Inertia strikes back In the old days, Soviet propaganda insisted that the overall course of economic policy was correct, and that all problems were the result of individual error by negligent or corrupt bureaucrats. Now that the Western powers and IMF control many of the levers in the Russian economy, they make the same claim. Boris Kagarlitsky suspects that the system itself is the problem
Itselt is the problem. Only a few months ago, anyone who even mentioned the idea of establishing control over capital investment, let alone nationalisation, might have been taken for a "red extremist" and had their views labelled as ridiculous or dangerous. Now, representatives of American corporations working in Russia are saying they do not intend to pull out of the market, demanding instead a radical revision of economic policy and measures that fly in the face of Western economic sermonising.
"If that means instituting age and price controls, or renationalising basic industries to ensure supplies and employment, so be it," Deborah Anne Palmieri, president of the Russian-American Chamber of Commerce, said in the Journal of Commerce earlier last month.
The New York Times of Sept. 15 approvingly quoted David Kotz and other radical critics of the neo-liberal policy in Russia, arguing that the time has come to recall Franklin D. Roosevelt's New Deal "as a model for helping the Russian economy recover."
Domingo Cavallo, who was brought to Russia to discuss the creation of a currency board on the basis of the Argentinean experience, used the September issue of Forbes Global to argue that such steps are not applicable in Russia and only a speedy annulment of sham privatisation can help.
The Russian crisis rudely demonstrated how misled the prevalent attitudes have been. The string of successive "reformist" governments led the country into such a blind alley that only extreme administrative measures could provide any hope of a way out. Foreigners who were working with portfolio investments and playing the T-bill market and those who catered to the whims of New Russians have already pulled out of the market. Those who remain have invested money into serious projects, and are here for the long term. They have no time for ideology, and are willing to support any measures that might help correct the situation.
Meanwhile, in Russia the bureaucrats and politicians are in a far more placid mood, as the unhurried formation of the government shows. No one shies away from talk of administrative measures, only from their implementation. Proposed half-measures such as the creation of special exporters and compulsory transfer of currency earnings to the government will probably come to nothing, and rather than signal the engagement of real command economy levers, will merely cause further disruption to existing market mechanisms. Not even the threat of famine in the northern regions and the Kaliningrad area appears to worry the government unduly.
But the explanation for all of this is not to be found entirely in Russians' carelessness and their tendency to hope for the best.
The government's own inability to seize control of anything would appear to be the main cause of its apparent timidity. Tentative efforts to deal with commercial banks that are unable to settle up with their own customers ended in nothing, while the bankers themselves seem prepared to go down with the entire country rather than concede property and power to the government.
To undertake something radical yet not touch the interests of the oligarchs is impossible. Although now practically bankrupt, the 15 wealthiest men in the country still command colossal political clout, and despite their inability to effectively use the property they accrued during the plundering of the state sector, they will not surrender it - Boris Berezovsky has already warned of civil war if there is an attempt to nationalise anything. Where is the left?
In theory, the Communists should be striving toward nationalisation, but like everyone else they fear (or respect) the oligarchs even more than the representatives of the other political parties. When erstwhile Prime Minister Sergei Kiriyenko raised the idea of the state seizing the property of Gazprom as the most heinous tax-dodging enterprise, it was the Communist majority in the State Duma who reacted with outrage. Nor did the Communists rush to pass legislation that would allow the nationalisation of banks. Over the past few years the leaders of the "left-patriotic" bloc in the Duma have played by the rules established by the Yeltsin regime while crushing dissent in their ranks.
The West's leaders fear a radical about-face in Russia under a Communist government. In fact, the real threat is that nothing will change. This contemporary inertia and dread of taking decisive action may ultimately prove to be a far more awful variant than any return to the past. * *Boris Kagarlitsky is a researcher at the Academy of Sciences Institute for Comparative Politics. This article first appeared in the Moscow Times, September 22, 1998
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* Polana
Doland
SHITTE