Aid Package Like Bailout of Corporation

WASHINGTON — Under the international aid package that President Bush unveiled Wednesday, Russia is scheduled to receive some new international checking accounts, loan guarantees to buy grain and merchandise and deferral of interest payments on some of its foreign debts.

Much of the money allocated already is awaiting the Russians’ entry into the International Monetary Fund, which acts as a banker for countries with troubled economies.

Only a small part of the $5 billion U.S. contribution--out of the $24-billion international aid package--needs Congress’ approval, primarily $300 million in new loan credits that Bush proposed to enable Moscow to buy a wide variety of American goods.

The Russian aid deal is like a major corporate financial package, the kind of multi-part assistance plan put together when worried bankers, wanting to protect their investment, try to keep a troubled but salvageable firm in operation. In this case, the nations of the industrial world want to keep the Russian democracy alive and flourishing.

“This is not altruism,” Commerce Secretary Barbara Hackman Franklin said Wednesday. “It is an investment in our future. Helping build strong economies in the new states will contribute to their political and economic stability, and these efforts will also create new export markets for American goods and services and will generate jobs for Americans.”

In addition, Washington will furnish another $1.6 billion to the other 10 republics in the Commonwealth of Independent States, the loose grouping that succeeded the former Soviet Union, for a total American contribution of $6.6 billion to the various republics.

For the Russians, about $1.5 billion of the funds were approved by Congress back in 1983 and have already been deposited in an IMF fund used to stabilize currencies that suffer from wild fluctuations. Since the ruble is such a currency, Moscow can take advantage of this fund as soon as it joins the IMF--which it is expected to do in the near future.

At that point, Moscow will be able to draw on the stabilization fund to buy or sell rubles, depending on the market, to keep its money stable in relation to dollars and other currencies.

Another $900 million already supplied to international lending institutions by the United States will be made available to Russia in the form of loans.

In addition, the United States is providing $1.7 billion in new agricultural credits, already voted by Congress but not yet used. These are loan guarantees enabling the Russians to get financing from American banks to buy U.S. grain.

Thus congressional approval will be needed only for the final $300 million in new lending authority to finance general merchandise purchases by the Russians. These loans can be used to buy anything from computers to pharmaceutical products.

Almost all of the money is in the form of credits. But Congress has also appropriated $600 million in grants--money that doesn’t have to be repaid--for humanitarian aid and food.

Although relatively modest in size, the $6.6 billion, along with aid from other countries, should enable Russia and the other republics to keep their populations fed and their economies growing as they make the transition from capitalism to communism, Administration officials said.

Countries that have extended loans to the Russians have agreed on debt deferral, allowing the Russians to postpone making interest payments.

Separately, the Administration will ask Congress to approve a $12-billion increase in the U.S. contribution to the International Monetary Fund. A boost in the fund’s total resources will make more money available for the Russians to borrow to pay for the imports they desperately need.