US' Russian-Centric Aid Policy Under Fire

AS the Clinton administration reconsiders its aid policy toward the former Soviet Union, experts caution against a Russia-centric approach, smaller republics call for more balance, and American businesses press for government help in penetrating what promises to be a lucrative market.

In the wake of the Russian spy scandal, and given the recent Russian parliamentary elections that whisked anti-reformers and nationalists back into office, many United States lawmakers have urged a suspension of the outstanding $1.7 billion in Russian assistance and a renewed look at the needs of other fledgling republics.

At a Monitor breakfast on Tuesday, former National Security Adviser Zbigniew Brzezinski criticized Washington policymakers for ``living in a fool's paradise, believing our own slogans about a democratic Russia,'' and implored them to take a much broader approach toward assisting the republics.

He scoffs at ``outrageous and childish ... talk about cutting off aid to Russia because of the spy case.'' But, he says, now is the appropriate time to recognize that ``the overconcentration on Russia has created a distortion in our policy toward the former Soviet Union,'' and see the need to ``put money into other republics, with aid to specific regions and projects.''

A flawed review?

Mr. Brzezinski is relieved that ``the administration is just beginning, finally, to realize that its policy is flawed.'' But while the White House ``ordered a major review of American policy toward Russia,'' he adds, ``it's being conducted by State, not by NSC [National Security Council], which I think is a mistake, because we know what the outcome will be ... a reaffirmation of what's been going on because the people who are doing the review are the people who have formulated the flawed policy.''

If the White House is slow to change its policy due to its own internal review, it is hearing from a steady stream of visitors - from Kazakhstan last week, Ukraine this week, and Georgia next week - all of whom want Washington to shift its almost singular focus on Russia toward helping to strengthen the survival prospects of the non-Russian republics.

Secretary of State Warren Christopher told the Senate Foreign Relations Committee last week that ``events in Russia over the past few weeks have revived our fears about the future.'' But, he said, ``we give aid to Russia to the extent we do, not as charity, not as something we're doing for them, but as something that's in the American national interest.''

Toby Warson, president and chief executive officer of Alliant Techsystems in Edina, Minn., says he is among many American business leaders who are pushing the US government to at least live up to Secretary Christopher's claim. Mr. Warson's firm is the top munitions supplier to the US Defense Department, and he is scouring foreign markets for contracts.Markets in the ex-Soviet republics may be new frontiers to Americans, but they are already exploited by European competitors who enjoy strong government backing, he says.

Help for Americans

To help Americans compete, two US agencies - the US Export-Import Bank and the Overseas Private Investment Corporation (OPIC) - are raising their profiles in Russia and other republics. Eximbank Chairman Kenneth Brody says he wants to see his institution, which facilitates the export financing for US goods and services, take greater risks and put US firms in the position to succeed against the toughest international competitors.

OPIC operates in nearly every ex-Soviet republic. A seven-fold increase in last year's OPIC funds for project investments in the ex-Soviet republics will provide up to $2.5 billion in financing and political-risk insurance for US firms operating there.

Today Warson will join other leaders from US business - ranging from AT&T to Dow Chemical - who will meet here at OPIC with Ukrainian President Leonid Kravchuk. The Ukrainian leader will pitch investment opportunities in Ukraine.

Alliant Techsystems already has a demilitarization contract with the Ukraine ministry of defense (and with Belarus's ministry, too) to dismantle conventional munitions. The projects employ out-of-work former Soviet soldiers, sell the scraps at market value, and convert explosives and propellants into commercial products and energy sources. The deals will generate over $100 million over the next five years and generate profits for the republics as well as Alliant Techsystems.

Washington's help in promoting Warson's firm's involvement in the former Soviet Union, he says, is not only good for business, it meets US national security needs and assists the republics in their difficult reform processes.

Warson also says the federal government's red tape is an obstacle in what could be considered a dream deal - disarmament that helps new democracies and a US industry facing defense cutbacks.