One can be a bit cynical: perhaps President Bush's new willingness to extend economic aid to the Soviet Union is motivated by the desire to keep Gorbachev in power. And Bush needs Gorbachev's endorsement of his policy vis-a`-vis Saddam Hussein.
Nonetheless, Bush decided to make a significant break with the past when he provided emergency food aid to the Soviet Union, partially lifted Jackson-Vanik trade restrictions and initiated a formal, if limited, relationship for the Soviets with the World Bank and the International Monetary Fund that ensures technical, but not monetary, assistance.
"It's a remarkable shift," says John D. Sewell, president of the Overseas Development Council. ODC, a research group, has long urged a three- to five-year "confidence-building" interim period as a prelude to full membership for the Soviet Union in the two Bretton Woods institutions.
By proposing a "special-associate status" that would evolve and grow as the Soviet Union alters its old "command economy," Bush appears to have adopted something quite like the ODC formula. Yet as recently as the Houston economic summit in July, administration officials resisted economic aid and labeled as "premature" closer ties for the Soviets with the IMF and the World Bank.
In the intervening period, two dramatic events have been modulating the hard-nosed attitude at Houston: In addition to the invasion of Kuwait that changed the order of world priorities, there has been a near-disintegration of the Soviet economy.
Scheduled to be released momentarily is an IMF study of the Soviet Union commissioned by the Houston summit. Leaked in Moscow, it predicts inflation running up another 50 percent in the coming year, a further slump in production and as much as a tripling of unemployment. The report's bottom line is twofold: First, only Draconian measures -- much tougher than Gorbachev appears to favor -- will work. And second, the present study has only scratched the surface of what needs to be explored.
Economic chaos among the Soviet states is so great that few experts will predict the union can hold together. The slide is so steep it has seriously affected prospects in former satellites still heavily dependent on the Soviet Union as an economic partner.
In providing the Soviet Union with "special-associate status," says Assistant Secretary of the Treasury Charles Dallara, Bush was reacting not only to the urgency of helping Gorbachev but to the needs of Eastern Europe and indirectly to other members of the global economic community.
Eastern Europe would be a big beneficiary of development of the Soviet energy sector -- presumably one of the first goals of assistance via the IMF and the World Bank. Other reforms would also enable the Soviets to build consumer demand -- and the ability to pay -- for Eastern European products.
To take advantage of this new opening to the West, Sewell says that Gorbachev will have to make "a wrenching turn": The U.S.S.R. has been locked into a non-market structure since 1917 -- even longer than the satellite countries, which were lost to communism in 1945. And the political ability of Soviet leaders to manage that transition is open to question. In Sewell's mind, that justifies the Bush administration position that full membership in the IMF and World Bank is still premature.
One advocate of full membership now is C. Fred Bergsten of the Institute for International Economics. As he says, other nations have been accepted into the IMF and World Bank before they adopted market economies. He also challenges the World Bank assertion that the Soviet Union couldn't put up the requisite capital, noting that the Soviet Union has plenty of gold.
In reality, the major obstacle to full Soviet membership is that to provide a "quota," or share in the two institutions' capital and power structure, some other country or countries would have to take an equivalent "hit." And no country likes to see its role diminished, especially since IMF "quotas" determine how much a country can borrow in an emergency.
Bergsten suggests that it's time, anyway, for a restructuring of the IMF/World Bank pecking orders, in which the United States' 18 percent "quotas" could be reduced slightly while retaining its veto power, and in which Western Europe, as it approaches economic consolidation, appears to be overrepresented with an aggregate of 25 percent.
Things may move in the direction of full membership, but certainly not until the Soviet Union's political situation stabilizes enough to reduce fears that the West may have to deal with 15 republics, rather than a single federation.
In the interim, the Soviet Union will get help, real and symbolic: once the United States was assured that it had little to fear from the Soviet Union in a military sense, it became willing to extend the same kind of aid it offers to other Third World -- or in Sewell's more diplomatic phrase, "transforming" -- nations.