July 10, 1998
PRESS BRIEFING BY MIKE MCCURRY
THE WHITE HOUSE
Office of the Press Secretary
_____________________________________________________________________
For Immediate Release July 10, 1998
PRESS BRIEFING
BY MIKE MCCURRY
The Briefing Room
1:50 P.M. EDT
................
MR. MCCURRY:
Now, the President of the United States and the
President of the Russian Federation, Boris Yeltsin, moments ago,
completed a useful and productive conversation that dealt primarily
with the financial situation, economic situation, in Russia, but also
touched briefly on issues related to missile technology
proliferation.
President Yeltsin reaffirmed that Russia is working hard
with the International Monetary Fund to bring negotiations on the
conditionality for an additional financing package that would be
available through the IMF to Russian economic authorities that are
trying to bring that to a successful conclusion. Those of you that
have covered and watched their deliberations know that there has been
intensive work done by Prime Minister Kiriyenko and his economic
team, including Deputy Prime Minister Chubais. They have done a lot
of work to satisfy some of the concerns that have been raised by IMF
officials who are in Moscow.
The United States government certainly agrees that
Russia needs an IMF program that works, one that the Russian
government is both capable of implementing and that addresses the
country's most pressing financial and structural problems.
We think both sides have done good work here. It's
time, though, in our view, for these negotiations to come to closure.
And certainly the President indicated to President Yeltsin that he
supported President Yeltsin's efforts to wind up these conclusions
successfully, and also to bring the urgency of this matter to the
attention of the Duma.
We also agreed that actions that Russia takes now will
be the most critical component in turning around the perceptions that
the investing community has in the financial situation in Russia.
And we think that the positive impact of the work being done now
sends the right signal to the markets and to investors about the
long-term structural prospects for Russia's economy.
And as I say, they also -- the President then raised the
issue of the importance we attach to missile technology proliferation
issues, reminded President Yeltsin of the great concerns our Congress
has about missile technology issues. And the President stressed the
importance of continuing to make progress in the variety of channels
that we have used to address these concerns as we look ahead to
issues that will be dealt with at high levels in preparation for the
summit the two Presidents will have in September.
Q On that topic, does the White House pay any
credence to this book by this Russian defector who says the mafia
controls the Russian government?
MR. MCCURRY: I don't have any analysis that would
suggest that that is a proposition we attach great importance to. We
are certainly well aware of and concerned about the operations of
organized criminal syndicates in Russia and elsewhere in the world,
and we have addressed that question in a variety of fora, including
most recently at the G-8.
Q Who initiated the call, how long did it last, and
was there any link at all between the two issues you just talked
about?
MR. MCCURRY: As I reported to the gaggle this morning,
the call was initiated at the request of President Yeltsin and it
lasted approximately 20 minutes.
Q Any link between the two issues you talked about,
implied or otherwise?
MR. MCCURRY: No. Those are two issues that arose, two
issues that will clearly be a part of the work that both governments
will do going into and leading up to the summit -- although obviously
the urgency of Russia's economic situation is what prompted the call
from President Yeltsin.
Q Did President Yeltsin indicate how much money
Russia will be seeking, and was there any discussion of simply
bilateral aid from the U.S. to Russia?
MR. MCCURRY: I don't know that they had specific dollar
figures, but those have been widely reported coming out of the
discussions the IMF is having with Russian authorities in Moscow.
Q Bilateral assistance from the U.S. to Russia?
MR. MCCURRY: We've indicated and would reiterate now
that we've talked about our participation in assistance being given
by international financial institutions, principally through the IMF.
This is a multilateral effort and one in which the United States is
joined by other industrialized nations.
Q Is it your anticipation that this package would be
done and in place by the time the President goes to Moscow September
1st?
MR. MCCURRY: Absolutely. That's our desire, as I just
said, to see this brought to a conclusion soon and Russian
authorities are working hard. If I'm not mistaken, President Yeltsin
has indicated he's changing his immediate travel plans, and obviously
the urgency of the situation requires that kind of a response.
Q Mike, is the President concerned that the longer
there is a delay in these international loans, the greater the
likelihood that Russia might earn its money through transfers of
nuclear technology?
MR. MCCURRY: There are a variety of ways in which --
those are apples and oranges comparisons in terms of the size and
volume of the transactions and what's being sought by Russian
economic authorities for their economy. But it is still a source of
concern irrespective of the financial situation that the
proliferation outside of established international norms of certain
types of technologies to countries that are not abiding by
international principles is a real concern irrespective of what the
financial aspect of the transaction is.
Q Mike, you talked about the importance of
perceptions. What are the most immediate steps that Russia can and
should take, in the administration's view, to improve the perceptions
of people in the financial community?
MR. MCCURRY: Clearly, the most important thing is to
negotiate successfully a package of credit assistance that would be
available through the IMF. And the IMF has got certain requirements
and stipulations, as they do in every situation in which they are
engaged, and that's been the premise of the talks that have occurred
between Russian officials and IMF officials.
A lot of it is technical, but essentially it calls for
transparency, it calls for some assurance that the market-related
principles that are important to the structural economy are abided by
with, and that the concerns that the IMF normally and routinely
places in some of its credit assistance programs are able to be met
by Russian economic institutions and authorities.
Q But, Mike, you've been pretty outspoken about what
Japan should do, for instance. Why not be more specific about --
MR. MCCURRY: The question there is related to the
Japanese macroeconomy; it's not the specifics that are attached to an
IMF conditionality on lending. We've got a much --
Q No, but Peter's question was how to reassure the
financial markets and foreign investors, not the IMF.
MR. MCCURRY: What would most reassure the financial
markets and the investing community, in the opinion of the United
States, would be to see a successful conclusion of these discussions
between the IMF and the Russian government.
Q So no other kind of structural reforms --
Q One of the provisions the President's talked about
were the need for Russia to be more successful in collecting taxes by
--
MR. MCCURRY: Yes. We have cited in the past our
concern about the taxing authority of the Russian government and
trying to see that there is more regularity in the collection of
revenues from the economic activity that Russian citizens engage in.
A great deal of it right now is all off the books and black market,
and that's been a principal source of concern to the government. And
Prime Minister Kiriyenko has been quite outspoken in the last several
weeks in dealing specifically with that problem.
Q On another issue, or --
MR. MCCURRY: We're still working on this.
Q It appears Russia has faltered, so to speak, in
carrying on economic reforms. Does the White House believe the
President has the political power -- the government of Boris Yeltsin
has the political power and the political will to reform the economy?
MR. MCCURRY: We have a high degree of confidence in
their determination to do this. They have a complicated environment
in which they make national economic policy, and we are well aware of
that. But we have high regard for the skills of Prime Minister
Kiriyenko and his team, and they are clearly working at the overall
direction of President Yeltsin, who is quite actively and vigorously
engaged in dealing with this crisis.
He's been on the phone today not only with President
Clinton but with a number of other world leaders, very actively
engaged in dealing with what is obviously a very real moment of peril
for his national economy.
Q Would it be fair to characterize the call as a
lobbying effort on the part of President Yeltsin to have the U.S. use
its influence on the IMF to approve the loan?
MR. MCCURRY: Well, I'll leave the characterizations to
you, but it was clearly President Yeltsin's desire to keep President
Clinton well briefed on the status of the discussions that are
underway.
Q Mike, what were the right signals that you referred
to that Russia is sending the financial markets?
MR. MCCURRY: As I just said, to see that they meet and
agree to the conditions the IMF is putting forward and that they
successfully resolve the negotiations they have underway.
Q But you said, to do with the discussions over the
loan. It doesn't have to do with any --
MR. MCCURRY: Well they have, as I just said, they've
got other things and there are other aspects of economic reform and
modernization that the IMF will look for and that we have encouraged.
And one of them, P.J. mentioned, is tax collection, but we've also
talked about better oversight and regulation of investment, more
attention to property rights and law when it comes to those who are
making investment decisions. And those are the kinds of things that
we routinely stress in our bilateral discussions with the Russians.
Q Mike, doesn't the fact that Russia is in the center
of this financial blowout after the Asia crisis indicate that the
situation we're facing -- the crisis we're facing in the financial
system is not a regional problem, but is really systemic problem
requiring, perhaps, more thoroughgoing measures to bail out a country
whenever it hits in a new region?
MR. MCCURRY: Well, I think -- I'd take it a little
differently. I think it reflects the growing interdependence of the
global economy and the way in which industrialized nations and
developing nations are directly affected by the changes that are
occurring in the global economy. As the global economy becomes more
interdependent, as capital flows, information flows, market activity
constricts, because of the flow of the different types of
technologies that speed transactions and speed information and
capital flows, there's more likelihood that market developments in
one area of the world can impact elsewhere.
You know, the simple way to put that is we wake up in
the morning with reports on what's happening in Asian financial
markets and then listen as that activity moves around the globe. And
that affects financial and economic decisionmaking of people all
around the world simultaneously.
.................
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