Bush Presses Congress To Approve Aid to Russia

President Yeltsin makes his own forceful case in address to joint session of US House and Senate

BORIS YELTSIN scored a strategic triumph in Washington this week. Heading an entourage of more than 100 Russian government and business leaders, he swept through town opening doors, signing treaties, and wooing investors in the United States.

At every step of a visit that was carefully choreographed by the Bush administration, Mr. Yeltsin called for American support to his country.

Having agreed to massive arms reductions earlier in the week, Yeltsin then appealed for help to keep his economic reforms alive and Russia's political hard-liners at bay. Addressing a special joint session of Congress and meeting individually with selected aid opponents, the Russian leader did more to boost congressional backing for Russian aid than the White House has managed to do in the past several months.

President Bush is pressing lawmakers to quickly approve the so-called Freedom Support Act, the US portion of the $24 billion international assistance package for the former Soviet Union.

In his impassioned speech to Congress, which elicited several standing ovations, the Russian leader tried to reassure those who oppose aid because of Russia's military arsenal. A supplement to this week's landmark US-Russia agreement to destroy thousands of nuclear weapons, he said, was his decision to take off alert "SS-18 missiles targeted on the United States."

At a later treaty-signing ceremony, Yeltsin cautioned that a failure to pass the aid package would trigger a resurgence of the Russian hard line and "trillions of dollars for the arms race."

But despite Yeltsin's reforms, US critics remain wary of his country's reliance on arms exports as the chief source of foreign-exchange earnings.

The Russian leader highlights defense conversion as one area that sorely needs technical aid and financing. But large-scale foreign investments will come only after the reforms are shored up by international aid, he says. Aid package held up

The Bush administration package - which includes technical and humanitarian aid, a fund to help stabilize Russian currency, and $12 billion for the International Monetary Fund - has been held up on Capitol Hill, where members of the House of Representatives and Senate have tied it to passage of a domestic urban-aid plan and extended benefits for America's unemployed.

Rep. Lee Hamilton (D) of Indiana, chairman of the House Foreign Affairs subcommittee dealing with ex-Soviet affairs, does not favor the linkage. He says that, now that Yeltsin has "changed the momentum," the stalled aid to Russia will move ahead. The bill's chief proponents are not so sure. Ever mindful of election-year sensitivity about endorsing foreign aid when the US economy is still struggling, both Bush and Yeltsin stress that the Freedom Support Act will lead to greater job opportunities for Amer icans.

"American businesses, by investing and trading with Russia, are going to create thousands of jobs here at home," Bush told a Department of Commerce-sponsored US-Russia Business Summit on Wednesday.

Stronger US-Russian economic ties "would promote a more efficient solution of your problems as well as ours, primarily by way of creating new jobs," Yeltsin told Congress. To underscore the US stake in Russia's transformation to democracy and a market economy, he added: "It is in Russia that the future of freedom in the 21st century is being decided. We are upholding your freedom as well as ours."

The Bush administration is eager for congressional approval in time for the Group of Seven Economic Summit in Munich next month. The G-7 - leaders of the US, Britain, Canada, France, Germany, Italy, and Japan - will convene July 6 to consider, among other issues, when and how to dispense its planned $24 billion aid package to the former Soviet Union.

While Yeltsin banks on an unlocked $24 billion aid package as a way to secure several hundred billion dollars in private investment, many international financiers are skeptical. Constantine Michalopoulos, the World Bank's senior adviser on European and Central Asian affairs, stresses the importance of first laying the legal groundwork and creating ripe macroeconomic conditions for foreign investment.

"For Russia, the bulk of the financing over the next two years will have to come from multilateral sources, rather than from the [international] private sector," he says.

American investment in Russia will likely double over the next year, says Fred Zeder, president of the US Overseas Private Investment Corporation (OPIC). Americans, Mr. Zeder says, will offer marketing, manufacturing, and management. Strong commitment

"On privatization, I've never seen a stronger commitment from a head of state than Yeltsin," he says. "You can see his response this week: He brought all those Russian business people over for the business summit."

In one of the broadest missions in OPIC history, Zeder departs for Russia today with executives from 45 US-based multinational corporations. He says US Ambassador to Russia Robert Strauss, who has served more as a business advocate than a traditional American diplomat, has been instrumental in exploring markets for US firms.

Mr. Strauss has arranged for the US business group to meet with representatives from 600 Russian companies.

Bush calls the mission an important step in establishing one of the most significant two-way trading relationships in the world.