DATE=03/20/99
TYPE=ON THE LINE
NUMBER=1-00723
TITLE=THE PROBLEM OF CORRUPTION 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 PROBLEM OF CORRUPTION IN
RUSSIA." HERE IS YOUR HOST, ROBERT REILLY.
HOST: HELLO AND WELCOME TO ON THE LINE.
PERHAPS THE GREATEST SINGLE THREAT TO A
DEVELOPING DEMOCRACY IS INSTITUTIONALIZED
CORRUPTION AND ORGANIZED CRIME. RUSSIA HAS BEEN
PLAGUED BY BOTH. SO GREAT HAS THE DANGER BECOME
THAT LEADERS SUCH AS MOSCOW MAYOR YURI LUZKHOV
HAVE WARNED THAT RUSSIA NOW FACES "UNLIMITED
CRIMINALIZATION OF THE ECONOMY AND OF THE
GOVERNMENT ITSELF." RUSSIAN PRIME MINISTER
YEVGENY PRIMAKOV RECENTLY UNVEILED A NEW
CAMPAIGN AGAINST CORRUPTION, SAYING IT
THREATENED RUSSIA'S ECONOMIC FOUNDATIONS. BUT
SOME OBSERVERS DOUBT WHETHER RUSSIA IS YET
PREPARED TO ADDRESS THE UNDERLYING CRISIS THAT
HAS ALLOWED CORRUPTION TO FLOURISH.
JOINING ME TODAY TO DISCUSS THE PROBLEM OF
CORRUPTION IN RUSSIA ARE THREE EXPERTS.
VLADIMIR BROVKIN IS PROJECT COORDINATOR AT THE
CENTER FOR THE STUDY OF TRANSNATIONAL CRIME AND
CORRUPTION AT AMERICAN UNIVERSITY. PAUL GOBLE
IS ASSISTANT DIRECTOR OF RADIO FREE EUROPE/RADIO
LIBERTY AND A SPECIALIST ON THE FORMER SOVIET
REPUBLICS. AND RICHARD PALMER IS A FORMER
SENIOR C-I-A OFFICER WHO SPECIALIZED IN RUSSIAN
ORGANIZED CRIME AND CORRUPTION.
WELCOME TO THE PROGRAM.
HOST: MR. BROVKIN, WHAT ARE THE DIMENSIONS OF THIS
PROBLEM THAT RUSSIA IS NOW FACING?
BROVKIN: IT'S PERVASIVE. I WOULD SAY THERE IS NOT ONE
BUSINESS, NOT ONE ENTERPRISE, NOT ONE COMPANY
THAT IS NOT CORRUPT BY OUR WESTERN DEFINITION OF
THE WORD. BUT THE WORD NEEDS TO BE DEFINED.
WHAT CORRUPT MEANS IS THIS DOUBLE ACCOUNTING.
IT'S A DOUBLE SYSTEM THAT GOES BACK TO SOVIET
TIMES. THERE'S THE OFFICIAL LEVEL AND THE REAL
LEVEL. AND THE REAL LEVEL IS THE WHEELING AND
DEALING THAT GOES ON BETWEEN ENTERPRISES,
BETWEEN VARIOUS ORGANIZATIONS. THE OFFICIAL ONE
IS TO SHOW FOR THE BOOKS, TO PAY LESS TAXES THAN
OTHERWISE WOULD HAVE BEEN THE CASE. THE MAIN
POINT IS THAT RUSSIAN CONTEMPORARY CORRUPTION IS
A DIRECT DEVELOPMENT AND CONSOLIDATION OF THE
SOVIET PAST, OF SOVIET PAST PRACTICES.
HOST: PAUL GOBLE WHAT HAPPENED TO THIS TRANSITION TO A
FREE MARKET ECONOMY THAT WAS SUPPOSED TO
ESTABLISH PROPERTY RIGHTS AND ACCOUNTABILITY?
GOBLE: WELL, ONE OF THE PROBLEMS WAS THAT TOO MANY
PEOPLE THOUGHT THAT DEVELOPING THE ECONOMY
DIDN'T REQUIRE THE DEVELOPMENT OF A STATE. WE
HAVEN'T DEVELOPED THE LEGAL INFRASTRUCTURE IN
RUSSIA OR MANY OF THESE OTHER COUNTRIES THAT IS
REQUIRED FOR A NORMAL OPERATION OF A MARKET
ECONOMY. TOO MANY PEOPLE IN THE WEST AND EVEN
MORE PEOPLE IN RUSSIA ASSUMED THAT JUST LET THE
ECONOMIC FORCES LOOSE AND THINGS COULD PROCEED.
WHAT HAS RESULTED, AS VLAD SAYS, IS THE
INSTITUTIONALIZATION, THE REINSTITUTIONALIZATION
OF SOVIET PRACTICE. BUT IT'S EVEN WORSE THAN
THAT. WE'VE SEEN THE COLLAPSE OF THOSE
REGULATORY INSTITUTIONS THAT DID EXIST IN SOVIET
TIMES -- THE COMMUNIST PARTY, THE SECRET POLICE,
THE MILITARY -- WHICH WERE ABLE, AS CROSS
CUTTING CLEAVAGES, TO REDUCE THE ABILITY OF
ENTERPRISE DIRECTORS AND HEADS OF LARGE
ORGANIZATIONS TO ACT AND FLOUT THE LAW AND DEAL
IN CORRUPT WAYS. IT WASN'T THAT THERE WASN'T
CORRUPTION IN SOVIET TIMES. IT IS THAT THE
COLLAPSE OF CENTRAL AUTHORITY HAS HAD THE EFFECT
OF MAKING THAT CORRUPTION FAR MORE PERVASIVE.
AND IT AFFECTS THE STATE AS WELL AS THE ECONOMY
BY FAILING TO BUILD A STATE, BY FAILING TO WORK
ON BUILDING LAWS AND LEGAL INSTITUTIONS. WE'VE
ALLOWED CORRUPTION TO GO BEYOND ANYTHING ANYONE
HAS IMAGINED ANYWHERE ELSE.
HOST: SPEAKING OF THE STATE, RICHARD PALMER, RUSSIA'S
ATTORNEY GENERAL YURI SKURATOV EXPOSED THE
TRANSFER OF BILLIONS AND BILLIONS OF DOLLARS
FROM RUSSIA'S CENTRAL BANK TO AN OFFSHORE
ACCOUNT IN THE CHANNEL ISLANDS, THE ISLE OF
JERSEY, SOME FIFTY BILLION DOLLARS OVER A PERIOD
OF SIX OR SEVEN YEARS, TO HIDE THESE ASSETS
APPARENTLY FROM POTENTIAL CREDITORS. I KNOW YOU
HAVE TAKEN A LOOK AT RUSSIAN BANKING PRACTICES
AND THE CENTRAL BANK. HOW PERVASIVE IS
CORRUPTION AT THAT LEVEL? IT SEEMS A MOST
ASTOUNDING STORY.
PALMER: THE PLANS TO LOOT THE THEN-SOVIET STATE BEGAN IN
1984. AND AT THAT TIME, THERE HAD ALWAYS BEEN
TIES BETWEEN THE CRIMINAL ELEMENTS AND THE
STATE. BUT FROM 1986 TO 1988, THEY BECAME
TIGHTER. THEY HAVE COME TO THE POINT THAT, BY
1990-1991, YOU COULDN'T TELL THE DIFFERENCE. IF
YOU LOOK AT ORGANIZED CRIME, LOOK AT THE
INTERPOL DEFINITION, EIGHTY-FIVE PERCENT OF
ORGANIZED CRIME IS CURRENT AND FORMER OFFICIALS
OF THE STATE. AND ONLY ABOUT FIFTEEN PERCENT
ARE THOSE MUSCULAR GUYS IN TIGHT JACKETS OR
SPORT SUITS. THEY, IN TURN, DECIDED TO LOOT THE
STATE. ONE OF THE FIRST THINGS THEY DID WAS SET
UP ACCOUNTS OFF-SHORE TO GET THOSE ASSETS BEYOND
THE REACH OF ANY SUBSEQUENT GOVERNMENT WHICH YOU
SEE WITH FIMACO [FINANCIAL MANAGEMENT COMPANY],
THE CASE THAT MR. SKURATOV RAISED IS ONLY ONE OF
SEVERAL ACCOUNTS THAT THEY OPENED UP. AND THAT
WAS NOT TO PUT THE ASSETS BEYOND THE REACH OF
THE I-M-F. THOSE ARE TO PUT THE ASSETS BEYOND
THE REACH OF ANY SUBSEQUENT GOVERNMENT AND ALSO
THAT CERTAIN ELEMENTS, THE OLIGARCHS IF YOU
WILL, OR THE ARISTOCRACY OF THE BUREAUCRACY,
COULD USE THOSE FUNDS FOR THEIR OWN WELFARE.
HOST: WELL, APPARENTLY THE CLAIM IS ASIDE FROM THE
MONEY SENT BY THE CENTRAL BANK WHICH WAS FIFTY
BILLION DOLLARS, THAT THERE IS A TOTAL OF ONE
HUNDRED AND FIFTY BILLION DOLLARS THAT WAS
LAUNDERED THROUGH THE ISLE OF JERSEY.
PALMER: WELL, THE ISLE OF JERSEY PERHAPS. THE RUSSIAN
MINISTRY OF INTERIOR PLACED THE FIGURE AT ABOUT
THREE HUNDRED BILLION TOTAL OUT OF THE STATE AS
OF EARLY 1998. AND BY TODAY WE ARE TALKING
ABOUT AT LEAST THREE HUNDRED AND SIXTY TO THREE
HUNDRED AND EIGHTY BILLION DOLLARS.
HOST: WELL OVER THE RUSSIAN NATIONAL DEBT. WHO HAS
ACCESS TO THIS MONEY, AND NOW THAT THE RUSSIAN
STATE KNOWS WHERE SOME OF IT IS, IS IT GOING TO
BE REPATRIATED?
BROVKIN: IT IS VERY UNLIKELY, BUT I JUST WANT TO ADD TWO
POINTS. RICK HAS DONE TREMENDOUS RESEARCH ON
THIS AND THE STORY OF THE THEFT OF THE RUSSIAN
STATE BY THE PARTY OFFICIALS AT THE END OF THE
GORBACHEV ERA WHO WERE PREPARING FOR THE
POSSIBLE FUTURE. AND THE POINT I WANT TO MAKE
NOW IS THAT THE RUSSIAN ELITE HAS THIS ATTITUDE
THAT THE ONLY MONEY THAT IS SAFE IS THE MONEY
THAT IS IN THE WEST. IN OTHER WORDS, IT IS A
VERY FUNNY SITUATION. YOU HAVE A STATE THAT IS
RUN BY THE ELITE THAT DOESN'T BELIEVE IN ITS OWN
STATE. AND I WANT TO GO BACK TO ONE MORE POINT
ABOUT THE CAUSE OF ALL THIS. I THINK THE MAIN
CAUSE OF THIS IS THE MORAL COLLAPSE. THERE ARE
NO VALUES. THAT'S SOMETHING THAT WE IN THE WEST
TAKE AS A NORMAL SORT OF GIVEN, THAT I WRITE A
CHECK AND IT'S AN HONEST CHECK. MAYBE IT'LL
BOUNCE, BUT MAYBE IT'S A PROBLEM AT THE BANK.
BUT ESSENTIALLY, PEOPLE TRUST OTHER PEOPLE.
THAT'S THE FOUNDATION OF CAPITALISM. IN RUSSIA,
WHEN THEY TALK ABOUT BUILDING THE RULE OF LAW,
THEY NEVER REALLY UNDERSTOOD WHAT IT MEANS.
THEY NEVER REALLY UNDERSTOOD. IT HAS ALWAYS
BEEN THE RULE OF PERSONS AND THAT'S WHAT IT'S
ALL BUILT UPON. I KNOW HIM, HE KNOWS ME, HE
OWES ME, HE OWES ME A FAVOR, I OWE HIM A FAVOR.
THE WHOLE ELITE IS ROTATING IN THAT SOVIET
CLAN-LIKE SYSTEM OF FAVORS AND DEALS BETWEEN
INDIVIDUALS AND THEY HAVE A WAY TO GO, MAYBE
DECADES, BEFORE THEY REALLY COMPREHEND WHAT THE
RULE OF LAW MEANS AND NOT A RULE OF INDIVIDUALS.
HOST: SO, ABSENT A SPIRITUAL RENEWAL, THIS IDEA OF
HAVING A FREE MARKET IS REALLY PREMATURE?
GOBLE: THE POINT THAT VLAD IS MAKING GOES EVEN DEEPER
THAN THAT. ONE OF THE REASONS, WHEN THE SOVIET
UNION FELL APART AND COMMUNISM COLLAPSED, IS
THAT THE OLD NOMENKLATURA ESSENTIALLY PRIVATIZED
THE ASSETS OF THE STATE INTO ITS OWN HANDS AND
STOLE THE STATE. SOME PEOPLE HAVE SPOKEN ABOUT
THE PRIVATIZATION OF ORGANIZED CRIME. IT USED
TO BE CALLED THE COMMUNIST PARTY. NOW IT'S
CALLED THE NEW RUSSIANS. AND THIS PROCESS OF
THE COLLAPSE OF THE PARTY AS A SOURCE OF
AUTHORITY, AS A SOURCE OF VALUES FOR THIS
SOCIETY, HAD THE EFFECT ON THE ONE HAND OF
ALLOWING A COLLAPSE OF COMMUNISM AND THE
COLLAPSE OF THE SOVIET UNION TO PROCEED WITH FAR
LESS VIOLENCE THAT MANY PEOPLE EXPECTED, BUT IT
ALSO MEANT THAT WE'RE IN A SITUATION NOW WHERE
ALL THE INTEGUMENTS THAT NORMALLY HOLD A SOCIETY
TOGETHER ARE GONE. AND THAT MEANS THAT THE
CORRUPTION IS NOT SO MUCH A CAUSE, BUT A SYMPTOM
OF SOMETHING FAR DEEPER, AND WE NEED TO GO BACK
IN TIME AND LOOK FAR IN THE FUTURE TO DEAL WITH
THIS KIND OF MORAL COLLAPSE.
HOST: WELL, YOU KNOW AT THE TIME THAT THIS
PRIVATIZATION OF PUBLIC ASSETS WAS TAKING PLACE,
SOME WESTERN ECONOMISTS SAID, WELL, WE KNOW THIS
IS WRONG, AND THEY ARE BASICALLY STEALING THIS
STUFF, BUT THE GOOD SIDE OF THIS WILL BE ONCE
THE ASSETS ARE PRIVATIZED, THE INDIVIDUALS WILL
PUT THEM TO PRODUCTIVE USE AND THIS WILL
GENERATE ECONOMIC ACTIVITY. YOU ARE SAYING THIS
DIDN'T HAPPEN. THEY LOOTED THE PLACE AND SENT
THE MONEY OUT OF THE COUNTRY.
BROVKIN: IT COULDN'T HAPPEN BECAUSE, AS I SAY, OF THE
MORAL FOUNDATION. BECAUSE THE PREMISE IS, ONCE
YOU PRIVATIZE, THAT THE MEANING OF THE WORD
PRIVATE, PRIVATE PROPERTY, THAT IT'LL BE LIKE IN
THE WEST. THAT'S THE COMMON MISTAKE. WHAT
REALLY HAPPENED IS THAT THE LINE BETWEEN WHAT'S
PRIVATE AND WHAT'S PUBLIC, WHAT'S PUBLIC SERVICE
OF A PRIVATE INDIVIDUAL, HAS BEEN COMPLETELY
ERASED. LET ME GIVE YOU AN EXAMPLE. THINGS ARE
PRIVATIZED. YOU LIVE IN AN APARTMENT. THE
SOVIET STATE SAYS NOW ITS YOURS. IT'S YOUR
APARTMENT. IT'S YOUR PRIVATE PROPERTY. FINE,
EVERYBODY'S HAPPY. SUPPOSE YOU ARE DIRECTOR OF
AN ENTERPRISE. YOU'VE BEEN RUNNING THAT
ENTERPRISE, AND NOW YOU SAY IT CAN BE
PRIVATIZED. SO, YOU BUY UP THE VOUCHERS AND NOW
IT'S YOURS, IT'S PRIVATE. SO THIS IS SUPPOSEDLY
THE SORT OF PRIVATE PROPERTY. NOW WHAT HAPPENS
TO A CIVIL SERVANT WHO CANNOT PRIVATIZE HIS
POSITION, FOR EXAMPLE, AN ARMY GENERAL. HE
CANNOT PRIVATIZE HIS DIVISION, JUST LIKE A
DIRECTOR OF AN ENTERPRISE COULD PRIVATIZE IT.
SO WHAT DOES HE DO? HE SAYS, HEY, I'M SO
UNLUCKY. THE OTHER GUY PRIVATIZED THE FACTORY.
NOW IT'S HIS OWN. HE CAN SELL IT. HE CAN GO TO
PARIS. HE CAN DEPOSIT MONEY IN THE CAYMAN
ISLANDS. I CAN'T BECAUSE THIS SUPPOSEDLY
BELONGS TO THE STATE. BUT HE DOESN'T DO IT THAT
WAY. HE CONTINUES TO ACT AS IF THIS WAS HIS
DIVISION. SO HE'S SELLING THE GUNS. HE'S
WHEELING AND DEALING. WHAT WE CALL IT -- LOUISE
SHELLY INVENTED THE TERM -- HE IS PRIVATIZING
THE STATE. IN OTHER WORDS, IN REALITY, HE
TREATS HIS DIVISION, HIS JOB AS A MINISTER, AS A
DOCTOR, AS A TEACHER, A POLICEMAN, A PROSECUTOR,
AS A JUDGE, AS IF IT WAS HIS OWN PROPERTY.
HOST: WELL, I WAS GOING TO BRING UP A STATEMENT MADE
LAST YEAR, WHEN BORIS NEMTSOV WAS STILL THE
DEPUTY PRIME MINISTER, IN WHICH HE SAID "THE
STATE HAS ALLOWED AND EVEN ENCOURAGED THE
CONCENTRATION OF PROPERTY AND POWER IN THE HANDS
OF A NARROW GROUP OF ENTREPRENEURS CONNECTED
WITH THE BUREAUCRACY." AND HE CALLED THIS
"PRIVATIZATION OF AUTHORITY," WHICH IS, HE SAID,
"DISGUSTING. " PAUL GOBLE?
GOBLE: BUT EVEN IN PLACES WHERE WE'RE TALKING ABOUT
ECONOMIC FIRMS THAT WOULD NORMALLY BE THOUGHT OF
AS BEING POSSIBLE PARTICIPANTS IN A COMPETITIVE
MARKET ENVIRONMENT, THE LEGAL CLAIMS OF THE
SUPPOSED OWNERS ARE SO WEAK AND SO DEPENDENT ON
THEIR RELATIONSHIP TO THE BUREAUCRACY THAT TWO
THINGS HAVE HAPPENED. BECAUSE THESE PEOPLE DID
NOT BUILD THESE FIRMS -- THEY ARE NOT ROBBER
BARRON CAPITALISTS AS IS SOMETIMES SAID BUT
SIMPLY ROBBER CAPITALISTS -- ON THE ONE HAND,
THEY CONTINUE TO INTERACT WITH THE STATE
INSTITUTIONS IN MUCH THE SAME WAY THEY DID IN
SOVIET TIMES, SEEKING RENTS, RATHER THAN
COMPETING FOR PROFIT. MORE THAN THAT, RATHER
THAN TRYING TO BUILD THEIR FIRMS UP TO PROMOTE
ECONOMIC GROWTH, TO PROMOTE JOBS, TO BUILD THEIR
COUNTRY, THEY'RE ASSET-STRIPPING, SENDING THE
STUFF ABROAD, THE CASH ABROAD, SO THAT THEY CAN
LIVE VERY WELL. AND THE CONSEQUENCE IS THAT
RUSSIA IS IN WORSE SHAPE RELATIVE TO THE
POSSIBILITY OF FUTURE ECONOMIC GROWTH NOW THAN
IT WAS EIGHT YEARS AGO.
HOST: RICHARD PALMER?
PALMER: THE LAST FOUR-POINT-TWO BILLION DOLLARS THAT WAS
SENT IN BY THE I-M-F ARRIVED IN RUSSIA AND WAS
OUT OF THE COUNTRY WITHIN FORTY-EIGHT HOURS. IT
DID NOTHING TO HELP THE PEOPLE IN THE COUNTRY.
BUT ARE THEY SERIOUS ABOUT LOOKING FOR THE FUNDS
OR THE CORRUPTION CAMPAIGNS? ANTI-CORRUPTION
CAMPAIGNS IN RUSSIA GO BACK SEVENTY YEARS.
USUALLY THEY ARE ONLY A TOOL TO WORK AGAINST
YOUR POLITICAL ENEMY. BUT LET'S LOOK AT WHAT'S
REALLY HAPPENED. THE FIRST ONE TO RAISE THE
SUBJECT OF LET'S LOOK FOR THE MONEY WAS YELTSIN
AND YET IT WAS ALSO YELTSIN WHO PRESIDED OVER A
GOVERNMENT THAT REFUSED TO PROVIDE ANY
DOCUMENTATION TO USE AS A BASIS FOR LOOKING FOR
THE FUNDS. THE MAN WHO WAS THE KEY PERSON IN
BLOCKING ANY INFORMATION COMING OUT ABOUT WHERE
THE FUNDS WENT, FOR AT LEAST SIXTY TO SEVENTY
PERCENT, WAS A MAN BY THE NAME OF YEVGENY
PRIMAKOV. HE IS CURRENTLY THE PRIME MINISTER.
AT THE TIME, HE WAS THE HEAD OF THE K-G-B. HE
WOULDN'T PROVIDE ANY INFORMATION OR THEIR HELP
IN MOVING THE FUNDS. THEREFORE, FOR THESE
PEOPLE TO SAY NOW WE'RE REALLY INTERESTED IN
LOOKING FOR THE FUNDS IS SUSPECT. SECONDLY,
THEY'VE HAD INVESTIGATION AFTER INVESTIGATION.
THEY HAVE LISTS OF THE NAMES OF THE PEOPLE WHO
HAVE MASSSIVE AMOUNTS OF MONEY THAT HAVE BEEN
MOVED TO THE WEST. AND EVERY TIME THEY TRY TO
FIND SOMEONE TO MAKE INTO A TEST CASE, THAT
INDIVIDUAL RALLIES POLITICAL SUPPORT AND MAKES
PAYOFFS. AND THEY SAY, LET'S MOVE DOWN THE LIST
AGAIN. SO THESE LISTS OF PEOPLE WHO STOLE OUR
MONEY BECOME BASICALLY A TOOL FOR SHAKING DOWN
THE OLIGARCHS FOR A LITTLE BIT MORE MONEY. BUT
THEY'RE REALLY NOT SHOWING ANY PROGRESS.
HOST: AND WE NOTE THAT THE ATTORNEY GENERAL WHO
BROUGHT THIS SCANDAL TO PUBLIC ATTENTION
RESIGNED FOR QUOTE, UNQUOTE, HEALTH REASONS SOON
THEREAFTER. LET US ASK NOW WHAT ARE THE
ULTIMATE CONSEQUENCES, MR BROVKIN, OF THIS STATE
OF AFFAIRS, FOR THE RUSSIAN STATE, THE REST OF
THE NEWLY INDEPENDENT STATES, AND THE UNITED
STATES?
BROVKIN: WELL, THE CONSEQUENCES COULD BE -- DEPENDING ON
WHAT YOU WANT TO LOOK AT. THE OPTIMISTIC
SCENARIO AND THE REAL PESSIMISTIC SCENARIO. LET
ME START WITH THE OPTIMISTIC SCENARIO. THE
OPTIMISTIC SCENARIO COULD BE THAT RUSSIA COULD
MUDDLE THROUGH. THE WEST WOULD ABANDON THE
ILLUSIONS THAT IT'S DEALING WITH PRIVATE
PROPERTY, WESTERN-STYLE DEMOCRACY, ALL THE REST
OF IT. AT BEST, IT COULD BE AN 18TH
CENTURY-TYPE AUTHORITARIAN SYSTEM WHICH IS NOT
PRIVATE PROPERTY-BASED. AND THAT'S ESSENTIAL TO
UNDERSTAND. THE [BORIS] BEREZOVSKY CASE
RECENTLY IS A GOOD ILLUSTRATION OF THAT.
PRIVATE PROPERTY IN RUSSIA IS CONDITIONAL. IT IS
CONDITIONAL ON THE GRACES OF THE KING. AS LONG
AS THE KING SAYS IT'S OKAY FOR YOU TO OWN THAT,
YOU CAN OWN IT. AS LONG AS NOT, YOUR HEAD IS
CHOPPED OFF AND THE PROPERTY IS GONE.
HOST: THAT'S THE BEST CASE. WHAT'S THE WORST CASE?
BROVKIN: AND THEN, WHEN THE WEST UNDERSTANDS THAT THIS IS
THE WAY IT IS, MAYBE THEY'LL BE SOME
STABILIZATION, SOME FOREIGN INVESTMENT. AND
RUSSIA WOULD RECOVER AT LEAST TO A POINT OF
GENERATING ENOUGH TO SUSTAIN ITSELF FROM
COMPLETE BANKRUPTCY. THAT'S THE OPTIMISTIC
SCENARIO. THE PESSIMISTIC SCENARIO IS THAT THIS
UNPATRIOTIC, ROTTEN ELITE WOULD STRIP THE
COUNTRY TO SUCH AN EXTENT THAT THERE WOULD BE A
HYPER-INFLATION, A WINDING DOWN SPIRAL OF
DEINDUSTRIALIZATION AND POVERTY THAT ONE DAY
WOULD SIMPLY HAVE TO BRING RUSSIA TO ITS
COLLAPSE AS A STATE. IT COULD HAPPEN IN ONE
DRAMATIC MOMENT, OR IT COULD HAPPEN LITTLE BY
LITTLE. THE FAR EAST WOULD DEVELOP MORE AND
MORE A RELATIONSHIP WITH KOREA AND CHINA, AND
ONE DAY, WOULD DISCOVER IT HAS MORE IN COMMON
WITH THEM THAN IT HAS WITH MOSCOW.
HOST: LET ME QUICKLY GO TO PAUL GOBLE AND ASK WHAT
SHOULD THE UNITED STATES DO IN THE FACE OF THIS?
GOBLE: WELL, THE FIRST THING IS WE SHOULD STOP CALLING
THINGS BY NAMES THAT DON'T APPLY. ABRAHAM
LINCOLN SAID ONCE: IF YOU HAVE A DOG THAT HAS
FOUR LEGS AND A TAIL, AND YOU SAY IT HAS FIVE
LEGS, IT STILL HAS FOUR. THE PROBLEM IS WE HAVE
INSISTED ON SAYING RUSSIA IS A DEMOCRACY. WE'VE
INSISTED ON SAYING IT'S IN TRANSITION TO A
MARKET ECONOMY, OR THAT IT HAS A MARKET ECONOMY.
AND THAT HAS MEANT WE HAVE ANALYZED RUSSIA USING
THE WRONG TOOLS, THE WRONG TERMINOLOGY, THE
WRONG THEORY. WE FIRST OF ALL NEED TO LEARN A
WHOLE LOT MORE. SECOND, WE NEED TO STOP
CONFUSING WHAT'S GOING ON IN THE CITY OF MOSCOW
WITH WHAT'S GOING ON IN RUSSIA AS A WHOLE. LAST
YEAR MOSCOW ATTRACTED ALMOST THREE-QUARTERS OF
ALL DIRECT FOREIGN INVESTMENT INTO THE CITY OF
MOSCOW. MOSCOW IS NOT RUSSIA. AND WE HAVE
IGNORED THE REST OF THE COUNTRY, WHICH IS GOING
TO HAVE AN ENORMOUS IMPACT. AND THIRD, WE HAVE
TO RECOGNIZE THAT, EVEN IF WE BEGIN TO
UNDERSTAND THESE PROBLEMS, OUR ABILITY TO CHANGE
THINGS IS MUCH LESS THAN WE WOULD LIKE AND WE
SHOULD, IN TERMS OF CHANGING THINGS, WORRY A LOT
MORE ABOUT DOING WHAT WE CAN TO AMELIORATE HUMAN
SUFFERING ON THE PART OF THE LARGE PART OF THE
RUSSIAN POPULATION THAN WORRYING ABOUT OF TAKING
CARE OF THE STOCK PORTFOLIOS OF THE NEW
OLIGARCHS.
HOST: WELL, FOR INSTANCE THE UNITED STATES IS SENDING
A LOT OF FOOD AID. IS THAT EVEN A SMART THING
TO DO? I SEE RICHARD PALMER SMILING.
PALMER: I RESEARCHED THAT SUBJECT VERY CAREFULLY. AND
THIS IS A MATTER THAT IS BILLED IN THE
NEWSPAPERS AS THE MOST CAREFULLY SCRUTINIZED AND
WITH THE HIGHEST LEVELS OF SECURITY. IN FACT,
THE TOTAL SECURITY FOR THIS INITIAL PART OF THE
PROGRAM, WHICH IS SIX HUNDRED AND FIFTY MILLION
DOLLARS -- THERE WILL BE ANOTHER EIGHT HUNDRED
MILLION FOLLOWING THIS -- IS SIMPLY SIX
AUDITORS. TWO F-B-I AGENTS WILL BE IN THE ROOM,
SIX AUDITORS TOTAL, A FEW PEOPLE FROM THE
EMBASSY. AND THE RUSSIANS WILL EVERY WEEK BRING
BY THE SLIPS OF PAPER SAYING THIS IS HOW MUCH
WHEAT WE GOT, THIS IS HOW MUCH WE SOLD IT FOR,
HERE'S WHAT WE PUT IN THE PENSION FUND. IN
FACT, THE U-S RESISTED ATTEMPTS TO MAKE THE
MONITORING EVEN MORE STRINGENT ON THIS TO MAKE
SURE IT'S REALLY USED AS IT IS. I KNOW FOR A
FACT THAT SOME OF THE REGIONAL DIRECTORS OF THE
REGIONS AND THE DISTRICTS HAVE ALREADY SIGNED
THAT THEY'VE RECEIVED THE WHEAT BEFORE IT
ARRIVED SIMPLY BECAUSE THE PEOPLE RECEIVING IT
WILL MAKE EIGHTY TO NINETY DOLLARS A TON IN THE
MIDDLE.
HOST: WILL YOU CONCLUDE FROM THIS THAT THE UNITED
STATES SHOULD NOT GIVE THIS AID?
PALMER: THE RUSSIAN PRESS AND MANY OF THE RUSSIAN
EXPERTS HAVE SAID THEY DON'T KNOW WHY ITS COMING
EXCEPT TO PUT MORE MONEY IN THE POCKETS OF THE
PEOPLE THAT WE'RE TRYING TO CONTROL.
HOST: I'M AFRAID THAT'S ALL THE TIME WE HAVE THIS
WEEK. I'D LIKE TO THANK OUR GUESTS -- VLADIMIR
BROVKIN FROM THE CENTER FOR THE STUDY OF
TRANSNATIONAL CRIME AND CORRUPTION AT AMERICAN
UNIVERSITY; PAUL GOBLE FROM RADIO FREE
EUROPE/RADIO LIBERTY; AND FORMER C-I-A OFFICER
RICHARD PALMER -- FOR JOINING ME TO DISCUSS THE
PROBLEM OF CORRUPTION IN RUSSIA. THIS IS ROBERT
REILLY FOR ON THE LINE.
19-Mar-99 11:20 AM EST (1620 UTC)
NNNN
Source: Voice of America
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