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The Russians need debt relief, including rescheduling of the 

 USDA debt, and they will need additional food assistance from the 

 West. American agriculture needs to get back into that market, 

 and we all have an interest in seeing the Russians convert their 

 military to peaceful uses and in encouraging the movement toward 

 a market-oriented economy. 



My bill gives the President the authority to achieve these goals. 

 Under it, he may write down the outstanding USDA debt in ex- 

 change for agreements from the Russians or other states for the 

 following purposes: To dismantle military facilities, to convert the 

 facilities to peaceful uses, to permit U.S. businesses to enter into 

 commercial joint ventures in state-owned enterprises, or other rea- 

 sons the President determines to be in the national interest. 



Additionally, once a state enters into such an agreement, the 

 President may extend new export loans to that state and release 

 previously approved credits to make new sales. He may also pro- 

 vide surplus commodities to those states and provide technical as- 

 sistance to achieve the terms of the agreements. 



The legislation is based on a practice common in the private sec- 

 tor: Debt-fcr-equity swaps. It has a precedent in the public sector: 

 The agreements under which Western creditors wrote down Latin 

 American debt in return for programs those governments initiated 

 for such things as preventing environmental degradation. 



In looking at the immediate problems the United States faces 

 with respect to the Russian situation, we must also be cognizant 

 of the long term. We need to provide assistance which will jdeld 

 long-term results in the United States interest, such as the dis- 

 mantling of the Russian military and the opening of its economy 

 to United States investment. 



We need to recognize that rather than simply waiting for the 

 Russian economy to improve enough to allow it to become current 

 on its debt, the United States needs to act now to restart food ship- 

 ments to ensure that the Russian population gets what it needs 

 and that American agriculture can make additional sales. 



Additionally, to those who will criticize my proposal because it 

 will relieve the Russians of some of their repayment obligation, I 

 would point out that it is in the best interest of the United States 

 to get some return on the loans in the form of the policies the Rus- 

 sians would be required in return for the write-down. The legisla- 

 tion establishes a quid pro quo instead of simply writing the debts 

 off altogether. 



Let me acknowledge that this legislation will have a cost, de- 

 pending on the amount of debt forgiven. I know this will concern 

 all of us, but these costs are minuscule compared to the costs we 

 have spent winning the cold war and to the costs we might face if 

 the Russian reform process fails, as so adequately and succinctly 

 put by former Secretary Baker. 



In closing, let me say that I think we need to be both bold and 

 imaginative in meeting the challenge before us. I think this pro- 

 posal offers a creative and constructive component to solving the 

 problem. I am attaching to my statement an explanation of the leg- 

 islation, which I dropped in yesterday. I had offered it previously, 

 and I made some changes in it. 



