CLINTON TELLS RUSSIANS PAIN IS PRICE OF ECONOMIC CURE.

Byline: John M. Broder The New York Times

President Clinton delivered a sober lecture to Russian leaders and the Russian people Tuesday about the hard realities of capitalism and the price of international support for relief from Russia's current financial crisis.

In meetings with President Boris Yeltsin and the temporary caretakers of Russia's paralyzed political and economic institutions, and in a speech to students at a Moscow university, Clinton warned there is no easy escape from the financial catastrophe that has closed banks, left millions of workers unpaid and caused the collapse of the government.

``The stakes are enormous,'' Clinton told a group of students and young business leaders at the Moscow State University for International Relations on Tuesday afternoon. ``Every choice Russia makes today may have consequences for years and years to come. Given the facts before you, I have to tell you that I do not believe there are any painless solutions. And indeed, an attempt to avoid difficult solutions may only prolong and worsen the present challenges.'' The first day of Clinton's two-day visit to Moscow was markedly muted, fitting for a summit meeting whose purpose was far from clear, given Russia's turmoil and its lack of a functioning government. Yeltsin's precarious political position and Clinton's unresolved legal problems at home added to the sense of gloom enveloping his trip.

All business

Clinton's meetings with Yeltsin were businesslike and utterly lacking in the back-slapping bonhomie that has characterized several of their earlier meetings, officials said. The state dinner Tuesday night broke up at 9:15 after barely an hour; in past years such affairs have lasted well past midnight.

The only concrete accords to be announced at the summit meeting are agreements to reduce both nations' plutonium stockpiles and to share data on ballistic missile launchings. Both were negotiated in the weeks leading up to the summit meeting, but even after the accords are signed, the details of both remain to be fleshed out.

American officials considered canceling the long-planned summit meeting because the prospects for meaningful progress were nil, but decided late last week to proceed because they concluded that abandoning the meeting would heap insult on Russia's multiple internal injuries.

The day was drab and rainy, unseasonably cold even for late summer in Moscow. Clinton's solemn speech at the university - the only extended public remarks he will deliver on the visit - matched the mood of this sullen city. While he offered words of encouragement and vows of friendship, the message was blunt and bleak. Russia's creditors and its international partners, the president said, will not tolerate a return to state control of important industries, efforts to escape financial hardship by printing rubles or special favors for cronies of powerful figures in the Kremlin.

``The challenge is to create a new Russia that benefits all responsible citizens of this country,'' Clinton said in a 35-minute address that was not once interrupted by applause. ``How do you get there? I do not believe it is by reverting to the failed policies of the past.''

`Rules of the road'

Clinton then spelled out what he called ``the rules of the road'' that Russia must follow if it wishes to become a modern state in the global economy. They included a fair and consistent tax collection system, anti-inflationary government monetary policy, legal protections for property owners and investors, steps to halt accelerating capital flight and an end to sweetheart deals for the tycoons who dominate an increasing share of Russia's legitimate and black-market economies.

``These are not radical theories,'' Clinton said. ``They are simply facts proven by experience. How Russia reacts to them will fundamentally affect your future.''

The hand-picked audience in the hall already agreed with most of what Clinton had to say, said Yekaterina Drozdova, a recent graduate of the university now working for the U.S. Agency for International Development in Moscow.

``All these people present are already for all of that,'' she said. ``He might better try to impose his influence on the powerful structures.''

She also mildly criticized Clinton for not speaking more forthrightly about politics in Russia. ``The international community should express an opinion on what is going on in our country,'' she said.

Boris Chernyshev, a physiologist in his late 20s, also agreed with most of Clinton's views. ``What would you expect him to say?'' Chernyshev said. ``It was all kind of predictable. I think it's just true.''

Clinton's message to Yeltsin and to Viktor Chernomyrdin, the acting prime minister, echoed that of his speech, according to Strobe Talbott, the deputy secretary of state who attended the morning and luncheon sessions.

Talbott said the United States would refrain from comment on Yeltsin's effort to piece together a government from the battling powers of the lower house of parliament or Duma, regional leaders and business interests.

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2 Photos

PHOTO (1) Russian President Boris Yelstin greets President Clinton with a bear hug Tuesday before their talks in Moscow. Their summit meeting, however, was pure business.

Associated Press

(2) President Clinton reaches out to students Tuesday after his address to a Moscow university.

Ivan Sekretarev/Associated Press