Rescue Mission

By NANCY GIBBS

An open hand, outstretched to a fallen adversary, may be the surest sign that a battle is truly over. Last week brought just such a sign as the Soviet government issued a dignified -- but desperate -- request for help, and an American President responded solicitously. George Bush's decision to help sustain the Soviet Union through the hard winter ahead reflected as much politics as pity, but what made it easy was that both sides had so much to gain.

For the first time in the postwar era, the Soviet government now puts its needs -- and its fears -- ahead of its pride. During three days of talks in Houston and Washington, Soviet Foreign Minister Eduard Shevardnadze admitted that the Soviet Union required food, medicine and loans to survive a winter of shortages unparalleled since the end of World War II. In response, President Bush overturned 16 years of trade policy and agreed to back loans worth up to $1 billion. He also offered emergency medical aid and proposed that the International Monetary Fund and World Bank provide experts to reinvent the Soviet economy before what is left of it collapses entirely.

The President's action occurred in a climate of unprecedented warmth between the two countries. Gone are the days when high-level U.S. and Soviet officials met twice a year; last week's visit in Houston was the 23rd meeting between Secretary of State James Baker and Shevardnadze, who managed in their whirlwind consultations to cover everything from Angola and Afghanistan to arms control and the Persian Gulf crisis. During the final Rose Garden ceremony on an unseasonably warm December afternoon, President Bush announced that he would travel to Moscow in mid-February for a fourth summit with Gorbachev, with the hope of signing a START treaty reducing the superpowers' arsenals of long-range nuclear weapons.

With so much progress on so many fronts, it was easy to see the offer of aid as a reward for good behavior. Both Baker and Bush were at pains to deny any quid pro quo, especially for Soviet cooperation in the gulf crisis. "None of the measures today are in any sense a payback," Baker insisted, thereby fueling suspicion in the act of disputing it. There was no denying that Soviet cooperation has been essential in keeping the pressure on Iraq -- by voting for sanctions, supporting the United Nations resolution permitting the use of force, and last week delaying a U.N. vote endorsing a Middle East peace conference, which the U.S. opposes.

To be sure, the Soviet-American rapprochement began long before the invasion of Kuwait. "Obviously, our ability to cooperate in the gulf is part of an overall understanding with the Soviets," says a top U.S. official. "If we weren't getting cooperation, it would have a bearing on a whole range of issues." By drawing back the Iron Curtain without bloodshed, undertaking democratic reform at home and supporting a number of U.S. policies abroad, Gorbachev has created a sort of personality cult in Western diplomatic circles. American officials claim to support policies, not politicians, but in private there is widespread fear that current Soviet policies may be inextricably linked to the current embattled Soviet leader.

The Administration is in a delicate position as it tries to bolster Gorbachev's standing at the very moment when the Soviet President seems to be retreating from democratic reform. "I want perestroika to succeed," Bush declared flatly. But Shevardnadze acknowledged a "certain instability" in Soviet society, igniting fears that a bad winter could prompt a retreat to more authoritarian tactics. Gorbachev recently appointed hard-liner Boris Pugo as Interior Minister and enlisted the KGB to crack down on black marketeers, whom some in the West view as the Soviet Union's fledgling entrepreneurs.

In Houston, Baker warned Shevardnadze that resorting to repression could damage superpower relations. At the same time critics charge that propping up Gorbachev's failing economy could retard rather than promote reform, especially since the aid is being delivered to central authorities instead of the individual republics. Gorbachev has come under fire for balking at truly radical market solutions, settling for half measures. Critics say he is undermining his commitment to private enterprise by trying to root out the thug-infested black market when he should be encouraging its entrepreneurial spirit.

Bush also had his own domestic economic agenda. Other major grain producers, from Canada to Australia, have already eased the Soviets' access to credit; failure to follow suit, U.S. farmers argued, could shut them out of the huge Soviet market. But farm- belt lawmakers complained that the credit guarantees did not go far enough: Senate minority leader Robert Dole of Kansas had hoped for at least $3 billion. Trade experts note that because of Moscow's shortage of hard currency reserves, the U.S.S.R. needed the credits simply to match its normal level of U.S. imports.

Amid all the grousing, hope was rising that a new, historic era of trade had begun -- with vast opportunities for U.S. exporters. To open that door, however, Bush had to waive the 1974 Jackson-Vanik amendment, which prohibited normal trade relations until Moscow allowed free emigration for its citizens. The Soviet parliament still has not passed a free-emigration law. But in the past year alone, authorities have permitted the departure of more than 150,000 citizens, mostly Jews headed for Israel, and it is likely that a satisfactory emigration law will be enacted next year. Once the law passes, the Bush Administration is expected to grant the Soviets most-favored-nation status, which would vastly reduce tariffs on goods exported to the U.S. "The Soviet Union has tremendous potential resources and capabilities," Baker said. "The right market reform can tap this in a manner to give that country a vibrant economy."

Such visions, however, depend both on political stability and a complete overhaul of the Soviet system. With that in mind, Bush proposed that the Soviet Union be granted "special association" status in the IMF and the World Bank. Those organizations would help integrate the U.S.S.R. into the world economy by dispatching experts on the banking system, stock markets, currency exchange, transportation and energy. Eventually the Soviets could be eligible for full membership in the international bodies.

The U.S. initiative was applauded overseas, where nearly two dozen other countries and relief organizations have already promised help, including $1 billion in credits and outright gifts and $1.4 billion in technical assistance from the European Community. So far, the Soviet Union has received more than 2,500 tons of goods, mostly food, which are being distributed to children's homes, pensioners, invalids and low-income families; all aid is under close guard to prevent pilfering.

Among the most generous rescue efforts are those from Germany. Chancellor Helmut Kohl is eager both to reward Gorbachev's support for unification and to promote stability as a way of keeping hordes of hungry Russians from heading west. The Germans have promised nearly $10 billion in aid, as well as enough meat, milk and medicine for 10 million people for a month. With a sense of irony and shame, war veterans in Leningrad find themselves awaiting CARE packages from Germany nearly 50 years after the city's population was virtually starved in the siege. Many believe Leningrad is suffering severe shortages these days at least partly because hard-line Communists are trying to undermine the democratically elected, reform-minded city council.

For outsiders seeking to help, the greatest challenge is not supply but distribution. The old centrally controlled system has crumbled, but no private market system has yet grown up in its place. An economic civil war rages between the republics and central state purchasing agents. The decrepit rail and road transportation system is grossly inefficient. In light of such fundamental weaknesses, critics of U.S. aid -- and some cynical Soviet citizens -- wonder if the relief will ever reach those who need it most.

Wary of pouring money down a sinkhole, Bush promised to send over experts in food distribution to prevent the Western supplies from rotting in warehouses alongside this year's Soviet harvest. The goal is to ease the panic of Soviet shoppers, who daily confront empty shelves in government stores. Experts believe hoarding, born of fear, is exacerbating the shortages -- and that cannot be solved by credits alone. "If the problem isn't with how much they can grow, the solution isn't going to be in how much more they can buy abroad," notes Richard Feltes, vice president of Chicago-based Refco, one of the world's largest commodities brokers.

Though there is talk of famine and reports of ever longer lines, most / experts agree that while Soviets may suffer, they will not starve this winter. State stores in Moscow and Leningrad are empty of bread, soap, matches, meat. Yet private shops are abundantly stocked and now account for as much as one- half the Soviet food supply, though they charge up to ten times state prices. With the exception of desperately poor areas like Uzbekistan, most regions are managing to feed their people. But the cost is high: nearly everyone is reduced to scavenging and hoarding, rather than working and rebuilding.

Though the aid package made the biggest headlines last week, a whole menu of regional issues was on the table in Washington. In an effort to end Angola's 15-year civil war, Shevardnadze met for the first time with Jonas Savimbi, leader of the U.S.- backed guerrilla forces, while Baker sat down with the Soviet-backed government's Foreign Minister, Pedro de Castro Van-Dunem. Shevardnadze also consulted with Israeli Prime Minister Yitzhak Shamir on the emigration of Soviet Jews and resumption of diplomatic relations, which Moscow severed after the 1967 Arab-Israeli war.

There were still some sticking points reminiscent of the old days of superpower stalemate. As Richard Burt, chief U.S. START negotiator, put it, "Arms control will not take care of itself." Both sides are eager to sign a START treaty, which would cut strategic nuclear arsenals one-third. But still outstanding were a number of technical issues, most involving inspection and verification. More seriously, there have been reports that the Soviets have simply removed weapons from Europe rather than destroying them, which violates the spirit if not the letter of the just signed Conventional Forces in Europe (CFE) treaty. Such fiddling with the treaty terms might delay ratification by the Senate and make lawmakers more suspicious of the terms of the START treaty.

But it was hard to imagine that the remaining conflicts could not be resolved. Diplomats savored the chance to construct a new international order, piece by piece, that would take crises in stride. There are risks, to be sure, in euphoria, but there is real cause for hope in the results of these meetings. Shevardnadze put it simply: "We are indeed in a very new phase of our relations." Underscoring the growing cordiality between the once hostile superpowers, President Bush offered the Soviet Foreign Minister a personal tour of his home to show off his Christmas decorations.

With reporting by James Carney/Moscow, William McWhirter/Chicago and Christopher Ogden/Washington