"The U.S. Treasury Department lashed out at the notorious loans-for-shares privatization scheme of 1997 in an appendix to the report."
Who moved jobs to Russia?
The Moscow Times
Saturday, Nov. 4, 2000.Page 8
Washington Reviews Its Strategy For Russia
By Igor Semenenko Staff Writer
After a decade of efforts aimed at putting its former Cold War foe back on the rails and steering it in the right direction, the U.S. government has decided to stop and rethink what has been done and undone.
In a report titled "International Efforts to Aid Russiaès Transition Have Had Mixed Results," the U.S. General Accounting Office says that the results of $66 billion sent to assist the nation’s transition to a market economy have fallen far short of expectations.
"The value of this assistance is difficult to assess, however, since Russia appears to be a long way from having a competitive, market economy," the report says.
It notes that the volume of financial aid to Russia is incredibly small when compared to other nations receiving aid.
The German government has spent $500 billion to overhaul the economic system of East Germany, while Poland tapped $36 billion from 1989 to 1994.
It is not clear whether the timing of the report, which was released Thursday, had anything to do with the upcoming U.S. presidential vote. But most of its conclusions are shared by the White House, which has been throwing good money after bad into Russia over the past 10 years.
The report says that one of the lessons the international community has learned is the need to coordinate efforts.
In early 1990s, the community agreed on some fundamental principles concerning Russiaès economic transition, but it did not have a comprehensive strategy for the country, the report says.
Some local difficulties surfaced.
"Limitations in program success are due to obstacles encountered in Russia, including the lack of domestic political consensus behind reform and the emergence of powerful vested interests," the report says. "Often, this lack of commitment was from high-level officials."
The U.S. Treasury Department lashed out at the notorious loans-for-shares privatization scheme of 1997 in an appendix to the report.
Under the scheme, loans were made to the government in return for stakes in prime metal- and oil-industry assets. When the government failed to pay back the loans the assets were "auctioned" off for paltry sums in tenders organized and, in many cases, won by the lenders.
"We continue to believe that it was a significant setback to Russia’s reform efforts," an assistant secretary of the Treasury Department wrote.
Recommendations suggest that further assistance be spread over a longer period, financial aid efforts be coordinated among donors and stronger emphasis be put on grass-root cooperation.
"Donor-sponsored exchange programs have been frequently mentioned as an effective mechanism for transferring to the Russians knowledge about and support for how market economies and democracy function," says a chapter titled "Conclusions and Lessons Learned."
In case something goes wrong, be it schemes to shift finances offshore, corruption or any other digression from the agreed rules of the game, "donors need to maintain flexibility in their programs," the report says. |
