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Public Papers - 1992 - April

Message to the Congress Transmitting the FREEDOM Support Act Proposed Legislation

1992-04-03

To the Congress of the United States:

I am pleased to transmit a legislative proposal entitled the ``Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992'' (the FREEDOM Support Act of 1992). Also transmitted is a section-by-section analysis of the proposed legislation.

I am sending this proposal to the Congress now for one urgent reason: With the collapse of the Soviet Union, we face unprecedented historical opportunity to help freedom flourish in the new, independent states that have replaced the old Soviet Union. The success of democracy and open markets in these states is one of our highest foreign policy priorities. It can help ensure our security for years to come. And the growth of political and economic freedom in these states can also provide markets for our investors and businesses and great opportunities for friendship between our peoples.

While this is an election year, this is an issue that transcends any election. I have consulted with the congressional leadership and have heard the expressions of support from both sides of the aisle for active American leadership. I urge all Members of Congress to set aside partisan and parochial interests.

Just as Democrats and Republicans united together for over 40 years to advance the cause of freedom during the Cold War, now we need to unite together to win the peace, a democratic peace built on the solid foundations of political and economic freedom in Russia and the other independent states.

This proposal gives me the tools I need to work with the international community to help secure the post-Cold War peace. It provides a flexible framework to cope with the fast-changing and unpredictable events transforming Russia, Ukraine, Armenia, and the other states. This proposal will allow us to:

Mobilize fully the executive branch, the Congress, and the private sector to support democracy and free markets in Russia and the other independent states of the former Soviet Union;

Address comprehensively the military, political, and economic opportunities created by the collapse of the Soviet Union, targeting our efforts and sharing responsibilities with others in the international community; and

Remove decisively the Cold War legislative restrictions that hamstring the Government in providing assistance and impede American companies and businesses from competing fairly in developing trade and investment with the new independent states.

Passage of this proposal will enable the United States to maintain its leadership role as we seek to integrate Russia and the other new independent states into the democratic family of nations. Without the tools this proposal provides, our policy of collective engagement will be constrained, our leadership jeopardized.

This proposal has 10 key elements:

First, this proposal provides the necessary flexibility for the United States to extend emergency humanitarian assistance to Russia and the other new independent states.

Emergency humanitarian assistance will help the peoples of the former Soviet Union to avoid disaster and to reduce the danger of a grave humanitarian emergency next winter. In this endeavor, the United States will not go it alone but will continue to work closely with the international community, a process we initiated at the Washington Coordinating Conference in January and will continue in the months ahead in regular conferences with our allies. By dividing our labors and sharing our responsibilities, we will maximize the effects of our efforts and minimize the costs.

Second, this proposal will make it easier for us to work with the Russians and others in dealing with issues of nuclear power safety and demilitarization. This proposal broadens the authority for Department of Defense monies appropriated last fall for weapons destruction and humanitarian transportation to make these funds, as well as foreign military financing funds, available for nonproliferation efforts, nuclear power safety, and demilitarization and defense conversion.

Third, technical assistance can help the Russians and others to help themselves as they build free markets. Seventy years of totalitarianism and command economics prevented the knowledge of free markets from taking a firm hold in the lands of Russia and Eurasia. By providing know-how, we can help the peoples and governments of the new independent states to build their own free market systems open to our trade and investment. It will also allow agencies authorized to conduct activities in Eastern Europe under the ``Support for East European Democracy (SEED) Act of 1989'' to conduct comparable but separate activities in the independent states of the former Soviet Union. Through organizations such as a Eurasia Foundation, we will be able to support a wide range of technical assistance efforts.

Fourth, this proposal will allow us to significantly expand our technical assistance programs that facilitate democratization in the new states, including our expanding rule of law program. It will authorize support for programs such as ``America Houses.'' It also provides support for expanded military-to-military programs with Russia and the other new independent states to cultivate a proper role for the military in a democratic society.

Fifth, this proposal provides a clear expression of bipartisan support to continue to extend Commodity Credit Corporation credit guarantees to Russia and the other new independent states in light of the progress they are making toward free markets. As they overcome their financial difficulties, we should take into account their commitment to economic freedom in providing credit guarantees that will help feed their peoples while helping American farmers.

Sixth, for American business, this proposal expands authority for credit and investment guarantee programs such as those conducted by the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank. It will allow us to waive statutory ceilings on credit guarantee programs of the Export-Import Bank Act and other agencies that applied to the Soviet Union and the restrictions of the Johnson Debt Default Act on private lending. In this way, it will expand U.S. exports to and investment in Russia and the other new independent states.

Seventh, this bill will facilitate the development of the private sector in the former Soviet Union. This bill removes Cold War impediments while promoting outside investment and enhanced trade. It will also allow waiver of restrictions on imports from the independent states of the former Soviet Union beyond those applied to other friendly countries. It will support efforts to further ease Coordinating Committee (COCOM) restrictions on high technology. The bill will also allow the establishment of Enterprise Funds and a capital increase for the International Financial Corporation.

Eighth, this proposal will allow the United States to work multilaterally with other nations and the international financial institutions toward macroeconomic stabilization. At the end of World War II, the United States stood alone in helping the nations of Western Europe recover from the devastation of the war. Now, after the Cold War, we have the institutions in place -- the International Monetary Fund (IMF) and the World Bank -- that can play a leading role in supporting economic reform in Russia and Eurasia.

Therefore, this proposal endorses an increase in the IMF quota for the United States. This will help position the IMF to support fully a program of macroeconomic stabilization. I request the Congress to pass both the authorization and appropriations necessary for this purpose.

Ninth, this proposal endorses a significant U.S. contribution to a multilateral currency stabilization fund. Working with the international financial institutions and the other members of the G - 7, we are putting together a stabilization fund that will support economic reform in Russia and the other independent states.

Tenth, this proposal provides for an expanded American presence in Russia and the other new independent states, facilitating both government-to-government relations and opportunities for American business. Through organizations such as the Peace Corps and the Citizens Democracy Corps, we will be able to put a large number of American advisors on the ground in the former Soviet Union.

In sending this authorization legislation to the Congress, I also request concurrent action to provide the appropriations necessary to make these authorizations a reality. In order to support fully multilateral efforts at macroeconomic stabilization, I urge the Congress to move quickly to fulfill the commitment of the United States to the IMF quota increase. And I urge prompt enactment of the appropriations requests for the former Soviet Union contained in the Fiscal Years 1992 and 1993 Budget requests presently before the Congress.

I call upon the Congress to show the American people that in our democratic system, both parties can set aside their political differences to meet this historic challenge and to join together to do what is right.

On this occasion, there should be only one interest that drives us forward: America's national interest.

George Bush

The White House,

April 3, 1992.

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