DATE=1/24/99
TYPE=BACKGROUND REPORT
NUMBER=5-42428
TITLE=RUSSIA/U-S FOOD
BYLINE=PETER HEINLEIN
DATELINE=MOSCOW
CONTENT=
VOICED AT:
INTRO: U-S AGRICULTURE SECRETARY DAN GLICKMAN IS IN MOSCOW FOR
TALKS ON ENSURING THE EFFECTIVENESS OF U-S FOOD AID BEING SENT TO
RUSSIA. V-O-A MOSCOW CORRESPONDENT PETER HEINLEIN REPORTS THE
ASSISTANCE PROGRAM IS ENCOUNTERING WIDESPREAD CRITICISM EVEN
BEFORE IT BEGINS.
TEXT: SECRETARY GLICKMAN ARRIVED IN THE RUSSIAN CAPITAL SAYING
HE WANTS TO MAKE SURE FOOD AID ACTUALLY GETS TO THE STOMACHS OF
HUNGRY PEOPLE.
THE UNITED STATES AGREED IN NOVEMBER TO DONATE ONE AND A HALF
MILLION TONS OF SURPLUS AMERICAN WHEAT AND 100-THOUSAND TONS OF
OTHER COMMODITIES TO RUSSIA. IN ADDITION, A LOW INTEREST LOAN OF
600-MILLION DOLLARS IS TO BE USED TO BUY FOOD FROM THE UNITED
STATES.
IN ALL, THE DEAL IS WORTH NEARLY 900-MILLION DOLLARS. A U-S
OFFICIAL IN MOSCOW SUNDAY SAID A FURTHER AGREEMENT MIGHT ALSO BE
SIGNED DURING SECRETARY GLICKMAN'S VISIT.
BUT EVEN BEFORE THE AID BEGINS ARRIVING, QUESTIONS ARE BEING
RAISED, NOT ONLY ABOUT WHETHER IT WILL REACH THOSE WHO NEED IT,
BUT ALSO ABOUT WHETHER RUSSIA NEEDS IT AT ALL.
SENIOR RUSSIAN AGRICULTURE AND AID OFFICIALS HAVE ARGUED THE
COUNTRY COULD EASILY DO WITHOUT OUTSIDE ASSISTANCE. THEY SAY
EVEN THOUGH GRAIN PRODUCTION FELL 43 PERCENT LAST YEAR, THE
COUNTRY STILL HAS ENOUGH IN RESERVE TO FEED THE POPULATION.
MANY FOREIGN EXPERTS AGREE. JANE HOLT, HEAD OF THE MOSCOW OFFICE
OF THE WORLD BANK, TOLD V-O-A SHE FEARS FOOD DONATIONS WILL
DISTORT THE MARKETPLACE AND HURT ALREADY STRUGGLING DOMESTIC
PRODUCERS.
///HOLT ACT///
SO OF COURSE FROM MY VIEW THERE IS A GREAT DANGER THAT
IT ALL WILL BE DUMPED AS CLOSELY AS POSSIBLE TO THE PORT
AND SOLD IN MOSCOW OR ST. PETERSBURG, AND THAT IT WILL
IN FACT HURT. IT'S NOT JUST IMPORTERS WE'RE WORRIED
ABOUT. WE'RE WORRIED ABOUT RUSSIAN BUSINESSES, THE
FARMERS IN RUSSIA. WHAT INCENTIVE WILL THEY HAVE IF
THEY'RE COMPETING WITH FOOD AID THAT'S FREE AND DOESN'T
HAVE TO PAY VAT (VALUE ADDED TAX)
///END ACT///
RUSSIAN AND FOREIGN EXPERTS SAY THERE IS ALSO A HIGH RISK OF FOR
FRAUD AND CORRUPTION IN THE FOOD AID DEAL. TERMS CALL FOR
PROFITS FROM THE SALE OF THE DONATED FOOD TO BE PLACED IN
RUSSIA'S CASH-STRAPPED PENSION FUND. BUT THE WORLD BANK'S JANE
HOLT QUESTIONS WHETHER IT IS POSSIBLE TO KEEP TRACK OF THE
PROFITS.
///2ND HOLT ACT///
OF COURSE ITS A POTENTIAL FOR CORRUPTION WHEN YOU GET
FOOD AT VERY CHEAP PRICES, YOU CAN MAKE A BIG PROFIT.
IF YOU'RE THE DISTRIBUTOR, YOU COULD ADD AN AWFUL LOT OF
PARTIES AND SAY THAT WAS PART OF THE COST AND
DISTRIBUTION. AND YOU CAN PAY A LOT OF PEOPLE OFF IF
YOU HAVE 20 YEARS TO PAY BACK THE LOAN AND FIVE YEARS
FREE INTEREST. YOU MAY GIVE THE GOVERNMENT SOME
PENSION, BUT WHAT PERCENT? AND SO THERE IS A REAL
POSSIBILITY OF CORRUPTION, AND I HOPE THE U-S GOVERNMENT
CAN TAKE REAL STEPS TO LIMIT IT.
///END ACT///
A U-S AGRICULTURE DEPARTMENT OFFICIAL WHO SIGNED THE FOOD AID
DEAL LAST NOVEMBER CALLED IT A "WIN-WIN" SITUATION FOR RUSSIANS
AND AMERICAN FARMERS. RED CROSS OFFICIALS HAVE ALSO WELCOMED THE
ASSISTANCE, SAYING IT IS BETTER TO ERR ON THE SIDE OF CAUTION
THAN FACE THE CONSEQUENCES OF WIDESPREAD MALNUTRITION.
BUT AGRICULTURE SECRETARY GLICKMAN WILL FACE TOUGH QUESTIONS IN
MOSCOW AND WASHINGTON ABOUT HOW TO AVOID WHAT A LOCAL NEWSPAPER
RECENTLY DESCRIBED AS "A POTENTIAL FESTIVAL OF GOVERNMENT FRAUD
AND CORRUPTION" IN THE NEARLY 900-MILLION DOLLAR AMERICAN AID
PACKAGE. (SIGNED)
NEB/PFH/JO
24-Jan-99 1:45 PM EST (1845 UTC)
NNNN
Source: Voice of America
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