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Commentary: In A World Of Trouble, Can Clinton Cope?


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COMMENTARY: IN A WORLD OF TROUBLE, CAN CLINTON COPE?

As he prepares for a Sept. 1 superpower summit in Moscow, Bill Clinton faces the greatest challenge of his Presidency. What had been a key foreign policy success--coaxing Russia into the global economic system--is quickly becoming a quagmire. And there appears to be very little the President--or anyone else--can do to fix it. Infusions of aid from international institutions have failed to bolster Russia's markets, and Clinton won't be writing any new checks. All Clinton can offer is advice. And it's not even clear--with Russian President Boris Yeltsin's grip on power shaky--to whom he can give it.

With 11,000 nuclear weapons, unstable democratic government, and resurgent ultra-nationalism feeding an anti-U.S. backlash, Russia again looms as a national security threat. And there's the rub: In his years in the Oval Office, Clinton has run foreign policy as if it were chiefly about opening world markets and integrating economies. When it comes to managing international crises with more conventional weapons of statesmanship, Clinton is a relative novice.SPILLOVER? And Russia is hardly his sole headache. From bombings of U.S. embassies in Africa, to the chicanery of Saddam Hussein, to reports of a renewed nuclear buildup in North Korea, the world hasn't looked this scary since the cold war. Add to this mix the specter of meltdowns in such key markets as Japan and South Korea. The currency crises that sapped most of Asia and Russia now threaten to spill into Latin America and Eastern Europe.

In the past, the world has looked to the U.S. to cure such ills. In turn, the President could seek help from other economic titans like Germany and Japan. But both Chancellor Helmut Kohl and Prime Minister Keizo Obuchi have their own local storms to weather. And because of the Monica Lewinsky scandal at home, Clinton's own political future is uncertain.

Sounds bleak. But there are steps Clinton can take. First, he must recognize that national security concerns can no longer take a back seat to international economics. "It's now clear we don't have a moment to relax," says Robert Kagan of the Carnegie Endowment for International Peace, a Washington think tank. "We have to both modernize our forces for strategic threats 20 years out, and jump in to maintain a reasonable international order."

To do that, Clinton must strengthen connections with these bruised countries. Yet the first instincts of nations in trouble--particularly when they know no Western bailout money is available--is to turn inward. Witness Russia's decision to halt trading of the ruble and freeze payments on its government debt market--moves that could bring stability but also hurt future relations with foreign investors. With Russia threatening to implode, some outside advisers even pressed Clinton to cancel his trip. But he rejected that advice. "To stay home would be unthinkable," says Anthony Lake, Clinton's former national security adviser. And given that the visit should bolster Russia's democrats, he made the right call.

Wall Street--with an eye to its hefty investment in Russian markets--has been clamoring for a new infusion of cash. But that would be throwing good money after bad. Indeed, Clinton already delivered that message to Yeltsin in an Aug. 25 phone call. "Additional money won't make things better--and might make them worse," says one senior Administration official. The Clintonites want reforms first, including better tax collection, a cleanup of Russia's corrupt banking system, stronger protections for investor rights, and further debt restructuring. Without this foundation, the Administration fears that Russia will squander more dollars and spook the markets even further.MORAL AID. Besides, when it comes to the U.S.-Russian equation, Russia's economy--smaller than that of the Netherlands--is peanuts. What's really at stake is the stability of a country that still has a big nuclear arsenal and wields clout over many of the world's hot spots, from Kosovo to Khartoum. That's why Russia must once again be viewed as a national security concern--one that needs moral support--and not just another chip in the global economic mosaic. "We want to demonstrate that the relationship matters," says one senior official. "Sometimes, you just keep the agenda alive and moving."

Clinton's team will back up that goodwill with offers of technical support on such items as restructuring banks and converting military-grade plutonium to peaceful use. But Clinton would also be well advised to quietly reach out to possible successors to Yeltsin, such as Siberian leader Alexander Lebed, and Moscow Mayor Yuri Luzhkov. "This is the beginning of the end for the Yeltsin era," says Russian scholar Alexander Rahr of the German Society for Foreign Affairs in Bonn.

Already, Clinton's team is mulling a U.S. Embassy party in Moscow where the President will be able to mingle with pols of all stripes, even as he seeks to buck up Yeltsin. That's a task tailor-made for the I-feel-your-pain President.

Clinton dare not fail. Treasury and Federal Reserve officials increasingly despair of Japan's will to fix its crumbling banking system. Japan is "the missing locomotive," says one Clintonite. China, too, could spark a panic in dicey Asian markets such as Hong Kong if it devalues the yuan.

Restoring confidence in Russia is just one step toward stabilizing a dangerous world. Right now, that may be a lot to expect of a crippled leader who too often views the rest of the world as little more than a loading dock for U.S. exports. It's a challenge Clinton can't sidestep.From Washington, Borrus and Foust write about politics and global economics.


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