Russia Joins the Club of Key Creditors

DENVER — In a move described as “the financial end of the Cold War,” the leading nations of the West on Friday agreed to admit Russia into the circle of creditor countries that assert vast authority over debt in the developing world.

The decision, announced at the summit of eight major nations here, dramatized Russia’s growing links to influential and prestigious Western institutions that long symbolized the deep Cold War schism between East and West.

Clinton administration officials said terms of admission--finalized early Friday inside the capitalist bastion of the Federal Reserve Bank of New York--improve Russia’s chances of collecting some of the $120 billion that developing countries owe it for Soviet-era aid by relaxing conditions for repayment.

“In a real sense, this agreement represents the financial end of the Cold War,” Deputy Treasury Secretary Lawrence Summers said.

The move was the latest in a series of events underscoring the strong ties between President Clinton and Russian President Boris N. Yeltsin, who met for an hour here Friday to review global security issues.

Russia’s admission to the “Paris Club” of creditor nations and other foreign policy advances in Denver appeared to vindicate Clinton’s unflinching support for Yeltsin throughout his six years as Kremlin leader, even when his democratic credentials and his appeal to the Russian populace were in question.

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The Friday breakthrough also provided instant gratification for the Kremlin at its first meeting as a nearly full participant in the annual meeting of the Group of 7 industrialized nations, renamed for this occasion as the Summit of the Eight.

“This is the first major success for Russia in its involvement within the G-8,” effused Yeltsin spokesman Sergei V. Yastrzhembsky, who said Clinton called to congratulate the Kremlin chief even before their midday meeting.

The seemingly odd “Bill and Boris” team has recently proved a surprisingly influential force in international affairs. Increasingly, it has become clear that Washington’s investment in the unpredictable Russian leader--once assailed as a dangerous U.S. misjudgment--is paying off on a range of global issues.

“I’m very pleased,” Clinton told reporters at the start of a meeting with Yeltsin, taking a bow for helping Russia resolve some of its debt woes. “What you see here is a sweeping integration of Russia into the major decision-making networks of the world in a way that is very positive for the rest of us.”

Like many of the inroads Russia has made in the global arena, the Paris Club invitation was expedited by Clinton as part of his strategy of bringing Yeltsin into the global fold of movers and shakers. “It really was two men who are really now used to working with each other,” said James Steinberg, deputy national security advisor.

Even before the Paris Club announcement, Clinton sought to enhance Russia’s role at this summit--the first in which it is taking part in economic matters--by arranging for Yeltsin to give the opening address at Friday night’s gala dinner at Phipps House, a Georgian mansion in this Colorado capital.

Only a year ago, the Clinton administration’s backing of Yeltsin was under attack as the Kremlin leader all but abandoned democratic reforms in a tough race for reelection amid growing Russian nostalgia for the Communist era. The White House also came in for harsh criticism of its support for Yeltsin during the Kremlin’s brutal 20-month war against the separatist republic of Chechnya.

But some rewards for the U.S. policy have recently come to fruition, such as Russia’s reluctant acceptance of the Western push to expand NATO. Since Clinton prevailed in drawing Russia into the alliance by promising it a voice in European security affairs, a rift that had been developing between Moscow and the rest of Europe has essentially healed.

Other benefits have been more subtle in surfacing, such as Russia’s new flexibility in a longtime territorial dispute with Japan and in its amicable division of the Black Sea Fleet with neighboring Ukraine.

Also on Friday, Yeltsin, Clinton and President Jacques Chirac of France signed a joint declaration that they will work together to mediate a settlement of the nearly decade-old dispute between Armenians and Azerbaijanis in the enclave of Nagorno-Karabakh.

Japanese Prime Minister Ryutaro Hashimoto proposed during his caucus with Yeltsin here that the two leaders meet for “trust-building weekends” in the Russian Far East, where Japan wants to invest once the two Pacific states resolve their dispute over control of the southern Kuril Islands.

Tokyo initially opposed Clinton’s invitation to Yeltsin for this year’s summit, but a Japanese Foreign Ministry official acknowledged after the Yeltsin-Hashimoto talks that the forum has been helpful in fostering an improvement in Russo-Japanese relations.

Yeltsin himself said in a pre-summit television interview that the Russian people are not yet prepared for a major change in policy regarding the Kuril Islands, but that enhanced contacts between the two countries’ leadership and significant investment in Russia by Tokyo could change the outlook.

Russia is also seeking entrance into the World Trade Organization and the Organization for Economic Cooperation and Development. But U.S. and other officials say Moscow’s inclusion in those groups now would be premature.