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Books by Grigory Yavlinsky
The Center for Economic and Political Research (EPIcenter)
Moscow, May 1992


The scope of the programme proposed by George Bush - 24 billion dollars for only one year - defies imagination. This is roughly a third of the former USSR's existing foreign debt piled up over the years of the Cold War and perestroika.

The first large part of this sum - 11 billion - mainly consists of the credit lines opened already in late 1990 and 1991. It is "old" money confirmed by the G7 countries in view of their growing trust in Boris Yeltsin and the new Russia. It amounts to tied-up credits conditioned by the import of commodities precisely from these countries.

The second part of the sum - 2.5 billion dollars - is a deferment of payments on the debt to official Western creditors, granted until June 30, 1992, whereupon negotiations will have to be resumed. This is forced aid - the republics of the former USSR are incapable of servicing the debt.

The third part - the receipt of 4.5 billion dollars from international financial organizations after Russia's entry to the IMF.

This is a standard and natural course of events.

Lastly, a new element in the US President's initiative - 6 billion dollars intended to build up the stabilization fund of the rouble for Russia. It is not worth counting on the sale of this entire sum inside the country - the fund as such is not being set up: these are the credit lines opened by the G7 countries, and control over the expediency of using them will evidently be granted to the IMF leadership. From Poland's experience we know that the formation of a stabilization fund is an attractive form of aid for donor countries, since it requires no money - resources from this fund are practically not issued to the country. The ideology of setting up a stabilization fund is aid for self-aid. This is mainly moral, not financial support.

Thus, so far aid to reforms in Russia is expressed in fulfilling the old promises (not in full volume), by natural progress and moral political support. In effect, the initiative amounts not to allotting money, but to restructuring already allotted resources.

A few facts for the sake of comparison. The volume of foreign aid promised the USSR in 1990-1991 amounted to about 80 bullion dollars. On January 22, 1992 Germany passed a decision to limit the issue of guarantees on export credits for the republics of the former USSR to a ceiling of DM 5 billion, instead of the 16 billion promised earlier. In his April 1 speech George Bush confirmed the objective of minimizing the "new" money.

It is erroneous to say that this is an up-dated edition of the Marshall Plan (under which, incidentally, aid was mainly given gratis). It is not worth engaging in wishful thinking.

Thus, the real content of the promised billions has no relation whatsoever to the Marshall Plan. It is impossible that a government whose principal merit is said to be high professionalism should not understand this.

So, what is the matter? Perhaps this is auto-suggestion coupled with mass hypnosis? Surely rank-and-file Americans already believe that they have given us 24 billion and we are sure that we have already received them. The situation in our economy is too complicated and will most likely take a turn for the worse by the end of the year. We believe that the aid given uss will not fundamentally alter this situation.

But can it be said that an appraisal of the announced aid programme must be negative? By no means. The statement made by the US President on April 1, 1992 may usher in a fundamentally new stage in Russia's economic relations with the rest of the world. Everything, however, depends on whether the political importance of this step will be understood in Russia and how responsible and competent will be the Russian leadership's attitude to the given question.

The present-day government must be aware that the avalanche-like disintegration of the federal state that has occurred, the failure of the first stage of economic reform, the threat that has arisen over discrediting the legislative bodies, Russia's chaotic decentralization and accelerated disintegration, and the possible loss of the chance of cooperation with the West are all associated with it?