U.S. Firms Still Face Uncertainty in Former U.S.S.R.

President Bush’s proposed $6.6-billion plan to aid the former Soviet Union comes at a time when the once-bright promise of East-West business contacts has been darkened by persistent, chaotic conditions in Russia and its neighboring republics, Soviet specialists said Wednesday.

In addition, some maintain that the new assistance--part of a $24-billion allied fundto promote economic stability and democracy in the former Soviet Union--is insufficient to have much effect on the region’s enormous economic problems.

“You get into a situation where it becomes government-to-government welfare,” said Lawrence A. Hunter, chief economist at the U.S. Chamber of Commerce, saying he would have preferred more emphasis on creating free-market incentives for farmers and others in the former Soviet economy.

Bush on Wednesday outlined plans for greater U.S. outlays to the International Monetary Fund, new loan guarantees to finance Russian purchases of American farm commodities, contributions to a ruble-stabilization fund and other forms of aid to help the former Soviet Union.

Under the plan, the United States will provide Russia with $600 million in loan guarantees, largely for U.S. farm products. Another $500 million will be available for Ukraine, Armenia and other former Soviet republics, once they demonstrate credit-worthiness and abide by certain technical requirements, U.S. officials said.

Deputy Commerce Secretary Rockwell A. Schnabel said a democratic and economically vibrant Russia will offer great opportunities for American merchants. “They are very much inclined to be pro-American and want to buy American products,” he said.

Since January, 1991, Russia has used $3.75 billion in U.S. export credit guarantees to buy wheat, corn, vegetable oil, soybeans, almonds, hops and other American commodities, according to the Department of Agriculture.

One Administration official predicted that the Russians will buy computers, medical equipment, pharmaceuticals and factory production-line equipment. Also, they are expected to buy technology for oil exploration and production.

Bush’s announcement comes at a time when U.S.-Russian business contacts seem to be growing, although haltingly because of the deep economic and legal uncertainties of conducting business in the former Soviet republics.

On Wednesday, New York-based Loral Corp. said that one of its units has been granted U.S. approval to buy electric satellite propulsion systems from Russia. The transaction may be the first exchange of space technology between a U.S. company and the former Soviet Union.

Still, the former Soviet Union remains a difficult place to do business, and its unstable economy has yet to overcome such entrenched roadblocks as a vague legal system, little wholesale network, and bureaucracies that resist reform.

Times staff writer Greg Johnson in San Diego contributed to this report. Peterson reported from Los Angeles and Rosenblatt from Washington.

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