Why We Must Act

Saturday, January 30, 1999

From both the right and the left, critics of U.S. policy toward Russia have had a heyday in recent weeks asserting that the Clinton administration got Russia wrong. The refrains are by now familiar: “Clinton became too close to Yeltsin,” “the IMF was naive,” “the West funded crony capitalism,” “Russians are not culturally predisposed to markets,” and so on. The policy conclusion from these observations is that the United States neither can nor should do anything to aid Russia in the future. Instead, we need to reconstruct a firewall around this basket case of a country and try once again to contain the Russian threat to markets and demo-cracy around the world.

This is a premature conclusion for several reasons. First, this argument assumes that we can ignore Russia. We cannot. As Russia’s economic crisis continues to worsen, the prospect of real tyrants coming to power in Moscow increases. If Russia’s fascists or hard-line communists eventually emerge on top, the consequences will be dire: Iraq, Iran, and Libya will become nuclear powers, Russian volunteer soldiers will flood into Kosovo, and military conflict will ignite throughout the former Soviet Union. To ignore Russia and pretend that its troubles are not our own would merely advance these worst-case scenarios. Second, the call to abandon and contain Russia assumes that “reform” in Russia is dead forever. In fact, even in the midst of this latest economic crisis, Russian leaders and the Russian people have not yet rejected markets and democracy completely.

Illustration by Taylor Jones

It is true that support for markets has reached its nadir. Prime Minister Primakov and his new team of Gorbachev-era ministers plan to assign a greater role to the state in managing the economy. Strapped for cash after defaulting on its debt, the government will print money and thereby fuel inflation. To control inflation, the new Russian government will introduce wage and price controls; some governors have already done so. Eventually, this set of policies will produce shortages, rationing coupons, and a black market.

Yet even in Russia’s worst economic crisis of the decade, no serious political group has advocated a return to a command economy. Even the Communist Party of the Russian Federation now recognizes the right to private property, the function of markets, and the inevitability of international economic integration. Russia may have to endure another round of ill-devised state policies for managing the economy, but even under the extreme conditions of economic disaster no credible political force has articulated an alternative nonmarket future for Russia.

The outlook is not yet as bleak in regard to political reform. To the surprise of many, Yeltsin and the Russian parliament practiced compromise and followed the constitution in forming a new government. And Russia’s patient citizens have not rebelled in response to the economic meltdown. However, this adherence to the democratic rules of the game and this social calm could change quickly as Russia’s economy worsens. If one trigger-happy soldier fires into a peaceful demonstration, calls for the violent overthrow of the current regime will escalate. To date, however, those advocating authoritarian solutions to Russia’s latest crisis remain in the wings.

A third and final assumption of the containment school is that the West can do nothing to change the course of reform or prevent Russia from collapsing from within. Instead, the United States must sit on the sidelines and hope for the best. This assumption is also flawed. While weakened and marginalized as a consequence of events both in Moscow and in Washington, the United States—and especially nongovernmental American organizations—can still play a role in helping Russia remain committed to markets and democracy.

Until the new Russian government has a credible anticrisis program, Western assistance programs for macroeconomic stabilization—such as IMF loans—must be suspended. At the same time, other kinds of assistance programs aimed at fostering microeconomic reforms should be expanded. For instance, programs that provide small business loans, projects that furnish information about Western markets, and business training and exchange initiatives should all be expanded. Similarly, technical assistance projects that facilitate the development of important market institutions, such as laws governing property rights, disclosure, bankruptcy, pension funds, taxes, and the securities markets, also need to increase. Since independence in 1991, Russia has yet to attempt genuine market reforms. If the opportunity arises in the future for a renewed attempt, the people and knowledge base must be in place to make reform work.

The United States should vigorously promote democracy in Russia. At the highest levels, U.S. officials must send clear signals to Russian elites about the negative consequences of circumventing the democratic process. In particular, the rules for the next presidential election must be followed. Given that such a transfer of power would be a first in Russian history, no single event is more important for the consolidation of democracy than Russia’s upcoming presidential election.

At the nongovernmental, grassroots level, programs that promote democracy and democrats in Russia also must be enlarged. For instance, projects that provide expertise regarding the development of parties, trade unions, federalism, the rule of law, an independent media, and civil society should be expanded, not curtailed as is presently planned. Fascism in Russia can only grow through the grass roots—trade unions, youth groups, parties, and women’s organizations are their current targets. Russian democrats who are currently battling for the hearts and souls of these organizations must be supported, not abandoned.

Obviously, the kinds of assistance programs outlined here will not “solve” Russia’s current economic crisis. But they may be the long-term investments that will save Russia from crises in the future. More immediately, such programs offer Americans a way to remain involved with Russia during this difficult period. These programs can be administered without transferring a dime to the Russian state. They can also be pursued without presidential leadership in either the United States or Russia, which cannot be counted on in the near future.

Many Americans have grown weary of Russia as achievements have been few and headaches many. However, now is not the time to give up on Russia. Only seven years after the Soviet collapse, Russia’s revolution has by no means ended. While Russia’s current leaders are still committed to developing a market economy and a democratic polity, it is in the vital national interest of the United States to ensure that this trajectory continues. The days of presidential summits may be over, but the work in the trenches has just begun.