BUSH YIELDS TO MOSCOW’S ‘NUCLEAR BLACKMAIL’: FIRST DIVIDEND FOR GORBACHEV’S PROTECTION RACKET
(Washington, D.C.): Yesterday’s
announcement by the White House that the
U.S. government would accede to Mikhail
Gorbachev’s urgent request for a further
$1.5 billion in agricultural credits was
appalling on several grounds:
- Coming on the eve of the
presidential election in the
Russian Republic, this aid to the
central authorities was
tantamount to a vote for
Gorbachev’s candidate, former
Prime Minister Nikolai Ryzhkov,
and yet another Administration
affront to reformer Boris
Yeltsin; - In announcing the President’s
decision, White House Press
Spokesman Marlin Fitzwater was
obliged to acknowledge that the
reason for this agricultural
assistance was not to prevent
people in the USSR from starving
but to supply extra feed
grain for pigs and cattle —
in other words, a step that will
only serve to fatten up those who
are able to obtain meat from the
central authorities,
the nomenklatura, not
put food in the mouths of
ordinary citizens; - This further U.S. food aid comes
at a moment when the agricultural
products normally exported to the
USSR by the struggling
democracies of Eastern Europe are
being supplanted by American
subsidized sales — with a
devastating effect on their
emerging, but still fragile, free
market economies. Istvan Major,
Deputy State Secretary in the
Hungarian Ministry of
International Economic Relations
reportedly said yesterday in
London that Western food aid to
the Soviet Union had
“eliminated” Hungarian
agricultural exports to the USSR; - This initiative was also
announced on the same day as the
Congress was advised by the
General Accounting Office that
the Bush Administration’s
estimates on another
government-guaranteed taxpayer
liability — the savings and loan
crisis — are understated by
a factor of two or three; and - Perhaps most troubling of all,
President Bush is with this
action sending an unmistakable
message to Moscow and to
his G-7 counterparts: Washington
is prepared to provide large
quantities of financial aid unconditionally
if that is what the Soviet
central authorities demand — a
portentous message, indeed, in
the run-up to the London Economic
Summit.
The Center for Security Policy finds
that the troubling implications of
yesterday’s presidential decision on the
agricultural credit guarantees are
greatly exacerbated by what the Bush
Administration has not done.
Consider the following, partial listing:
- The Bush Administration has
failed to stipulate any
arrangements for distribution of
the affected agricultural
products. It has chosen instead
apparently to put its faith in an
oral pledge conveyed in a
telephone conversation between
Presidents Bush and Gorbachev to
the effect that the aid would be
equitably distributed, i.e., not
used to coerce the Baltic States
and independence-bound republics
of the USSR. - It strains credulity that much
stock could be placed in such a
commitment in light of
Gorbachev’s acquiescence — if
not authorization — of past
coercion and his unwillingness to
repudiate the patent whitewash of
last January’s crackdown in
Lithuania performed by the Soviet
prosecutor general at his
request. - The Bush Administration declined
to follow the Senate’s advice as
expressed in a resolution adopted
on 15 May 1991, and break the
credit package into tranches tied
to repayment and reform. Instead,
it has pledged to get the credits
out the door as quickly as
possible ($600 million
immediately, virtually exhausting
the Commodity Credit
Corporation’s allotment for
FY1991; $500 million at the start
of the new fiscal year and the
last $400 million by February
1992). Needless to say, this is
far too quick a disbursement
scheme to permit a full
evaluation of how well the
commitments to equitable
distribution or Soviet repayment
promises are being honored, let
alone the degree to which other,
necessary reforms are proceeding. - The Bush Administration chose not
to abide by the law insofar as it
elected to extend in direct
contravention of four separate
provisions of the Farm Act of
1990. For one thing, the
Administration’s claim that it is
satisfied the Soviet Union is
creditworthy, as that statute
requires, is laughable; just last
week the Soviet Union announced
that it would shortly begin
rescheduling some of its debt to
Western government credit
agencies (presumably including
the Commodity Credit
Corporation). Sen. Bill Bradley
(D-NJ) has noted, moreover, that
foreign policy, foreign aid and
debt rescheduling considerations
are clearly at work in the
President’s decision as well.
None of these is permitted to be
a justification for such an
extension of agricultural export
credit guarantees. - The Bush Administration declined
to describe accurately the true
record of Soviet performance on
obligations to the U.S.
government. For example,
Fitzwater stated yesterday that
one of the considerations that
prompted the President to approve
the Soviet Union’s latest request
was the fact that “[The
Soviets] have never defaulted on
an official loan involving this
country.” - In fact, the Soviets have failed
for decades to repay $674 million
in debt obligations to the United
States incurred under the
Lend-Lease Agreements. Such a
selective characterization of the
Soviet credit record is also
misleading with respect to
Moscow’s large and growing
arrearages to private Western
creditors — estimated to be on
the order of $6 billion as of May
1991. - Perhaps most striking of all, the
Bush Administration does not seem
to comprehend the real problem —
Gorbachev’s unwillingness to
engage in a radical
transformation of the Soviet
Union. Instead, in explaining
that a more efficient
distribution system was what the
Soviets needed — not more food
production, Marlin Fitzwater
seemed to reflect Administration
tolerance of Gorbachev’s
determination to improve, rather
than replace, his command
economic structure: - It shored up the inefficient centralized
planning system. This is
precisely the point behind
demanding that reform precede
aid, not the other way around. - Interestingly, the Soviets make
no bones about the fact that they
do not see the lack of a genuine
free market as the factor
stultifying their economy.
Instead, according to today’s Journal
of Commerce, Soviet Deputy
Prime Minister Fyedor Senko, the
official responsible for
agriculture in the Soviet
government, “blamed the
economic crisis on political
turmoil.” According to
Senko, “Collapse of state
structures, the weakening of
executive power….confrontation
of different political
organizations, inter-ethnic
conflicts and strikes have led to
a wide-scale crisis.”
“The main problem
[identified by the
Agriculture Department
delegation recently
dispatched to assess
Soviet needs] simply was
just that there was not a
distribution system that
allowed [the Soviets] to
identify needs in various
cities and locations and
then make sure the goods
got delivered there.
There weren’t the kinds
of regional supply
centers that we tend to
think about, the kind of
collective transportation
points where you can
identify needs in a city
a thousand miles away and
make sure the orders are
placed in the right
areas, the right states
wherever the wheat’s
coming from — Georgia,
for example….It was
mostly that kind of a
problem.”
The Center for Security Policy believes
that the Bush Administration has shown,
both by what it has done and by what it
has not done, a dangerous willingness to
yield to Soviet coercion for
unconditioned aid. In so doing, it is
setting the stage for multi-billion
dollar taxpayer losses — losses that are
as unnecessary as they are likely to be
counterproductive to the goal of
transforming the USSR.
Congress, the
press and the American people should
recognize that this installment
of taxpayer aid to Moscow is likely to be
neither the last nor the most expensive
contribution the Bush Administration is
asked to make, in Gorbachev’s words, to
keep the peace from vanishing, to prevent
a retum to the Cold War and to avoid a
dangerous instability with which Mr. Bush
is so clearly preoccupied. Worse yet, it
is likely — if the Administration has
its way — that the coming installments
will be no more conditioned on a
cessation of Soviet activities contrary
to domestic economic revitalization and
incompatible with U.S. and Western
security interests. In considering this
prospect, the Center urges members of
Congress and others with a vital stake in
any such development to consider the
made previously by senior American
officials — President Bush, Senate
Minority Leader Robert Dole (R-KA) and
House Majority Leader Richard Gephardt
(D-MO) expressing their past, strong
opposition to unconditioned aid to the
USSR.
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