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Books by Grigory Yavlinsky
Economics and Politics in Russia
The Center for Economic and Political Research (EPIcenter)
Nizhni Novgorod-Moscow, 1992


Let us try to imagine developments in Russia at least a year from now.

Which factors will determine the state of our country and its citizens in such a new environment?

Owing to a dearth of knowledge and historical precedents, we lack the requisite elements to answer these questions fully. We don't even have a developed terminology at our disposal to describe current developments, and major social processes are still at their embryonic stage. Although we intend to examine this subject professionally and objectively, we are well aware that we are speaking about our own country. So we shall begin from the basics.

Reforms in Russia were traditionally initiated and implemented by the central authorities via a regimented top-down bureaucracy.

By Autumn 1992 the "reformist movement from the top" had virtually exhausted itself: the potential for continuing on this path had been reduced to a minimum.

Owing to the inertia of previous mentality and delusions about our country's ability to act according to established economic patterns in the face of dramatic changes in the political structure, we rapidly lost the instruments we needed to conduct the reforms. The federal central authorities have actually lost their economic and political potential to conduct the reforms. However, neither the authorities nor society seem to fully realise this.

In this sense we are moving to the end of AN ENTIRE ERA OF REFORMS, consisting of a number of serious failures. The reforms never managed to radically improve the lives of the majority of people.

Summing up developments and results from a purely economic angle, it could be said that we are witnessing the final act of the reformist drama and are now confronted by a completely new stage of development.

Russia is undergoing new qualitative changes in need of interpretation. It must once again decide its future.

The new state of affairs in Russia has been engendered by a cascade of emerging differences in people's lives, their attitudes, aims and ways of achieving their goals. A similar process has been noted in different regions and among different ethnic groups. Diversifying trends are beginning to influence interests, economic forms and politics.


Owing to an absence of institutional forms, legal norms and economic models (i.e., regulators of these processes, ensuring that they are democratic and secure), conflicts may flare up. A spontaneous process may transform the differences into contradictions and lead to a clash.

Consequently Russia is facing the problems of a fledgling state, which contains both potential dangers and new opportunities. One must correctly evaluate the situation, recognise these opportunities and exploit them.

In our view we can already distinguish the starting blocks, which enable us to try out new paths and exert a decisive influence on the fate of the country: Russian territories

and their peoples, new social and professional communities and, finally, new ideas that are a departure from great- power thinking, which is fading irrevocably from the minds of our people. It is being replaced by daily domestic problems, the family, social group, ethnic and territorial communities.

The need for safety and stability and the emergence of principally new opportunities provide the main solution - a new rationale and paradigm: "DISMANTLING - REFORMS FROM THE TOP" IS BEING REPLACED BY "DEVELOPMENT FROM WITHIN - CREATION FROM THE BOTTOM". New economic and political transformations are emerging: from individual interests to those of a territorial community, and in so far as these interests are common - to new integrity.

In specific political conditions, the new integration in Russia should be engendered by developments, taking place both at a federal level, and in the regions, which mutually interact and thereby initiate the evolution of the present federal centre or the formation of a new one.

Now that the changes have taken place, a radically new country is emerging, involving a different division of power and internal ties.

Even today Russia's regional authorities are assuming progressively more functions as architects and proponents of their own economic and social policies.

According to the new rationale, ALL THE ELEMENTS AND MECHANISMS OF NEW ECONOMIC AND POLITICAL PROGRAMMES, proceeding from vital problems and being implemented in the territories, CAN ONLY GUARANTEE HORIZONTAL COORDINATION ON A VOLUNTARY BASIS, WITH DUE ACCOUNT TAKEN OF EXISTING DIFFERENCES. This envisages movement towards new integrity through the "nuclei of crystallisation", which are made up

of all centres of cooperation, and proponents of ideas of civil society and consensus. On this basis, regional authorities can become aware of their role as independent - 11 -

subjects of political transformations. After defining their place in this process, they can formulate their own goals, as well as common ones and the ways of achieving them.

On the other hand, ANY ATTEMPTED REFORMS FROM THE "TOP", WHICH AIM TO REVIVE SECTORAL MANAGEMENT in the interests of, for example, the so-called commodity producers - something Russia is still not insured against - are in principle DOOMED TO FAILURE, EVEN IF THE TOTALITARIAN REGIME IS RESTORED. They can only serve to aggravate the economic situation. The limited potential of such a scenario will prevent any resolution of ethnic, social and political problems, contradict the interests of individual producers (different forms of property, in the first place), and also make them clash with consumer interests. The state structures lobbying on behalf of industrial or corporate interests are, as a rule, ineffectual and incompetent outside the sphere of their own utilitarian interests. Moreover they have nothing in common with the historical process of transformation of the Eurasian community and the creation of a new Russia.

The starting point for the creation of a new society is characterised by the diversity and variety of the new entities, changes in development structures, their new rationale, and the emergence of new driving forces and the realization of their interests.

We must now try to come to terms with these developments and consequently take prompt action.

IT IS ABSOLUTELY CLEAR TO US THAT THERE IS NO ALTERNATIVE TO NEW INTEGRATION. Our choice dictates a certain rationale and specific practice, which will be described in this book.