Bill Clinton: “Let me answer the question. He also went out of his way to tell me, though, he said, ``We are not going to reverse our…”

“Let me answer the question. He also went out of his way to tell me, though, he said, ``We are not going to reverse our reform course, and we don't want to slow it down, but we do want to cushion the impact of it better. We want to have a better sense of how it affects people.'' And he said, ``We also want to try to demonstrate the successes more clearly. We want to be able to show people that this has been done.'' And in that connection--and you know what he asked? He was very pleased with a lot of the initiatives that I told him we worked on, like we were working to get the G-7 to make sure that the countries that buy oil from Russia, for example, that buy energy from Russia, could pay for it in a timely fashion so they can use that money to help them build their country. That's a big deal to them. He was interested in getting his next IMF money in a timely fashion. He was interested in making sure that the accumulated debt, once he's making payments on it, can be rescheduled. In other words, he didn't want to slow down reform. He wanted to make it work better, and he wanted to make sure that they had some strategies for cushioning the impact on ordinary people. He also said that he would keep a team that was reform oriented, and it would be a good, competent team. Gaydar left the government once before, and the reforms didn't stop. So the only thing I encouraged him to do was, I said, ``You proved you're committed to democracy. You've stayed with this reform. You've still got some tough decisions to make.'' I told him, I said, ``I contacted the G-7 before I came up here. We want to help cushion the impact of reform, and we want to help make sure the people of Russia know what you're doing to help the economy. And if you're going to keep on the reform path, it'll be easier for us to do that, because then we'll be able to make sure that the IMF and the World Bank support you as well as these individual countries.'' I found it to be a satisfactory conversation. You know he's in some--the political situation over there is not free of difficulty. I mean, you just only have to look at the makeup of the lower House of the Parliament to draw that conclusion. But I think he'll try to hang in there, mostly because if you look at the go-slower approach, you look at Ukraine and you see they're in worse shape than Russia. And one of the things--and let me just say that this is something I didn't even talk about on the trip--but one of the things I want to spend a lot more time doing when I get back, and have our people try to be helpful on, is trying to dissect what we mean by reform, because there are at least three big elements to it. There's the privatization of government-owned companies, which Russia is doing very, very well, better than anybody else. There's the management of fiscal and monetary policy, which means you've got to keep inflation down at a reasonable level to get private investment, which means you can't just keep on printing money to pay for subsidies in a dying industry. They're having trouble with that, although they're doing better than they were last year. Then the third area is making sure you've got the infrastructure, if I can use that much-maligned word, that will attract investment from outside the country and will permit the markets to work. That means you've got to have a system of laws relating to private property, contracts, bankruptcy, clear, unambiguous taxation laws, that sort of stuff. If you look at Czechoslovakia, which is the most--I mean, the Czech Republic, which is the most successful of the former Communist countries, they're behind Russia on privatization but ahead on the infrastructure. So the one thing that I think we need to focus on is now that they've got a constitutional democracy, and all of them, even the ones who want to slow down reform, want more investment, which is interesting--they all want more investment, even the ones that think, ``Well, reform has gone too fast''--they might be for the first time in a real position now to write some of the laws in such a way that will attract a lot more investment. For example, if you want to make an energy investment in Russia, you may not care what the rate of privatization of small companies is, but you do want to know if you put the money in there and who you're investing with, is your investment good, what do you do in case of breach of contract, what are your tax obligations if you make money? Just clear, simple, straightforward stuff that we take for granted, that I think they now have to do a little more work on.”