Bankrupt Superpower: No Cash For Clout When Governments Don't Have Money

WASHINGTON — Washington. -- In its setting and urgency, Secretary of State James A. Baker III's December 12 speech evoked Winston Churchill's famous Iron Curtain warning of a generation ago.

Standing in the Romanesque auditorium of Princeton University's century-old Alexander Hall, Mr. Baker declared that the world stands at "history's precipice."


Its wealthy states could help the former Soviet republics to build democracy, advance economically and demilitarize smoothly, he said, and stand to "be beneficiaries of its success for decades to come."

Or they can do nothing, he added, and witness the possibility that Russia and the other republics will degenerate into economic chaos, anarchy and perhaps fascism.


The dramatic message seemed to signal something grand, perhaps on the order of the post-World War II Marshall Plan: vast amounts of money and energy devoted to reviving an entire region economically.

But Mr. Baker proposed far less: a Washington conference in January to coordinate humanitarian aid and an international coalition to divide up various assistance tasks.

And eight days after his speech, a senior administration official felt constrained to defend plans for $600 million in new Soviet aid, stressing that it was coming out of already appropriated defense and foreign-aid funds.

What's happening here?

The United States, wracked by a prolonged recession and hobbled by budget and trade deficits, is in no position to bolster its world leadership role with big sums. As a result, there are signs that America's global clout is fraying a mere nine months after the Persian Gulf victory established U.S. preeminence as the sole superpower.

Foreign aid has rarely been popular. Still, the United States has in the past found deep pockets by marshaling well-organized support.

But as it seeks to guide perhaps the most world-shaking event in a generation -- the transformation of its Cold War enemy -- the Bush administration finds itself strapped.

Its reluctance is compounded by the 1992 election campaign. With Democratic critics ever alert to how much time President Bush spends on foreign affairs, he is loathe to show more interest in Russian domestic problems than America's. Administration officials took pains to point out the benefits to the American farmer of the food aid already sent.


So it was not surprising that the response to Mr. Baker's "call to action" was a bit like the sound of one hand clapping.

French President Francois Mitterrand derided the conference as unnecessary, Germans noted they have been carrying the single biggest share of the burden already, and Japan appeared wary of being called on for a big contribution.

Mr. Baker hastened to add that it would not be a "pledging conference." Enthusiasm seemed to grow after his recent trip to the former Soviet Union and Brussels. The conference remains on track -- probably for the third week in January -- but some administration officials now are just steeling themselves to get through it without a major problem.

The lukewarm response may also have stemmed from the fact that the United States took so long to assert leadership toward the Soviets' plight. The idea of an international conference, in fact, had been under consideration here for some time. For months, the Bush administration seemed to resist acknowledging the dissolution of central authority, its ties to Mikhail Gorbachev matched by wariness of Russian President Boris Yeltsin and other republic leaders.

But U.S. officials realized early on that no unilateral American aid effort could meet the need. "It's difficult to match resources with the problem we've defined," one official said.

The financial limits to American power were ironically evident in the Gulf war, when the United States supplied most of the winning fighting strength, but Gulf nations and wealthy non-participants paid much of the bill.


This arrangement, put together with doggedness and skill, suggested a new model for how the United States would maintain its preeminence as sole superpower without piling on more debt: build an international consensus around a policy the United States wants and spread out the cost.

As the Gulf crisis showed, this works in cases where allies' interests coincide with America's and where U.S. military strength is crucial.

American dominance is still felt in the Middle East, where the United States heavily subsidizes Israel and Egypt and where the financial vacuum left by the Soviet Union is being filled by American allies in the Persian Gulf.

The United States thus was able to get Arabs and Israelis to the negotiating table, though not without relentless effort.

Where economic clout matters most and allies' interests clash, however, the consensus doesn't always go America's way.

This was driven home last month when neither the United States nor the U.N. secretary general was able to prevent Germany from recognizing Croatia and Slovenia, and taking the European Community with it.


Back when Mr. Baker was trying to extract a bigger German contribution for the Persian Gulf war, he chided the newly unified country that being more means doing more. Last month's display of German assertiveness may not have been quite what he had in mind. Nor was the decision by German bankers to raise interest rates at a time when other European countries and the United States were doing the opposite.

Both Germany and Japan, which has emerged in recent years as the world's biggest foreign-aid donor, are now considered strong enough to be mentioned for permanent U.N. Security Council seats, which would dilute American power in the Security Council.

Some pundits argue that with the end of the Soviet Union, the United States will be able to cut its defense budget to the point where it can more effectively compete with Europe and Asia.

But that may come to late to prevent erosion of American influence. Already, says U.S. Ambassador to Moscow Robert Strauss, Germans and Japanese are aggressively pursuing investment in the former Soviet republics. Those two economic superpowers may stand to increase their political influence as well, perhaps at U.S. expense.