of the United States and its citizens to build on 
the earlier package of assistance announced in Vancouver in order to 
promote even greater Western support for reform in Russia.

Accordingly, I'm announcing here today for the first time that the 
President will request an additional $1.8 billion in support for Russian 
reform.  This new package of American support includes roughly $1.55 
billion in grants, $300 million of which will be directed to the other 
newly independent states, with the remainder for Russia.  I say 
"roughly," because the President is still in the course of consultation 
with Congress on precisely how this new figure of $1.8 billion will be 

This package will encompass expanded US support for initiatives in 
energy and the environment, housing for military officers, assistance to 
the private sector, exchanges, medicine, and trade and investment.  A 
principal new feature of this package is a $500-million grant to begin a 
new special privatization and restructuring fund.  This amount is 
contingent on contributions from other G-7 governments.  Our aim is to 
create a $2-billion G-7 fund with additional commitments from the 
international financial institutions on top of the $2-billion fund that 
we hope to create here.  This new fund would provide loans and grants to 
newly privatized Russian enterprises and to local workers and 
communities undergoing the very difficult transition and conversion from 
a command economy to a market economy.

In addition to this privatization fund, we discussed the creation of 
another new fund to support the process of dismantling and de-
nuclearization in Russia and the other newly independent states.  The 
United States has already committed $800 million in Nunn-Lugar funds to 
this effort, and the President is now requesting an additional $400 
million from the Congress in FY 1994.  We hope to have agreement by the 
Tokyo summit in July on this new G-7 effort to create much greater 
resources in this critical de-nuclearization area.

I want to underscore to the American people, who may be viewing or 
listening to this announcement, that the United States effort at reform 
in the new Russia is in no way a program of charity; it is in no way a 
handout.  On the contrary, President Clinton has decided to act here in 
support of Russian reform because it's in the self-interest of the 
American people.  As I've said many times, the stakes simply could not 
be higher here.  It's in our interest to move forward with this program 
of reform.

Should the forces of reform, led by President Yeltsin--should they be 
thwarted or reversed, we would face increased instability in Russia, the 
loss of large potential markets for our businesses, the necessity to 
continue to invest dollars in defense and not in the urgent domestic 
needs of our people in the United States.  On the other hand, if the 
Russian people succeed, all the world's people will succeed and will be 
benefited.  We must take the long view here and make the investments 
that I've outline here.

To sum up the conference here, I think we've made excellent progress in 
meeting the challenge of building a new relationship with the new 
Russia.  The President is determined to continue the intensity and pace 
of the effort that we began in Vancouver here in Tokyo, yesterday and 
today, [and] in Tokyo, again, in July and in the months to come.  He 
looks forward to a continued collaboration with the Russian Government 
and with Japan and our other G-7 partners.

Secretary Bentsen:  This week's meeting in Tokyo is truly unique.  It's 
the first time that you've had a joint meeting of the G-7, of the 
foreign ministers and the finance ministers;  and that's not the only 
thing that's different about it.

Our agenda is no longer dominated by questions of nuclear security, the 
balance of power.  It's one of economic cooperation and partnership that 
advances global peace and prosperity.  Our meetings were extremely 
productive.  Seven nations sat down and crafted a $28.4-billion 
multilateral economic support package for Russia.  It will provide 
assistance tailored to help Russia succeed in one of the greatest 
political and economic challenges in history--creating a democracy and a 
vibrant market economy.  That process is going to require a sustained 
transformation in Russia and continuing support from the rich G-7 
nations and the international financial institutions.  It's going to 
take many years, so we have to get started quickly.

Secretary Christopher spoke about the bold bilateral initiatives that 
President Clinton has put forth to assist Russia.  I will briefly 
describe the multilateral support package assembled here in Tokyo.

We welcome the proposed systemic transformation facility, which we 
expect the IMF to create in coming weeks.  It could provide Russia with 
up to $3 billion, half of that as soon as Russia takes the first steps 
toward stabilizing its economy.  In addition, the IMF and Russia are 
working on a $4.1-billion standby loan which would clear the way to 
activate the $6-billion ruble stabilization fund.  We also urge the 
World Bank to step up its support for Russian structural reform.  The 
bank can furnish $4 billion in new commitments to help Russia rebuild 
key sectors, and that's especially energy and agriculture.

The EBRD also must play a greater role in supporting Russia's  private 
entrepreneurs.  We urge the EBRD to develop a $300-million fund that 
will finance small and medium-sized private companies in Russia.  We 
welcome indications from our G-7 partners that their export credit 
agencies also will provide resources in the range of $10 billion.  The 
recently concluded US Export-Import Bank oil and gas framework should 
help provide up to $2 billion for rehabilitating Russia's oil wells 
while boosting US exports.

With this kind of a far-reaching, multilateral program, we can walk with 
Russia down the road of reform, with each step backed by appropriate G-7 
financial support.  The multilateral effort we are announcing today 
represents a major coordinated effort to bolster Russia's reform 
revolution as well as its reformers.  (###)


US Must Lead a Strategic Alliance With Post-Soviet Reform
Strobe Talbott, Ambassador-at-Large and Special Adviser to the Secretary 
for the New Independent States
Statement before the Subcommittee on Foreign Operations of the House 
Appropriations Committee, Washington, DC, April 19, 1993

Mr. Chairman and distinguished members of the committee, thank you for 
the opportunity to discuss the Clinton Administration's policy toward 
Russia and the other new independent states of the former Soviet Union.

The task of your subcommittee, Mr. Chairman, is to draft legislation, 
just as the task of our Administration is to draft policy.  But on the 
issue before us in this hearing, what we are really doing--what we are 
doing together--is nothing less than helping to shape history.

There have been three great struggles in this century.  The first was 
World War I, a conflagration that ignited the Russian Revolution of 
1917; the second was the World War against fascism and imperialism of 
1939-1945; the third was the Cold War against Soviet communism and 

Now a fourth great struggle is underway in Eurasia.  It pits those who 
brought down the Soviet communist system against those who would like to 
preserve its vestiges if not restore its essence.  It pits those who are 
determined to build a proud future against those who are clinging to a 
cruel and shameful past.  In short, it pits reform against reaction.

We have a stake in the outcome of that struggle.  Until now, many 
Americans have been led to see our stake primarily in terms of what we 
do not want to happen:  We do not want economic distress and political 
turmoil to trigger a civil war that could rage across 11 time zones; we 
do not want a nuclear Yugoslavia in the heart of Eurasia; nor do we want 
to see the rise of a new dictatorship that represses its people, 
threatens its neighbors, and requires the United States and its allies 
to return to a Cold War footing.

Mr. Chairman, while those concerns are entirely valid, I believe we need 
to think of our objectives in much more positive terms:  An investment 
now in the heroic effort of these new democracies to restructure their 
economies will pay dividends down the road.  A Russia, a Ukraine, a 
Kazakhstan fully integrated into the international economy will be a 
reliable source for raw materials and manufactured products, a reliable 
market for American goods and services, and a reliable partner in 
diplomacy and in dealing with global threats to human welfare and the 

In other words, Mr. Chairman, our policy should not be only to prevent 
the worst that can happen, but should focus on nurturing the best.  
Russia is undergoing a transformation in its very nature as a state.  
We, therefore, should undertake a corresponding transformation in the 
role we play.  Having successfully led an international coalition 
against the Soviet Union for nearly half a century, we must now lead a 
strategic alliance with post-Soviet reform.  A strategic alliance 
implies a policy intended to serve us, and our allies, for a long time.  
And so ours must.

Yet, while taking the long view, our Administration has also had to act 
quickly.  The beginning of this Administration has coincided with a 
crisis in Russian politics.  Exactly 1 month after President Clinton's 
inauguration here in Washington, President Yeltsin threw down the 
gauntlet in Moscow before a parliament that is dominated by 

Six days from now, on April 25, Mr. Yeltsin faces a referendum in which 
the Russian people will express their views on his leadership, on his 
economic policies, and on whether there should be new presidential and 
parliamentary elections.  We all hope that the referendum will 
strengthen the reformers' ability to pursue their course.  We want the 
Russian people to understand that the world stands with them as they 
make the transition from communism to democracy and free markets.  But 
we recognize that April 25 may not be conclusive, either for better or 
for worse.  And the referendum alone is unlikely to end the struggle 
between competing interests and conflicting visions.

Both on April 25 and in the months and years that follow, the showdown 
between the reformers and the reactionaries will be waged largely over 
the issue of which camp represents the interests of the Russian people.  
One of the main reasons that President Yeltsin is embattled today is 
that too many Russians identify reform with hardship--with skyrocketing 
prices, falling living standards, and deteriorating social order.  
Unless the reformist government is able to build a broader and more 
active constituency for its policies in the months to come, those 
policies--and that government--will be in jeopardy.

Thus, the Administration has had to move boldly, in a way that reflects 
our sense of urgency yet demonstrates our commitment to the long haul.  
In what we have done already--and in what we are asking you to do now as 
you go about drafting foreign aid legislation in the weeks ahead--the 
United States must advance two objectives:

First, we must do what we can from the outside to make the benefits of 
reform visible and tangible to the people on the inside--that is, 
average Russians--and to do so as soon as possible.

Second, we must find targets for support that will last [and] that 
represent trends we hope will become irreversible, so that we are 
supporting an ongoing process that can survive the buffeting of 
political and economic setbacks.

While the first of these objectives is short term and the second is long 
term, they are, we believe, entirely compatible.  Indeed, they are 
mutually reinforcing.

We believe that both objectives are evident in the four steps the 
Administration has taken in support of reform:  the $1.6-billion 
initiative that President Clinton unveiled in Vancouver on April 4; the 
$28.4-billion package of multilateral measures to which the G-7, led by 
the United States, committed itself last week; the additional $1.3 
billion in bilateral programs that the Administration announced at the 
same time; and, finally, the $704 million FREEDOM [Freedom for Russia 
and Emerging Eurasian Democracies and Open Markets] Support Act 
component of the FY 1994 budget.  Let me say a bit about each.

At the conclusion of the Vancouver summit 2 weeks ago yesterday, the 
President announced a plan for accelerating, intensifying, and 
redirecting existing programs so that their benefits will be apparent to 
the Russian people this year.  Moreover, the Vancouver package is 
intended to meet the key needs that the Russian reformers themselves 
have identified:  in the areas of energy and environment, housing, 
exchanges, private sector development, and trade and investment 
activities.  The Vancouver package also included $700 million in 
concessional loans for foods sales, which permit a resumption of US food 
exports to Russia.

It has been President Clinton's determination from the outset to use US-
Russian bilateral cooperation as a catalyst to multilateral support for 
Russian reform.  In that spirit, 10 days after the Vancouver summit, 
Secretary of State Christopher and Secretary of the Treasury Bentsen 
traveled to Tokyo for a meeting of the Group of 7. The Tokyo meeting 
delivered a clear message of support for Yeltsin and the reform 
movement.  That support took the form of a commitment on behalf of the 
G-7 to help Russia restructure key sectors of its economy, divest itself 
of inefficient state enterprises, finance critical imports, and 
stabilize its currency.

Significantly, the Tokyo meeting was the first joint meeting of finance 
and foreign ministers in the history of the G-7.  It was intended to 
underscore the connection between politics and economics in Russia:  
Market reform is likely to succeed only in a pluralistic society 
governed by the rule of law; democracy is more likely to thrive in a 
vibrant economy.

Tokyo also demonstrated two vital themes in this Administration's 

First, that we, the United States, are in partnership with our fellow 
industrial democracies; and

Second, that we, the industrial democracies, are in partnership with the 
Russian reformers who are trying to transform their country into an 
industrial democracy in its own right.

Just as the contents of the Vancouver package reflected the discussions 
between Presidents Clinton and Yeltsin, so the contents of the Tokyo 
package reflected what [Russian] Foreign Minister Kozyrev and Deputy 
Prime Minister Fyodorov told Secretaries Christopher and Bentsen and 
their assembled G-7 colleagues:  namely, that Russia needs Western help 
to maintain the pace of reform.

Minister Fyodorov and his colleagues were actively involved in the 
discussions leading up to Tokyo.  They helped shape a number of the 
elements of the multilateral package.  Their involvement focused the G-7 
effort on developing a realistic set of short- and medium-term 
objectives for reform.  Ministers Fyodorov and Kozyrev participated 
fully in the second day of the G-7 meetings.  The G-7, in turn, made 
clear to the ministers that it is up to the Russians themselves to 
control inflation before our support can be effectively used.

The Tokyo G-7 package includes approximately $4 billion in fast-
disbursing funds from the International Monetary Fund [IMF] and World 
Bank.  These are targeted at the primary objectives of reigning in the 
credit policies of the Russian Central Bank and providing critical 
imports to slow the economic contraction.  Disbursements could be made 
in a matter of weeks.  They would allow the Russian Government to 
undertake some politically tough measures necessary to stabilize the 

These initial steps would, we hope, yield substantial progress in the 
campaign against inflation.  The government could then translate success 
on that critical front into a more comprehensive economic stabilization 
program.  The G-7 has agreed to support $10 billion over the coming year 
for this endeavor.  This includes $4 billion for a new IMF standby 
program and a renewed commitment to a $6-billion currency stabilization 

Unlike last year's G-7 program to support Russian reform, this year's 
program sets what we believe to be realistic standards for Russian 
performance.  The Russian economy must walk before it can run.  Each 
incremental step must be matched by prompt, demonstrable benefits to the 
Russian economy and to the Russian people.

The third component of multilateral support is directed toward reforms 
in specific sectors of the economy.  While long-term viability depends 
on the success of the stabilization program, efforts in sectors, like 
energy and agriculture, can complement and enhance the stabilization 
program by increasing foreign exchange earnings and making improvements 
in the local market visible to the general population.  In Tokyo, the G-
7 leaders committed $14 billion to this effort, most of it in the form 
of new export credits.

The US has already made a significant contribution in this area.  In 
Tokyo we announced with the Russians an agreement on a $2-billion 
Eximbank framework for export credits in the oil and gas industry.  The 
US equipment and services financed under this agreement will 
substantially increase Russian exports and foreign exchange earnings.  
At the same time, there will be benefits here at home.  The first 
tranche of $500 million in guarantees alone will support thousands of 
jobs in US companies that were hit hard by the recent recession.

We also laid the groundwork at Tokyo for a number of what we believe to 
be promising additional multilateral measures.  We hope to persuade the 
G-7 to join us in providing assistance for the safe dismantlement and 
destruction of nuclear weapons in keeping with the terms of 
international agreements.  We were pleased that the Japanese announced 
last week that they will contribute $100 million toward this end, but we 
think more needs to be done by them and by other G-7 members.  We agreed 
in Tokyo to establish a working group on how to expand the nuclear-
weapons dismantlement program by the July G-7 summit.

The second new proposal put forward by the United States at Tokyo was 
for the creation of a special privatization and restructuring fund.  
This fund--which is an American idea strongly endorsed by the Russian 
reformers--would help ease the economic and social consequences of 
privatizing some of the more than 20,000 medium- and large-scale 
enterprises.  The fund would help make the newly privatized firms self-
sustaining with loans to modernize plants, retraining for workers, and 
technical assistance to managers who are making the adjustment to 
operating in a market economy.

The Russian economy and society are cursed by huge--and hugely 
inefficient--state-owned enterprises that utterly dominate entire 
cities.  The special privatization and restructuring fund would be used 
to help municipal governments in these one-company towns cope with the 
consequences of breaking up and selling off these monoliths.  Outlays 
from the funds could be used to invest in local infrastructure to 
support the smaller, newly privatized companies and the communities of 
which they are a part.

To be effective on the ground, this program must be carefully targeted, 
phased, and monitored.  The funds would be directed toward enterprises 
and communities that are selected as the most promising and deserving.

The US proposed in Tokyo that the G-7 create a support implementation 
office.  The office would be headed by a person with strong 
administrative and managerial capabilities--as well as experienced in 
Russian affairs--and with a small staff of technical experts.  This 
office would also be responsible for working with the Russian reformers 
to remove bureaucratic obstacles to implementation of G-7 programs and 
for ensuring that Western funds are spent effectively.

At Tokyo, the US told the G-7 that the Administration would seek from 
Congress $500 million for the privatization fund as a "challenge grant," 
to be matched by at least $1.5 billion in contributions from other 
countries, as well as up to $2 billion in co-financing by the World Bank 
and the European Bank for Reconstruction and Development.

Here again, Mr. Chairman, please note one of the central elements of our 
policy:  The US is not only demonstrating its leadership--it is using 
that leadership to leverage from the international community 
considerably more money than we are putting on the table ourselves.  The 
G-7 has agreed to establish a working group on the special privatization 
fund, with a view toward making a decision by the July summit.

Finally, Mr. Chairman, let me say a bit about the  new package of US-
Russian bilateral initiatives that President Clinton announced 
simultaneously with the G-7 meeting.  You will recall that, at 
Vancouver, the President indicated his intention to go beyond the $1.6-
billion program he announced there.  He would, he said, seek additional 
funds for certain high-priority areas after he had a chance to take into 
account what he had heard from President Yeltsin and what he learned 
from further consultations with Congress.  The congressional 
consultations have begun in earnest, and I regard my appearance before 
you here today as part of that process.

The Administration is committed to seeking approximately $1.3 billion in 
additional bilateral assistance to support reform in Russia and the new 
independent states.  Those funds would be used to strengthen programs in 
the priority areas of energy and environment, housing, the private 
sector, exchanges, trade and investment, and humanitarian assistance.  
How exactly the $1.3 billion will be apportioned is still a matter we 
are discussing.  Our discussion will, as I just indicated, depend in 
significant measure on our deliberations with you and your colleagues, 
both on the details of the package and on the appropriate funding 

While I cannot, therefore, get into a detailed breakdown of the package, 
I can say a bit more about the areas on which we intend to concentrate.

In energy and environment, a substantial portion of the funds would be 
used to finance improvements in nuclear reactor safety.  With nearly two 
dozen water-cooled nuclear power plants, there is an urgent need for 
additional assistance to upgrade the safety systems and protect against 
potentially catastrophic accidents.

We also hope to expand significantly our efforts to improve oil 
production and restore oil and gas pipelines that are an environmental 
hazard and that waste precious resources.  Other industries are also 
major polluters and desperately need the benefits of US technology.

In Vancouver, President Yeltsin identified housing for returning and 
demobilized officers as a top priority.  It is in our interest as well 
as his to see the continued withdrawal of the troops of the former 
Soviet armed forces from neighboring countries, especially the Baltics.  
The success of continued political reform, is, in part, dependent on the 
military staying out of politics and allowing the democratic 
transformation to continue.

Expanded US support could finance the construction of several thousand 
housing units for returning officers.  This initiative seeks to include 
the US private sector and American private and voluntary organizations 
in building houses and developing the local construction capacity.

There is also a need to expand efforts to help Russia's farmers and 
institutions create a market-driven food system.  If more US 
agribusinesses are linked with Russian partners, it will help break 
marketing bottlenecks and make delivery systems more efficient.  
Expanded programs would respond to the ever-growing demand to help small 
businesses and entrepreneurs overcome the enormous obstacles that are 
the vestige of a command economy.

Additional funding would also be used to dramatically increase the 
number of people-to-people exchanges.  There is no substitute for making 
training and firsthand experience in America available to people who 
lived their entire lives under a system that discouraged creative 
initiative and independent thinking.  It is our hope that thousands of 
students, teachers, and budding entrepreneurs could be given the chance 
to study and train in this country.  They would take back not just facts 
and know-how but a view of a successful democracy and free market based 
on a real experience.

To expand bilateral trade and investment, the Administration would also 
intend to provide additional credits and guarantees through the Export-
Import Bank and the Overseas Private Investment Corporation [OPIC].  
Beyond the oil and gas sector already being targeted, the Eximbank and 
OPIC could use additional funds to support financing in areas like 
mineral extraction, telecommunications and air-traffic control, and 
defense conversion.  With US companies and exports directly supported by 
these programs, the mutual benefits are obvious.

Still, there must be a continuing component of humanitarian assistance 
as well.  Americans have always responded generously to medical 
emergencies around the world, and the need in Russia is acute.  The 
recent congressional delegation, of which several of you were a part, 
saw the appalling lack of supplies for hospitals.  Some of the funds we 
are requesting in the follow-up bilateral package would be used for 
supplying vaccines and responding to critical shortages of medicines, 
especially those that will help children.

But in this area, too, we are guided by the adage:  Give a man a fish, 
and you feed him for a day; teach him how to fish, and you feed him for 
a lifetime.  Our hope is that over time, Russia and the other new 
independent states will move away from a reliance on foreign donations.  
To that end, we want to provide technical assistance to build up local 
capacity for the manufacture of basic pharmaceuticals, particularly in 
areas outside of Moscow.

Let me reiterate that I have purposely not attached specific dollar 
figures to the programs I have mentioned here, because we hope over the 
next few weeks to have continuing consultations with members of this 
committee and other Members of Congress before making final decisions on 
the components of the additional request.  I would welcome your views on 
the areas I mentioned as priorities as well as programs you think we 

I should add that Ambassador Thomas Simons will shortly be assuming the 
post of coordinator of our assistance programs to the new independent 
states.  After serving for several years as ambassador to Poland, he has 
a great deal of experience in helping former communist countries make 
the transition to democracy and market reform.  He knows what works and 
what doesn't, and he has the proven leadership and management skills to 
ensure that the many agencies involved remain focused on key objectives 
and are complementary to each other.  I expect Ambassador Simons to work 
closely with members of this committee and its staff in shaping our 
program and carrying out his duties.

Ambassador Simons will coordinate US assistance programs, including 
those funded under the FREEDOM Support Act, which was passed last year 
and on which we intend to build.  As you know, we have requested $704 
million in the FY 1994 budget to continue many of the successful 
programs under the FREEDOM Support Act into next year.  Those funds will 
be used in the same key areas I have just outlined.

Before making myself available to your questions, let me make a final 
point.  Much of what the Administration has done so far--and much of 
what I have said here this morning--has been focused on Russia.  That is 
appropriate, given the sheer size of the country as well as the 
magnitude of the problems it poses and of the opportunities it 
represents.  However, this Administration's efforts will be directed at 
reform in all of the new independent states.  A significant share of the 
grants and credits announced in Vancouver and Tokyo will  be directed 
toward the other countries.  A number of the multilateral programs 
announced in Tokyo, like the new IMF facility, will be available to 
these countries as they move along the path to reform.  Substantial 
amounts of our own Nunn- Lugar nuclear-weapons dismantlement funds will 
also be used in Ukraine, Belarus, and Kazakhstan.  So will funds from 
whatever dismantlement program emerges from the G-7.  The funds we are 
requesting for the FY 1994 FREEDOM Support Act will be weighted toward 
states other than Russia in the hopes that many will have followed 
Russia's lead in reform.

In conclusion, Mr. Chairman, my overall point is that as you and your 
colleagues examine the specifics of our policy, I think you will see 
that they reflect our determination to support reformers wherever they 
are to be found--whether in capitals like Moscow or Kiev or Bishkek or 
in the farthest reaches of those countries, large or small; whether in 
the Kremlin or the parliament or the regional governments or 
municipalities, down to the grass roots.

We have also concentrated, to the greatest extent possible, on the non-
governmental sector.  Since we are trying to nurture the growth of the 
private sectors in the new independent states, it is natural that we 
should enlist the American private sector.  That is another common 
denominator of the initiatives we have put forward.

In general, Mr. Chairman, when we speak about US-Russian economic 
"engagement" and "partnership" instead of "assistance" and "aid"--when 
we speak about building a "strategic partnership with Russian reform"--
we are not resorting to euphemisms.  We are expressing what we believe 
to be a fundamental aspect of our policy.  All the programs I have 
outlined for you today are intended to benefit both Russia's people and 
our own. (###)


Assistance to Russia And the Foreign Affairs Budget
Secretary Christopher
Statement before the Senate Foreign Relations Committee, Washington, DC, 
April 20, 1993

It is a pleasure to appear again before you and this committee.  Three 
months have passed since our first official meeting at my confirmation 
hearing.  Much has transpired in that time.  We have conducted an 
activist, internationalist, democracy-oriented foreign policy.

I look forward to exploring the full range of challenges we confront.  I 
will limit my formal remarks to two key issues.

First, I want to update you on our single-most important foreign policy 
priority:  the effort to help reform succeed in Russia.

Second, I will review the Administration's foreign affairs budget 
requests and management strategy.

Assisting Reform in Russia:  From Vancouver to Tokyo
Mr. Chairman, the last few weeks have witnessed important developments 
in Russia's relations with the United States and the West.  The 
Vancouver summit between Presidents Clinton and Yeltsin marked a 
milestone.  It was the first truly post-Cold War summit, where talk 
about economic reform and democracy played as central a role as 
negotiations over nuclear weapons did in the past.

At the summit, the presidents agreed on a new package of bilateral 
programs designed to address Russia's immediate human needs and 
contribute to the building of a market economy.  It targets areas of 
high priority.  This includes a resumption of US food exports; support 
for privatization and new businesses; help in dismantling nuclear 
weapons; a housing program for demobilized soldiers to speed Russia's 
withdrawal from the Baltic countries and parts of the former Soviet 
empire; funding for programs to enhance nuclear safety; help in 
resurrecting Russia's energy sector; and an increase in people-to-people 

These programs are designed to deliver quick, tangible benefits to the 
Russian people.  They will support Russia's long-term transformation to 
the market, and--most importantly-- directly serve US interests by 
reducing the former Soviet nuclear arsenal and opening new markets for 
our workers, farmers, and businesses.

While America's increased support and leadership will be critical for 
promoting reform, we cannot do it alone.  Our help must be part of a 
much larger partnership between Russia and the international community.  
Building that broader cooperative effort was precisely the purpose 
behind last week's extraordinary meeting in Tokyo between foreign and 
finance ministers of the G-7 [Group of 7 industrialized] countries and 

At that meeting, Russia's Deputy Prime Minister Fyodorov outlined a bold 
new plan to control Russia's money supply, reduce its budget deficits, 
and achieve macroeconomic stabilization.  In response, we and our G-7 
partners--working through the international financial institutions--
announced a major new multilateral initiative to support reform.  In 
addition to the Paris Club's recent rescheduling of $15 billion of 
Russia's foreign debt, the $28-billion Tokyo package will include 
helping Russia to stabilize its currency, to finance critical imports, 
to restructure key sectors of its economy, and to reduce the threat of 
its deadly nuclear legacy.

The vast majority of this new support for Russian reform will come from 
the international financial institutions.  But it is also going to 
require contributions from G-7 members, as well as other countries in 
Asia, the Middle East, and Europe that are capable of participating.  
Here, America must be willing to pay its fair share.

As President Clinton stated in Vancouver, our strategy to assist Russia 
consists of three steps.

--  The first is the $1.6 billion package of bilateral programs 
announced at the US-Russian summit.  As you know, the monies for this 
package have already been appropriated by the Congress.  

--  The second step is the new multilateral support program announced in 
Tokyo.  One of the most important and innovative parts of that program 
could be the creation of a G-7 privatization fund.  This fund is 
designed to help Russia cope with the economic and political 
consequences of privatizing the huge--and hugely wasteful--state-owned 
enterprises that are bleeding its budget dry and fueling inflation.  Our 
share of this effort would amount to some $500 million, and would take 
the form of a "challenge grant."  That is, it would be contingent on 
other G-7 members contributing another $1.5 billion.  We would then look 
to the international financial institutions to commit an additional $2 
billion in co-financing, bringing the fund's total resources to $4 
billion in grants and loans.

--  The third step in the President's plan to support Russian reform is 
to work closely with the Congress to develop further bilateral 
assistance efforts.  A starting point will be the funding requests in 
our fiscal year (FY) 1994 budget to continue current programs to 
dismantle nuclear weapons, deliver humanitarian help, and promote 
democracy and privatization.  In recent talks with the Russians, our G-7 
partners, and the Congress, we have reached the conclusion, Mr. 
Chairman, that even more must be done.  As I announced last week in 
Tokyo, the President has decided to seek an expanded package of US 
bilateral programs, to build upon the ones announced at Vancouver, and 
in addition to the requests contained in our FY 1994 budget.

This package reflects the intensive consultations that we have had.  It 
focuses on what Russia's reformers say they most need, as well as the 
areas where Members of Congress have suggested our efforts should be 
aimed.  This will build on our assistance efforts in energy, 
privatization, and housing for demobilized soldiers and also provide 
support for the environment, medicines, trade and investment, and 
exchange programs.

This expanded package of bilateral steps, together with our $500 million 
contribution to the prospective G-7 privatization fund, would require an 
additional appropriation of approximately $1.8 billion.  We are now 
consulting with this committee and others in Congress to determine how 
best to structure such a request.Mr. Chairman, I realize this is a 
difficult proposal at a time when so many Americans face hardships here 
at home.  But President Clinton and I are convinced that this investment 
in Russia's democratic future is an essential investment in America's 
future.  By making this investment, we can help turn our most dangerous 
enemy into an enduring partner.  That, I believe, is a critical--indeed, 
a noble--mission.

The President and I will continue to make the case to the American 
people that a focused program to assist Russian democracy is in our 
deepest self-interest.  We are counting on the members of this committee 
to join us in this effort.

International Affairs Budget
Mr. Chairman, let me now turn briefly to a discussion of our FY 1994 
international affairs budget.  It is a budget that accurately reflects 
the times we live in.  In its funding requests, it recognizes the tight 
fiscal constraints confronting our government today.  And in its 
priorities and objectives,  it marks a first but important step toward 
addressing the new challenges of the post-Cold War era.

One of our highest priorities will be promoting democracy and human 
rights.  I have already described the especially high stake we have in 
helping freedom triumph in Russia and the other new states of the former 
Soviet Union.  But our efforts must be worldwide.  The lesson of this 
tragic century is clear:  The best check against international 
aggression is the emergence of governments that encourage tolerance, 
pluralism, and respect for the individual.

Our budget also places a new emphasis on promoting multinational peace-
keeping and peace-making.  The end of the Cold War has unleashed long-
suppressed conflicts in Eastern Europe, the former Soviet Union, and 
elsewhere.  But it has also opened up new possibilities for 
international cooperation.  Our task is to harness that cooperation to 
contain, and far more importantly, to prevent conflict.  The tragedies 
of the Balkans and Somalia bear grim witness to the price of 
international delay.  International peace-keeping--especially by the UN-
-can and must play a critical role. Capabilities must be enhanced to 
permit prompt, effective, preventive action.

We in the United States must be ready to do our part.  In this 
connection, the President and I believe that millions spent now on 
preventive diplomacy and peace-keeping can save hundreds of millions in 
defense and international relief later.

These priorities, as well as others highlighted in our budget, represent 
an important effort to reorient our scarce resources to the realities of 
the post-Cold War era.  The budget reflects a commitment to using the 
taxpayers' dollars wisely and efficiently, in full support of the 
President's economic and deficit-reduction programs.

Reforming the Institutions
As important as how much we spend on foreign policy, however, is how we 
spend it.  I'm convinced that the Department of State cannot hope to 
respond effectively to new challenges unless we improve the way we deal 
with complex problems that cut across traditional bureaucratic 
boundaries.  A stifling bureaucracy, an obsolete division of labor, or 
cumbersome decision-making are luxuries we cannot afford.

As a first step in remaking the State Department, I announced a broad-
based reorganization plan in February.  The plan shifts portfolios and 
creates new positions to mirror post-Cold War missions.  It will reduce 
excessive layering within the Department and streamline the policy 
process.  Our objective is simple:  quicker policy-making, more open 
policy-making, and, most importantly, better policy-making.

We also need to refocus our foreign assistance priorities and programs.  
Specifically, the US Agency for International Development must be 
overhauled.  I have asked Deputy Secretary Wharton to examine the 
Agency's role in the post-Cold War era and report his recommendations to 
me by the end of this month.  We look forward to working closely with 
this committee and the full Congress in this effort.

Before I conclude, Mr. Chairman, I would like to depart from my prepared 
remarks to say a few words about the worsening tragedy in Bosnia.  Upon 
taking office, our Administration was faced with a condition of advanced 
deterioration.  Frankly, it was a situation that would have been better 
dealt with by the West more than a year ago.  Nonetheless, we now face a 
worsening environment in eastern Bosnia that has horrified the world.

In response to the Serbs' relentless aggression, the United States 
joined our partners in the Security Council this weekend in passing a 
resolution that will dramatically tighten existing economic sanctions.   
The steps are, indeed, severe--and entirely fitting.  When implemented, 
they will significantly increase the pariah status of Belgrade and its 
Bosnian allies. We intend to press for total isolation so long as they 
continue their aggression.

If Bosnia's Serbs fail to halt their aggression and agree to a peace 
plan within 6 days from today, Serbia will confront a series of harsh 
new measures, including the following:

--  All ships will be banned from entering Yugoslav territorial waters;

--  No country will be allowed to ship goods by land across Serbia;

--  Every Yugoslav plane, ship, truck, rail car, and cargo container 
outside the country will be subject to impoundment;

--  Barges will be prohibited from passing through Serbia along the 
Danube River unless they have special permission and submit to UN 
monitoring; and

--  All bank accounts and other financial assets held by Yugoslav 
institutions abroad will be frozen.

These steps will also apply to Serb-held areas of Bosnia and Croatia.

The President remains deeply concerned [about] the situation.  The 
Administration is now urgently reviewing a wide range of options 
available to the world community to further punish Serbian aggression 
and bring an end to the violence.  As the President has said, this 
includes options that have previously been unacceptable.  We will stay 
in close touch with members of this committee and the full Congress as 
our deliberations proceed. (###)


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