THE UNITED STATES yesterday announced an unexpectedly large dollars 1.6bn (pounds 1bn) package of emergency short-term aid for President Boris Yeltsin, a step which President Bill Clinton insisted was a first down-payment on a co-ordinated effort by the wealthy industrialised world to save Russia's fragile democracy.

And, at a upbeat joint press conference after a fruitful summit here with the Russian leader, the US President pledged 'within a few days' to complete a policy review which could lead to the lifting of curbs left over from the Cold War. They include the Cocom ban on high technology exports to Russia, and the Jackson-Vanik restrictions on trade, imposed back in 1974 to punish Moscow for its opposition to the emigration of Jews.

Mr Clinton emphasised that all the money was immediately available, already approved by Congress under the 1993 budget proposals. Three-quarters of the funds would bypass the central goverment in Moscow, to ensure they reached the intended

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recipients.

Typically blunt and down-to-earth, Mr Yeltsin proclaimed himself 'fully satisfied' with the US package. The aid on offer was 'not a Christmas present' but an investment which would benefit all. Russia had barely embarked on reform: the package would help to permit 'a transition period, a breathing space', Mr Yeltsin said. Almost truculently, he declared there was no democratic alternative to his rule: 'Perhaps there'll be one tomorrow, but not today.'

Although Mr Clinton and other Western leaders know whatever is decided by the Group of Seven leading industrial nations will at best have a marginal effect on Russia's vicious and unpredictable political turmoil, this weekend's assistance is designed to boost Mr Yeltsin as he prepares for his 25 April referendum.

Geared both to making an impact on the daily lives of dispirited Russian citizens and to foster trade and investment ties between the two countries, the package is a mix of food and medical aid and steps to boost privatisation and free enterprise. It contains dollars 215m (pounds 143m) to speed the dismantling of Russian missiles and thus, Washington hopes, ratification and implementation of the stalled Start-1 and Start-2 treaties.

A key ingredient is dollars 700m (pounds 466m) of emergency finance so Moscow can buy US grain before Russia's harvest starts to come in this summer. This will restore Moscow's access to US grain markets after its partial default on earlier grain purchasing loans. Repayment of the new loan will not start for at least six years, officials said.

The Vancouver package is seen by President Clinton as only a first step before the meeting of G7 finance and foreign Ministers in Tokyo in 10 days.

The Tokyo session could produce the outline of a multilateral relief deal worth some dollars 30bn (pounds 20bn), including greater Russian access to IMF resources and a dollars 6bn (pounds 4bn) rouble stabilisation fund, for which Mr Yeltsin and his reformist advisers are desperately pressing. Trying to allay Western fears that such help would be wasted without a firm government grasp on the money supply, President Yeltsin promised President Clinton yesterday that he would seek to discipline the Russian central bank.

Washington is also promising to support a Russian application to join the General Agreement on Tariffs and Trade. In a separate step of great potential importance, the US Export-Import Bank is close to agreeing dollars 2bn (pounds 1.3bn) of loan guarantees for US companies to develop Russia's tattered oil and energy industry.

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The Americans admit that the Vancouver package is but a drop in the ocean of what is needed to salvage the moribund Russian economy, and concede they carry no guarantee of success. Politically, too, they are immensely sensitive, as Mr Yeltsin frankly conceded to reporters. 'Too small would be a bad thing,' he said, but too much would enable his conservative foes to claim the West had 'shackled' Russia.

Partly for that reason, Mr Clinton yesterday spoke of a new 'partnership' between Moscow and Washington, buttressed by a four-page 'Vancouver Declaration' enshrining the new co-operation, while his aides tried to pretend the benefits were not all one way.

But some disagreements persist. The US is worried over the flare-up between Russia and Georgia, and Moscow's failure to pull out its troops from the now independent Baltic countries. Mr Yeltsin, however, said that he was stalling withdrawals from Latvia and Estonia until the rights of the ethnic Russian minorities in those countries were guaranteed.

Lesson of history, page 2

Silver lining, page 10

What Yeltsin needs, page 20