20 



that historians will look at this as a mind-boggling experience, how 

 quickly things have taken place. 



That's the great danger in a society that has never known democ- 

 racy, that has an extraordinary history of kind of virulent national- 

 ism and authoritarianism, that if we don't move in and try to help 

 them, we could find ourselves in mighty dangerous territory. And 

 then we'll look back and we'll look, for example, in the area of nu- 

 clear proliferation. The biggest challenge we have right now, fi*ank- 

 ly, with the Russians is to try to get them to honor the terms of 

 their nuclear agreements, reduce nuclear weapons, and not ship or 

 transfer either the weapons or technology to other people in order 

 to get cash to be able to pay for food and whatever else they have. 

 That's another reason why we have an obligation to now forget 

 maybe some of the mistakes we've made in the past and move 

 ahead. 



Mr. Penny. How do you anticipate monitoring the agreement? I 

 mean, if, for example, a write-down or an offer of new credit is con- 

 tingent on military reforms, dismantling of the military apparatus, 

 what's the oversight mechanism? 



Mr. Glickman. I don't think there's any magic to it. I think you 

 can quantify it by perhaps setting some standards in terms of mis- 

 sile delivery systems, warheads, that kind of thing. I mean, we do 

 that in arms control agreements now. We monitor those reductions, 

 and we've had pretty good success — in fact, we have had very good 

 success in getting compliance to be monitored. I wouldn't see that 

 that would be an enormous problem. The question for us would be 

 that we'd have to make it realistic enough so that we know the 

 agreement would not be ignored, and I think we could do that. 



Mr. Penny. Mr. Allard. 



Mr. Allard. Thank you, Mr. Chairman. 



Mr. Glickman, I appreciate your comments. In looking over your 

 proposal, you had indicated in your remarks that you think it's im- 

 portant that we move along in a very expeditious manner and 

 quickly get some assistance to the new Baltic States, particularly 

 Russia. It seems to me that if we're going to do that, that we best 

 accomplish that through keeping the GSM program as a commer- 

 cial program and not get the State Department involved, which I 

 don't know is particularly expeditious in reaching their agree- 

 ments, or even the military. 



So my question to you is, why tie the U.S. credit guarantee pro- 

 gram to foreign policy considerations? It seems to me we're just 

 going to delay the process. 



Mr. Glickman. Well, they're one and the same, unfortunately. 

 They are one and the same, because the Russians and the other 

 Republics historically are in a situation of default, and the United 

 States Government and the taxpayers are going to have to pick up 

 the tab. Quite honestly, private companies would not be lending 

 money there. There are much better commercial places to lend i 

 money unless we provide some incentive, guarantees, some sort of 

 help to move the process along. 



I don't think that you can remove it from foreign policy. I think 

 it's one and the same, £md I think what you try to do is to protect 

 yourself as best as you can from having foreign policy jerk the rug 

 from underneath you. 



