DATE=7/6/2000
TYPE=BACKGROUND REPORT
TITLE=PUTIN'S SLOW-STARTING REFORMS
NUMBER=5-46619
BYLINE=BARRY WOOD
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
INTRO: It's been 100 days since Vladimir Putin
assumed the Russian presidency promising far-reaching
economic reform including a campaign against
corruption, a fairer tax system, and secure property
rights. With the Russian economy now growing swiftly
for the first time since communism collapsed a decade
ago, V-O-A's Barry Wood reports the much-touted
reforms read well on paper but have been slow to be
implemented.
TEXT: For energy economist Matthew Sagers (of
Washington's Planecon consultancy) the tripling in oil
prices over the past 18 months have triggered a boom
in the Russian economy.
//Sagers act//
The Russian economy is going just gang-busters
here in the first half of 2000. Industrial
output is way up, g-d-p is way up. And so
besides the multiplier effect from higher oil
prices-and what it means for tax revenues,
revenues for companies, and incomes, it also
seems to be playing a major role in sustaining
the economy.
//end act//
Oil and gas are Russia's primary exports and the boom
in the energy sector translates into rising foreign
exchange reserves and an overall boost to the economy.
Russia is expected to register solid five percent
growth this year.
John Hardt, a Russia specialist at the Congressional
Research Service, is sceptical that oil prices will
remain at their current high level. He believes that
to assure long-term economic growth Mr. Putin has to
put substantive reforms in place.
//Hardt act//
My sense is that he has a number of ingredients
underway which seem to be headed in the right
direction. Reform of the tax policy, an approach
to monetary reform, a willingness to address the
administrative system, to change the rules of
the game-to make it more competitive and to
change the corruption prone environment, are all
admirable and understandable goals. But it
remains to be seen if this can be carried out
consistently and whether or not he can maintain
the degree of broad support he now has in the
Duma.
//end act//
Mr. Hardt is encouraged by parliament's preliminary
approval of the government's economic program.
However, specific measures concerning tax policy and
enterprise restructuring will not be implemented until
September at the earliest.
Janine Wedel, a professor at George Washinton
University who has written extensively on corruption
in Russia, anticipates no great changes in Russia's
overall approach to the rule of law.
//Wedel act//
My suspicion would be that he is under pressure
to demonstrate both for domestic and
international consumption that he is interested
in the rule of law and must therefore pay lip
service to this rather vague notion of the rule
of law. But I think it definitely remains to be
seen whether he is interested in helping to
create institutions that will establish property
rights, shareholder rights and the kinds of
institutions that are associated with building
the rule of law where fair transactions can take
place.
//end act//
But purely on economic grounds the early results of
the Putin presidency have been positive. Inflation
seems to be under control. Tax revenues are up. Russia
is keeping current on its debt payments to the
International Monetary Fund. And the I-M-F and World
Bank are sending missions to Moscow this month to
discuss new lending programs.
U-S Treasury Secretary Larry Summers this week
welcomed Russia's healthier budget and rising
reserves. But he said the substantial improvement in
Russia's economy can't be sustained without
establishing the rule of law and enforceable property
rights. (Signed)
NEB/BDW/ENE/PT
06-Jul-2000 16:17 PM EDT (06-Jul-2000 2017 UTC)
NNNN
Source: Voice of America
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