Publication: Monitor Volume: 4 Issue: 160

There were few surprises yesterday as U.S. President Bill Clinton held the first of two days of summit talks in Moscow. A somewhat qualified reaffirmation of his support for economic reform by Russian leader Boris Yeltsin did, however, generate some concern among American delegation members. Yesterday’s meeting provided an opportunity for the U.S. and Russian presidents to quickly renew their friendly personal relations. Clinton was greeted by Yeltsin with a bear-hug upon his arrival at the Kremlin and the two leaders–each of whom faces considerable political challenges at home–were soon laughing together jovially.

In his remarks during the meeting with Yeltsin, however, and later, in the course of a speech to students at Moscow State University, Clinton reemphasized the same message that he had voiced prior to his departure for Moscow: namely, that only continued market reforms would restore investor confidence in the Russian economy. “You can build a prosperous future if you stand strong and complete–not run from, but complete–the transformation you began seven years ago.” The U.S. president warned anew of a return to the “failed policies of the past,” and was also reported to have made clear that the United States is not now prepared to offer additional financial help to Moscow. A White House official traveling with the U.S. delegation was quoted as saying, “We didn’t come here with any money…. Right now, money isn’t the answer.” (Reuter, AP, September 1)

Kremlin sources said that the Russian president had assured Clinton that Moscow “will follow the path of creating a market economy” and that there “will be no going back on reform.” But, according to the same sources, Yeltsin also said that “in certain situations, there could be some tactical adjustments to this [reform] course, including in terms of strengthening the state role in the economy.” U.S. Deputy Treasury Secretary Lawrence Summers suggested later that the U.S. side was reserving judgment on Yeltsin’s remarks until the “plan and the actions” of the Russian government are made clearer. (Reuter, AP, September 1)

In a series of consultations preceding Clinton’s departure for Moscow, Western leaders expressed their concern that backsliding by Russia in the area of economic reform could have adverse effects, not only on the Russian economy, but on international financial markets as well. The West has made clear that continued financial support for Russia is contingent on Moscow’s maintaining its economic reform program.