Remarks and an Exchange With Soviet Journalists on the Upcoming Moscow Summit

The President. Well, we have, I think, about 30 minutes, and I don't know any better way to start other than to say I'm looking forward to this visit very much indeed. A lot of things to talk about, and I have every anticipation that the visit will go well.

A lot of the issues were addressed at this G - 7 meeting, but we've got a lot of bilateral things to discuss and, as far as we're concerned, every issue is open for discussion. So, I think it will be positive. And I hope that the outcome of the visit will be a strengthening of this relationship. It's very important to the United States, and I like to think it's important to the Soviet Union.

So, with no further ado, why don't we just keep going around the circle here until we run out of questions or time. Who wants to start?

Q. Mr. President, you've met with Mr. Gorbachev several times, and every meeting was kind of a step toward some new situation. Can you -- maybe it's a little bit premature to ask you such a question -- but can you explain to us, what could it be from your point of view, this visit of yours -- from a qualitative point of view, qualitative for Soviet-American relations?

The President. Well, of course, on the qualitative sense, I think the signing of an arms control agreement speaks for itself. And I hope that we'll have the agreement ready to sign on every detail. But even if we don't, we've got so much -- I mean, the deal is done, and whatever we sign will be viewed as a significant step forward and one that -- this one isn't just U.S.-Soviet, it just has -- a lot of people around the world have been hoping to see this for a long time.

So, that will probably dominate it. We've got a lot of -- I don't know what you mean "qualitative." I guess I would put that in the terms of just improving a bilateral relation. I think there's been some doubts in the Soviet Union about the United States intentions. There are different voices in the United States saying different things, just as there are in the Soviet Union. But as the President, I think it will be helpful to convey a message of respect, wanting to work with the Soviet Union, discussing all issues including the regional issues where Soviet participation -- very important on the Middle East -- discussing what we call a new world order where a changing Soviet Union, changed Soviet Union, are an integral part of it.

So, that's the way I'd answer the qualitative aspect of it.

Q. Mr. President, how do you view motivations in the triangle -- Washington, Soviet central government, and the Republics? Your first steps on this way meeting with Mr. Yeltsin and the trip to Kiev -- --

The President. Well, I don't think we've got a triangle. In other words, I view that the President of the United States primarily deals with the President of the Soviet Union. Having said that, contacts with the Republics is a very important thing. And I think any Soviet leader has many contacts with our Federation, with our Governors, and with our Representatives of these different States.

So, to me it's -- but I don't want to suggest that we've got a three-sided triangle. We're not in that. But we will deal -- I thought Mr. Yeltsin, when he came here, conducted himself very well. He came here in a manner that is understood by Americans -- and that is, backed by a very large vote. And this made quite a difference to Americans. Here's a man who took his case to the Russian Republic and won a big victory.

But I don't think that that means we have a triangle where I deal with Yeltsin on the same basis as I deal with Gorbachev, and Yeltsin deals with us the same way he deals with Gorbachev. I mean, you can't conduct foreign policy that way. You have to have an ordered approach. And people in the Soviet Union, whole Union, are entitled to know that the President of the United States will deal with respect with the President of the Soviet Union.

Having said that, that doesn't preclude good relations with Yeltsin or anybody else there. But I just don't want to equate the two.

Did I get that question? Okay. I just wanted to be sure that was the question.

Q. Mr. President, the START treaty, to some extent, signifies a shift from the cold war agenda centered around arms control, to a new agenda, so to say, agenda with more emphasis on economic preparation -- trade. What is your perspective on that?

The President. I think that's true. I don't say this is the end of the arms control road, but -- because there will be other objectives down the road, I think. But we're dealing with such dynamic change in the Soviet Union that, as we said out at the G - 7, in terms of technical assistance and all, we want to be a part of it. And so, I think that the economic questions that will be -- were discussed -- will be a part of it. The system questions will be a part of it.

The Soviet Union has not had a market economy. They've not had convertibility of currency. They've not had private ownership. And now there seems to be -- and elections. So, we have all these subjects that will soon dominate the agenda without driving arms control totally away from the agenda. But these are the critical things. These are the things that -- successful acceptance of the technical assistance and moving the Soviet economy and markets forward and all -- we think is in the best interests of all the citizens there. And clearly, we think it's in our interests, or we wouldn't be pursuing this.

I mean, I think if you want to visualize a bright future, you look at the continuations of the Gorbachev reforms; you look at the continuations of much of what Mr. Yeltsin stands for; and you see enormous opportunity for investment and for participating and working closely in political matters. The very changes that Gorbachev has brought about really was, I think, largely responsible for the utility of the United Nations, for example. We talk about a new world order, but this couldn't have taken place unless there had been a dramatic change in the thinking in the Soviet Union. Thinking, incidentally, that both Gorbachev and -- since we mentioned Yeltsin -- seem to share.

So, I think that arms control, defense, all of these things will continue to be important -- and sometimes sticking; there will be some sticking points. But if we do our jobs properly, I think they will be overshadowed by this common desire to work together for the change -- to facilitate and enhance the changes taking place in the Soviet Union.

Q. Mr. President, my question may be kind of a follow-up on what my colleague just asked. I am interested in the arms control issue. My impression is that, now, when START is done, the arms control issue is going to the background. I mean, in the first place, we're having these economic and social problems -- --

The President. Yes.

Q. -- -- between the United States and the Soviet Union. So, the question, number one, to which extent would you agree that arms control is not as important as it used to be, say, a year ago? And secondly, if we talk about START II, which you're going to discuss in the Soviet Union, what do you think would be the ultimate goals of the START II process? Do you have any numerical figures?

The President. I don't. On the second part, I just don't. Can't help you with what we will be proposing or even a broad dimension of what might follow-on.

There will be other arms control areas where we've got to work together -- chemical weapons is a good example. We like this open skies approach that we've talked about before, and I've got to convince Soviet leaders that this is not detrimental to their interests at all, particularly in a new and open society. So, there will be arms control items that will follow-on.

Having said that, the achievements in CFE, INF, and START have taken the major intractable issues off the table. And those are the ones that the world looks to and says, my God, isn't this great? We're moving in the same direction with the Soviet Union. Our children might grow up without the fear of nuclear weapons. And so, those three have been very, very important in my view. But I think we've still got an arms control agenda. And there could be some START follow-on, there could be some of these other areas we're talking about. But I think the reason the economic issues and all will come to the forefront is that so much has already been done in arms control -- or will have been done by the time we get this START deal done.

Q. If I understood you correctly, Mr. President, you will be taking some specific proposals for a START II to -- --

The President. I don't know how specific they will be in this short of time, but there will be a broad discussion of issues. I haven't really seen the briefing paper to know how interested the leaders over there will be in all of this, but I have found Mr. Gorbachev always interested in discussing that kind of thing. But I can't help you with any specifics at this point. We may be fleshing out some before we get there, but there won't be any bold, new proposal on the part of the United States for a dramatic next step. We'll be talking more, how do we achieve a next step; what areas are of interest here?

Q. Mr. President, until the last years there was a huge and very intensive ideological war between East and West. As I find it today it's nearing to the end, but it's centered and moved to the Soviet Union. And being here in Washington, I heard that there was a new thesis which was put in use in the Soviet Union that results -- and meeting of Mr. Gorbachev with you and with other leaders from Western countries -- they are estimated now by some circles, some political circles of our country, as a third world war which was lost by Mr. Gorbachev. Would you comment on such a -- --

The President. I think that is a very cynical and very unfair observation. You mean the results of the summit would be -- yes. I don't agree with that at all, because what I detected there in the G - 7 was an anxious desire to try -- to facilitate the change that is already taking place there, to help in the change.

And maybe somebody is saying, well, he didn't get money. Maybe that's what the criticism is. But he didn't ask. I mean, he wasn't there with his hat in his hand in a beggar's uniform, coming there trying to beg for money. We talked very openly about the needs to continue the reform. Obviously, we made clear to him something that he already knew: that finalization of the treaty, union treaty, formalization of the 9 plus 1, is very important. It's very hard to make investments if you don't know who you're contracting with or how the taxes are going to be divided up.

But to suggest that this was a cold war victory just misinterprets the climate of the meeting. The climate wasn't staring at each other across the table with animosity. It was really quite constructive: How do we work together? And therein lies the biggest difference on cold war ideology. Hell, I remember from the U.N. with Yakov Malik, who became a friend of mine; but, God, there'd be times when we'd just sit glaring at each other with opposite positions. And that was cold war, maybe not the coldest days of the cold war, but that was cold war. And now that's changed and there isn't any kind of "grind the other guy into the dirt" on either side as far as I'm concerned. So, it's not -- the analogy, the charge that people make, that say, that simply is unfounded in my view.

Q. Mr. Bush, the G - 7 decided that the West would give the Soviet Union only advice, not money, not much credit. However, we hear another viewpoint in the West. Aid will increase the chances that reform start -- area and will work. What do you think about this position, and where is a fine line when the West can realize that the Soviet Union's reforms are going successfully?

The President. Well, one of the reasons we proposed this associate membership in the IMF and the World Bank, is that I think that membership, that associate membership, will lead to greater understanding all across the economic hierarchy in the Soviet Union. And so, I think that it will end when the treaty's been finalized; when reforms are irreversible; and where the commitment that Gorbachev has made and Yeltsin has made to market, to privatization is more demonstrable, where there's more -- and technical assistance that came out in this G - 7 is important to facilitating all that.

It wasn't a question of just finding some way not to do something with the Soviet Union. Everybody there really felt that technical assistance, be it in energy, or food distribution, or nuclear safety, consultation on environment -- all of this kind of thing is essential to make subsequent investments worthwhile. Without them the private investments wouldn't come, as a matter of fact. And that's where the big change is.

One of the summit participants made the comment that we've got a company in our country that wants to invest $1 billion in the Soviet Union. They can't quite do it yet until you finalize the union treaty, until some of the internals are worked out -- how we get our money out. But when that happens, all you need is 100 of those and you have $100 billion that can make a tremendous difference in the lives, the standard of living of the people inside the Soviet Union.

So, this technical assistance approach was not some kind of stumbling fallback position -- let's do that and then we won't have to do something else. I think President Gorbachev knows not only that that makes sense, but I also think he knows that financial constraints under which some countries -- I'll start right with the United States -- are operating. You guys know it. You're here, you read the debate every day. And I think he handled that -- getting all that in perspective very well.

Q. Sir, this is kind of a follow-up. If we could get back to the London summit. I want to make sure one thing. So, eventually you think that the West will commit its prestige, I mean itself, its prestige, some of its resources to making the U.S.S.R. part of what Gorbachev called one civilization?

The President. No question. And the emphasis should be, to really help the lives of the people, on private-sector investment. I mean, that's where the big bucks lie; that's where the major change lies; that's where employment of people lie; where increase of standard of living lies. However, the preliminary -- what the hell am I thinking of -- associate membership in the World Bank, in the IMF, yes, would lead to membership, which in turn would lead to the kinds of specialized funding requirements that some of these projects or some of the central government or some of the governments there will require.

I do think that this approach will lead to irreversibility at home because once -- in the Soviet Union, I mean -- because once that starts big, I think it will so benefit the people's lives that there won't be any going back. It's happening in other countries. It's happening in Eastern Europe, although it's a little slower than they'd like to see. But they're beginning to get the feel of what private investment can do and what market economies can do and what private ownership can do.

Having said that, the Soviet Union has some big problems. And it's not for me to go over there and get all involved in their internal affairs, but I'm told they've got problems with housing for returning soldiers. Well, those are tough problems to work out. But I still believe that the broad emphasis on markets and private investment and all of that is a way to solve even those intractable problems.

Q. Mr. President, I would like to raise an issue which is very much in the headlines these days.

The President. Which country, yours or mine?

Q. Both.

The President. Both -- okay.

Q. The application for the full membership with IMF and the World Bank for the Soviet Union -- so what are you going to do about that?

The President. Well, the G - 7 has already taken a position on that; it should be an associate membership. The application came in a letter that was dated prior to the G - 7 meeting, so I will try to get some clarification on this. But there was a lot of consideration given to it, and what I've said here is the position of the United States.

Q. So, in other words, it's premature you think?

The President. That's what we decided and that's what -- the position that was taken at the G - 7. The IMF and the World Bank have certain requirements. We've touched generally on what some of these requirements are. And the Soviet Union, like any other country, is going to have to meet the requirements. And the requirements can't be met yet. But they will be met when this associate membership brings to fruition -- helps bring about the changes in the strengthening, in the different economic -- the economy in the Soviet Union.

You know, I was a little surprised to see the application, but on the other hand, I don't get all out of shape on it because I know what the G - 7 -- how they deliberated. I know the spirit of cooperation -- not negativism -- that existed in terms of helping there. And it's our strongly-held conviction that this has to happen. The rules of these big IFIs, we call them -- international financial institutions -- would not at this juncture permit them to go forward with loans or with grants or whatever it is. But if the program that we outlined, the associate membership -- if experts get the feeling of how it works and the assistance that we talked about here goes forward, who knows? I mean, that may happen sooner rather than later.

But it's not an anti-Soviet position. It's just a very realistic position. So, when this application was made, we say, hey, what's happening here? I mean, maybe they decided to go in for some technical reason at this point. But I don't think anybody can be under any illusion as to what's going to happen on that because that was discussed a little over a week ago. And the decision taken by at least seven of the countries that are members of these IFIs, these international financial institutions.

Mr. Fitzwater. One more round -- --

The President. All right -- four to go.

Q. Mr. President, I hope that during your visit to the Soviet Union you wouldn't hear such an accusation such as we hear. But, anyway, they exist and we must talk -- --

The President. Yes, I understand.

Q. -- -- and one of them, it's again from an ideological point of view that if there would be a profound and comprehensive market reentered, reforms in the Soviet Union, everything, every little bit of Soviet industry will be bought out or sold to the so-called Western capitalists. Is there, from your point of view and from your experience, any foundation?

The President. I don't think there's a foundation for that. I'm all for encouraging foreign investment in the Soviet Union. I think that would be the quickest way, the quickest way to encourage -- to raise the level of -- standard of living of people at home. But that doesn't mean all foreign investment.

The dynamism of the U.S. economy when it was more dynamic, and as it recovers, will come from small business. It's not going to be the General Electrics and these gigantic corporations. It comes from small business. And once this thing takes hold, in some little business in some corner of the Soviet Union that was owned by the state or by a city or by some bureaucracy, moves into ownership by Igor so-and-so on the corner down here -- it has nothing to do with foreign investment. It has to do with system. And that's what's going to make this economy more dynamic.

Foreign investment can help. And as I say, I think it's important. But the concept, the exciting concept, has to lie with individual people over there or people coming together to start businesses or take over a state-owned business and make it more efficient. I'm absolutely certain that it will just open up tremendous opportunities, in addition to what may be foreign investment coming, but for the guy next door owning a small shop, a restaurant, whatever it is -- a manufacturing company -- and doing it quicker and doing it better and making a better product because of competition.

And so, to those that say, hey, we don't want the foreign investors to own everything in the Soviet Union, I'd say, you make these changes that the whole world is looking for and you'll find that it is -- this is all a cash and is generated by what I'm talking about. You'll find there's a lot of innovation in people once they don't have to comply with a lot of state regulation.

Now, how do I know this? Because we've been down this; we still have publicly-owned utilities or publicly-owned projects that are much less efficient than those that are owned by the American people.

Now, you hear the same charge made, incidentally, about Japanese investment in this country. Some have rather cynically said, well, Japan's going to own all of the United States. My view is, I support Japanese investment in our country. It results in competitiveness. It results in productivity increasing in our country. If they can come in and show a better way to run a hotel, the guy next door is going to have to do a better job, or his hotel is going to go down.

So, I would say to those that might be concerned about this at home, no, private investment will help. It will make a big difference. But what you're going to do here is unleash the dynamism of private ownership at home of people in the Soviet Union. And people say, well, they don't have the money to do that. Watch how it generates. Watch how a small business can mushroom, create jobs for people, and create opportunity. So, I would say to those who might worry about that: don't worry. That's not the history of how it works in other countries.

One more?

Q. And in this connection, what are your personal expectations of achievements -- political and economic achievements -- in the Soviet Union between now and the year 2000?

The President. Oh, well, there I'm optimistic about all that because I think you'll see a Soviet Union that has sorted out its internal relations with the Republics. I'm not saying you have to do it the way we do -- 50 States and a central government. But there may be some pattern, how we sort these relationships on taxation or power to regulate between States and Federal. But that will be sorted out on a Soviet Union scale, Soviet Union model; Not a U.S. model; not a French model.

And once that's done, I would say that -- and that will be done far sooner than the year 2000 -- then I'd say, looking over the horizon to the year 2000, you're going to find a dynamic situation with better transportation, a better distribution for agricultural products, a smoother working political relationship between the Republics and the center, and a standard of living that has gone up for the individual worker or the individual housewife in the Soviet Union. That's what I visualize. And, of course, that's what we'd like to see happen.

And some might say, well, you see a big economically strong Soviet Union beginning to emerge in the year 2000 -- isn't that competition for the United States? No. Competition stems from the differences in ideology -- I mean, to be very candid about it, the approach that the Soviet Union took for many years in terms of what we would view as totalitarianism or centrally-controlled industry, Marxism, whatever you want to call it. But as that gives way to the same kind of change that's taken place elsewhere, this idea that we have to be enemies or that we have to be in competition all the time is crazy. We compete with Europe. And I get mad at them when they've got protection practices that we don't like. And they get mad at us when we do.

But nobody views it as an enemy kind of thing. So, I would say that the final answer to your question is, looking at the year 2000, there wouldn't be this talk of enmity. And, of course, I'd like to see that we'd look at our defense requirements and have a little more trust and take some of the great assets that are involved in defense and turn them into private productive uses -- beat the swords into ploughshares.

We've trying that, as you know. We're bringing down -- we're closing bases, bringing down defense. We've still got a very strong defense. The Soviet Union has a strong defense. But as we trust each other more, and as this economic model works, why I think the happy thing about 2000 is that kids growing up in the Soviet schools and the kids growing up in the American schools -- little 10-year-olds -- 9 years from now won't be looking with a kind of question -- hey, we trust these people. I mean, I'd like to think that more mutual trust would emerge because of what we're talking about.

Mr. Fitzwater. This is the final question.

The President. Yes, we've been around. Keep going, I'll keep the answers shorter, Marlin.

Q. Sir, can we expect a joint statement emerging from the Moscow summit on the Middle East probably, or Iraq?

The President. I don't know whether there will be a joint statement. My position has been the Soviet Union already has demonstrated a very helpful attitude in terms of -- cooperative attitude, working towards bringing about peace talks in the Middle East. And we're grateful. But whether there will be a statement emerging on that, I don't know.

And Iraq, we may have some differences is how we look at it. But the main thing is we came together at the U.N. on the major common goal: this aggression will not stand. And the Soviet Union at the last minute had a couple of ideas of a peace conference or peace talk just before military force was used. But that's fine. I mean, so did a lot of other people have those ideas. But once the battle was joined, the Soviet Union stayed with the U.N. position and the U.N. resolutions. And so, I will be looking at that and thanking people there for that support.

But whether there will be anything in the future on it or not, I just don't know. I have to see what we talk about when we get there.

Last one.

Q. Mr. President, since this is the last question, could I make it two-part?

The President. Yes.

Q. Those will be very short parts.

The President. Two parts with no follow-on -- how's that for an idea. [Laughter] I hope you guys don't get into the American system just because you've lived here a long time, with a follow-on. The insidious follow-on question.

Q. From Helen Thomas [Helen Thomas, United Press International].

The President. Yes, exactly. Exactly.

Q. Mr. President, you said that you wouldn't like to interfere into the internal affairs of the Soviet Union.

The President. That I don't want to interfere in it?

Q. Yes, right.

The President. Yes.

Q. But still I don't think we would come out of this room without you making your comment on what happened yesterday in the Soviet Union when President Gorbachev managed to strike a deal with the leaders of the Republics.

The President. I see what you mean. No, I don't feel I'm interfering in the Soviet Union when I say it's very good that a deal appears to have been worked out. Don't ask me to give you the details on the deal. Don't ask me to fine-tune any paragraph on it. But the idea of the Soviet Union working out a deal with the Republics is very, very important to these economic objectives that I talked about here. So, I would view a comment by me as simply being supportive. But I hope it wouldn't be interpreted as intervening in the internal economic affairs or political affairs of the Soviet Union.

Q. And the second part, which would be drastically varying from what we used to ask you before. And so, should we expect any news today, which is the final day for the United Nations deadline on Iraqi supplying all the information about nuclear -- --

The President. I don't know what's happening up there. Brent, do you know what's happening today up there?

General Scowcroft. No -- --

The President. There's been a kind of heightened view that after -- almost got it back to the January 15th deadline in terms of using force. And I think that's gotten a little out of hand. I mean, the United States is not going to go off like some cowboy, six-guns shooting in the air because the 25th of July has gone by. But we are going to do is be damned sure one way or another that Saddam Hussein does not continue to lie and does not continue to go against the U.N. resolutions.

And he has not restituted the gold from Kuwait. He has not fully accounted for the people from Kuwait. He continues to do bad things in terms of pursuing nuclear objectives. And there is a whole other list of things that he -- he diverts food away from the people into certain hierarchies. And that's not any good.

But I think there's been a heightened kind of feeling -- well, on the 25th, we'd better batten down the hatches over there because this man is going to be punished. He may get punished someday. And we have got to enforce these United Nations sanctions and resolutions. But I'm just trying to put that 25th of July into a proper perspective. We have expected full disclosure. And I'll be interested to see on the 26th of July what my experts tell me about whether there's been full disclosure. But I wouldn't read too much into it as a day that we -- that military action is taken.

I think the very fact that there was some rather strong feeling from a lot of countries that military action might be taken if he doesn't comply resulted in his coming forward and say, oh, all the things I told you I wasn't doing yesterday, yes, I am doing them. But here's the answer, here's the disclosure. The problem is the disclosure is not full and he's got to comply.

And so, all we want to do is have him keep his word and stop brutalizing his own people by diverting food away from them and medicines. But I think -- I'm still hopeful that he will do that, very candidly -- still hopeful. But I can't guarantee it from what I've seen so far.

Q. Mr. President, this interview will appear on Saturday. What you just said, it still will be valid by that time?

The President. Saturday? What time Saturday? No, I'm just teasing you. [Laughter] No, it will be valid.

Q. Thank you very much, sir.

The President. No, it will be valid. Yes, it will be valid. This thing is -- any action, you've got to have other people with out. We're not going to be off on some Lone Ranger wicket, as I say.

Good to see you all. Thanks for coming.