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U.S Aid to Russia Under Scrutiny

Washington, June 14 (RFE/RL) -- American aid to Russia and other Newly Independent States of the former Soviet Union is undergoing close scrutiny as the U.S. Congress begins to outline spending cuts for 1997 in a continuing effort to balance the national budget and reduce the deficit.

But the looming presidential election in Russia this weekend cast an uncertain haze over an inquiry of the U.S. House of Representatives International Relations Committee Thursday into U.S. assistance for Russia, Ukraine, Armenia and the other states.

Committee chairman Ben Gilman (R-New York) said the entire issue may have to be reconsidered, depending on who wins the election on Sunday and that in any case, he plans to hold hearings after the election to examine its impact on U.S.-Russian relations.

The U.S. State Department's top diplomat in charge of assistance to the Newly Independent States, Richard Morningstar, said that if the Communist Party candidate Gennady Zyuganov wins, there will be no dramatic reaction from the United States. "The U.S. will look at what he does and not act too precipitously," Morningstar said, adding that the U.S. is reviewing aid programs that will continue to be important whoever wins, and particularly if there were to be a communist victory on Sunday.

Morningstar said that if Zyuganov wins, presumably it will be through free and fair elections, and that, as he put it "our first priority will be to make sure this is not Russia's last free and fair election."

He said U.S. assistance programs would have to focus even more sharply on promoting democracy, creating linkages and partnerships between Russians and Americans and doing as much as possible to effectively support remaining reformists in Russia.

Morningstar agreed with committee members that in the case of a communist win, greater consideration would be given to proposals to divert U.S. aid from Russia to other countries of the former Soviet Union. "That's something we are doing anyway," he said.

Morningstar noted that two years ago, two thirds of U.S. assistance to the newly independent states went to Russia, while this year it is only about one fourth and that the drop in dollar levels has been even steeper.

In 1994, Russia was receiving assistance from the United States worth 1,600 million dollars. This year it is receiving about a tenth of that, or 163 million dollars.

Some U.S. legislators want to cut that down to 150 million dollars in the 1997 fiscal year beginning in October.

Congressman Alcee Hastings (D-Florida) said that the U.S. president is requesting in his budget proposal to Congress, appropriations of 173 million dollars in aid to Russia for the next fiscal year. "But we can anticipate that will be reduced," Hastings said.

Panel members, reflecting some of the congressional concerns about U.S. spending in Russia, asked about the level of crime and corruption in there, the reliability of safeguards protecting nuclear materials and stored warheads, antisemitism and religous persecution, and how the U.S. can make its assistance programs to the newly independent states more efficient to do more with fewer resources.

Morningstar said the State Department wants to maintain aid at least at current levels also next year. He said the U.S. is mindful in its planning that in the countries of the former Soviet Union moving away from command economies, "the most difficult phase of the transition for the average citizen is now."

Currently, the top recipient of U.S. aid to the region is Ukraine with 225 million dollars, followed by Russia, and then Armenia with 85 million dollars. This order is expected to remain in 1997 with the U.S. Congress designating how big a slice of the aid pie is to go to these three countries.

Morningstar said the money will be well spent, focusing on community projects, people to people exchanges and small business development, as well as key economic sectors such as banking, and especially in Ukraine on the energy sector.

He said humanitarian aid would continue to take up most of the U.S. funds in 1997, although its share is diminishing and the U.S. wants to see a bigger shift toward technical assistance.

Morningstar also told the committee that because of the funds earmarked for Russia, Armenia and Ukraine, the U.S. can only maintain small aid programs to other former Soviet states. He said more should be spent on Central Asia which is of strategic importance to the U.S. and lags in democratization and free market development.