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Office of the Press Secretary

                         BACKGROUND BRIEFING

March 31, 1993

The Briefing Room

3:27 P.M. EST

MS. MYERS: Good afternoon. The following is a BACKGROUND BRIEFING. It will be conducted by [names deleted]. They are to be identified as senior administration officials.

Without further ado, [name deleted]. Or --

SENIOR ADMINISTRATION OFFICIAL: [name deleted]. (Laughter.)

Good afternoon. [name deleted] and I thought that it might be useful to all of you who are going to be covering the summit if we were to set the scene a little bit. Now, that does not mean raising the curtain on the specifics of what the President is going to be taking with him to Vancouver. But we can, I think, tell you a little bit about the overall approach to this weekend's meeting and also the approach that we're taking to a series of follow-up meetings that will be taking place in the weeks and months to come after Vancouver.

The major point that I would like to stress in these brief opening remarks before turning the podium over to [name deleted] is that with the end of the Cold War, just as partnership has replaced competition in the relationship between the United States and Russia, so economics has replaced traditional military security issues as the centerpiece of U.S.-Russian relations.

For decades, when leaders from the White House and the Kremlin met at summits of the kind that's about to take place their principal goal was to minimize the harm that their countries could do to each other. When President Clinton and President Yeltsin meet this weekend in Vancouver they will be discussing how to maximize the good that America and Russia can do for each other.

It's a sign of the times that Secretary Bentsen will be on the American side of the table, sitting across from Boris Fyodorov the Russian Finance Minister and one of the principal architects of the Russian reform program.

Now, of course, we do still have security concerns -- specifically, reducing the threats of nuclear weaponry and proliferation. And those are very much on the agenda in Vancouver. But on Sunday, when the two Presidents announce the results of their meeting, I think you will see that the emphasis is heavily on economic interaction.

Without, as I say, anticipating what the specifics will be, here are several themes that will characterize the American proposals in this meeting. This administration's policy, as you've heard repeatedly from this podium and elsewhere in recent weeks, is to support reform and reformers, wherever reform is taking place in Russia and the new independent states, and wherever reformers are at work.

The outcome of the Vancouver summit will, I think, give fresh and more concrete meaning to those words that you've been hearing so often, particularly in the last couple of weeks. You will see, I hope, how our initiatives are focused on those trends in Russia that we most want to encourage -- trends like privatization and democratization, which we think are likely to continue despite the twists and turns and the ups and downs of Russian politics.

One of the messages that we are trying to send with these initiatives is that we are in this for the long haul. You will also see that we've made an effort to target as much of our program as possible outside of Moscow; that is at the regional, local and grassroots levels of Russian society.

We are also reaching out as much as possible to nongovernmental partners for the programs that we have in mind --that is to the still relatively small but nonetheless remarkably robust private sector. Speaking of the private sector, you will see that we're making a concerted effort to get the American private sector more involved in a variety of ways, particularly by trying to work cooperatively with the Russians to improve the climate for foreign trade and investment.

One final point about what happens after Vancouver. In our determination to support Russian reform we are embarked on two tracks. One, bilateral -- that is what the United States does on its own directly with Russia; and the other, multilateral -- that is what we do in concert with the other industrialized democracies, especially through the international financial institutions. Those two tracks are linked. They're more closely linked than they have ever been in the past.

Our bilateral programs are intended to serve as a catalyst for what happens at the multilateral level. Again, without going into specifics you will see on Sunday that what we propose to President Yeltsin in Vancouver has a direct and explicit tie-in to what Secretary Christopher and Secretary Bentsen will be taking with them to Tokyo 10 days later for a joint foreign and finance ministers meeting of the G-7. I stress this point because it's important that you see Vancouver not as a one-shot deal, but as part of a process which, like Russian reform itself, will continue for months, years and probably decades to come.

Over to you.

SENIOR ADMINISTRATION OFFICIAL: Welcome to an exercise in redundancy, partly. Let me just emphasize a few points that my colleague got into. One -- and a few new ones. One, first, let me note what I've mentioned already to a number of you, and that is the extraordinary degree of involvement of the President himself in this process. He has been consulting not only with experts within the administration, but a wide range of people outside the administration, and a lot of congressional consultation has gone into this as well.

I think his interest flows both from the fact that there are big stakes involved here -- this is probably the central strategic issue before us -- but also because of his own particular interest and skill in knowing how to make economic programs work domestically here, and it interests him in Russia as well.

Let me just make a few general points to reiterate to some degree what my colleague said -- first of all, is that you will not hear us only be talking about aid, but we are using quite properly the concept of partnership. Russia is a great nation. The United States can act as a catalyst; it can act to underwrite the reform movement in Russia. But only the Russians can save Russian democracy, not the United States.

Secondly, another word you'll be hearing is investment - - that this is an investment not only in their future, but in our future. This is often put only in terms of the dangers, what will happen to our defense budgets or to the lives of Americans if democracy and market reform fail in Russia. But we sometimes forget that we're talking also about immense opportunities precisely because Russia is a great nation -- opportunities not only for cooperation in foreign policy and the security issues we will be discussing at Vancouver, but opportunities also, extraordinary opportunities for American trade, American investment.

On assistance itself, let me tell you what the President has begun almost every meeting with. The President's first law in this has been that we must be able to do what we say we will and to deliver on what we promise. This, as you know, has been a problem in the past and is not one that we intend to see repeated here.

Therefore, at Vancouver the President will be presenting a very serious economic package. That package will include projects that are either completely new or that are expanded and reshaped versions of current programs. Let me emphasize that this will not simply be an exercise in repackaging existing efforts and calling it new.

The other point here is that all of these programs that he will be presenting will be funded with already authorized and appropriated funds so that we can deliver now on what we are proposing.

In addition, the President will discuss with President Yeltsin and get his views on future U.S. help and then discuss all of that with the Congress. And to reiterate what my colleague said, then also after Vancouver we will use the Vancouver package and discuss it with the other members of the G-7 as a way of encouraging two things: one, that they present around the time, or before, perhaps, the meeting of foreign ministers and finance ministers on April 14th their own bilateral packages, which would be coordinated with ours, and also further G-7 financing measures, largely through the international financial institutions. We're already working with the other members of the G-7 on this.

As my colleague emphasized, the general strategy comes down to supporting reform. And, therefore, we will be trying to make our aid as direct as possible; in part, to make sure that it is doable not only here through money that we have, but doable there as well. We'll be emphasizing a number of sectors, including: privatization, small enterprise development, education and training, modernization of agriculture and energy and, of course, denuclearization as well.

My colleague, I think, said that there would be no numbers. We have a deal here that if either one of us begins to speak in quantifiable terms, the other will wrestle us to the ground, will bob and weave, I'm sure, as you ask us about it.

So, your questions, please.

Q Sir, you said there will be no new money, actually, no new money involved in this aid package?

SENIOR ADMINISTRATION OFFICIAL: In what we present in Vancouver, yes.

Q On the basis of that we can conclude it won't exceed $1.4 billion? (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: Since my colleague may or may not have been a wrestler in high school, I will avoid comment.

Q Does that mean you're going to reprogram funds that have already been passed by Congress? And if so, what are you going to reprogram? Where are you going to get the money?

SENIOR ADMINISTRATION OFFICIAL: Now, I realize why I made a mistake in speaking second.

SENIOR ADMINISTRATION OFFICIAL: No, I just think that we want you all to have some reason to go to Vancouver after all. And that means not getting into the specifics either of the magnitude of the different program involved or the funding sources.

Q Could we just clarify --

SENIOR ADMINISTRATION OFFICIAL: Do not be misled, this will be a serious --

Q The $400 million has been already appropriated for the last fiscal year, $400 million for the next fiscal year. What you are saying is that all these programs will be within those two tranches, not including the $300 million more that Clinton has asked for in his budget, and not including anything in addition to that $300 million he might ask for.

SENIOR ADMINISTRATION OFFICIAL: If you listen carefully to what my colleague just said, he said that basically that there are two pieces to this: one piece that we will be taking ready to go -- to Vancouver. There will be discussions in Vancouver. That is the point of going. On the basis of those discussions, the President will then make some decisions about what further can be done; and remember that that means fairly quickly, because the two step here is Vancouver-Tokyo. There are only 10 days between them. Now, the point here is that the Russian component of this is very important, particularly as you get more multilateral and more macroeconomic. It becomes more important that there be the Russian policies in place to assure that there is indeed some hope for the stabilization of the Russian economy. It would be premature at this point for us or for anybody in the G-7 or for the IMF to talk in very specific terms about what a western stabilization package would look like for Russia because Russia needs to do a lot more. And President Clinton hopes to hear both from President Yeltsin and Mr. Fyodorov about what those programs will be.

Q I'm just trying to clarify your colleague's remark, that's all.

SENIOR ADMINISTRATION OFFICIAL: Yes, it is FY '92, FY '93 funds for the foreign assistance programs that we will present at Vancouver. Let me say, again, that for future assistance then, the whole point here is to not to simply lay it all on them at Vancouver but to get the views of the Russians to come back, talk to the Congress and then see where we go after that.

Q And is that money, that second piece of --

SENIOR ADMINISTRATION OFFICIAL: Again, I don't want to mislead you. This does not mean that this is an insignificant package at Vancouver itself. And just one further point, I really would not become so focused on the number that you lose sight of the importance of the actual programs themselves and what they are doing.

Q Just to clarify though, the second piece of it, what you're going to present to Yeltsin, seek his reaction to and then bring back to Congress. Will that also include money that is already appropriated or would that include money that you will seek anew from Congress?

SENIOR ADMINISTRATION OFFICIAL: We'll discuss that with the Congress when we get back.

Q So that does not come under the category --

SENIOR ADMINISTRATION OFFICIAL: No, not the same as I was just talking about, no.

Q You've left the misapprehension here that you're dealing with already appropriated funds in this second package that you're talking about.


Q You're going to have to go to Congress and get approval.

SENIOR ADMINISTRATION OFFICIAL: -- in the first package and in the second we will see. There will be discussions.

Q How will what you have described for your new proposals, your new approach, your themes, be different from what George Bush did?

SENIOR ADMINISTRATION OFFICIAL: Most of the programs will be, in fact -- most is fair is it not -- new programs. Some will be based on ideas that the previous administration had had, that we will then perhaps be reshaping slightly, but were not underway and that we will, then, put underway; and some will be an expansion programs that are already underway.

Q What will make this uniquely Clinton's rather than a continuation of American foreign policy, if it will be; or, do you perceive this as a continuation? I suspect --

SENIOR ADMINISTRATION OFFICIAL: We're not doing this, first of all, as part of a competitive exercise with the previous administration. The stakes are much higher than that. But, secondly, I would say that the most important difference -- and this is not just with regard to the previous administration, but to the international community, generally -- is, again, what I said before, that we must do what we say we will do and follow through on our promises. And I think one big difference will be that we really have looked extremely carefully at what can be done and what cannot be done and focusing on the former.

SENIOR ADMINISTRATION OFFICIAL: Andrea, let me just add one thing. Because of the experience of the Bush administration, we've had over a year of experience with this on which we can build. We have learned things from the experience of the past year and a half. There have been two problems, broadly speaking, with the first year of this effort. One is a problem here. And that is the widespread perception, not altogether fair by any means, that the money has not been well spent. And then, there's a problem in Russia, a widespread perception, not altogether fair, that the money has not made much of a difference to real people.

One of the things that we've tried very hard to do in putting together this package is to come up with real programs that will make a real difference to real people.

Q How much -- without giving us the total of your package -- how much is the pool of money that is available now from already appropriated and authorized funds for you to deal with here?

SENIOR ADMINISTRATION OFFICIAL: That's an extremely intelligent question. (Laughter.)

Q Thank you. (Laughter.)

Q How big is it?

Q Just -- the budget number.

Q It's a matter of public record.


Q We know there are about $600 million left in the '92-'93 funds, and --

SENIOR ADMINISTRATION OFFICIAL: The reason that's hard to answer is that --

Q What's the big secret?

SENIOR ADMINISTRATION OFFICIAL: Well, because -- and correct me if I -- I have my fingers crossed and if I get this wrong, then my colleague will tell you what I meant to say -- but the point here is that the funds we may use may not be only funds appropriated specifically for that purpose. And I don't mean that we're going to reprogram a lot of other foreign aid projects or whatever, but I am saying that the American government budget is fungible.

Q I meant to ask you another question. You said that there has to be the right Russian policies. A lot of critics have suggested that one of the reasons, primary reasons, for the problems between Yeltsin and the Congress of People's Deputies is the fact that policies urged on him -- economic policies urged on him by the IMF, the World Bank and the United States have failed and caused a great deal of hardship. To what extent are you going to take that criticism, which comes from Democrats and centrists into account as you design this package and as you go to the IMF and World Bank for --

SENIOR ADMINISTRATION OFFICIAL: Again, a very complicated issue. Some parts of what we will be talking about, both bilaterally and in the multilateral context, depend quite specifically on the kinds of programs that the IMF and others have been talking about, and stabilization generally. Some of them don't. And I can't go in here, obviously, into which fall into which category; but it's not simply a question of saying all of this depends on stabilization measures in Russia, or none of it does. It really depends on which program you're talking about.

Q I'm simply trying to find out whether you intend to push forward on aid, as you said, for the long haul -- whether you can get from Congress the aid that you want if, for example, Yeltsin decides to pull back somewhat on market reform because some of it is too painful.

SENIOR ADMINISTRATION OFFICIAL: Certainly, the success of this depends very much on the Russians proceeding with their reform programs. But, again, the degree to which each program is tied to stabilization measures or other reform measures really depends on that particular program.

SENIOR ADMINISTRATION OFFICIAL: Let me just add one thing. You have correctly identified one of the big problems with Russian reform, and it's one of the paradoxes that reform is taking place in a democracy, however ragged the procedures of that democracy may be.

Too many people in Russia now identify reform with hardship rather than a better life. Now, that, I would say, is principally up to the Russian leaders to deal with, but we can help in some ways. Only slightly violating our joint injunction here to stay away from numbers, we agreed coming in here the only number we were going to use was "7" as in "G-7" -- (laughter) -- but there's one other number. When you look at the package that we are taking to Vancouver with us, you will see that three-quarters -- three-quarters of these programs -- are targeted in the nongovernmental sector; and three-quarters are targeted on partners outside of Moscow. And that means down to the far reaches of that very vast country.

Q Three-quarters of what?

SENIOR ADMINISTRATION OFFICIAL: Three-quarters of the programs that we will be release --

Q That's not three-quarters of the value of the programs, that's three quarters of the programs?

SENIOR ADMINISTRATION OFFICIAL: Three quarters of the dollar value. Don't ask me what the dollar value is.

             Q    Of the second three-quarters out of the first 

three-quarters, which goes to the private sector? (Laughter)

SENIOR ADMINISTRATION OFFICIAL: I obviously made a mistake -- (laughter) -- but I think it did underscore a point.

Q Three quarters of seven? (Laughter.)

Q If you won't tell us what the secret FY '94 number is, tell us at least whether you've got a secret FY '94 number or arranged that you're going to discuss with Yeltsin. Or are you going to tell Yeltsin, we don't know what we're going to be able to get out of our Congress. We're going to send our President out on a grand campaign to convince the American people this is in your interest and watch this space.

SENIOR ADMINISTRATION OFFICIAL: This is truly -- obviously we've been working on ideas, but this truly depends both on the conversations in Vancouver and on the consultations afterwards with the Congress and other members of the G-7 --

Q So, you're going to talk about a range but a very fuzzy range?

SENIOR ADMINISTRATION OFFICIAL: Again, let me emphasize the important point here is the programs not the numbers and, obviously, they're inseparable. But the focus in the first case is on the programs, on what will be helpful and what won't and then you work your way to the numbers.

Q Any specific measures in your new plan to control what the French call financial evaporation of aid?

SENIOR ADMINISTRATION OFFICIAL: I think that issue is going to have to be addressed more at the level of macroeconomic assistance. That is what the international community as a whole will be doing, not what we will be doing preliminarily in Vancouver.

Q outside of Moscow. Can you give us some sense of how many sites you hope to have Americans actually face to face with Russians working in businesses or in privatization or agricultural projects?

SENIOR ADMINISTRATION OFFICIAL: It's a good question and I will try to make sure that it's in the fact sheets that are available on the weekend.

Q Can you describe --

SENIOR ADMINISTRATION OFFICIAL: But because of the focus of the program, the answer is, a great man.

Q You're talking thousands here, or --

SENIOR ADMINISTRATION OFFICIAL: Numbers. It will be spread out all over the Russian Federation.

Q What will you say to Yeltsin when he says, well, I've heard this before, the list of programs -- you say this time we're really serious, we're really going to deliver on these things? Is there going to be some kind of oversight committee, for instance, set up to follow up? I mean, what is going to ensure that these will be delivered any more than any of the previous ones, other than your assessment that they're deliverable? I mean, the previous administration was certain that its were deliverable on also.

SENIOR ADMINISTRATION OFFICIAL: That's as big a concern for us as it is for Yeltsin, and we are discussing mechanisms to make sure that this time we get it right.

SENIOR ADMINISTRATION OFFICIAL: Again, part of the purpose of doing it this way was to show that the package we discuss at Vancouver, that we lay on the table at Vancouver, is obviously doable.

Q To what extent and in what way at this summit will President Clinton deal with Yeltsin on issues like Russian sales to Iran, Bosnia, enforcement, participation in ground operations and those type of issues? Where will that be dealt with, and to what extent?

SENIOR ADMINISTRATION OFFICIAL: Obviously, the main focus is going to be on the economic issues. But we are, in the way we are structuring it, reserving a decent amount of time for a discussion on precisely those issues.

Q The general staff in Moscow has announced that they're stopping their withdrawal from the Baltics. In part, it is an economics-related question, due to their facilities, housing and other -- how much concern does this give you that they're again --say they're stopping the withdrawal; and is there anything in your programs that might deal with this question?

SENIOR ADMINISTRATION OFFICIAL: I think all we can say on that is that obviously we've noted the statements, there have been similar statements in the past; but on the other side of it, they have been making withdrawals. And we certainly expect them to keep their own promise to get the troops out of the Baltic States.

Q And to extent are you doing anything that might help in this program?

SENIOR ADMINISTRATION OFFICIAL: As we shape this, this has been a concern on our minds.

Q Are you going to be building housing for the withdrawing Russian troops --

SENIOR ADMINISTRATION OFFICIAL: I can't get into the specifics of --

Q Is that one of the areas -- the direct, tangible areas?


Q Let me just follow up on one other point. When you're talking about Fiscal '92 and '93 money that's already been appropriated, are you talking about money that has nothing to do with aid to Russia or foreign aid in general, money that's been appropriated for totally unrelated matters that you're now going to reprogram and say this can be used to build housing or whatever in Russia?

SENIOR ADMINISTRATION OFFICIAL: -- talking about money that's appropriated from specifically or money that individual agencies have in their authorizations.

SENIOR ADMINISTRATION OFFICIAL: Yes, that's that the right answer. Did you hear that?

Q have in their authorization -- foreign assistance programs, such as HUD or the Energy Department or --

Q For foreign assistance generally or is this also earmarked?

SENIOR ADMINISTRATION OFFICIAL: No, most of it is not earmarked.

Q So this is just sort of found money.


Q Money agencies have for what?

SENIOR ADMINISTRATION OFFICIAL: For international programs.

Q Strictly for international programs that's never been spent.

SENIOR ADMINISTRATION OFFICIAL: But not necessarily foreign assistance.

Q That's never been spent.

SENIOR ADMINISTRATION OFFICIAL: That's right. That's sort of what I was talking before about these things are all fungible so that within the --

Q What about defense? Any additional Defense Department money --

SENIOR ADMINISTRATION OFFICIAL: There will be some Nunn-Lugar money probably in it.

Q Other than that?


Q You guys keep talking like it's a done deal and the package is finished. Some of us are hearing that the administration is still split on key aspects of the package and that there's blood on the floor. Could you address both parts -- has there been widespread disagreement, and is it done?

SENIOR ADMINISTRATION OFFICIAL: The first package, I'd say, was pretty well done, would you not? And I don't think there was as these things go, a lot of bloodshed. And like that. And then, of course, we're discussing the future also and that is not yet done, as I said, because we want to talk to Yeltsin, consult with the Congress, et cetera.

Q At the outset, your colleague, mentioned arms control. Do you mean the summit has implications for arms control or is there something specific you're talking about besides cleaning up those chemical weapons --

SENIOR ADMINISTRATION OFFICIAL: I'm sure that the two Presidents will also talk about what I believe is their shared desire to see the START II Treaty ratified in the Supreme Soviet and to advance the nonproliferation goals.

Q Will they make a point of that? And if they made a point of that, how do you suppose that would impact on Ukraine?

SENIOR ADMINISTRATION OFFICIAL: I don't know if they'll make a point of that. And if they do make a point of it, we'll see what the impact will be on the Ukraine.

Q Will you have the second package done before Christopher goes to Japan?


Q How much discussion do you expect on strategic arsenals in Vancouver, and what does the President hope to come away from Vancouver with on that subject? For example, will there be discussion of Ukraine's role?

SENIOR ADMINISTRATION OFFICIAL: I'm sure Ukraine will be mentioned but since it's a U.S.-Russian summit it will be focused much more on the issue of nuclear weapons in the Russian Federation.

Q How much discussion do you expect -- you said it's dominated past summits, it's not going to be completely --

SENIOR ADMINISTRATION OFFICIAL: And I also said it's likely not to dominate this one.

Q Can you go a little bit further on Bosnia. Do we now have a cooperation with the Russians on Bosnia in a no-fly zone? Do we still have to work that out? Is that still a subject for further discussion and decision-making by the Russians at Vancouver?

SENIOR ADMINISTRATION OFFICIAL: Well, as you know, at the U.N. Mr. Jurkin has been working quite closely with Reg Bartholomew on these issues. I think that cooperation will continue. And I think there will be, certainly, a discussion of Bosnia. I don't know how long it will be and I can't be certain one way or the other at Vancouver and to try to increase the cooperation.

MS. MYERS: Why don't we take two more questions.

Q Beyond the G-7, beyond the bilateral arrangement, what will the President be prepared to tell Yeltsin about what he can expect from the G-7, both the meeting 10 days later and in mid-July? How do you expect that will go, especially on restructuring?

SENIOR ADMINISTRATION OFFICIAL: I think he will certainly tell President Yeltsin that he, President Clinton, intends to continue doing what he's already doing; and that is, taking the initiative to both intensify and accelerate the G-7's deliberations on the whole question of economic engagement, not just with Russia, by the way, but with the new Independent States as a whole. I'm sure he will also stress the important role that other countries are playing in this and particularly Japan as the chair of the G-7.

But just to reiterate something that I said earlier, this will have to be a two-way conversation between the two men because in the final analysis if there is to be any hope at all for a successful multilateral macroeconomic stabilization package this year, as opposed to the one which everyone remembers as a lesson in how not to do it last year, then they are going to have to be very important reforms, not only decreed but also implemented in Russia itself.

SENIOR ADMINISTRATION OFFICIAL: And let's remember this is a process that's already going on. Fyodorov went to the meeting in Hong Kong to discuss all of this. There are negotiations going on, as you know, right now on that et cetera, so we're not starting de novo in Vancouver.

Q Is ruble stabilization impossible at this point impossible at this point, because of the runaway inflation?

SENIOR ADMINISTRATION OFFICIAL: I think that depends on the policies that the Russian government follows and, specifically, the central bank. And I don't think that is --

Q by parliament which is -- wants the ruble printed at a runaway pace. Is there anything that Yeltsin can do about it?

SENIOR ADMINISTRATION OFFICIAL: I don't think that's an immutable fact of life.

Q Sir, it is fair to say the package which was announced exactly a year ago on April the 1st, '92, should -- this $24 billion packages a thing of the past -- should be ignored?

SENIOR ADMINISTRATION OFFICIAL: Actually, quite a good bit of it has been expended, as you know, and other parts of it are still on the table and would be addressed at the G-7.

END4:11 P.M. EST