Money talks at alms race summit

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BILL CLINTON extended an open-armed welcome to Boris Yeltsin as a new era of US-Russian summits dawned here yesterday. For all the elaborately choreographed show of support for the beleaguered Russian President, Washington emphasised that it was imposing severe conditions on sanctioning the long-term financial aid that might make a difference to Moscow's overwhelming economic crisis.

The Clinton administration is refusing to release a dollars 6bn rouble- stabilisation fund - centrepiece of the dollars 24bn Western aid package to Moscow last year - until the Russians produce a credible strategy to control prices and rein in the money supply.

Mr Clinton said before leaving for British Columbia that he would try to mobilise world support for Russian aid: 'Just as we mobilised the world on behalf of war in the Gulf, we must now mobilise the world on behalf of peace and reform in Russia.' Later in Vancouver he said that US aid for Russian reform would only be the start of a much bigger Western multinational effort to support a 'long-term process of development in Russia'.

Mr Yeltsin told reporters before the start of the summit that communists wanted to take his country back to the past, but that 'as long as there is President Yeltsin in power in Russia . . . the reforms can continue.'

This is the first meeting in half a century between Russians and Americans where economic, not security, issues are paramount; at which finance ministers are more important than military chiefs of staff; where the two countries meet not as rivals but quasi-allies. Top aides were putting the finishing touches last night to a dollars 1bn package of short- term assistance measures, which President Clinton will formally unveil when the summit, held on the campus of British Columbia University, ends today. This will pave the way for a much larger package, to be announced later by the Group of Seven wealthy industrial nations.

Moscow can expect easier repayment terms for the bulk of its dollars 87bn of foreign debt. But Friday's dollars 15bn rescheduling deal in Paris reflects the simple fact that Russia is already unable to meet interest payments.

Mr Clinton's main purpose at the summit, his aides said, was to listen and learn, to 'get a sense of how the Russians see their reforms going forward'. For both leaders, the potential rewards are great. As he arrived, Mr Yeltsin was already certain of a resounding display of American backing. For the US President, Vancouver is an all-important opportunity to banish lingering doubts about his foreign affairs credentials, and convince domestic opinion that help for Russia is in America's own best interests.

Rarely has a policy issue produced such a divide between US opinion-makers and the man in the street. Pundits and politicians of every hue urge bold action to bolster Mr Yeltsin. Not so the general public, if a poll this weekend is anything to go by; it suggests that fully 80 per cent oppose more money for Russia, beyond purely humanitarian aid.

The Vancouver package, billed as 'people to people and not government to government', has been crafted to generate maximum impact for minimum outlay. Drawing almost exclusively on cash already allocated by the Bush administration, it requires no further approval by Congress.