Russia's Success Story: Chernomyrdin Pulls It Off
The Western perception of Russia as a destitute country on the verge of collapse or of falling into the hands of fascists could not be further from the truth. Much of the Russian economy has been successfully privatized and is now relatively strong. Russia possesses the basic political and economic institutions to oversee the final stages of its transition to a market economy. It must now move to combat crime and to control inflation by finally adopting a full-fledged economic stabilization program. Even if they don't quite know it yet themselves, the Russians have already turned the corner on success.
Anders Aslund is a Senior Associate at the Carnegie Endowment for International Peace and is writing a book about Russias transformation to a market economy.
The Russia emerging today is very different from what pessimists have prophesied. It is not falling apart but coming together. The new political institutions function. Strikes are rare, and no serious social unrest is on the horizon. Incredibly, most of the Russian economy, measured by either employment or output, has been privatized in just two years. Russia has already become a market economy, but one in the midst of a long-overdue and massive restructuring. In short, Russia has undergone fundamental changes and appears to be on the right track.
The Western caricature of Russia as a destitute country on the verge of either collapse or falling into the hands of fascists could not be more wrong. Naturally, things are far from perfect, but no one thought communism would go away without costs. In a new openness all problems are discussed in the Russian media, and often exaggerated. But few in the West write about Russia’s successes, like the end of shortages and the risk of famine. Moreover, the true disaster of other former Soviet republics is often confused with Russia’s. Of course major problems such as crime and inflation remain in Russia, but even monthly inflation fell to five percent in June. More daunting is the task of building a system of rule of law, which has been a cumbersome process all over Eastern Europe. The situation is worse in Russia, but far from hopeless.
NATION-BUILDING IS WORKING
Russia’s parliamentary elections in December 1993 left the West in despair. The extreme nationalist Vladimir Zhirinovsky was touted as Russia’s new leader. In fact, his Liberal Democratic Party gained only 14 percent of the seats in the State Duma, the lower house of the new Federal Assembly, and a bare handful in the Federation Council, the upper chamber. Zhirinovsky’s impact on Russian policy making has been minimal, and his deputies have deserted him in droves. The real winner of the elections has turned out to be Prime Minister Viktor Chernomyrdin, a 55-year-old engineer of traditional Soviet stock who was not even a candidate for parliament.
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Conventional wisdom in the West says that post-Cold War Russia has been a disastrous failure. The facts say otherwise. Aspects of Russia's performance over the last decade may have been disappointing, but the notion that the country has gone through an economic cataclysm and political relapse is wrong--more a comment on overblown expectations than on Russia's actual experience. Compared to other countries at a similar level of economic and political development, Russia looks more the norm than the exception.
The neoliberal economic and political models used by Western analysts to explain Russia's recent transformation ignore the interrelationship between the economy and politics. Russia is in the midst of a social revolution. Economic reform without political reform-as attempted by Yegor Gaidar-will fail. Prime Minister Viktor Chernomyrdin's policies have met with some success because of accompanying political changes. This interrelated pattern of reform must continue.
Most people think that Russia's economic problems are due to the shock of fast and radical reforms. Actually, the Russian economy is not very liberalized at all, and its problems have been caused by reforms that were too slow and partial, not too sweeping. Russia suffers not from too free a market but from corruption, which thrives by preying on an unwieldy bureaucracy. Still, the outlook for the months ahead is promising. If Poland could do it, why can't Russia? The private sector got a salutary wake-up call from the 1998 collapse of the ruble, and the strength of the political center bodes well for economic recovery and social change.
