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EAST-WEST-RESEARCH  March 1999

EAST-WEST-RESEARCH March 1999

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Subject:

Open Letter on the Russian Crisis

From:

"Andrew Jameson" <[log in to unmask]>

Reply-To:

<[log in to unmask]>

Date:

Wed, 10 Mar 1999 10:42:13 -0000

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (267 lines)

I am taking the liberty of forwarding the attached Open Letter
from Johnson's Russia List 3083, which I received today.
If, like me, you believe the world may be sleepwalking into
a crisis which could have catastrophic effects on all of us,
you may like to read and consider its contents.
Andrew Jameson
Chair, Russian Committee, ALL 
Languages and Professional Development
1 Brook Street, Lancaster LA1 1SL UK
Tel: 01524 32371  (+44 1524 32371)

#5
Date: Tue, 09 Mar 1999 
From: "Vladislav G. Krasnow" <"[log in to unmask]>
Organization: Russian-American Goodwill Ass
Subject: An Open Letter on the Russian Crisis

We, the undersigned, ask JRL subscribers and other readers  to read the
following statement. If you agree with its substance and recommendations
please consider joining us in endorsing the statement. 

We plan to submit the statement to US government officials in hopes of
improving relations between Russia and the United States. 

Please send your name and affiliation to W. George Krasnow at
[log in to unmask]

Or write to: W. George Krasnow
             1332 Vermont Ave. NW
             Washington  DC 20005


An Open Letter on The Russian Crisis

We, a group of American scholars, business people, and journalists, are
alarmed over the ongoing financial crisis in Russia and the deterioration
of U.S.-Russia relations.

Mortimer Zuckerman and Christian Caryl write in the February 8 issue
of U.S. News and World Report,
"Death is one business that flourishes in the catastrophe that has
overtaken Russia. Elderly pensioners dying of starvation no longer make
news. Life expectancy for adult men has fallen from 64 in 1990 to 59 in
1998. And the question for the country now is whether it can survive at all
as a coherent state, still less as a civilized society. The statistics are
staggering: At least 70 percent of Russians live near or below the
subsistence level."

For those Americans who remember our history, they bring the point home:
"The decline of Russia in the 1990s is deeper than even the Great
Depression in the United States. From 1929 to 1935, American national
incomes and gross domestic product fell by a third; in Russia, real per
capita incomes are down by as much as 80 percent."

We feel deep sympathy with the millions of ordinary Russians forced to
confront this winter in conditions of misery not seen since WWII. We
admire their patience, perseverance and common sense, attributes which
have kept them from choosing mass rioting and violence.

Catastrophe has overtaken even the Russian military. As the U.S. News observe:
"Once a superpower, Russia now fields a military that looks more like a
beggar's army, unable to pay itself, house itself, or, as seen in Chechnya,
fight. No one trusts the police. The judicial system is impotent. Laws are
openly disregarded. The press protects the oligarches who own most of it."

The weakening of the Russian state should give us no reason to gloat over
the demise of our former Cold War opponent. On the contrary, if Russia
disintegrates we would be faced with an arch of instability, starvation, and
armed struggle, stretching from the borders of NATO countries to China and
the Sea of Japan. Should this happen, with Russia's enormous stockpiles of
nuclear weapons and fissionable materials, our present problems in the
Middle East, Bosnia and Kosovo would pale in comparison.

We agree with the U.S. News and World Report that Russia's present
near-catastrophic predicament  is "man-made," and that the U.S. and other
Western governments and institution have actively, if inadvertently,
participated in its creation. It was on their advice that Yegor Gaidar,
Anatoly
Chubais and other "young pro-Western reformers" in President Yeltsin's
entourage administered "shock therapy" and "privatization" to Russia. The
"shock" produced no "therapy.""Privatization" produced the rule of the
oligarchs who made a mockery of free-market ideas. The financial crash of
August 17, 1998, was a collapse, not of the reforms that Russia needs and
seeks, but of the peculiar course of reforms that the "young reformers"
imposed on Russia, with America's advice and encouragement.

As Janine Wedel so clearly demonstrates in her new book, "Collision and
Collusion: The Strange Case of Western Aid to Eastern Europe 1989-1998"
(St. Martin's Press), the Harvard Institute for International Development
(HIID) managed to monopolize and privatize U.S. economic aid to Russia..
Its principals, Andrei Shleifer, Jonathan Hay, and Jeffrey Sachs colluded
with their Russian counterparts, Chubais and company, to serve as the main
conduit of U.S. assistance to Russia. Jointly they pushed Russia in the
direction which proved so disastrous. Not only were the ideas of "shock
therapy" economically unsound and politically unsuitable to Russia. While
squandering U.S. taxpayers' money, key participants on both sides came
under investigation for involvement in insider trading and shady financial
schemes. Hay and Schleifer remain under investigation by the U.S. Justice
Department.

Originally the IMF was open to different approaches to reforms. Jakues
de Groote, the most senior director on its board, in a 1993 memorandum
suggested that Moscow should "develop its own approach, based on its own
national characteristics," and it may need to regulate economy "along the
lines followed in many western countries during the postwar period." De
Groote also put priority of restoration of Russian production.

According to John Helmer, the Moscow correspondent of  The Journal of
Commerce, de Groote's memorandum was ignored. Since 1993 "radical
monetarism" has been enthroned as the indisputable orthodoxy of the IMF.
Like Wedel, Helmer suggests that George Soros, the international financial
speculator, participated in the Harvard group's lobbying of the IMF. Anne
Williamson, in her forthcoming book "How America Built The New Russian
Oligarchy" demonstrates that covert lobbying of the U. S. Treasury and the
IMF did indeed deliver nomenklatura-like insider benefits to George Soros
and other Western investors.

No wonder, that both the IMF and the U.S. government have remained deaf
to any other proposals for economic reforms in Russia, including those
advocated by prominent Nobel Prize winning American economists.

We do not wish to exempt the Russians from the main responsibility for
their present situation. However, as concerned American citizens, we want
the U.S. government to acknowledge that serious mistakes were made in both
formulating and implementing our Russia policy. 

We join former U.S. Senators Gary Hart and Gordon Humphrey in deploring
that "we have handed the U.S. foreign policy mandate to the International
Monetary Fund, while all but abandoning unilateral efforts to stimulate
Russia's dormant productive capacity."  We too wish to summon "America's
vision and creative spirit" to assist Russia in her efforts to extricate
itself from the dangerous situation in which it landed on the advice of U.
S. officials. (The Washington Post, February 11)

We agree with Katrina vanden Heuvel and Stephen F. Cohen that a new
policy toward Russia is urgently needed. It should be "based on a very
different principle--not the intrusive, ideological conditions imposed by
US and IMF officials, but...by letting Russians, not our State and Treasury
Departments, decide what constitutes reform in Russia." George Kennan,
fifty years ago, foresaw the end of Communism and advised U.S. leaders,
"Give [the Russians] time; let them be ussians; let them work out their
internal problems in their own manner." 

Instead of continuing the inherently doomed and dangerous crusade to
transform Russia into a replica of America, say Heuvel and Cohen, the
United States should support "any Russian government that promotes the
well-being of ordinary citizens without abrogating the still fragile
process of democratization." (The Nation, January 11-18). This advice the
U.S. and  IMF officials cannot ignore without further jeopardizing
Russia-U.S. relations and world peace itself.

Unfortunately, the government which has so prided itself on having
re-invented itself domestically, has shown no willingness to acknowledge
the obvious failure of its Russia policy. Secretary of State Madeleine
Albright continues to nudge Russian Prime Minister Yevgeny Primakov to the
same course of "reforms" that, under his predecessors, brought Russia to
the brink of disaster. Treasury Secretary Robert Rubin continues to cajole
the Russians to accept the dictates of the IMF--or else.

IMF Managing Director Michel Camdessus continues to refuse Russia
desperately needed loans "unless the government overcomes internal
resistance to market reforms." The trouble is that the catch word "market
reforms" has become anathema for the majority of the Russians whose incomes
have plummeted under the "reformist" oligarchic rule, for which the IMF is
partially responsible. What the IMF deems as a "realistic plan" is exactly
the opposite to what Primakov's government can do without disrupting the
precarious political balance on which it is built. In effect, the IMF is
pushing Primakov's government to commit political suicide and open the
floodgates for civil unrest and the final disintegration of Russia. But
what about democracy? After all,  Primakov's is the first government since
1993 that is built on a consensus with the Duma and that enjoys the support
of nearly all political forces.

We are convinced that making our aid to Russia conditional upon the
Russian government's support for U.S. policy, be it on Iraq, Kosovo, or
NATO, must seem humiliating to the Russians. It is also unwarranted, as
even our NATO allies sometimes disagree with us on vital issues. We should
respect the right of Russia to conduct its own foreign policy based on her
national interests.

* We appeal to the U.S. government to re-invent its policy toward
Russia.  Stop encouraging the intransigence of IMF. Give a clear signal
that we are ready to cooperate with Primakov's government in rooting out
the oligarchy and the corruption it breeds. Instruct the FBI to work with
the Russian authorities in preventing the illicit capital flight from Russia.

* We appeal to the U.S. Congress to exercise its oversight duty over
U.S. foreign policy with greater vigor and rigor. Break a monetarist
thought monopoly and allow a free market of economic ideas to flourish.
Don't fall into the trap of "the weaker Russia, the better for us." Russia
is already weak way beyond what is good for U.S. national security and
world peace.

* We appeal to U.S. non-profit organizations working in Russia to open
their hearts and minds to all Russians, regardless whether they agree or
disagree with us. Advocate the principles of democracy, civil society and
free enterprise not just among the converted (or self-proclaimed)
"Westernists" and "reformists," but among all Russians of good will.

* We appeal to the U.S. private sector. Be more creative and imaginative in
helping the Russians build a private sector. Don't tolerate the oligarchic
monopoly in Russia. Teach Russians to use anti-trust laws. Don't wait for
the governments. Do business, ignoring ideological strings. Small private
enterprise especially should be able to advance economic development in
Russia more efficiently than any bureaucracy.

 * We appeal to the American people to show magnanimity to our World War II
ally who sacrificed tens of millions of  lives to secure our freedom, too.
Remember that Russian veterans, Russia's "Best Generation" who saved Europe
from the scourge of Nazism, are now barely surviving on the meager pensions
seldom paid on time. Why should we let inept bureaucrats penalize the
people who in 1991 chose freedom and proclaimed the sovereignty of the
Russian Federation, thus putting an end to both Communism and the Cold War?

We want the Russian people to know that the American people have not
abandoned them in their most difficult times, that "Friends in need are
friends indeed."

Dr. W. George Krasnow, former professor at the Monterey Institute of
International Studies, now president of Russian American Goodwill
Associates (RAGA), Washington, DC.

Abraham Brumberg, independent writer, former editor of Problems of
Communism, contributor to the Los Angeles Times, Times Literary
Supplement, and a number of other periodicals in the U.S. and Great
Britain, Chevy Chase, MD

Anne Williamson, the author of the forthcoming How America Built the New
Russian Oligarchy, who since 1989 has shuttled between Moscow and New
York City where she now lives.

William Mandel, Hoover Institution Fellow since 1947, Berkeley, California

Dr. Ronald R. Pope, Associate Professor of Russian Politics, Illinois State
University; President, Serendipity: Russian Consulting & Development, Ltd. .

Stephen G. Wright, President, The Global Community Project, Inc.; Associate
Professor, Johns Hopkins University, Cross-cultural Management and Business
Communications; Visiting Lecturer, Georgetown University,
Understanding U.S. Culture and Business Etiquette

Alexandra Mattson, Vice President, RAGA; intercultural communications
specialist and trainer, Washington, DC

Richard D. Jacobs, President and CEO of Newstar, Inc., Washington, DC,
has extensive business experience in both the USSR where he managed a
number of Armand Hammer operations, and in post-Soviet Russia where he
bought and then was forced to sell a large piezoelectric materials factory.

James K. Galbraith, Professor, Lyndon B. Johnson School of Public Affairs,
The University of Texas at Austin and Chairperson of Economists Allied for
Arms Reduction (ECAAR).

Andrei Nikitchyuk, an aerospace engineer and translator, Senior Consultant,
RAGA, Herndon, Virginia

Erin Nikitchyuk, a software engineer, Program Manager, RAGA, Herndon, Virginia

Janine R. Wedel, Associate Research Professor, Department of Anthropology,
The George Washington University

*******



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