Nuclear disarmament is associated with a number of socioeconomic factors,which should be considered in the efforts of government activities todevelop the positive potential of this process, including the problem offinding worthwhile employment in the civilian sector of the economy forpersonnel formerly employed in the nuclear complex.

In this regard, the Initiative by the U.S. Department of Energy andMinatom of Russian to establish alternative peaceful production, which isconnected with the economic diversification and redirection of facilitiesof the nuclear complex, is viewed as highly important. Within theframework of the Initiative, work is under way to identify commerciallyviable projects to produce civilian goods and services and attractinvestments in such projects. This activity is known as the "NuclearCities Initiative."

The parties note that the Initiative is envisioned as an equalpartnership, which is gaining increasing support in both government andbusiness communities in our countries, and express the hope that it willresult in alternative economic opportunity in the nuclear cities.

The parties acknowledge that joint activities conducted under thisInitiative will require careful consideration and long-term commitment. Inthis connection, we direct our respective organizations to immediatelybegin the development of a government-to-government agreement whichestablishes the formal framework for the Initiative, and to start in 1998the implementation of pilot projects leading to economic diversification,including the creation of new civilian sector jobs, in the nuclear cities.

[Signed]

Vice President of the United States of America

Chairman of the Government of the Russian Federation