By proposing an unprecedented "special associate status" for the Soviet Union with the World Bank and International Monetary Fund, President Bush hopes to help end that country's isolation from the free world economy, a senior Treasury official said yesterday.
The official, who asked not to be identified, said the special status, which he termed "a new animal," is not a full membership in the two multinational financial institutions, but will help facilitate the transmission of technical assistance from them to the Soviet Union as it tries to move from a centrally planned economy to one with freer markets.
"This can be an evolving relationship, not something set in stone," the official added. "The point I would underscore is that it has to be an evolutionary relationship, because the Soviets' reform effort will be a factor."
The World Bank's primary role is making development loans to Third World countries, while the International Monetary Fund (IMF) oversees the world financial system and provides emergency financial and technical assistance to countries in economic distress.
Most non-communist nations and several Eastern European countries are members of both institutions, which are based in Washington.
As part of the package of assistance to the Soviet Union, including emergency food aid, announced by Bush on Wednesday, the president said the IMF and World Bank would provide technical help -- but not financial aid -- to the Soviets, utilizing a specially devised "associate status."
Charles H. Dallara, assistant Treasury secretary for international affairs, said in an interview that possible areas for discussion between experts from the institutions and Soviet authorities include how to deal with budget deficits, establish free-market prices, open up the trading system and develop the tools of monetary policy that are employed by central banks in the West.
But IMF officials involved in a study of the Soviet economy commissioned by the seven leaders of the industrialized countries at the Houston economic summit in July said they believe they first need to help the Soviets establish a sound system for keeping statistics.
The essence of the "special associate status" idea is to provide a framework to allow Moscow to tap the combined expertise of the two institutions, instead of seeking assistance on an ad hoc basis or waiting until the Soviet Union could qualify to become a member.
Although Foreign Minister Eduard Shevardnadze told World Bank President Barber Conable last month in Moscow that "in principle" the Soviet Union had decided to apply for membership in both the bank and the IMF, Treasury and World Bank officials emphasized yesterday that the Soviet Union is a long way from being able to qualify as a member -- lacking, among other things, the capital required to join. Only members are eligible for loans.
Treasury officials said the proposal, already informally approved by the Soviet Union, is expected to be ratified shortly by the boards of directors of the IMF and World Bank, and will be discussed as well at a meeting here next month of the finance ministers and central bankers of the major industrialized nations.
Under the Bush proposal, the two institutions would establish an office or offices in Moscow. Some Soviet personnel could be brought to Washington for training.
The IMF study, due to be released before Christmas, has uncovered an enormous gap in the West's knowledge of the Soviet economy and its problems.
"We only just now know some of the questions we should have been asking six months ago," said one official working on the study.