[Congressional Record Volume 140, Number 149 (Thursday, December 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: December 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           CODEL TRIP REPORT

 Mr. Leahy. Mr. President, I ask that a report of a Codel trip 
to Russia, Ukraine, Moldova, and Italy be printed in the Record.
  The report follows:

    Report of Codel Leahy Trip to Russia, Ukraine, Moldova, Italy, 
                          September 2-12, 1994

       Senator Patrick Leahy, chairman of the Foreign Operations 
     Subcommittee of the Appropriations Committee, led a 
     delegation of senators to Russia, Ukraine, Moldova, and Italy 
     September 2-12, 1994. In addition to Senator Leahy, the 
     delegation consisted of Senators Thad Cochran, J. James Exon, 
     and Hank Brown. Mr. James Collins, Senior Coordinator, Office 
     of the Ambassador at Large for the New Independent States, 
     U.S. Department of State, and Ms. Barbara Turner, Deputy 
     Assistant Administrator, Bureau for Europe and the New 
     Independent States, U.S. Agency for International 
     Development, accompanied the delegation.
       The delegation was assisted by William Witting, clerk of 
     the Foreign Operations subcommittee, Luke Albee, 
     Administrative Assistant to Senator Leahy, Hunt Shipman, 
     Legislative Assistant to Senator Cochran, and Leah Gluskoter, 
     Personal Assistant to Senator Leahy. Jan Paulk, Director of 
     Interparliamentary Services, provided scheduling and 
     logistical assistance. Lt. Colonel Nicki Watts and Lt. 
     Colonel Rick Pyatt, USAF Senate Liaison Office, were the 
     military escorts.
       The U.S. Department of State, the U.S. Agency for 
     International Development, the U.S. Department of 
     Agriculture, the U.S. Export-Import Bank, the Overseas 
     Private Investment Corporation, the U.S. Trade and 
     Development Agency, the U.S. Department of Commerce, the U.S. 
     Information Agency, and the Peace Corps all provided briefing 
     materials.


                        I. Delegation Activities

                                 Russia

       Saint Petersburg: The delegation travelled to St. 
     Petersburg to observe the progress that the city, a leader in 
     Russia's efforts to make the transition to a private 
     enterprise-oriented market economy, is making.
       The delegation met with Americans and Russians involved in 
     an AID-sponsored Rule of Law project and discussed work being 
     done to establish an independent judiciary, protect 
     individual rights, attack crime, and establish a framework of 
     commercial and contract law.
       Representatives of a U.S. company working under AID 
     contract described to members of the delegation their efforts 
     to help a group of independent stockbrokers in St. Petersburg 
     organize themselves into an association modeled on the 
     American NASDAQ. The aim of this AID project is to have 
     the brokers establish rules of conduct for themselves, 
     much as Wall Street did during its first century of 
     existence, and begin to create sufficient order, 
     reliability, and transparency to attract large numbers of 
     investors and become a significant source of finance for 
     private investment.
       Many people have had to pursue second jobs in the service 
     economy. The delegation spoke with college students forced to 
     sell trinkets in sidewalk stalls in order to make ends meet. 
     Despite the fact that their lives are far more stressful than 
     in the days when their life at university was financed 
     entirely by the State, the general spirit among these 
     students seemed to be one of stress and resignation that life 
     will be difficult for some time, but cautious optimism that 
     the future will be better.
       The delegation visited a private food market where good-
     quality foods of all kinds, including imported fruits like 
     bananas, were in plentiful supply. Prices were high, but the 
     delegation observed that significant numbers of people of 
     modest income were making purchases there.
       Moscow: In Moscow, the delegation held a lengthy meeting 
     with Russian Foreign Minister Andrei Kozyrev during which 
     they discussed the conflict in Bosnia, Russian relations with 
     Ukraine and Moldova, and U.S.-Russia economic relations. The 
     delegation discussed Russia's program of enterprise 
     privatization and economic reform and U.S. technical 
     assistance to that program with Deputy Prime Minister and 
     Minister of Privatization Anatoly Chubays and a group of 
     other senior economic policy-makers. During meetings with 
     leaders of the Duma (the lower house of Parliament) and the 
     Council of the Federation (the upper house), the Senators 
     inquired into the politics of enacting legislation in support 
     of Russia's transition to democracy and a market economy. 
     Senator Exon met with Minister of Atomic Energy Viktor 
     Mikhaylov to discuss Russian nuclear security. U.S. 
     Ambassador to Russia Thomas Pickering hosted a dinner meeting 
     with U.S. business representatives, including the President 
     of the American Chamber of commerce and the President of the 
     Russian-American Enterprise Fund, with whom the delegation 
     discussed new developments and continuing problems in the 
     conditions for operation of private enterprise in Russia. The 
     delegation visited a USAID new business development project, 
     and an OPIC-supported U.S.-Russia cellular telephone leasing 
     joint venture enterprise. Senator Brown visited a USAID 
     capital market development project.
       Nizhny Novgorod: Nizhny Novgorod, Russia's third largest 
     city, located on the Volga River east of Moscow, has, through 
     the leadership of Governor Boris Nemtsov and with the 
     assistance of a wide range of U.S. and other technical 
     assistance agencies, established itself as a leader in 
     implementing economic reform at the regional and local 
     levels. The delegation met with Governor Nemtsov and Mayor 
     Ivan Sklarov and discussed their efforts to create a 
     market economy in Nizhny Novgorod. The delegation 
     travelled outside the city to visit a privatized farm and 
     discussed the problems of agricultural reform and land 
     privatization with the USAID project officer, the 
     representative of the International Finance Corporation 
     providing technical assistance to the farmers, and the 
     farmers themselves. The delegation had lunch with 
     representatives of a number of U.S. agencies and 
     organizations including the Peace Corps, Volunteers 
     Overseas Cooperative Assistance, Research Triangle 
     Institute, and International Executive Service Corps 
     working on economic reform in Nizhny Novgorod. The 
     delegation also walked around the downtown to observe the 
     extent of private enterprise established in the city.

                                Ukraine

       Newly independent and exercising control of their own 
     affairs for the first time, Ukrainian political leaders have 
     been working to establish the structure and lines of 
     authority of their government, and have not yet made much 
     progress in reforming their heavily centralized economy. The 
     delegation travelled to Kiev, Ukraine to express support for 
     Ukraine's independence and to urge the Ukrainian government 
     to move without further delay to stabilize the economy and 
     encourage private enterprise. Newly elected President Leonid 
     Kuchma met with the delegation and discussed the policies and 
     priorities that his government will be following. The 
     delegation also met Rada (Parliament) Speaker Oleksandr Moroz 
     and other Rada members to explore the prospects for enactment 
     of reform legislation by the Rada. Economic Minister Roman 
     Shpek provided the delegation details of his government's 
     economic reform program. U.S. Ambassador William Miller 
     hosted a reception for the delegation during which the 
     senators met representatives of many USAID contractor and 
     related agencies. The delegation also visited an open-air 
     food market where both state-controlled and private food 
     distributors were present.

                                Moldova

       Moldova, a small, landlocked country on the Dniester river 
     sandwiched between the Ukraine to the east and Romania to the 
     west, is working aggressively to establish itself as an 
     independent country and develop close ties with the West to 
     balance existing ties with Russia and other countries of the 
     former Soviet Union. It is pursuing actively a program of 
     economic reform, particularly in its large agricultural and 
     agro-industrial sectors, and is eagerly seeking western 
     investment and trade to bolster that program. Drought in 
     the spring, followed by serious flooding in August, have 
     increased Moldova's need for foreign assistance. 
     Separatist sentiments, among the Gagauz in southern 
     Moldova and the Russian-speakers who inhabit the trans-
     Dniester region in eastern Moldova (where the Russian 14th 
     Army is still stationed), have complicated the 
     government's efforts at nation-building.
       The delegation met in Chisinau with President Mircea Snegur 
     and with Parliament President Petru Lucinschi. The senators 
     travelled outside Chisinau to Cojusna where a group of 
     farmers from collective farms that have been privatized and 
     are receiving USAID-funded technical assistance from 
     Volunteers in Overseas Cooperative Assistance hosted a lunch 
     for the delegation and discussed the challenges they must 
     overcome to survive in a market environment. The delegation 
     visited a collection site for vouchers provided to Moldovans 
     as part of Moldova's enterprise privatization program. 
     Parliament President Lucinschi hosted a dinner for the 
     delegation and U.S. Ambassador Mary Pendleton.

                                 Italy

       Aviano Air Force Base: Aviano Air Force Base is a major 
     base of operations for U.S. and NATO air forces dedicated to 
     enforcement of UN sanctions against Serbia and other actions 
     in the former Yugoslavia. 16th Air Force Commander Lt. 
     General Joseph W. Ashy and 31st Fighter Wing Commander 
     Colonel John H. Campbell briefed the delegation in detail on 
     these operations, and the role of U.S. forces in the NATO 
     effort. The delegation also toured the base and observed 
     operations.
       Rome: In Rome, the delegation met with newly arrived U.S. 
     Representative to the United Nations Agencies for Food and 
     Agriculture Thomas Forbord and with UN Food and Agriculture 
     Organization Director-General Jacques Diouf and discussed 
     with them strategies for reducing costs and enhancing the 
     effectiveness of the FAO. James Creagan, Deputy Chief of 
     Mission, U.S. Embassy Rome, hosted a meeting for the 
     delegation with members of the Italian Senate and Chamber of 
     Deputies concerned with international cooperation to ban 
     anti-personnel landmines.


                              ii. findings

                                 Russia

       President Yeltsin and his government have made impressive 
     progress over the past two years in introducing democracy and 
     a market economy to Russia. American aid is helping a lot.
       Russia still has a long way to go to complete the process 
     of transition. Many of the essential elements of a successful 
     private enterprise-oriented economic system still do not 
     exist. If they are not created quickly, corruption and crime 
     rather than competition could become the dominant features 
     of the Russian economy.
       Russia's transformation to a private enterprise-oriented 
     market economy requires a massive reallocation of resources 
     and people. Russia has not yet escaped from the devastating 
     depression that accompanied the collapse of the command 
     economy. Millions of people have been laid off from jobs that 
     they held in the old command economy but that are not valued 
     by the new market economy. The rate of unemployment may 
     exceed 12 percent. The delegation saw many people reduced to 
     standing shoulder-to-shoulder on street corners trying to 
     sell clothing and toys.
       Despite continuing debate within the Russian government 
     over the best path and pace for economic reform, the Russian 
     government is moving forward with a broad range of reforms 
     including privatization of land and agriculture, creation of 
     an independent judiciary, and encouragement of small 
     enterprises. The Duma passed Prime Minister Chernomyrdin's 
     austere budget in June. Monthly inflation is down (although 
     has begun to increase for the first time since 1991. Consumer 
     spending is up. Russia is continuing to fulfill its 
     commitments under its program of cooperation with the 
     International Monetary Fund.
       Although it took time, the U.S. assistance program for 
     Russia is now in full operation. Russian government and non-
     government representatives with whom the delegation met were 
     virtually unanimous in praising the contributions of the 
     program, and many requested increases in technical assistance 
     for elements of the reform program. All agreed that Russia 
     has no further need for humanitarian assistance now.
       With strong assistance from USAID, Russia has over the past 
     two years, privatized 70 percent of state-controlled 
     enterprises, a feat far beyond anything anyone imagined 
     possible as recently as two years ago. Although much more 
     remains to be done, Russia has succeeded in creating a large 
     class of shareholders who are beginning to hold enterprise 
     managers responsible for generating sufficient revenues to 
     cover obligations and yield a return to them. By some 
     estimates, more than half of Russia's GDP now comes from the 
     private sector, and more than half the workforce is employed 
     in the private sector. In a short space of time, a large 
     number of Russians have been given a stake in the 
     preservation and expansion of a market economy in Russia.
       The growth of corruption and crime in Russia is today the 
     single largest threat to establishment of a democratic, 
     market society in Russia. Neither individuals nor companies 
     feel secure. No element of government is competent at the 
     moment to provide them security. Russian law enforcement 
     authorities need to strengthen their performance defending 
     citizens' rights. The United States should include 
     technical assistance for law enforcement as a major 
     element of its assistance to Russia.
       The United States should also give high priority to 
     assisting Russia to create a framework of law to govern 
     private enterprise. A commercial code, legal protection of 
     land ownership, prohibitions against monopoly and other anti-
     competitive practices, and rules to govern corporate issuance 
     of stocks and bonds and trading in such securities, are all 
     essential to a private enterprise economy. USAID's projects 
     in the areas of democratic pluralism and rule of law are 
     attempting to respond to this need.
       Much remains to be done to create an attractive climate for 
     private investment in Russia. Excessively heavy regulation 
     and an unpredictable tax regime are major concerns among 
     businessmen. This may be less of a problem for Russians 
     because of a tradition in Russia of evasion of government 
     regulation and taxation. U.S. companies are required by U.S. 
     law to respect the laws of all countries in which they 
     operate. If regulation is too heavy, U.S. companies are 
     likely simply to withdraw from Russia.
       Creation of an effective, equitable, and well-enforced 
     system of taxation is essential to the survival of a private 
     enterprise-based economy in Russia. The government needs 
     taxes to survive. Government employees need to be paid 
     realistic wages if they are to resist corrupt practices. The 
     United States should give priority to providing technical 
     assistance in the areas of drafting tax law and creating both 
     police and judicial enforcement mechanisms.
       Russia has taken the crucial first step in agricultural 
     reform by placing ownership of some farms in a few regions 
     such as Nizhny Novgorod in the hands of the farmers. Much 
     remains to be done. The traditional Soviet collective farm 
     provided not only employment for farmers but also housing, 
     education, health care, social, and other services. In 
     restructuring the farm, the farmers will be seeking to 
     maintain access to essential services. This is something that 
     they can best work out for themselves. U.S. agricultural 
     reform assistance projects in Russia should support 
     privatization of the collective farms, i.e., placing 
     ownership of the farm in private hands and exposing the 
     owners to the challenge of making the farm earn income. They 
     should also assist farmers in learning to function in a 
     market system, purchasing inputs, marketing produce, 
     controlling costs and assessing profitability. They should 
     refrain from trying to influence the outcome of debates among 
     Russians about how farms should be structured and whether 
     individual or cooperative ownership of farms better suits 
     their needs.
       The delegation met many Russian, Ukrainian, and Moldovan 
     agriculturalists who have received training in the United 
     States under the Cochran Fellowship program in areas vital to 
     agricultural reform such as product marketing, agricultural 
     input supply, farm management and agricultural credit. 
     Without exception, the beneficiaries appreciated and 
     benefited from their participation in the program. The United 
     States should seek to maintain funding for this program.
       In Nizhny Novgorod, the delegation saw how focusing U.S. 
     assistance at the sub-national level can achieve impressive 
     results. Governor Nemtsov and his colleagues have moved ahead 
     of the central government in experimenting with strategies 
     for enterprise privatization, encouraging private investment, 
     and privatization of collective farms, consciously trying to 
     establish a model for other governorates in Russia. They 
     confirmed that they could not have accomplished as much as 
     they have without the assistance they have received from the 
     United States and multilateral agencies such as the 
     International Finance Corporation, and appealed for an 
     increase in this assistance. Aid to Nizhny Novgorod is making 
     a concrete contribution to helping Russia make the transition 
     to democracy and a market economy, particularly as it is 
     reaching people at the grassroots level. USAID should 
     continue it, but, given budgetary limitations, will have to 
     balance it with other priorities.
       USAID is seeking through its New Business Development 
     program to provide support for grassroots entrepreneurship 
     and private enterprise creation. Stimulation of 
     entrepreneurship is critical to Russia's transition to a 
     market economy and the United States has a lot of expertise 
     from which the Russians should be able to learn. The 
     delegation is concerned, however, about the potential for 
     inefficiency in a project of this kind. USAID should monitor 
     this program carefully and continuously to ensure that all of 
     its elements deliver value commensurate with their cost.
       Russia is struggling to define how it will interact with 
     the other states of the former Soviet Union. There is no 
     consensus among the Russian people on this question, and 
     leaders such as Vladimir Zhirinovsky have tried to win 
     support by criticizing President Yeltsin for tolerating the 
     dissolution of the Soviet empire. Russia has the potential to 
     play a constructive role in assisting economic restructuring 
     in some of its neighbors, for example in helping the Ukraine 
     to adjust to paying world market prices for the natural gas 
     that it purchases from Russia. It is important for the United 
     States to support strongly the independence of all of the new 
     independent states of the former Soviet Union. The United 
     States should oppose actions by Russia that compromise that 
     independence. It should at the same time support 
     interaction between Russia and its neighbors that is 
     consistent with international principles of respect for 
     national independence and is undertaken by mutual 
     agreement.
       Foreign Minister Kozyrev assured the delegation that the 
     Russian Government shares the desire of the United States to 
     see the Bosnian Serbs accept the UN-sponsored peace plan. 
     Minister Kozyrev himself has invested much effort in 
     attempting to convince the Serbs to accept it. Given Russia's 
     strong influence over the Serbs, it is important that the 
     United States continue to seek Russia's cooperation in its 
     search for a formula to bring a halt to the fighting in the 
     former Yugoslavia.
       Minister Kozyrev noted to the delegation that the final 
     document of the ``G-8'' meeting in Naples in July, signed by 
     President Yeltsin, included a statement of support for a ban 
     on the export of anti-personnel landmines. This is an 
     important commitment since Russia is among the largest 
     exporters of such mines. The U.S. Government should seek to 
     cooperate with the Russian Government in promoting broad 
     international agreement on banning anti-personnel landmine 
     exports. The U.S. Embassy in Moscow should report to 
     Washington on Russian actions to implement the ban.
       The Overseas Private Investment Corporation is making a 
     substantial positive contribution to promoting the expansion 
     of private investment in Russia by providing insurance and 
     financing for U.S. investments and by sponsoring seminars and 
     other exchanges to acquaint Russians with western business 
     practices. Demand for OPIC support exceeds its resources. The 
     U.S. Government is going to have a difficult time over the 
     next several years deciding how to fund OPIC programs that 
     support private investment in Russia without prematurely 
     cutting off funding for technical assistance that is helping 
     create the framework necessary for private investment to 
     succeed in Russia. Given the commitment of the present 
     Russian Government to economic reform, the U.S. Government 
     should give strong weight to its views about where the funds 
     will achieve the best results.
       Peace Corps volunteers are making a unique contribution to 
     reform in Russia, Ukraine, and Moldova by bringing western 
     business, agricultural, and other know-how to the grassroots 
     level. The delegation was impressed with the skills of the 
     volunteers with whom it met.
       The Eurasia Foundation is playing a key role in the U.S. 
     assistance program for the NIS. Its mandate is to provide on-
     the-ground, small-scale, citizen-to-citizen and institution-
     to-institution grants in support of economic reform and 
     democracy building. It has established offices in five cities 
     across the NIS and has in an admirably short space of time 
     funded a wide range of projects in the areas of economic 
     reform, governmental reform and development of non-
     governmental organizations, and institution-building in 
     the field of media and communications. The Foundation 
     specializes in making small loans rapidly and with a 
     minimum of red tape. Its projects have the advantage of 
     demonstrating U.S. goodwill to Russians at the micro, man-
     in-the-street level in cities across Russia.
       After a very lengthy start-up period, the Russian-American 
     Enterprise Fund has recently made its first loans to small 
     and medium-sized enterprises in Russia. Given the rapidly 
     expanding scope of private enterprise activity and the 
     corresponding demand for credit in Russia, the Fund should 
     expand its loan portfolio rapidly over the next year.

                                Ukraine

       The United States has a strong interest in supporting the 
     independence and sovereignty of Ukraine, and its transition 
     to democracy and a market economy.
       As the delegation informed President Kuchma, the U.S. 
     Congress attaches strong importance to Ukraine's ratification 
     of the Nuclear Nonproliferation Treaty. The Congress has 
     welcomed warmly the Rada's vote in favor of ratification on 
     November 16, 1994.
       The Ukrainian economy is mired in depression resulting from 
     the collapse of the command economy and the government's lack 
     of revenues to stimulate recovery. Excessive money creation 
     has also provoked hyperinflation.
       Newly-elected President Leonid Kuchma assured the 
     delegation that his administration would reach agreement with 
     the International Monetary Fund on an economic stabilization 
     and reform program and move forward with the program. He 
     subsequently has concluded that agreement and obtained Rada 
     ratification of the economic program.
       The Ukrainian Government is in urgent need of additional 
     resources to finance this program.
       The United States has promised Ukraine generous financial 
     and technical assistance in support of this program. Specific 
     plans for additional assistance were announced during the 
     state visit of President Kuchma to Washington November 21-23, 
     1994. In addition, the United States should act as a leader 
     in organizing international support for Ukraine's reform 
     program.
       Ukraine is heavily dependent on Russia and Turkmenistan for 
     its energy. Russia has been generous in continuing to supply 
     natural gas to Ukraine and accepting delay of payment for 
     much of it. Ukraine needs to move quickly to make its energy 
     use more efficient. USAID is providing useful support to 
     this effort.
       The Ukrainian Government has announced that it will proceed 
     early in 1995 with a broad program of privatization of state-
     owned enterprises. USAID has committed extensive technical 
     assistance. The Ukrainian economy is starving for capital 
     investment that can only come from the private sector. 
     Privatization of state-owned enterprises and enactment of 
     laws to support and regulate private enterprise activity are 
     necessary to stimulate such investment.
       Some Ukrainian officials told the delegation they consider 
     foreign investment more important to Ukraine's economic 
     recovery than economic reform. It is unlikely that Ukraine 
     will succeed in attracting significant private investment 
     without also pursuing economic reform. Private investors of 
     any nationality will undertake projects only in places that 
     offer a stable, predictable business environment where the 
     prospects of earning an attractive return on their investment 
     are good. Stabilization of prices, liberalization of 
     restrictions on exchange conversion, and establishment of a 
     stable and fair corporate taxation system are among the steps 
     investors who are contemplating investment in Ukraine 
     consider vital.
       Ukraine's agricultural potential is enormous. Privatization 
     of farms and of land will stimulate realization of that 
     potential.
       Entrenchment of democracy in Ukraine requires establishment 
     of sound legal, judicial, and law enforcement systems. USAID 
     is providing technical assistance to strengthening of 
     democratic institutions and the rule of law. This assistance 
     should be expanded. In addition, the United States should 
     offer cooperation in the area of law enforcement.

                                Moldova

       Although it is one of the smallest of the new independent 
     states of the former Soviet Union, Moldova has proven to be 
     one of the bolder champions of political and economic reform. 
     It has held democratic elections for both its President and 
     its parliament, and has just instituted a new constitution. 
     Starting last December, it has concluded a series of 
     agreements with the International Monetary Fund and is 
     implementing economic policies consistent with those 
     agreements. The United States should provide generous 
     technical assistance in support of these efforts.
       On top of an extended drought that had caused a large 
     reduction in agricultural production, Moldova was devastated 
     in August by floods. The United States has led the 
     international community in providing humanitarian 
     assistance and should continue to do so.
       The Moldovan Government needs to create conditions that 
     will attract foreign technology and investment to develop the 
     Moldovan economy and enable it to begin to export into 
     western markets. Agencies like the Western NIS Enterprise 
     Fund and the Overseas Private Investment Corporation should 
     make themselves available to counsel the Moldovan Government 
     on the policies needed to promote private investment.
       Moldova's program of privatization of state-owned 
     enterprises, being undertaken with substantial U.S. technical 
     assistance, is proceeding actively, but the number of 
     enterprises currently being privatized is modest. Expansion 
     of the privatization program would help erase any remaining 
     doubts about the government's commitment to move to a market 
     economy.
       U.S. assistance to Moldova in the area of agricultural 
     reform has been warmly received. Farmers on privatized farms 
     and managers of agribusiness companies with whom the 
     delegation met expressed eagerness to adopt western 
     management techniques and hope for both expanded technical 
     assistance and investment from the United States in this 
     field. Given continuing resistance among many Moldovan 
     government officials to privatization of agriculture 
     (privatization of land is suspended until the year 2000), 
     however, U.S. assistance will have to be carefully targeted 
     to be productive. The U.S. Farmer-to-Farmer program is 
     achieving positive results.
       The Russian 14th Army continues to be stationed in the 
     trans-Dniester region of Moldova. Negotiations are underway 
     between the Russian and Moldovan Governments regarding 
     withdrawal of the 14th Army. The United States should 
     continue to support the sovereignty, independence, and 
     territorial integrity of Moldova and urge the Russians to 
     withdraw the 14th Army as soon as possible. The delegation 
     expressed this concern to Russian officials during its visit 
     to Moscow.
       To date, USAID has maintained no direct-hire staff in 
     Moldova and has overseen its program of assistance to Moldova 
     through its mission in Kiev, Ukraine. Given the encouraging 
     prospects for the Moldova aid program, U.S. Embassy Chisinau 
     and USAID should work together to station USAID direct-hire 
     staff in Chisinau.

                                 Italy

       U.S. military officers and forces participating in NATO 
     efforts to enforce United Nations sanctions against Serbia 
     and Bosnia are substantially integrated with the forces of 
     other NATO countries. Any action by the United States to 
     pursue a policy vis-a-vis the conflict in Bosnia independent 
     of NATO would force de-integration of those forces. Prior to 
     undertaking such action, the U.S. Government should evaluate 
     carefully its implications for NATO and the role of the 
     United States in that organization.
       The Director General of the Food and Agriculture 
     Organization is working to increase the FAO's effectiveness 
     in increasing world food security. Food shortages are a major 
     underlying cause of conflict in the world. The United States 
     should support efforts to increase food security. It also 
     should support the Director General's efforts to increase the 
     effectiveness of the organization through reorganization.
       The delegation was told by Italian Deputy Emma Bonino that 
     Italy, traditionally a major producer and exporter of anti-
     personnel landmines, is about to join the United States in 
     imposing a moratorium on these exports, and that it will also 
     in the near future take the steps necessary to block 
     production of these inhumane weapons. The U.S. Government 
     should welcome these steps by Italy. The U.S. Embassy in Rome 
     should keep Washington up to date on Italian actions in this 
     regard. The Department of State should maintain contact with 
     Deputy Bonino and other responsible Italian officials and 
     consult with them about future steps to reduce the threat to 
     innocent civilians posed by anti-personnel landmines.

                          ____________________