Can Anyone Manage the World?

Solving world crises is difficult in an age of rising domestic politics and tight global financial ties.

As Presidents Clinton and Boris Yeltsin ended their summit, the embattled leaders' dour expressions said more than their words about the outcome.

Official declarations aside, there were no major arms-control accords or resolutions of foreign-policy differences. More critically, Mr. Clinton's exhortations to Russia to stay the course of free-market reform did nothing to ease mounting uncertainty over the future economic and political stability of a nation armed with more than 20,000 nuclear warheads.

Perhaps the overriding lesson of this distracted two-day conclave is the limited ability of the United States and other major powers to influence the direction of the crisis in Russia and the growing menu of other threats to international order. With financial troubles in Russia and East Asia fueling fears of a global downturn and new political and social turmoil, some experts say leading powers are finding themselves increasingly constrained and overstretched in confronting world challenges. Among the reasons they cite:

* The limited abilities of governments to guide and influence globalization and the massive amounts of capital that flow around the globe at the click of a mouse, unhinging or bolstering markets daily.

* The end of the cold war balance of power in which the interests of most nations were guided by whether they aligned with the US or the former Soviet Union. Now many governments are more concerned with gearing their foreign policies to domestic political and economic priorities, often putting long-term allies at odds.

* Increased national self-interest, which is undermining the ability of major powers to forge coalitions to confront international problems. Moreover, national concerns appear to be restricting the ability of the US to persuade Russia, Japan, and other financially struggling nations to adopt Western-style economic reforms.

* Constraints on major powers' unilateral use of military power imposed by the prospect of international isolation and censure. Such considerations have played significant roles in the Clinton administration's retreat from threats to use force to compel Iraq to allow a resumption of UN weapons inspections.

"You need a large number of coalition partners, economic or military, to deal with these increasingly complex issues," says Hans Binnendijk, director of the Institute for National Strategic Studies, a Pentagon think tank. "But that is much harder to do when you have coalition partners doing their own thing and following their own national interests."

Adding to these concerns are the weak leaderships at the helms of the world's three leading economic engines. In Germany, Chancellor Helmut Kohl faces a tough reelection fight. Japan's new prime minister, Keizo Obuchi, is floundering in addressing his country's financial straits.

Meanwhile, Clinton's authority and credibility are being questioned because of his personal problems, constraining his ability to forcefully advance US interests, experts say. "We have a very unfortunate conjuncture of a lot of different forces...," says Charles William Maynes, a former senior State Department official at the Washington-based Eurasia Foundation.

A popular Moscow view: a summit of 'lame ducks'

Mr. Yeltsin began his summit with Clinton with a bear hug, enveloping him in an exuberant welcome. But many of the country's 147 million citizens wondered why the American leader had come at all.

President Clinton's empty pockets and preaching about free-market reforms strike an odd note as Russia drifts without a functioning government, the economy is collapsing, and the Communist opposition threatens revolt. Some eyebrows were raised over whether Clinton should have shown as much support as he did for Yeltsin by saying more international aid would come in return for reforms. Taking the unpopular Yeltsin seriously was like visiting former President Suharto during Indonesia's riots, critics say.

"As a Russian citizen, I feel humiliated by Clinton's visit," says Boris Kagarlitsky, an analyst with the World Workers' Movement, a political science research center in Moscow. "It is not the task of an American president to tell us what to do or not to do. He is lending moral support to the wrong cause. Clinton came to express solidarity for a government whose leadership the country is unhappy about."

For many Russians, the meeting was overshadowed by how to survive with the ruble free-falling, banks defaulting, and prices going up. Newspapers gave it scant attention or derided it as a summit between lame ducks.

So great was preoccupation with the economy that observers tended to ignore two deals that were struck: one on reducing bomb-grade plutonium stockpiles and the other on sharing early-warning information on missile launches from third countries. Clinton may have alienated the public here by hammering home the message of reforms, such as better tax collection. These have failed or done little to improve most Russians' lives.

"Many Russian people are disillusioned with reforms. They haven't changed their standard of living," says Vladlen Martynov, director of the World Economy and International Relations Institute, a research organization based in Moscow.

Although Clinton did not criticize his host publicly, some Kremlin watchers saw a distancing from the man whom Washington has until now backed as the champion of Western-style change. By attaching the condition of reforms to more international bailouts, Clinton tried to avoid the mistake of supporting too vigorously such an unpopular man, says Victor Kremenyuk, deputy director of the Moscow-based Institute for the Study of the United States and Canada. "This marks a subtle shift in Clinton's attitude towards Yeltsin.... The Russian economy is a dying horse and there is no way the American president can avoid that. It puts a big question mark over his support of Yeltsin," he says.

To hit home that he was in Moscow to hear all sides, Clinton's schedule included meetings with prominent nationalists and Communists likely to play a big role in the future. High on the list was Alexander Lebed, governor of the Krasnoyarsk region in Siberia. He is a nationalist and a leading presidential contender in 2000.

Communist leader Gennady Zyuganov, who has warned of unrest if Yeltsin does not resign, had said he was looking forward to meeting with Clinton to tell him "what is going on in Russia." Clinton said he would urge the Communists, who dominate the Duma, the lower house of the parliament, not to turn the clock back to more state control. But Mr. Zyuganov had other matters on his mind. The Communists are preparing for a showdown with Yeltsin to force him to give up his nearly autocratic powers. They rejected his candidate for prime minister, Viktor Chernomyrdin, in a first vote. And they have threatened to reject him in a second round Friday.

Yeltsin can dissolve the parliament if it defeats his candidate a third time. He is then bound by the Constitution to call early elections. But analysts increasingly speculate that the erratic president may refuse to do so and rule by decree instead.

- Judith Matloff in Moscow

Europe greets Russia's crisis with muffled yawn

Faced with financial meltdown, a rudderless government, and the possibility of violent unrest in Russia, Western European politicians appear to have concluded that sitting tight and keeping their fingers crossed is the only option.

Like President Clinton in his meetings this week with Russian President Boris Yeltsin, they say that this is Russia's problem, and that only Russia can solve it.

"Russia must do it by itself," said German Finance Minister Theo Waigel last week, summing up the European mood.

What seems to be making European governments skittish about offering economic aid is a concern that political infighting in Moscow may yield a new government less inclined to Western ways. Many would also like more time to assess how serious Russia is about promised reforms, such as improving tax collection.

And with few levers they can pull to influence the outcome of the crisis in Moscow, European governments are offering only sympathy and pious words about the need for renewed economic reform. "Lasting stabilization of the financial situation in Russia is only possible if new confidence is created on financial markets and in the Russian public," said Mr. Waigel.

As European stock markets steadied this week, staving off a free fall, fears of an immediate economic fallout from the Russian crisis receded. But prospects for the future of political relations with the continent's giant nuclear neighbor looked uncertain as the Russian ship of state heaved in search of a new direction.

"There is not so much risk in the economic field, but there are many more difficulties and dangers in the political and psychological fields," warns Frank Umbach, a security expert with the influential German Foreign Policy Society, a Bonn-based think tank.

A government in Moscow less sympathetic to Western policies would have far-reaching effects, he says. "That would pose a danger to the long-term stability of Eastern Europe, it would raise questions about how we would deal with Russia in general."

Mr. Kohl argued against calling a hasty meeting of the Group of Seven industrialized countries. "If you send a message you must know what the message is," he said. "It would be counterproductive to try to tell the Duma what to do at the moment."

While the economic consequences for the European Union appear minimal - the EU Commission still predicts a 3.6 percent growth rate for Europe this year - some worry that East Europe might suffer from the contagion of the Russian crisis.

But, although the Polish, Hungarian, and Czech currencies and stock markets are all under pressure, this appears to be a result of initial fallout. These countries' fundamental economic situation is sound, analysts say. "The crisis shows the world that Poland and Hungary belong to the West, that their economies are tied to the West," Hungarian Foreign Minister Janos Martonyi said Tuesday after meeting his Polish counterpart.

He made the point as much for political as for economic reasons. Poland, Hungary, and the Czech Republic are in line to join both NATO and the EU in the next few years, a prospect that irks the Communist and nationalist politicians who might emerge now in Moscow.

- Peter Ford in Bonn, Germany