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Russia: U.S. Official Says Aid For Ex-USSR Critical

Washington, 10 June 1999 (RFE/RL) -- A senior U.S. State Department official says it is in America's national security interest to continue to provide both long and short-term economic aid to Russia and other former Soviet countries.

Bill Taylor, coordinator of U.S. assistance to the newly independent states at the State Department, made the statement Wednesday at a hearing of the U.S. House of Representatives International Relations Committee. The hearing was held in order to review what U.S. aid programs in Russia have achieved over the last seven years.

Taylor said it is critical for the U.S. to keep funding both economic and technical assistance programs in the former USSR in order to promote democracy and economic reforms and to help stabilize the region.

But committee chairman Benjamin Gilman, (R-New York), expressed concern that Russia has already received close to $20 billion in loans from international lending institutions and several reschedulings of its debts, but still wants more money.

Gilman said Russia cannot even repay what it already owes the International Monetary Fund, is unable to adequately account for much of the last loan installment of over $4 billion received just last summer, and probably cannot meet the economic and budgetary reform conditions that it should meet to receive further loans.

"Today we see a Russian government that is broke, and we read reports of billions of dollars in Russian capital that has been squirreled away in foreign bank accounts. We'd like to know what purpose will be served by furthering such loans, and for how long."

Taylor acknowledged the severe economic difficulties in the region, especially the Russian financial crisis last August, but said America must continue to encourage democracy because the future course of reform in the former Soviet Union could "dramatically affect U.S. national security."

"It is clearly in our national security interest to have a democratic, market-oriented set of countries in the place where there was the Soviet Union in the past. If these new countries go down one road, our security is enhanced. Market reform, democratic reform, the secure disposition, reduction and non-proliferation of the former Soviet arsenal of weapons of mass destruction are obviously good for the U.S....But if these countries go down another road, Americans are clearly less secure."

Taylor said the U.S. assistance programs should be guided by two principles of engagement.

First, he said there needs to be a balance between the programs that address immediate threats, and programs that promote a lasting generational change in that part of the world.

The second principle, Taylor said, is that the U.S. should use a policy of "selective engagement" based on a country's willingness to reform. He said the U.S. needs to increasingly differentiate between reforming and non-reforming countries when designing these aid programs.

As a result, Taylor said the U.S. will increasingly provide technical assistance only to those governments where leaders and citizens demonstrate a clear commitment to reform.

"Let's be frank. Some of the countries are making good progress. Economic and political reforms, however, are not going well in other countries. In Moldova, Kyrgyzstan, in Georgia -- commitment to reform is genuine. In Belarus and Turkmenistan, however, we see little such commitment on the part of the government."

As an example, Taylor said the U.S. recently provided additional funding to Moldova in the area of land privatization because it is the one country in the region that has "moved the farthest on agricultural reform and support for private farmers."

He also said the U.S. has redirected its agricultural programs away from the central government in Ukraine, and toward pilot regions where work is ongoing with the private sector.

In Russia, Taylor said the U.S. has largely cut off funding for agriculture and energy projects because there is "very limited prospects for our programs to have an impact on development in these sectors." He also said the U.S. has suspended support to the election commissions in Kazakhstan and Uzbekistan.

But Taylor stressed that U.S. assistance programs of some kind are critical for all the countries in the former Soviet Union.

"Engagement is more important after the events of last August, both because of the immediate threats posed by the economic crisis, including increased risks of poverty, proliferation, and regional instability, and because engagement ensures that we can influence the long-term evolution of these societies toward markets, democracy, sovereignty and independence."

Taylor said the U.S. programs should include short-term goals such as humanitarian aid and to promote non-proliferation. But he said the U.S. must also invest in long-term political and economic reform by supporting academic exchanges, non-governmental organizations, Internet access and businesses.

Taylor testified that the U.S. currently spends about 1,032 million dollars annually for its Freedom Support Act programs in the countries of the former Soviet Union to encourage economic and political reform. He urged the Congress to approve a similar level of funding over the next five years, a proposal issued earlier this year by U.S. President Bill Clinton.