U.S. to advise Soviet leader

Press, 26 September 1989, Page 8

U.S. to advise Soviet leader

NZPA-Reuter New York The chairman of the Federal Reserve Board and a top State Depart- - ment official will travel to the Soviet Union next month for discussions on President Mikhail Gorbachev’s economic reform progamme, a senior United States official said yesterday. The extraordinary talks follow two days of intensive meetings in Jackson Hole, Wyoming, between the Secretary of State, James Baker, and the Soviet Foreign Minister, Eduard Shevardnadze. They underscore the changing nature of the United States-Soviet agenda, which has broadened in recent months to include American advice on the deeply troubled Soviet economy. The senior official, who asked not to be identified, said the decision to send Alan Greenspan, chairman of the Federal Reserve, and Robert Zoellick, a top aide to Mr I

Baker, was made during the week-end talks.

After trout fishing yesterday morning, the two Ministers flew separately to New York where they will attend the United Nations General Assembly this week. Mr Greenspan and Mr Zoellick are due in Moscow for three or four days in mid-October at the invitation of a leading Soviet economics expert, said the official, who briefed reporters aboard Mr Baker’s plane from Wyoming.

The Bush Administration has been criticised for not doing enough to help Mr Gorbachev, whose economic woes may be his political undoing.

Mr Bush and Mr Baker have resisted any idea of direct United States aid, such as loans or grants, but Mr Baker has said officials are willing to give informal advice on such matters as price reform and the

rouble. “There is an interest (on the Soviet side) in taking steps to open up that economy and move it toward a more open system, and perhaps there are some things we could contribute there,” Mr Baker told a press conference on Sunday. On the plane the senior official said the Soviets recognised that price reform was crucial but many difficulties stood in the way. To bring about monetary stability — and deal with what Mr Baker calls the “rouble overhang” or a surplus of roubles — the Soviets are considering a number of remedies including importing large amounts of consumer goods to soak up the currency. They are also thinking about using large Soviet gold reserves to support the rouble, and are discussing issuing bonds, reducing the deficit and cutting defence