DATE=10/10/98
TYPE=ON THE LINE
NUMBER=1-00677
TITLE= THE CONTINUING CRISIS IN RUSSIA
EDITOR=OFFICE OF POLICY - 619-0037
CONTENT=
THEME: UP, HOLD UNDER AND FADE
ANNCR: ON THE LINE -- A DISCUSSION OF UNITED STATES
POLICIES AND CONTEMPORARY ISSUES. THIS WEEK,
"THE CONTINUING CRISIS IN RUSSIA" HERE IS YOUR
HOST, ROBERT REILLY.
HOST: HELLO AND WELCOME TO ON THE LINE. THE CRISIS IN
RUSSIA IS INTENSIFYING. RUSSIA HAS DEFAULTED ON
ITS FOREIGN DEBTS. THE RUSSIAN STOCK MARKET HAS
VIRTUALLY COLLAPSED. THE RUBLE CONTINUES ITS
DECLINE IN VALUE, AS INFLATION ACCELERATES. THE
NEW GOVERNMENT OF PRIME MINISTER YEVGENY
PRIMAKOV HAS YET TO OFFER A PLAN TO ADDRESS
THESE PROBLEMS. SOME OBSERVERS THINK RUSSIA IS
ON THE VERGE OF ECONOMIC AND POLITICAL
BREAKDOWN. OTHERS THINK THE COUNTRY WILL
SOMEHOW MUDDLE THROUGH.
JOINING ME TODAY TO DISCUSS THE CONTINUING
CRISIS IN RUSSIA ARE THREE EXPERTS. ANDERS
ASLUND IS A SENIOR ASSOCIATE AT THE CARNEGIE
ENDOWMENT FOR INTERNATIONAL PEACE. PAUL GOBLE
IS ASSISTANT DIRECTOR OF RADIO FREE EUROPE/RADIO
LIBERTY AND A SPECIALIST ON THE FORMER SOVIET
REPUBLICS. AND HERMAN PIRCHNER IS PRESIDENT OF
THE AMERICAN FOREIGN POLICY COUNCIL. WELCOME TO
THE PROGRAM.
ANDERS ASLUND, HOW DO YOU ASSESS THE DEPTH OF
THE CURRENT CRISIS IN RUSSIA?
ASLUND: I THINK IT'S VERY BAD, INDEED. AND NOW, THE
FINANCIAL SYSTEM HAS MELTED DOWN. YOU CAN'T
PROCESS PAYMENTS THROUGH THE BANKS. THAT MEANS
IT MAKES NO SENSE TO SEND ANYTHING, TO TRY TO
GET PAYMENT. PEOPLE ARE NOT IMPORTING ANY
LONGER. THEY ARE NOT DELIVERING WITHIN THE
COUNTRY. SO NOW WE ARE SEEING THE COLLAPSE OF A
REAL ECONOMY. AND PARTICULARLY IN THE MODERN
URBAN MONETIZED ECONOMY, WE ARE SEEING A TOTAL
COLLAPSE.
HOST: BUT HOW MUCH OF THE ECONOMY WAS MONETIZED?
ASLUND: ADMITTEDLY, ONLY A QUARTER OF THE
INTER-ENTERPRISE TRANSACTIONS WERE IN MONEY.
BUT YOU CAN SAY THAT THIS IS THE BEST PART OF
THE ECONOMY. AND, OF COURSE, THIS HAS
REPERCUSSIONS. SO, G-D-P [GROSS DOMESTIC
PRODUCT] IS FALLING BY AT LEAST TEN PERCENT AT
AN ANNUAL RATE RIGHT NOW.
HOST: PAUL GOBLE, WHAT IS YOUR ASSESSMENT? AND I WILL
QUOTE YOU A REMARK MADE TO ME BY ONE RUSSIAN
ECONOMIST, VITALY NAISHUL, SEVERAL MONTHS AGO,
SAYING RUSSIA IS MORE STABLE THAN HER
GOVERNMENT. AND IN FACT HE POINTED TO THE FACT
THAT AT LEAST HALF THE ECONOMY IS IN THE SHADOW
ECONOMY SECTOR AND, THEREFORE, THERE'S MORE
GOING ON THAN MEETS THE EYE.
GOBLE: I WOULDN'T DISAGREE WITH THAT ASSESSMENT. BUT I
THINK THAT THE PROBLEMS THAT ANDERS ASLUND HAS
POINTED TO SUGGEST THAT THIS CRISIS IS VERY
FUNDAMENTAL, INDEED. WHILE RUSSIA MAY BE MORE
STABLE THAN MEETS THE EYE, SHE IS STILL
REMARKABLY UNSTABLE. WE HAVE A GOVERNMENT THAT
IS NOT IN EFFECTIVE CONTROL OF THE COUNTRY,
INDEED THAT HAS NOT YET BEEN FULLY FORMED. IT
IS UNCERTAIN THAT, IF IT GIVES AN ORDER, WHETHER
ANYONE WILL OBEY. IT'S NOT ONLY THAT THERE'S
BEEN A MELTDOWN OF THE RUSSIAN ECONOMY, BUT
THERE IS NO LONGER AN EFFECTIVELY FUNCTIONING
GOVERNMENT OR STATE ON THE TERRITORY OF WHAT WE
CALL THE RUSSIAN FEDERATION.
HOST: HERMAN PIRCHNER, IF WHAT PAUL GOBLE JUST SAID IS
TRUE, WHY ISN'T THERE MORE OF AN UPHEAVAL? WE
KNOW THAT LAST WEDNESDAY THE LABOR UNIONS AND
THE COMMUNIST PARTY DECLARED FORTY MILLION
PEOPLE WOULD BE MARCHING ACROSS RUSSIA AND IN
MOSCOW. AND WE KNOW ONLY A VERY SMALL
PERCENTAGE OF PEOPLE SHOWED UP FOR THOSE
PROTESTS. WHY ISN'T THERE MORE OF AN UPROAR IF
THE PLACE IS IN COLLAPSE?
PIRCHNER: BECAUSE IN DAILY LIFE, PEOPLE ARE FINDING THEIR
WAY AROUND THE CHAOS. THOUGH THERE WERE
PROBLEMS INITIALLY WITH FOREIGN GOODS COMING
INTO MOSCOW, THE MAJOR FOREIGN IMPORTERS ARE
AGAIN PUTTING FOOD AND OTHER PRODUCTS ON THE
WATER THAT ARE BEGINNING TO ARRIVE THROUGH
SLIGHTLY DIFFERENT WAYS AND [WITH] SLIGHTLY
DIFFERENT FINANCING THAN OCCURRED BEFORE THE
COLLAPSE. IF PEOPLE WERE HURTING, OR IF THEY
BEGIN TO HURT SERIOUSLY, YOU WOULD HAVE A LOT
MORE THAN A FEW TENS OF THOUSANDS OF PEOPLE IN
MOSCOW.
HOST: ANDERS ASLUND, WHEN WE SPOKE LAST SUMMER, YOU
TOLD ME THAT YOU THOUGHT THAT THE GOVERNMENT OF
THEN-PRIME MINISTER SERGEI KIRIYENKO WAS
PROBABLY THE BEST REFORM GOVERNMENT THAT RUSSIA
HAD HAD. HOW DO YOU ASSESS NOW THE GOVERNMENT
THAT YEVGENY PRIMAKOV HAS ASSEMBLED?
ASLUND: CORRESPONDINGLY, THE WORST RUSSIA HAS HAD SINCE
1991. THIS IS VERY MUCH THE LEADERSHIP FROM
[MIKHAIL] GORBACHEV'S LAST GOVERNMENT.
HOST: SO THIS IS PERESTROIKA ALL OVER AGAIN.
ASLUND: YES, AND IF YOU LOOK UP FIRST DEPUTY PRIME
MINISTER YURI MASLYUKOV'S PROGRAM, IT IS VERY
MUCH THE SAME THING HE PUSHED IN 1990. THE MAN
HASN'T LEARNED ANYTHING. HE HASN'T FORGOTTEN
ANYTHING. HE'S TRYING THE SAME THING ONCE AGAIN
IN SPITE OF EVERYBODY KNOWING THAT THIS DOESN'T
WORK.
HOST: AND HE RAN GOSPLAN, WHICH WAS THE ORGANIZATION
THAT CENTRALLY CONTROLLED THE ECONOMY BACK IN
THE SOVIET ERA.
ASLUND: YES, INDEED. AND NOW FOR THE LAST QUARTER OF
THIS YEAR, HE PROPOSES A BUDGET WHERE THE BUDGET
DEFICIT IS BIGGER THAN THE FEDERAL REVENUES.
AND HE WANTS TO CONTROL PRICES, EMIT MONEY,
RATHER THAN COLLECT TAXES, NATIONALIZE A LOT OF
THE BANKS, CONTROL EXPORTS AND IMPORTS. DOING
ALL THE MISTAKES THAT WERE DONE IN 1991 ONCE
AGAIN.
HOST: PAUL GOBLE, EXPLAIN TO ME THE POLITICS OF THIS.
WHY WOULD RUSSIA NOW TURN TO A GROUP OF MEN WITH
A PROVEN RECORD OF FAILURE? THE LAST TIME MR.
[VIKTOR] GERASHCHENKO RAN THE CENTRAL BANK
INFLATION WAS HYPER-INFLATION.
GOBLE: ONE RUSSIAN PROVERB HAS IT THAT TO A DROWNING
MAN, A SNAKE LOOKS LIKE A STICK. WHEN THINGS
ARE AS BAD AS THEY ARE NOW, PEOPLE IN THE
POLITICAL CLASS ARE REACHING OUT IN DESPERATION
FOR SOMETHING. THE LAST TIME THERE WAS SOME
STABILITY. MOST OF THE RUSSIAN PEOPLE ARE
IGNORING THE POLITICAL SYSTEM. THE REASON THEY
DIDN'T GO IN THE STREETS LAST WEEK IS BECAUSE
THEY NO LONGER SEE POLITICS AS THE BEST WAY TO
PROSECUTE THEIR OWN INTERESTS. THE STATE
ENTITIES ARE SIMPLY CASTING AROUND FOR YET
ANOTHER CAST OF CHARACTERS. THIS IS A
MINISTERIAL CHECKERBOARD, WITH PEOPLE BEING
MOVED AROUND. WE HAVE A GROUP IN OFFICE TODAY
THAT I HAVE NO CONFIDENCE WILL BE THERE IN TWO
MONTHS OR SIX MONTHS. THIS POLICY, AS ANDERS
ASLUND HAS MADE VERY CLEAR AND I COMPLETELY
AGREE, IS GOING TO FAIL. IT'S GOING TO FAIL
RATHER QUICKLY. AND IT'S GOING TO BE OBVIOUS
THAT IT FAILS. AND THEN WE WILL SEE YET ANOTHER
CAST OF CHARACTERS. MEANWHILE, AS YOU POINT
OUT, THE RUSSIAN PEOPLE ARE GOING TO BE
OPERATING BELOW THIS POLITICAL DISASTER AND
TRYING TO FIND SOME WAY OUT. WHEN THOSE TWO
THINGS WILL COME TOGETHER AND IF THAT WILL LEAD
TO AN EXPLOSION OR RESOLUTION IS VERY DIFFICULT
TO SAY BECAUSE IT DEPENDS NOT ON THIS PARTICULAR
GROUP OF PEOPLE, WHO ARE NOT GOING TO SUCCEED,
BUT ON SOME SUBSEQUENT ARRANGEMENT OF POLITICAL
FORCES IN THE REGIME, IN THE ECONOMY AND IN THE
POLITICAL SYSTEM THAT MAY COME TOGETHER OR,
ALTERNATIVELY, MAY SPLIT APART, LEADING TO AN
EVEN DEEPER CRISIS.
HOST: HERMAN PIRCHNER, WHAT'S YOUR POLITICAL READ ON
THAT?
PIRCHNER: I AGREE. I THINK THE CURRENT GOVERNMENT WON'T
STAND THERE VERY LONG BECAUSE THEY CAN'T SOLVE
THE PROBLEMS. AND THE QUESTION IS, WHAT COMES
AFTER THEM? IS IT ANOTHER GOVERNMENT UNDER
PRIMAKOV? OR DO WE END UP WITH A SITUATION
WHERE [PRESIDENT BORIS] YELTSIN, AFTER ALL,
RESIGNS BECAUSE OF ILL HEALTH. YOU KNOW, THE
RUMORS IN MOSCOW OF HIS HEALTH THE LAST WEEK
WERE SO SERIOUS IN THE RULING CIRCLES THAT HIS
WIFE WENT ON TV JUST BEFORE THE DEMONSTRATIONS
TO REASSURE THE NATION THAT HIS HEALTH WAS OKAY.
SO I DON'T THINK WE CAN EVEN COUNT ON YELTSIN
STAYING AROUND. SOMEBODY ELSE WILL COME EITHER
UNDER PRIMAKOV OR MAYBE NEW PRESIDENTIAL
ELECTIONS.
HOST: MEANWHILE, A NUMBER OF THE REGIONS OF RUSSIA ARE
TAKING MATTERS INTO THEIR OWN HANDS AND TRYING
TO ADDRESS THIS PROBLEM. AS WE KNOW, GENERAL
[ALEXANDER] LEBED, NOW THE GOVERNOR OF THE
KRASNOYARSK REGION, HAS DECLARED WAGE AND PRICE
CONTROLS ON SOME COMMODITIES IN HIS REGION. AND
OTHER REGIONS OF RUSSIA HAVE DONE THAT AS WELL.
WHEN WE TALK ABOUT 1990-1991 AS THE GRAVE CRISIS
THAT CONFRONTED THE SOVIET UNION AT THAT POINT,
IT ENDED UP WITH THE DISSOLUTION OF THE SOVIET
UNION. WHAT DANGERS EXIST, BECAUSE OF THE
GRAVITY OF THIS CRISIS, FOR THE SURVIVAL OF
RUSSIA?
ASLUND: ECONOMICALLY, WE ARE ALREADY SEEING THE SAME
PROCESS. THE FEDERAL TAX REVENUES IN SEPTEMBER
WERE ABOUT HALF OF THE FEDERAL TAX REVENUES IN
JUNE. AND THIS IS A MASSIVE DECLINE. SO WE CAN
SAY FROM NOW ON, THE FEDERAL CENTER WILL HAVE TO
LIVE ON EMISSION.
HOST: WILL HAVE TO LIVE ON?
ASLUND: PRINTING MONEY. THEY CAN'T COLLECT TAXES. AND
INCREASINGLY THEN, REGIONAL GOVERNORS ARE TAKING
OVER THE TAX COLLECTION AND LEAVING NOTHING FOR
THE FEDERATION.
HOST: AND KEEPING THE REVENUES.
ASLUND: YES, AND THEY ARE ALSO PAYING THE MILITARY.
THEY'RE PAYING LAW ENFORCEMENT TROOPS AND THEY
ARE CONTROLLING PRICES AS YOU MENTIONED. AND
THEY'RE ALSO BLOCKING EXPORTS OF FOOD FROM THEIR
REGION. SO POOR NORTHERN RUSSIA CAN'T GET FOOD
FROM ANYWHERE. IMPORTERS ARE NOT IMPORTING FOOD
BECAUSE THEY DON'T KNOW AT WHAT PRICES THEY WILL
BE ALLOWED TO SELL. SO WHY IMPORT IF YOU THINK
THAT YOU WILL FORCED TO SELL FOR HALF THE PRICE
YOU'VE PAID FOR YOUR PRODUCT. AND OTHER PARTS
OF RUSSIA ARE NOT ALLOWED TO EXPORT FOOD TO
NORTHERN RUSSIA EITHER. SO WE ARE LIKELY TO GET
PARTS OF RUSSIA WHERE FOOD IS NOT FORTHCOMING.
HOST: PAUL GOBLE, THIS IS A SUBJECT IN WHICH YOU ARE
EXPERT. WHAT ARE THE DANGERS OF DEVOLUTION?
GOBLE: I THINK THE MOST IMPORTANT THING TO UNDERSTAND
IS THIS IS A REGIONAL PROBLEM RATHER THAN AN
ETHNIC PROBLEM. IT IS NOT SO MUCH ETHNIC
CHALLENGES FROM THE NORTH CAUCASUS AS RUSSIAN
REGIONAL CONCERNS. AND WHAT IS MAKING THIS MUCH
MORE SERIOUS, AND WHICH THREATENS THE INTEGRITY
OF THE RUSSIAN STATE AT SOME POINT, IS THAT
INSIDE THE RUSSIAN GOVERNMENT THERE ARE
DISCUSSIONS NOW GOING ON ABOUT REDRAWING
REGIONAL LINES. THIS IS BEING PUSHED BY MAYOR
[YURI] LUZHKOV OF MOSCOW AND SOME OTHERS WHO
WOULD REDUCE THE NUMBER OF REGIONS FROM THE
CURRENT EIGHTY-NINE TO TWELVE OR FIFTEEN. ONE
OF THE CONSEQUENCES OF THAT WOULD MAKE THE
GOVERNORS EVEN STRONGER RELATIVE TO MOSCOW. IT
WOULD ALSO MEAN THAT THE POLITICAL ENTITIES
WITHIN THE RUSSIAN FEDERATION WOULD BE
COTERMINOUS WITH THE ECONOMIC ZONES AND WITH THE
MILITARY DISTRICTS. THAT WOULD REINFORCE THE
PROCESS THAT ANDERS HAS REFERRED TO ABOUT THE
PAYING OF MILITARY SALARIES BY REGIONAL
OFFICIALS. I BELIEVE WE'RE HEADED TOWARD A
SITUATION WHICH MIGHT BE CALLED WAR-LORDISM
WITHOUT FIGHTING. IN OTHER WORDS, VERY STRONG
REGIONAL OFFICIALS WHO ARE NOT RECOGNIZED AS
INDEPENDENT COUNTRIES BUT HAVE DE FACTO
POLITICAL, MILITARY AND ECONOMIC CONTROL ON
THEIR TERRITORIES. AND IT WILL HAVE TO BE DEALT
WITH BY FOREIGN POWERS EVEN IF THE FOREIGN
POWERS, AS I SUSPECT IS LIKELY, WILL RETAIN
THEIR EMBASSIES IN MOSCOW AND THINK OF THE
TERRITORY CALLED THE RUSSIAN FEDERATION AS A
COUNTRY. IT WILL NOT BE AN EFFECTIVE COUNTRY
EVEN IF FOREIGN POWERS RECOGNIZE IT, JUST AS, AT
THE END, THE SOVIET UNION WAS NOT AN EFFECTIVE
COUNTRY, EVEN THOUGH FOREIGN COUNTRIES, UNTIL
VERY LATE IN THE DAY, CONTINUED TO HAVE THEIR
EMBASSIES IN MOSCOW AND NOWHERE ELSE.
HOST: CAN THAT HAPPEN, HERMAN PIRCHNER? CAN THE
RUSSIAN MILITARY BE, IN EFFECT, PRIVATIZED BY
THE REGIONAL GOVERNORS?
PIRCHNER: IT CAN, BUT THERE ARE ALSO COUNTERVAILING
TRENDS. IF YOU HAVE A PRESIDENT LEBED, I THINK
THE MILITARY COMMAND WILL STAY CENTRALIZED AND
HE'LL ESTABLISH DISCIPLINE WITHIN THAT
ORGANIZATION. IF YOU HAVE THE WRONG TYPE OF
LEADERSHIP IN MOSCOW, THE COUNTRY COULD
FRAGMENT, AND I THINK THAT'S WIDELY UNDERSTOOD.
THE FACT THAT IT'S UNDERSTOOD BEGINS TO BE AN
ARGUMENT AGAINST IT BECAUSE DEEP IN THEIR SOULS,
MOST RUSSIANS DON'T WANT THAT TO HAPPEN.
HOST: AND TO WHAT EXTENT IS THE MILITARY A SOURCE OF
INSTABILITY IN THAT, OF COURSE, THE MILITARY HAS
NOT BEEN PAID. OFFICERS, FAMILIES ARE
PRACTICALLY ON THE BRINK OF -- STARVATION MAY BE
AN EXAGGERATION.
PIRCHNER: SOME ARE.
HOST: IS THERE A PALPABLE FEAR WITHIN RUSSIA THAT THE
MILITARY MAY TAKE THINGS INTO ITS OWN HANDS?
PIRCHNER: THERE WAS THE HEAD OF THE DUMA DEFENSE COMMITTEE
BY THE NAME OF LEV ROKHLIN. AND HE BROKE WITH
YELTSIN TO TRY TO ORGANIZE MILITARY DISCONTENT
AND TO ESTABLISH SOME SORT OF DICTATORSHIP WITH
MILITARY BLESSING. HE DIED UNDER HIGHLY SUSPECT
CIRCUMSTANCES FROM PEOPLE THAT DID NOT APPROVE
OF HIS ACTIVITY.
GOBLE: I THINK THE REFERENCE TO GENERAL LEBED IS AN
IMPORTANT ONE. WHILE I THINK IT WOULD BE TRUE
THAT, WERE GENERAL LEBED NOW PRESIDENT OF
RUSSIA, YOU MIGHT FIND A GREAT DEAL OF LOYALTY
WITHIN THE MILITARY TO HIM AS A PERSON. THE
FACT IS THAT AS GOVERNOR OF KRASNOYARSK, IT HAS
BEEN PRECISELY GOVERNOR LEBED WHO'S RAISED THE
SPECTER OF REGIONS TAKING CONTROL AND
RESPONSIBILITY FOR THINGS, INCLUDING THE
STRATEGIC ROCKET FORCES, WHICH UP TO NOW HAD
BEEN THE MOST UNIFIED OF THE PORTIONS OF THE
RUSSIAN MILITARY. I THINK THAT WAS A THREAT
RATHER THAN AN ACTUAL FACT. BUT IN FACT, HE
RAISED IT, AND BY RAISING IT, AS YOU SAY, ONCE
SOMETHING IS VISIBLE, IT CHANGES THE NATURE OF
THE GAME. BUT I THINK THE RUSSIAN ARMY -- AND
LET US REMEMBER THAT IN THE LAST TEN YEARS IT
HAS DECLINED FROM FIVE MILLION MEN TO ONE POINT
TWO MILLION, OF WHOM ONLY ABOUT SEVEN HUNDRED
AND FIFTY THOUSAND ARE CONSIDERED TO BE
EFFECTIVE, THAT IS, PEOPLE WHO ARE PAID, TRAINED
AND READY TO GO IN THE FIELD -- IS A VERY
DIFFERENT INSTRUMENT FOR ANYBODY'S USE TODAY
THAN IT WAS ONLY A FEW YEARS AGO. I THINK WE
SHOULD NOT BE FOCUSING SO MUCH ON THE MILITARY
BUT ON THE ABILITY OF THE COUNTRY TO HOLD
TOGETHER ECONOMICALLY AND HAVING A POLITICAL
SYSTEM WHICH WILL ENFORCE SOME KIND OF
LEGISLATION ACROSS THE TERRITORY OF THE RUSSIAN
FEDERATION.
HOST: PERTAINING TO THAT POINT, LET ME ASK ANDERS
ASLUND ABOUT THE CONTINUING RELATIONSHIP, IF
THERE IS ONE, BETWEEN THE I-M-F [INTERNATIONAL
MONETARY FUND] AND RUSSIA, AND THE G-7 [GROUP OF
SEVEN INDUSTRIALIZED NATIONS] AND RUSSIA. UNDER
WHAT CIRCUMSTANCES CAN THE NEXT TRANCHE OF THIS
TWENTY-TWO BILLION DOLLARS OF LOANS TO RUSSIA BE
MADE, OR DO YOU THINK THAT'S SIMPLY OVER? ALSO,
INTERESTINGLY ENOUGH, A SENIOR RUSSIAN OFFICIAL
SAID THE OTHER WEEK THAT THE I-M-F MUST CONTINUE
TO GIVE US MONEY BECAUSE IT'S THE WAY IN WHICH
THEY GAVE US MONEY IN THE PAST THAT CAUSED THESE
PROBLEMS. SO THEY HAVEN'T LOST THEIR -- IT THAT
AN ATTEMPT AT RUSSIAN HUMOR ON HIS PART?
ASLUND: IT'S CLEAR THAT THE PROGRAM IS OVER. AND IF
THERE WILL BE ANY NEW MONEY FROM THE I-M-F,
FIRST, THERE WILL HAVE TO BE A TOTALLY NEW
ECONOMIC PROGRAM IN RUSSIA. THE I-M-F DOESN'T
GIVE MONEY IF IT DOESN'T THINK THAT IT CAN COVER
THE FINANCIAL GAP. AND THERE'S NO WAY THAT THE
I-M-F WITH ITS RESOURCES CAN COVER RUSSIA'S
FINANCING GAP TODAY. THAT'S EVEN IF THE I-M-F
WOULD BE VERY BENEVOLENT. AND NOW RUSSIA IS, ON
THE CONTRARY, PUSHING FOR A BIG BUDGET DEFICIT,
MAKING NO EXCUSES. THE I-M-F CAN'T DO ANYTHING
AT ALL. THE WORLD BANK CAN ISSUE SOME LOANS
WHICH ARE INVESTMENT PROJECTS, BUT NOT FOR THE
RUSSIAN BUDGET. SO WE CAN SEE ALREADY NOW,
ALMOST FOR CERTAIN, THAT RUSSIA WON'T GET ANY
INTERNATIONAL FINANCING FOR ITS BUDGET BEFORE
THE END OF THIS YEAR.
HOST: THEN LET ME ASK: MR. PRIMAKOV WENT ON
TELEVISION TO SPEAK TO THE RUSSIAN NATION
RECENTLY IN WHICH HE SAID WE'RE GOING TO
STABILIZE THIS SITUATION AND MOST OF ALL, DO NOT
WORRY. THERE WILL BE PLENTY OF POTATOES AND
VEGETABLES AND NO ONE IS GOING TO SUFFER THIS
WINTER.
GOBLE: THOSE ARE NICE PROMISES, AND I EXPECT THE
RUSSIAN PEOPLE BELIEVE THEM. WE'VE HEARD THEM
ALL BEFORE. THEY WEREN'T TRUE IN THE PAST. MR.
PRIMAKOV IS NOT GOING TO DELIVER NOW. I THINK
HE HAD NO CHOICE, BUT TO SAY THAT. TO IMAGINE
HIM TO SAYING THE REVERSE IS UNTHINKABLE. WE
WON'T SOLVE THE CRISIS. IT WILL GET WORSE. YOU
WON'T BE EATING THIS WINTER. IT'S NOT SOMETHING
THE PRIME MINISTER OF A COUNTRY IS GOING TO SAY.
HOST: AT THE SAME, THOUGH, HE MUST HAVE SOME IDEA ON
HOW HE'S GOING TO ACHIEVE THAT OBJECTIVE. AND
SINCE THEY HAVE TO IMPORT SO MUCH OF THAT FOOD,
HOW ARE THEY GOING TO HAVE THE RESOURCES TO DO
IT WHEN THEY DON'T HAVE ANY FINANCES?
GOBLE: THAT'S A PROBLEM. THEY AREN'T GOING TO BE
IMPORTING BECAUSE PEOPLE AREN'T GOING TO BE
SENDING FOOD WHEN IT'S NOT BEING PAID FOR.
ASLUND: HE HASN'T GOT A CLUE. MASLYUKOV HASN'T GOT A
CLUE. GERASHCHENKO HASN'T GOT A CLUE. AND
THESE ARE THE THREE MOST IMPORTANT PEOPLE.
PIRCHNER: I HAVE TO DISAGREE A LITTLE WITH THAT. THERE
ARE SOME THINGS THEY ARE DOING. THEY ARE GOING
TO CUT THE IMPORT TAX DRASTICALLY ON FOOD ITEMS
AND I'VE BEEN TALKING IN THE LAST WEEK TO PEOPLE
THAT SHIP INTO RUSSIA THAT HAVE NOT SHIPPED OVER
THE LAST FOUR WEEKS AND ARE BEGINNING TO DO IT.
HOST: WHY ARE THEY STARTING NOW?
PIRCHNER: BECAUSE THEY FIGURED OUT A WAY TO GET FINANCED
AND GET PAID.
GOBLE: I WAS JUST IN ESTONIA, WHICH IS A COUNTRY THAT
HAS PROVIDED A GREAT DEAL OF DAIRY PRODUCTS AND
CANNED FISH TO THE NORTHWESTERN RUSSIAN
FEDERATION AROUND ST. PETERSBURG. OVER THE LAST
SIX WEEKS, THERE HAS BEEN ABSOLUTELY NO
EXPORTING OF FOOD TO THE EAST FROM ESTONIA
SIMPLY BECAUSE NO ONE IS PAYING. AND THE FOOD
HAD BEEN BUILDING UP IN WAREHOUSES. IT'S NOW
BEING SHIPPED WESTWARD INTO THE EUROPEAN UNION.
HOST: ANDERS ASLUND, YOU'RE SAYING, WITH THE PRESENT
GOVERNMENT IN RUSSIA, AN IMPROVEMENT IN THE
SITUATION IS SIMPLY NOT GOING TO TAKE PLACE.
ASLUND: YES. HAVING SAID THAT, CLEARLY THEY WILL START
REALIZING NOW THAT THEY DON'T KNOW WHAT SHOULD
BE DONE. WE HAVE SEEN IN THE LAST WEEK A
CERTAIN DISTANCING FROM THE MOST EXTREME
STATEMENTS, FOR EXAMPLE, ON PROHIBITION OF USAGE
OF DOLLARS. BUT, MOVING AWAY SLIGHTLY IN THAT
DIRECTION IS NOT ENOUGH TO GIVE HOPE. YOU HEAR
NOW THE GOVERNMENT IS SAYING DON'T WORRY, WE
HAVEN'T GOT A PLAN AND WE WON'T HAVE ONE FOR AT
LEAST TWO WEEKS. THAT'S NOT WHAT YOU WANT TO
HEAR IN THE MIDST OF A SERIOUS CRISIS. SO I
FIND IT VIRTUALLY EXCLUDED THAT THIS GOVERNMENT
WILL FIND AN ECONOMIC WAY OUT. [BUT] IT IS NOT
NECESSARY THAT WE ARE DOING AS BADLY AS WE ARE
NOW, ALL THE TIME.
HOST: I'M AFRAID THAT'S ALL THE TIME WE HAVE THIS
WEEK. I'D LIKE TO THANK OUR GUESTS -- ANDERS
ASLUND FROM THE CARNEGIE ENDOWMENT FOR
INTERNATIONAL PEACE; PAUL GOBLE FROM RADIO FREE
EUROPE/RADIO LIBERTY; AND HERMAN PIRCHNER FROM
THE AMERICAN FOREIGN POLICY COUNCIL -- FOR
JOINING ME TO DISCUSS THE CONTINUING CRISIS IN
RUSSIA. THIS IS ROBERT REILLY FOR ON THE LINE.
09-Oct-98 11:02 AM EDT (1502 UTC)
NNNN
Source: Voice of America
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