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US Proposing Few Changes in Aid to CIS States

Washington, May 17 (RFE/RL) -- U.S. economic and humanitarian assistance to the former Soviet republics next year is expected to remain at the same level it is now. But Georgia, Moldova and the five Central Asian states may get a bigger share of the American dollars.

The U.S. State Department's top diplomat in charge of assistance to the newly independent states, Richard Morningstar, says current aid trends will be maintained with less money going to Russia and more going to other former Soviet republics in the 1997 fiscal year, beginning in October.

Russia's portion dropped to roughly one fourth of the total for the region this year, compared to two thirds in fiscal 1994. Morningstar says proposed aid to Russia in fiscal 1997 is at similar levels to the current period.

He made the statement Thursday in testimony before a U.S. Senate Appropriations subcommittee inquiring into U.S. funding for the newly independent states.

Morningstar said the State Department will ask the Congress to approve 640 million dollars for NIS assistance.

That's more or less the same as the 641 million dollars allocated for the 1996 fiscal period, but nothing like the huge sums America spent on Russia and other former Soviet republics three years ago.

Morningstar recalled that in fiscal 1994, the U.S. gave 2,500 million dollars to the republics, and of it 1,600 million dollars went to Russia.

Morningstar says that subject to congressional approval, in fiscal 1997, Russia would get about 173 million dollars worth of assistance, compared to 163 million this year.

A U.S. State Department official told RFE/RL's correspondent that the extra ten million dollars is a domestic technicality because some programs previously funded by the U.S. Defense Department now are to be transfered to the State Department budget.

But the official, who did not wish to be named, cautions that the assistance request submitted to the U.S. Senate committee is just the beginning of what is expected to be "a lot of dicussion" and a long legislative process lasting several months.

"These are very tentative numbers," the official said, adding that final dollar amounts of aid probably would not be approved by Congress until September.

U.S. aid is only one element in a flow of dollars to the region. In addition to aid from the State Department, Russia and the other states get funding for programs run by the U.S Energy, Defense and other government agencies, as well as massive financial support from international organizations such as the World Bank and the International Monetary Fund.

At the hearing, Morningstar said Ukraine now is the top recipient of U.S. aid to the region, followed by Russia, and Armenia. That order is expected to remain in spite of a suggested cutback in assistance to Ukraine.

In the current fiscal year, Ukraine is getting 225 million dollars, compared to the proposal for 183 million dollars in fiscal 1997.

The State Department official says the amount proposed by the administration a year ago was much lower than the figure eventually approved by the U.S. Congress and that supporters of Ukraine in the Senate and House of Representatives may again earmark a higher portion of the aid for Ukraine in coming weeks.

How is the money to be spent? Morningstar says major U.S. priorities in Ukraine are economic reform, including restructuring of the agriculture and privatization, expanding the energy sector and closing the Chernobyl nuclear reactor, and promoting democratization and the rule of law.

He said president Leonid Kuchma has begun to make progress in economic reform and is now pressing for ratification of a new constitution. Ukraine will be the last of the independent states to adopt a new post-Soviet constitution.

Morningstar says "the U.S. must support this process in every appropriate way that it can."

Turning to economic goals, Morningstar said that after a slow start, privatization is now progressing at what he says is "the appropriate pace," except for the agribusiness sector and that U.S. programs are targeted to support the privatization process.

He says another "major thrust of U.S. assistance this year and looking ahead into 1997" is help to Ukraine in closing remaining Chernobyl reactors and restructuring the energy sector.

In Russia, Morningstar says some agricultural and health projects will be phased out because of funding limits. "With declining funds to Russia, we can no longer carry so many programs," he says.

Morningstar says U.S. assistance is now focusing on drafting commercial laws to regulate capital markets, banking and taxation. He says many big American companies do not feel secure in Russia's commercial environment and are not increasing investment there.

Turning to the other former U.S.S.R. republics, Morningstar says the U.S. will, as he put it: "try to maintain reasonable, if somewhat smaller programs in Kazakhstan, Kyrgyzstan, Moldova and Georgia.Belarus and the other Central Asian republics will continue to see small programs." He gave no further details.

But the official told our correspondent that the State Department would like to expand assistance to Central Asia, Georgia and Moldova and has proposed increasing 1997 levels over the current period.

He says the State Department's proposal last year for these countries was also higher but was cut back by Congress in favor of Ukraine and Armenia.