US, Britain Emphasize 'Balanced' Soviet Aid

British prime minister brings message to Moscow: Aid must be linked to drastic economic reform

THE world's leading industrial nations will let their hearts help to determine the scope of the short-term relief they supply to the Soviet Union in the aftermath of the anti-Gorbachev coup.But hard-headed assessments of Moscow's plans to reform the Soviet economy will decide the extent of longer-term Western aid. This careful balancing of the demands of compassion and the imperatives of political realism was struck Friday at two key meetings that Western political leaders say will help to set future guidelines for the capitalist world's response to the Soviet crisis. In Kennebunkport, Maine, United States President George Bush and British Prime Minister John Major, current chairman of the Group of Seven (G-7) industrialized nations, agreed on a six-point plan of action for the coming months. Also on Friday, sherpas (senior officials) of the G-7 countries met in London and began detailing short- and longer-term responses to the Soviet crisis. On Sunday, Major flew to Moscow for separate talks with Soviet President Mikhail Gorbachev and Russian Federation president Boris Yeltsin. The six-point plan Mr. Bush and Mr. Major agreed on calls for implementing existing food credits; assessing the need for aid during the winter; providing teams to help with food production and distribution; increasing "know-how" programs; speeding up the Soviet Union's association with the IMF, and for the IMF and World Bank to work out structural reform plans.

Window of opportunity Bush and Major said the upheavals in Moscow presented the West with a "window of opportunity" to advance the reform program in the Soviet Union. But although they agreed to act "compassionately and urgently" to prevent starvation this winter, they found common ground in stressing that economic aid must be linked to what Major called "a clear, comprehensive reform program." The G-7 officials agreed in London to reflect this balanced approach in preparing a report that Major took with him to Moscow. Major's chief concern, his officials said, was to ensure that food and other commodities do not fall into the hands of black-marketeers. Downing Street officials said Major would remind Mr. Gorbachev and Mr. Yeltsin that the Soviet republics are rich in raw materials but need to drastically reform their economies if they are to recover. This week British supermarket chiefs were holding meetings with John Gummer, the agriculture minister, to thrash out a detailed food-aid plan. Some large British grocery chains are reported to be considering sending relief supplies directly to the Soviet Union. Thursday's London G-7 meeting was a follow-up to the July summit in the British capital at which the broad outlines of a policy toward the Soviet crisis were drawn up. Horst Koehler, Germany's sherpa, says a new situation now exists in the Soviet Union, requiring the provision of more economic aid. But when he urged the meeting to recommend an upgraded program of direct economic aid, he was voted down by the other delegates. An Italian official said afterwards that there was "a huge problem in deciding who to negotiate with in the Soviet Union." Until the situation becomes clearer it is "wise to be cautious" and focus on short-term relief, the official added. Sir Ronald Mackintosh a senior food aid adviser to the British prime minister said the Soviet Union could produce enough food for its own people, but had big problems in getting it to them. "One of the big differences between their system and ours is that there's virtually no preservation or packaging as we know them," Sir Ronald said. "There's no long-life milk or fruit juice, no frozen vegetables, no vacuum-packed biscuits. They don't have sophisticated cold stores where meat and fruit are kept in peak condition until they are needed, and they have no home freezers. So, if food isn't eaten quickly, it's simply thrown away or fed to animals."

Reform a priority The London meeting of G-7 officials decided that the chief priority in the Soviet Union had to be for the people managing the economy to produce a convincing economic and political reform program. It decided also that all members of the group should begin forging or improving their bilateral links with the Soviet republics, particularly the Russian Republic and the Ukraine. Bush and Major said they would continue to consult each other throughout September on the need for food aid and medical assistance. British officials say they expect the onset of the Soviet winter in early October. It was reported in London that Britain's foreign secretary Douglas Hurd is advocating that the European Community should buy up surplus wheat from former East Bloc countries and make it available to the Soviet Union through food credits. Lev Voronin, the Soviet ambassador to the EC, took up this theme Friday. He says the fate of the Soviet Union depends to a large extent on the position taken by the EC. "The priority is an increase in humanitarian food assistance to combat food shortages caused by declining productivity and technical advice to help with the introduction of a market economy," Mr. Voronin said. The EC's existing food aid program to the Soviet Union includes about $300 million in emergency food aid, and about $600 million in food credits. Western officials say distribution of the aid has been greatly hampered by inexperience and corruption on the part of Soviet officials.