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Text File | 1992-10-19 | 6.3 KB | 136 lines

                                                                                WORLD, Page 27

The Time Has Come to Help


By RICHARD NIXON


    Now is the time to provide economic aid to pro-reform
republics of the new Commonwealth of Independent States. Russia
and any other republics that break decisively with their
communist past in 1992 deserve our help no less than did the new
democracies of Eastern Europe in 1989. To put it bluntly,
Russian President Boris Yeltsin and those like him in other
republics must not fail.

    It would have been a catastrophic mistake to provide
large-scale assistance to the former Soviet Union under Mikhail
Gorbachev. Dominated by communist hard-liners until the August
1991 coup, hostile to free elections and self-determination for
the nations of the Soviet Union, and addicted to economic half
measures, his government adopted reforms to strengthen the
communist system, not to abandon it. With the final lowering of
the red flag of the Soviet Union on Christmas Day, that
situation changed decisively. The Soviet people finally achieved
their deepest aspiration -- not reform under communism but
reform without communism. Unfortunately, the West has been slow
in committing itself to a comprehensive program of assistance
to reform-minded republics.

    Much of that reluctance stems from those who overcommitted
themselves to Gorbachev. Unlike Gorbachev, Yeltsin has met the
conditions to qualify for aid. He led a genuine democratic
revolution, winning the Russian presidency through free
elections, standing heroically against the August coup, and
supporting self-determination for the non-Russian nations. He
has expressed a firm intention to resolve outstanding
geopolitical issues in ways consistent with our interests. And
with the freeing of most prices on Jan. 2, he has staked his
political life on the rapid creation of a free-market economy
in Russia.

    The West should help Yeltsin's Russia for two reasons.

    First, no better alternative exists. His staff, which
includes the best economic thinkers in Russia, understands what
needs to be done. Yeltsin also has unmatched political capital
and the courage to tell his people that things will get much
worse before they get any better. He has fielded Russia's A
team. But in light of the country's shortage of free-market
expertise, there is no B team. If Yeltsin's reforms fail, no
successor will be able to do any better.

    Second, the reform of Russia is a key to the reform of the
other republics. We should provide large-scale assistance only
to those republics that hold free elections, protect minority
rights and adopt free-market reforms. So far, only Russia has
met all three conditions. By assisting Yeltsin's government, we
will create an incentive for reform elsewhere. Moreover, if the
free market succeeds in Russia, it will inexorably spread to
the other republics. For the first time in its history, Russia
will lead not by force of its arms but by force of its example.

    Nonetheless, the West should not entertain illusions about
launching a new Marshall Plan. Postwar Western Europe needed
only an economic jump start, but markets in the former Soviet
Union need to be invented. Beyond humanitarian aid, we can
improve the odds for successful reform in four ways:

    -- Create a U.S.-led organization to spearhead Western aid
efforts. The West has failed to organize itself to cope with the
magnitude of the task the post-cold war world confronts.

    After World War II, the U.S. led the way in creating an
agency, the Organization for European Economic Cooperation, to
coordinate the postwar reconstruction of Western Europe. Today
we need a similar organization whose sole purpose is to assess
the needs of the republics and delegate specific tasks and
projects to private groups, Western governments and
international agencies.

    Most important, this organization must deploy teams of
economic and industry experts to the capital of every republic
of the former Soviet Union so that they are available for
day-to-day consultation. Embassies cannot fulfill this role
because too many career diplomats lack an understanding of and
dedication to free-market policies.

    -- Provide accelerated assistance to agricultural sectors.
The U.S. should immediately send teams of its own experts in
agriculture and food processing to all republics. While their
economic free falls will continue for at least the next few
years, we could help the republics turn the corner on food
supplies much more quickly. By decollectivizing agriculture, for
example, China doubled its per capita income within a decade.
Tangible signs of progress are indispensable to buy time for
other reforms to work.

    -- Establish "enterprise funds" for reformist republics.
For those republics, like Russia, that take the plunge on
free-market reforms, the U.S. should create enterprise funds
similar to those already operating in Poland and Hungary. These
funds train local bankers in sound lending practices and provide
them with capital to make small-business loans, which average
only $15,000, and have been invaluable in promoting the market
at the grass-roots level.

    -- Expand educational and information-exchange programs.
We should aggressively advance people-to-people exchanges and
open American business schools in each republic to train the
thousands of managers, accountants and other specialists needed
in market economies, as well as direct Radio Liberty and Voice
of America to air programs on the nuts-and-bolts operation of
a market system.

    Once Yeltsin's full reform program is in place, the West
should commit the billions of dollars needed to help stabilize
the Russian economy. The U.S. cannot be the only banker in the
world. While we bore the burden of rebuilding the economies of
our allies and adversaries after World War II, Japan and
Western Europe must now pull their weight. But as the best
example of what free enterprise can achieve, we must demonstrate
leadership in organizing the West's efforts.

    The nations of the former evil empire lost faith in
communism both because of its inhumanity and because it did not
work. Now the ideas of freedom are on trial. If they succeed,
the end of the cold war will mark not only the defeat of
communism but also the victory of freedom.