Home pageAdvanced searchIndexe-mailAdd to favorites


We Live in a Mythical State
(Extracts from a speech in Tolyatti)
By Grigory Yavlinsky, Chairman of the Yabloko Association
Yabloko Rossiyi, No. 53
December 4-10, 1999
The electoral campaign has demonstrated yet again that we live in a strange mythical state. We have come to regard the bankruptcy of state finance as a sign of normal state management. We are being asked to believe that the economy is undergoing a slight upturn. At the same time our state's finances are bankrupt, we have a conventional state budget and conventional state rule. Our state institutions are in such a lamentable state that they are incapable of collecting taxes and controlling finances.

In a bid to retain power, Yeltsin's circle created a party of governors. They explain to the people that this is the party of a real "right" power. Why don't they honestly admit here that although 62% of Russia's budget is being spent in federation subjects, nobody knows how federal money is being spent. However, everyone knows about the scale of corruption in the regions.

I, for example, don't know how we can resolve the problem of corruption in the current circumstances. First and foremost I don't know, as I don't perceive any attempt by the authorities to take steps to resolve this problem.

There are ways to replenish state finances. For example, regulation of problems at customs. Our country loses annually $3.75 billion owing to unregulated customs' regulations between Russia and Belarus. Now we plan to sign a Union Treaty with Belarus in the near future. This is much more than any IMF loan. And now we will also have to face the task of strengthening our already common borders, whereas expenditures are likely to be financed from Russia's budget.

But I know how difficult this is to do: not a single decision on issues related to the customs authorities can be taken without overcoming serious resistance. The people with interests connected to the customs authorities hinder any attempts to install order here.

In general we have observed strange things in issues connected to certain individuals interested in some sectors of our economy. Today Russia's government is in such a state that it has to conduct negotiations with the country's largest financial and industrial corporations, so that the latter fulfil their fiscal obligations.

We know too well that the issues of tax payments are being resolved on a case-by-case basis. Instead of complying with effective legislation, agreements are reached by the government and the largest corporations on who to pay and how much tax they need to pay.

I think that we need to create a uniform tax system, which would inter alia encourage our black economy to become legalised. But the black economy constitutes about 70% of Russia's economy. We propose a potentially extremely rapid resolution of the problem of the black economy, as we cannot expect to make further progress otherwise.

Russia still survives at the expense of its natural resources. These resources accounted for 75% of the Soviet Union budget. The situation has not altered radically since then. We must make the science and technology branches the main resource of our future economic development: high precision machine-building, the instrument-making industry and aircraft building. Only then will we be able to become one of the most developed countries. Only them will we be able to resolve the problems of the education, free health care and public security systems. (Extracts from a speech in Tolyatti

ei Stepashin on Grigory Yavlinsky's proposals