Western Doubts on Soviet Reform Stall Aid Effort

Article excerpt

INTERNATIONAL donors, meeting over the next two weeks to respond to desperate Soviet pleas for help, are looking for a ready and reliable set of partners on the receiving end.

But a coherent Soviet leadership - with a mix of central government officials and representatives from the breakaway republics - is as tall an order in this disintegrating union as are the huge sums of foreign aid being sought from the West.

A host of United States, European, and Japanese officials are now visiting Moscow to assess Soviet need and explore ways of distributing foreign assistance. They are seeking evidence of Soviet commitment to economic reforms before they dole out even a portion of the tens of billions of dollars in requested aid.

But central and local leaders here are having difficulty cooperating, much less reaching an agreement, and the jurisdiction between the republics and the union remains undefined.

Soviet President Mikhail Gorbachev had indicated optimistically that the republican leaders and central authorities could sign an economic agreement by this Thursday. But many republics, citing conflicting national interests, have been reluctant to coordinate policies covering debt, currency, trade, banking, and customs.

Mr. Gorbachev has amended his earlier expectation, saying over the weekend that an economic agreement will be signed by mid-October. Observers doubt that even that date can be met. Kirghizia and Armenia have so far withheld their support, and the Ukraine has reserved its participation in an all-union economic treaty until its Dec. 2 presidential election is held.

Even the relative economic powerhouse, Russia, is at odds with the Economic Management Committee of the State Council charged with managing the planned inter-republic economy. Committee chairman Ivan Silayev, whose resignation as prime minister of the Russian Republic took effect Friday, is accused by former Russian colleagues of trying to work out an economic agreement that would in effect undermine Russian sovereignty.

While the Soviets are mired in domestic squabbles, US Treasury Secretary Nicholas Brady is pushing for an early meeting of the Group of Seven to coordinate international policy toward the Soviet Union.

The G-7 - economic policy makers from the world's richest countries, including the US, Britain, Canada, France, Germany, Italy, and Japan - will meet in advance of the annual meeting of the World Bank and the International Monetary Fund scheduled later this month in Bangkok.

High on the G-7 agenda is the mammoth $70 billion Soviet debt, which the cash-strapped Soviets are increasingly unable to pay. US and European officials say that in the coming six months, the Soviets need more than $5 billion to service their debt and pay for essential imports.

Soviet prospects for reaping foreign exchange through exports to pay for imports remain dim. Soviet oil, the biggest dollar earner, is needed domestically. Oil production has slipped dramatically this year because of mismanagement, technical problems, and poor equipment. A leading world producer, the Soviet Union may become a net oil importer, if conditions continue to deteriorate. …