THE WHITE HOUSE                    Office of the Press Secretary                  (Vancouver, British Columbia)  ______________________________________________________________                          BACKGROUND BRIEFING                                BY                  SENIOR ADMINISTRATION OFFICIALS                             April 4, 1993 	                                Canada Place                   Vancouver, British Columbia     9:40 A.M. PST 	      	      	     Folks, we're about to start the BACKGROUND BRIEFING  on the aid package.  	     SENIOR ADMINISTRATION OFFICIAL:  Good morning.  The  President -- President Clinton and President Yeltsin agreed  yesterday on a series of American initiatives to support economic  and political reform in Russia, and it's valued at $1.6 billion.    	     Before taking your questions and running through the  basic outlines of this package, I want to make a few points.   First, this is the maximum that the Clinton administration can do  with available funds to support Russian reform.  All of the funds  have been allocated and appropriated by the Congress.  There is  no need for the administration to go back to the Congress to fund  any of these programs.  All our Fiscal Year '93 funds currently  are available, so in effect, all of these programs can begin  tomorrow. 	      	     The second point is that this package is designed to  support Russian reformers.  All of the initiatives in the package  are directed at reformers and for their benefit, and all have  been worked out with prior consultation with the Russian  government. 	      	     Third, the President is determined that we will  deliver on these commitments this year.  The package is designed  to maximize our ability to support reform.  In designing it we  wanted to avoid making commitments that we could not meet, and we  feel very confident that we can meet all of these commitments in  front of you. 	      	     Fourth, I'd like to note the special importance of  trade and investment.  I think it's fair to say that Russia's  capital and technology needs throughout the next decade extend  well into the hundreds of billions of dollars.  No collection of  governments can meet those needs; only the private sector can do  so.  And so the President and President Yeltsin agreed to make  trade and investment a major priority in the relationship.   	      	     They also agreed that there would be a new joint  commission on energy and space formed, headed on the U.S. side by  Vice President Gore; on the Russian side by Prime Minister  Chernomyrdin.  And the goal of this effort is to break through  the barriers to trade and investment on both sides and to promote  a vastly expanded relationship. 	      	     If it would be helpful I'd be prepared to run down  the first page, which is a summary of U.S. assistance, and just  give you some general background on what these programs are.   I'll do it quickly and then I'll be glad to take questions. 	      	     The first group of initiatives are humanitarian food  and medical assistance.  This is part of our effort which has  been underway for several years to provide basic humanitarian  grant food assistance so that the Russian government can assure  there's at least a minimal amount of bread on the shelves in the  major cities.  That's $194 million in grant -- that is from Food  for Progress, the grant portion of Food for Progress.  We'll also  be continuing our grant assistance in medicines and  pharmaceutical supplies, and that's $30 million. 	      	     The second item is concessional food sales.  As you  know, the United States has had a long-term grain relationship  with Russia.  It's important to us and it's important to Russia  that we continue that relationship.  The President has chosen the  Food for Progress program which is a concessional loan program.   The value over the next seven months is $700 million.  These are  concessional terms.  The exact terms have not been worked out,  but I think it's fair to say there will be a grace period on  principal of six or seven years, and concessional rates  thereafter for the life of the deal. 	      	     The third program is a collection of private sector  support.  We think this is one of the most important things we're  going to do.  Privatization and the creation of small businesses  is the number one priority of the reform government in Moscow.   And so the President has decided to create a Russian-American  enterprise fund capitalized this year at $50 million.  And the  goal of this fund is to make direct loans to small businesses in  Russia, to take equity positions in those businesses.   	      	     The President has also decided to create a  privatization fund which would work directly with the Russian  government in its priority objective of trying to convert state  enterprises from a state-owned basis to a private basis.  He has  also agreed -- the President has also agreed to establish a  Eurasia foundation.  This would be a private foundation led by  prominent Americans to fund democratization projects in Russia. 	      	     The fourth grouping you see there in the summary  page is democratization itself.  I think it's fair to say that  this administration has given a new impetus to the goal of  pursuing democratization in Russia.  You see that we have a total  of $48 million in programs, various programs.  The detailed  tables give an indication of some of the programs that we're  launching.   	      	     The President is also calling for the development of  a democracy corps, which will be an overarching umbrella group to  try to incorporate all of the disparate private and public  efforts now underway from the United States to support reform in  Russia. 	      	     The fifth program you see is Russian office of  resettlement.  This is a new initiative created and  conceptualized by this administration.  This is a demonstration  project.  What we'd like to do is work with the Russian military  to help resettle Russian officers returning from the Baltic  states and other parts of the former Soviet Union.  We want to  make sure that we work out the best way to do that, whether it's  with Russian labor and Russian materials or using prefab American  construction.  And so we've decided to fund on a demonstration  basis the construction of 450 housing units.  We'll be working  very closely with the Russian military on this.  And I would say  that we have a long-term commitment to this project.   	      	     The sixth area is energy in the environment.  They  are two issues that the President feels strongly about.  Our  initial efforts will be feasibility studies to look into the  possibility of enhancing their energy production, both oil and  gas; and equally important trying to cut down on the leakages in  the oil and gas pipeline systems, which cause so much  environmental damage. 	      	     I've talked a little bit about trade and investment,  about the new group being created that the Vice President will  chair on our side.  Secretary Ron Brown will also be cochairing  with Deputy Prime Minister Shohkin, a business development  committee, which will work in all other sectors of the economy,  to break down the many barriers that currently exist and impede  trade and investment.  We are also going to appoint a full-time  investment ombudsman in the American government to work on this  problem full-time.   	      	     And the point I'd like to make here is, trade and  investment in the 1990s is every bit as important, to draw an  analogy, as arms reductions was in the '70s and '80s.  And we  just thought that in looking at this we needed to make a  commitment within our own government to have people work on it --  senior people on a full-time basis, because it is terribly  important. 	      	     You'll notice that the United States is going to  support Russia's membership in the GATT.  Russia has had observer  status.  Russia has requested our support and, in fact, requested  our advice in becoming a member of the GATT.  We think that the  long-term goal of drawing Russia into the global economy is  paramount, a very important goal.  And that is why we are  supporting the membership in the GATT.  We are also supporting  their access to GSP, the Generalized System of Preferences.   	      	     You'll note that Ex-Im has extended $82 million in  credit for a caterpillar deal in Siberia, that OPIC has extended  $150 million in credits and loan guarantees for a Conoco oil  project.  I'd like to emphasize that we are very close to an  agreement between Russia and the United States for a $2-billion  framework facility through the Ex-Im Bank that would finance  Russian purchases of American oil and gas equipment and services.  We think this is a very important development.  We think we'll  get there by April 14th, which is the opening day of the Tokyo  conference, the G-7 conference. 	      	     Before I take any further questions, I'd like to  defer to my colleague, who will review the security assistance  objectives with you. 	      	     SENIOR ADMINISTRATION OFFICIAL:  Our major  unfinished agenda with the Russians and with their counterparts  in Ukraine, Kazakhstan and Belarus is in the area of the safe and  secure dismantlement of the nuclear arsenals on their territory  under the terms of the START I and START II agreements.    Recently we completed in Moscow three, I think, very important  agreements that devote a significant chunk of Nunn-Lugar funding  to three important programs.  The first is the program of $130  million for the strategic nuclear delivery vehicle dismantlement  program.  That is for submarines, for ICBM dismantlement and for  bomber dismantlement -- $130 million. 	      	     The second is a $75 million tranche of funding for  the construction of a facility to store nuclear materials removed  from the warheads as they are dismantled.  This will essentially  contribute to the overall design and the early phases of the  construction of that storage facility.   	      	     And finally, a $10-million tranche of money to help  in the establishment of a monitoring system for the nuclear  materials as they are withdrawn from the weapons system.  So we  add that $215-million total to the extant Nunn-Lugar assistance  which has been flowing -- about $150 million for some overall  safety improvements for various kinds of equipment and safety  measures that we have been working out with the Russians over the  last couple of years.   	      	     So this is an area where we will be going a lot more  work with not only the Russians but with the Ukrainians, Kazhaks,  and Belarussians.  Belarus, for example, has just, in the last  couple of weeks, received up to $65 million in FY'93 funds for  safety, security and dismantlement programs on Belarussian  territory.  And this was in the wake of their ratification of  START I, an agreement to accede to NPT.  	      	     So we are working very hard with all the parties to  the Lisbon protocols, and will continue to work very hard with  them.  And I look upon these three recent agreements with Russia  as a very important step in that process. 	      	     Q	  The OPIC funds to -- is that for the field in  Kazhakstan -- and Conoco already signed this deal with  Kazhakstan.  Why do you feel now it is necessary -- if it's the  same one, why do you feel it's necessary? 	      	     SENIOR ADMINISTRATION OFFICIAL:  It's not the same  deal.  Chevron signed a deal with Kazhakstan, the Tenges oil  field.  This is a new investment project.  It's a polar lights  oil development and renovation project, and it's being announced  today.  So it's completely new. 	      	     Q	  Can you tell us more about what's involved? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Yes.  Conoco, like  other American oil companies has been searching for ways to do  two things.  One, to prospect for new oil in Siberia, west  Siberia; and two, to try to get into the business of renovating  oil wells and renovating pipelines, both oil and gas, in Russia.   The objective here, obviously, is to take advantage of the  natural resources in Russia, increase energy production, which  will, in turn, increase hard currency revenues, which is what  Russia needs. 	      	     So we think this deal is very, very good development  for Russia.  The Russians do as well, and it's good for an  American company.  And the American government has played a  leading role in pulling this together through the credit facility  in OPIC and through the loan guarantee. 	      	     Q	  So it's to search and also to renovate fields  that are already there? 	      	     SENIOR ADMINISTRATION OFFICIAL:  That's right. 	      	     Q	  On that point, should other American companies  expect to get administration support for such deals, or should  they now go to the Ex-Im and try to get the money out of the $2  billion? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, as you know,  Ex-Im is part of the U.S. government and various parts of the  U.S. government have been pushing, including the State Department  and the White House for this deal to be consummated.  And we  think it will.  And if we arrive at this agreement by April 14th,  there will be $2 billion in financing available for American  companies to sell their equipment and sell their services. 	      	     Q	  That should take up all of the rest of the  deals and their won't be -- and their will or there won't be  support for OPIC sort of deals such as this Conoco? 	      	     SENIOR ADMINISTRATION OFFICIAL:  There's a  tremendous amount of interest on the part of American oil and gas  companies to invest in Russia.  We think that the Ex-Im oil and  gas facility, the $2-billion facility, once it is concluded, will  soak up a lot of that interest.  But I think the interest may  even extend beyond that.  And if so, the government will respond. 	      	     Q	  What's the current year budget costs of that  $2-billion agreement should it go forward?  And is there any  current year budget costs -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  I'll have to refer  you to Ex-Im for that.  I don't know the details of that. 	      	     Q	  The concessional food sales -- is there any  current year costs to that, or is it delayed until the years in  which the payments are due? 	      	     SENIOR ADMINISTRATION OFFICIAL:  The concessional  food sales are from Food for Progress, which is a USDA program.   USDA has the funds, we don't need to go back to the Congress to  expend those funds.  There will be a hit in the budget.  I'd  refer you to USDA and OMB for the details on that. 	      	     Q	  Can you talk about the Democracy Corps? 	      	     Q	     and the private sector -- how many folks are  going to be involved in that? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Why don't I start  with the Democracy Corps first.  I think the administration felt  coming into office that there were literally thousands of  organization, private organizations in the United States that in  one way or another were working at the goal of trying to achieve  democratization in Russia, helping on a farmer-to-farmer basis.   And there were literally 10 or 15 U.S. government agencies that  had a variety of programs in this area.  And so the  administration felt -- the President felt it was important to try  to draw all of these initiatives together under one group to give  some coherence to the efforts and to give some impetus to the  efforts.  And so this is a presidential initiative. 	      	     It will be headed by Ambassador Tom Simons who will  soon take up his duties as the coordinator for U.S. assistance in  the former Soviet Union.  And we're very hopeful that we might  use this Democracy Corps not only to draw upon the resources of  our own government, but the resources of the American private  sector and schools and communities across the nation. 	      	     Q	     any kind of commitment yet, any kind of word  yet on FY'94, and any new money that needs to be appropriated  besides the $300 million the President talked about? 	      	     SENIOR ADMINISTRATION OFFICIAL:  The administration  is requesting additional funds in FY'94 of $700 million.  What  the President has done this weekend is to consult really  intensively yesterday with President Yeltsin about additional  measures the United States could take in some of these areas to  support reform.  He'll be consulting with the Congress.  When he  returns to Washington, he'll be consulting also with the other  ally governments, and we'll make a decision at that time. 	      	     Q	  Two questions about the $700 billion  agricultural money.  First of all, I thought it was the sort of  consensus that what Russia did not need was more loans for food.   So why did you decide to do it that way?  Secondly, could you  explain -- agriculture has been stopped from making further loans  for food because of Russia's inability to pay.  How does this fit  into that situation? 	      	     SENIOR ADMINISTRATION OFFICIAL:  As you know, the  United States for a long time has been a major supplier of grains  and food commodities, agricultural products to Russia.  I think  between 1991 and '92 we had extended -- a little bit of history  here -- about $5.5 billion in credits, credit guarantees, through  the Commodity Credit Corporation.  That was the principal vehicle  to ensure the sale of American grain products.  On December 1 of  last year, '92, the Russian government stopped its payments on  that program.  They are now in arrears to us on that program, and  therefore, by law, the United States cannot continue that  program.  And so the President, working with Secretary Espy and  other officials in the Cabinet, looked for other ways that we  could promote American grain sales.   	      	     And I think we have two ways to do that.  We've  announced today $194 million in grant food assistance through the  Food for Progress program.  But we do not have sufficient  authority to spend $700 million in grant food, and so we looked  for a concessional loan program.   	      	     I think everybody agrees that Russia -- that a  short-term loan program for Russia would not make sense now, but  a long-term concessional loan program would.  And that is what  this program is.  It will provide, once the final details are  worked out, for a six to seven-year grace period on payments of  principal.  And then from years seven through 15, which is the  life of the deal, it will provide for concessional rates of  interest -- generally around three to four percent.  And so we  believe and the Russian government believes this is a good deal  for them because it will avoid the imperative of early payments  and put them into the out years, but it will also continue this  very important grain relationship, which is important for them,  and it's important for the American farm community. 	      	     Q	  I gather from what you say that this could make  it explicit -- the Russians' failure to pay the interest on ECC  loan does not in any way affect this kind of loan going through,  is that right?  	      	     SENIOR ADMINISTRATION OFFICIAL:  Let me be explicit  about that.  We are prevented under the law to from continuing   the Commodity Credit Corporation short-term credit program  because of Russia's arrearages to the United States.  All of you  know about those arrearages.  They total about, I think, around  $640 million.  USDA can give you an exact figure.  So having  taken that into consideration and wanting to preserve American  market share and a long-term grain relationship, wanting to  respond to a specific request from the Russian government for  major food assistance, knowing that we couldn't take it from the  grant programs because we don't have sufficient authority there,  we looked at Food for Progress, which is a program we've used to  great effect in other parts of the world.  And we consulted with  the Russian government and arrived at this solution.   	      	     I think the Russians are pleased because it provides  them with the food, but also gives them a little bit of relief on  the short-term payments. 	      	     Q	  Where do those funds actually come from? 	      	     SENIOR ADMINISTRATION OFFICIAL:  They come from the  Food for Progress program, which is a program under USDA's  authority.  USDA has the authority to spend these funds.  We do  not need to go back to the Congress for these funds.  And I want  to make that general point again:  Everything in this package,  the $1.6 billion package, comprises funds that have already been  allocated and appropriated by the Congress.  The administration  can begin to spend these monies tomorrow.  And it's very  important in our eyes that we expend all the funds this year,  that we meet these commitments.  And we are confident we'll be  able to do so. 	      	     Q	  How did you arrive at the figure of $700  million -- does that max out that program, or did you actually  have a range from 0 to -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  There's a reason  for it.  The reason was that the Russian government told us  that's about the amount of grain that they needed between now and  harvest time.  And so the idea is that we would begin the  shipments probably $100 million per month from now until the  harvest in the autumn, at which time Russia won't require the  same level of food imports from the West. 	      	     Q	  I would imagine there's going to be some  considerable envy and jealousy on the part of some of the other  republics because of the size and the scope of this with Russia.   Have you given any consideration to advancing negotiations for  the same kinds of projects with the Ukraine, with Georgia , with  some of the other republics? 	      	     SENIOR ADMINISTRATION OFFICIAL: Yes, we're very  conscience of the fact that we also have an interest in extending  American support to the 11 other countries of the former Soviet  Union.  We have told ourselves, and we have planned that in the  area of technical assistance, the grant technical assistance that  you see, roughly 50 percent of the funding will go to Russia and  roughly 50 percent to the other countries.  	      	     In the area of food sales, we have been active with  Ukraine, in grant food assistance with Georgia and Armenia.  We  will continue that.  And I think it's fair to say that after this  summit we will go back and look at all of our programs with the  other countries to ensure that they are adequate and they are  productive and they're hard-hitting. 	      	     Q	  Has anything happened at the summit to lead  American energy companies and other companies to believe that  Russia is going to be more user-friendly toward them in terms of  taxing, legalities, bureaucracy? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, one of our  primary objectives coming into this summit was to highlight,  not  only the economic agenda, but also trade and investment.  And I'd  like to refer to the point I made at the beginning.  We're  convinced in talking about this problem -- the problem of how to  support Russia long-term -- we're convinced that no collection of  Western governments have the financial resources over the next  decade to fuel the continuation of reform, that only the private  sector can do that.   	      	     We look at our own society and we see tremendous  capability in resources in the oil and gas sector.  It is a very  good match with what the Russians need now, which is financial  investment in the existing oil and gas wells and pipeline and new  technology and new capital to finance new production.   	      	     That's what the Russian government has told us it  wants to do, and so that's why we have made such a major emphasis  on it.  That's why trade and investment was a prominent issue on  the first day of these talks, and in fact, figured prominently  last night in the meeting between President Yeltsin and President  Clinton.  And we're hoping that together we might send a strong  signal to the American business community that we support their  efforts to invest in Russia, that the United States, through Ex- Im and OPEC and the Department of Commerce, will be there to  support them. 	      	     Q	  My question is, is Yeltsin in any position to  deliver on making Russia a more -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  We think he is.  I  would note that President Yeltsin's Prime Minister, Mr.  Chernomyrdin, worked for 30 years in the Russian oil and gas  sector.  He will now chair a high-level commission with the Vice  President, Vice President Gore, to try to break through the  barriers that currently exist to Western investment in the oil  and gas sector.  We believe we have a commitment to make that  committee an important committee.  And we're looking forward to  the work. 	      	     Q	  What type of mechanism is already in place to  administer the private sector portion of the program?  And will  the U.S. be directly involved in the tail end of distribution of  the actual funds or is the money simply turned over to the  Russian government for distribution at their will? 	     	     	     SENIOR ADMINISTRATION OFFICIAL:  Are you talking  about the variety of programs listed here?  It depends on the  program itself.  In most cases, though, we are either working  through American PBOs or American government agencies to ensure  that the money obviously is well spent, that the money gets to  the intended source.  That's an obligation we have to the  Congress to ensure the money is well spent and that we can  account for the money.  We have done that in the last couple of  months intensively and we will continue to do it for each of  these programs. 	      	     But they are all quite different.  For instance, in  the area of grant food and medical assistance, for grant food it  is carried out through USDA and USDA accounts for the delivery of  the food.  For grant medical assistance, we've been working  through Project Hope which is a private organization.  For the  housing -- for instance, the resettlement of Russian officers,  we'll be working with a group of American PBOs.  On some of the  democratization projects, we're working directly with Russian  private individuals and private foundations.  We're working with  journalists in Russia on a media project that you may have  noticed. 	      	     So we literally have here 30 to 40 different  activities under all these rubrics and they're all going to be  carried out in slightly different ways.  Some directly with the  Russian government, some with Russian citizens. 	      	     Q	  The Jackson-Vanik restrictions that remain and  on the COCOM restrictions that remain, can you tell us what the  President has to do on that? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, as George  noted yesterday, President Yeltsin raised these as irritants in  the relationship.  The President has noted that.  I think it's  fair to say we will go back now in our own government when we  return to Washington and look at both of these questions, and  we'll get back to the Russian government. 	      	     Q	  You were not prepared for these questions when  you got here? 	      	     SENIOR ADMINISTRATION OFFICIAL:  We were prepared  for these questions.  We've looked at them.  But we're not  prepared to make a quick decision this weekend.  They require -- let me just explain, particularly on Jackson-Vanik.  They require  consultation with the Congress.  They require consultation with  the American Jewish community.  And we're very sensitive to those  concerns.  And so we'll want to go back and talk to them before  we take any action. 	      	     Q	  Is this package designed so that you will not  have to go to Congress for anything at this point? 	      	     SENIOR ADMINISTRATION OFFICIAL:  As I said at the  beginning, the advantage of this particular package is that all  the funds have been allocated and appropriated by the Congress.   So the administration will not have to go back to the Congress to  seek any additional authority to fund any of these efforts.  In  effect, they can all begin tomorrow, and I know that many of the  agencies responsible for these projects will begin tomorrow.  And  that's the advantage of this particular initiative. 	      	     Q	  If this, as the President says, is a long-term,  long-haul thing, and members of Congress are at this moment  heading for Moscow, why aren't you talking about going to  Congress and suggesting to the President of Russia that you are  prepared to go to Congress for various things? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I think we've been  clear about that.  The President is discussing this weekend with  President Yeltsin some additional ideas that we have for American  funding of additional projects, and ideas that he has.  We have a  major congressional delegation that left last night, headed by  Representative Gephardt and we'll want to consult with that  delegation and other members of Congress before doing anything.   And we'll also want to consult with our allies.  So that's where  it stands now. 	      	     Q	  We've been told repeatedly that a number of  these items represent different or new ways of spending the money  already appropriated.  Could you just tick off which of these  items represents reprogramming or at least spending money in ways  that it was not previously set to be? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I think that we've  said that these are all projects that either Congress had  allocated money for through the Freedom Support Act; there were  some funds that were left over from FY'92.  And this  administration took office and had some new ideas about how the  funds might be expended. 	      	     We didn't use just the Freedom Support Act funds or  the FY'92 funds.  We went into some of the agency allocations -- Ex-Im, OPIC, and USDA -- and tried to look for creative ways to  further our programs. 	      	     And example of that is the Food for Progress  concessional loans.  We had hit a brick wall with another type of  funding through USDA.  We could not go forward legally, and so we  looked for a more creative way to ensure continued American  market share and ensure continued grain sales, and we think we  found it. 	      	     Q	  Where, for example, are you getting the money  for this Russian officer resettlement -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  That's from the  Freedom Support Act funds. 	      	     Q	  In other words, all of the money is being  directly spent in new ways, so to speak -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  Most of the grant  projects that you see -- if you look at the general chart, the  second chart, it's broken down into grant and credits.  And if  you look under grants, the technical cooperation projects that  total $281.9 million -- that is almost all Freedom Support Act  funding.  A little bit of it is leftover funds from fiscal year  '92.  The Nunn-Lugar funds, of course, you know about the  legislative history of those funds. 	      	     Q	     cooperation -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  From FY '92?  I  don't have the exact figure.  It was not a considerable figure. 	      	     Q	  Could you tell us please, has anything happened  here this weekend that will break the log jam between Ukraine and  Russia over START -- for START I and II as a result of what's  happened here -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  Both presidents,  President Yeltsin and President Clinton, will be discussing this  issue this morning.  In fact, we haven't yet gotten to security  and arms control related issues.  That will be this morning's  session.  I know that President Clinton will be very strongly  reinforcing that this is a top priority for us.  We've been  talking to the Russians and the Ukrainians over the last couple  of weeks about ways that we might help to facilitate the  discussions between them.  Up to this point, this has been a very  important negotiation that's been going on essentially between  Moscow and Kiev.  And we are at the point now of essentially  discussing with them if there are ways that we could contribute  to this discussion, help to move things forward essentially.   	      	     But in terms of what is coming out of this weekend,  I don't yet know.  In a couple hours we'll know. 	      	     Q?	    Just a follow-up on the financing here.  Is  any of this robbing Peter to pay Boris -- since it's all current  year appropriations, have you taken it from anyplace that's been  earmarked and put it into this fund? 	      	     SENIOR ADMINISTRATION OFFICIAL:  There are smoke and  mirrors here, and I think it's an important point to note.  We  could have given you a page of assistance numbers that included  out-year funding.  We're going to make a long-term commitment to  many of these projects -- for instance, the enterprise funds, the  privatization effort, the housing effort.  And we've already  talked to the Russians about our long-term commitment.   	      	     We could have put in really big numbers and this  could have been a bigger package, but we wanted to make a point:   This package is FY '93.  It's funds that we have.  And we're  going to do what we say we're going to do.  And the President  feels very strongly about that.  In the past there is a legacy  that the western governments, the combination of governments, put  up large budget figures and for any number of reasons we're not  able to meet them, we're determined, and the President is  determined, to carry out every single program in this package.   And we'll do it.   	      	     But we do have a longer-term commitment, and that's  part of the discussions on economics this weekend.  We're looking  for Russian ideas on what it is we can do to most effectively  support reform.  And we've told them that we do have a commitment  on some of these programs beyond this fiscal year. 	      	     Q	     taken it way from any -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  No, we haven't.   Okay, the question is, have we reprogrammed any of these funds;  so have we taken it from other countries to pay for programs in  Russia?  The answer is no, we have not done so. 	      	     Q	  In terms of funding, there is no available  monies left -- and you simply find a creative way to find money  somewhere else.  Doesn't that, in fact, support the -- theory? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Not at all.  I  don't think it does.  That's a particular example, and the  example is grain sales.  The Commodity Credit Corporation credit  guarantee program was short-term loans that Russia had to pay  back within 12 to 15 months.  You all know about Russia's debt  problem, and Russia was unable to meet those commitments.  So we  looked for a way to do two things:  to meet Russia's requirement  for grain.  They're a net grain importer on a massive scale, and  also meet our objective of making sure that the American farmers  have a chance to sell their products to Russia.  And we simply  look for another way to finance that.  And we have legislative  authority to do it.  This program has been successful in other  areas.  We had not tried it before in the former Soviet Union,  but we thought we should now. 	     	   	     Q	  Isn't this really the Bush-Clinton aid package  for Russia, since these funds were really first derived by  initiatives put forward by President Bush? 	      	     SENIOR ADMINISTRATION OFFICIAL:  No, I don't think  that's a fair characterization.  A lot of these funds were  appropriated by the U.S. Congress is 1991, in 1992.  This  administration took office and inherited some obligations that  the Bush administration had made.  But we had a long six to seven  week review of this program.  We decided to meet the commitments  that had been made by the previous administration.   	      	     But we have gone well beyond them in funding the  enterprise fund, which was just an idea, but the idea had not  been filled out with a program.  There was no number attached to  it.  In grouping together some projects and trying to make them  into a coherent whole in the privatization effort, I would say,  is another Clinton initiative.   	      	     Further, we listened to the Russian government and  listened to the Russian military who told us that the  resettlement of their officers was important to them for  political and economic and social reasons.  And President Clinton  has responded to that.  And we are making a long-term commitment  that beyond this demonstration project we're going to figure out  a way to do much more in trying to settle those officers.   	      	     I would also say that the President has given  impetus to all of us in the agencies to think much more broadly  about what it is we can do on democratization, because there we  have some experience and some comparative advantage that lends  itself to the Russian experience.  And in calling for the  creation of a democracy corps, which is another new initiative,  we're hopeful that we can take the resources of the private  sector as well as the American government, to achieve that  objective.   	      	     So I would not characterize it that way at all.  And  as most of you know, I am a career civil servant.  I was in the  last administration.  I'm very familiar with what the last  administration did.  And I would characterize this as a Clinton  assistance package for Russia. 	      	     Q	  There's been a lot of criticism that aid in the  past has not gotten to the people.  Is there anything in this  outside of the ombudsman, that will guarantee that this money  will not just disappear because it's being administered by the  Russian government? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I think that -- I  know that the President and other senior officials of our  government are concerned that American money be spent wisely and  that it get to the source that it's intended -- for which it's  intended.  And so we're going to take great care -- AID and the  State Department will take great care in making sure that the  funds are expended properly and that they're reaching their  source. 	      	     I would not that this package is not simply a  package of support solely to the Russian government.  Some of  these projects, especially in democratization and exchanges, are  going to be worked out directly with Russian private individuals,  with businesses.  The private enterprise support is another  example of that. 	      	     SENIOR ADMINISTRATION OFFICIAL:  If I could just add  a word on this point with regard to the SSD-related programs, one  area that we've been looking at very, very closely is  consideration of actually using Russian firms in subcontracting  for these kinds of programs.  They would be working very closely,  of course, with the American firms, who would be the prime  contractors.  But this is a fine example, I think, of a more --of  a imaginative and flexible approach toward getting some of that  funding down to the grassroots level, down to the ground in  Russia; but at the same time ensuring that it is spent  efficiently and for the purposes for which it was intended. 	      	     Q	  When would the democracy corps start?  Exactly  when do you see this happening?  How would get it off the ground? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, the President  is today calling for the creation of a democracy corps.  I think  it's fair to say that we're going to work out its framework over  the next couple of weeks.  Ambassador Simons takes up his duties  on May 1st.  But in effect we've already started, because over  the last couple of weeks the administration has begun to reach  out to people in the private sector who have come to us asking us  to help facilitate their activities in Russia.  And we've said  that we will be helpful.  We've also tried to kind of coordinate  in a much more effective way the activities of our own  government.  We do have 10 or 15 agencies that are active in  Russia in one way or another.  We think it makes sense to draw  them together and to focus their efforts. 	      	     Q	  Excuse me.  How much of this $1.6 billion will  actually be spent in the United States by American made goods? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I don't have any  figures for you now, but perhaps we could try to work something  up in the next couple of days on that. 	      	     Q	  This figure is larger than the figure that has  been in the press -- did this program grow yesterday as a result  of the discussions, or have we just been that far off the mark? 	      	     SENIOR ADMINISTRATION OFFICIAL:  No, I think -- unfortunately the press has been a little bit off the mark, and  I'm sorry to say that.  No, this package -- President Clinton put  us to work about seven weeks ago on this package.  And he was  briefed intensively on this.  He contributed a lot of the  intellectual leadership in this package.  He contributed a lot of  the ideas in the package.  And I think it's fair to say that we  had this rough package worked out about two weeks ago.  We have  been refining it ever since.  We spent a couple of days last week  going over it with the Russian government, both the embassy in  Washington and the government in Moscow through our own embassy.   And so it's been evolving.  But this particular package has been  together for about two weeks. 	      	     Q	  Where is Yeltsin's input into this then?  There  was so much talk before about the President wanted to get  Yeltsin's views about specifically what was needed and so forth.   Is that in the out years? 	      	     SENIOR ADMINISTRATION OFFICIAL:  No, it's both.   President Yeltsin has on several occasions told us, for instance,  that support for the creation of private businesses is important  to him; that the resettlement of Russian military officers is  important; and that first and foremost the effort to privatize  the state industries is important to them.   	      	     And so what we did was to try to make those the  centerpiece of our technical assistance part o the package.  We  listened to him.  On the privatization effort, we have been  working with the Russian government for months on this trying to  work out all the details.  So the Russian government on most of  these programs was involved every step of the way.   	      	     But let me get at the other part of your question.   The President is also using this weekend to talk about a broader  set of initiatives that we might undertake.  And we're looking  for his ideas.  The President has brought his own ideas to the  table -- for instance, on energy and the environment and in  housing.  But we're looking for Russian ideas not.  We need to  consult with the Congress; and we need to consult with the other  allied governments that are also active. 	      	     Q	  There's essentially nothing that happened in  the last day and a half that measurably altered the package that  you came in with? 	      	     SENIOR ADMINISTRATION OFFICIAL:  This particular  package, as I said, was worked out and was ready about two weeks  ago.  We have since then consulted with the Russian government on  the final stages of its development, and so this weekend we've  primarily talked about future, about what more the United States  and other Western countries can do to support reform in Russia,  which is our base objective here. 	      	     Q	  I noticed that you -- that money appropriated  to train bankers and businessmen and officers.  Can you tell me  what about job training for workers who are displaced by  privatization? 	      	     SENIOR ADMINISTRATION OFFICIAL:  You're right; we  have a program to train Russian -- young Russians in banking and  financial services in the United States.  Part of the housing  initiative, it's not just to build housing units, it's to retrain  Russian officers who are retiring into other professions. 	      	     Q	     money for job training for workers whose  jobs are disappearing because of privatization -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  We have not yet  allocated any money for that. 	      	     Q	  Why not? 	      	     Q	     of the $6 million is going to build 450  housing units.  Isn't that a lot of money per unit given what the  Western dollar will buy in the former Soviet Union? 	      	     SENIOR ADMINISTRATION OFFICIAL:  If you want to do  housing the right way, it's not just the building the framework  of a house, you've got to think about all the utilities.  You've  got to think about the purchase of land.  You've got to think  about sewage and gas and electricity and so forth.  And it's also  retraining.  It's not enough to put retired -- an officer coming  out of -- Riga or Tallin or Vilnius in a house in western Russia.   We think we have an obligation to try to retrain those officers  as well.  This is responding to a request from the Russian  government. 	      	     Q	     of the $6 million will go to retrain -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  That's right. 	      	     Q	  Are you talking about apartment buildings or  single -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  We're talking about  single, individual dwellings. 	      	     Q	  You're saying that only 450 families will be  served by this? 	      	     SENIOR ADMINISTRATION OFFICIAL:  What I want to -- I  thought I pointed out earlier, this is a demonstration project.   What we didn't want to do -- given the experience that the  Germans and the Turks and the Italians have had in building  housing in western Russian, we did not want to leap into it with  a huge amount of money.  What we want to do is work over the next  couple of months and try to figure out with American  organizations in the private sector the best way to get this job  done.   	      	     I noted that we have a long-term commitment to that.   And so I would expect that we would put a lot more money into  this in the future .  But we want to do it wisely; we want to  spend the money wisely. 	      	     Q	  What is it about this program that convinces  you that it will protect Russia's reforms and that Russia will be  in a position to may back the money they're supposed to pay back,  especially considering their other debt problem? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, look, I think  it's important to note that the United States on its own does not  have the capability to fuel a continuation of Russian reform.   It's got to be a collective Western effort, and we're looking to  our allies to do more as well.  But beyond that, it's really what  the Russians do that is going to decide the fate of reform.  We  can simply play a role, and we feel we have an obligation to do  so, which is consistent with our national interests. 	      	     Q	  Did the President say that the value of the  U.S. contribution was that it would create security and  prosperity for the United States?  So what is it about this  program that does this? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I think you have to  go back to the fundamental objective of our policy toward Russia,  and that is we want to do everything we can to support the  continuation of reform.  We are convinced that if reformers stay  in power, then we'll be able to continue the drawdown of nuclear  forces, foreign policy cooperation and economic interaction,  which are the three benefits to the United States from reform in  Russia.  So it's not a simple question.  You can't just say that  this program is the answer.  It's a long-term question and we  have to make a long-term commitment to it. 	      	     Q	  And then on the question of Russia's ability to  repay, what convinces you they'll be able to pay seven to 15  years from now? 	      	     SENIOR ADMINISTRATION OFFICIAL:  Well, the Russian  government has made a commitment to repay, and what we're hoping  is that if reform continues, and if they can continue to improve  their oil and gas sector and earn additional hard currency  revenues, that Russia will be in a position six or seven years  from now to pay back those loans. 	      	     Q	     substantial government-to-government loan  we've ever gotten into with the Russians? 	      	     SENIOR ADMINISTRATION OFFICIAL:  I don't want to  answer authoritatively on that.  I don't go back 20 or 30 years  on this.  But in the last four or five years, yes it is, because  the previous way that we financed grain exports was really to  just ensure private bank loans.  This is a different type of  effort. 	      	     Q	     government loans in any other sector that  you recall?  I know it wasn't done in -- 	      	     SENIOR ADMINISTRATION OFFICIAL:  I think it's fair  to say this is a new and unique effort.