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Equipment Rental in Russia

If you want to have a harvest in autumn, you have to plant in spring - even if the weather is bad. Now Russia is having bad weather, but it's definitely spring.' Interview with Grigory Yavlinsky).

By brian ALM editor, February 2002

Editor's Note: Through the efforts of our researcher and interpreter, Svetlana Frantova, Rental Management was granted a rare interview with Grigory A. Yavlinsky, chairman of the Yabloko Party in the Duma (the Russian parliament). We met for an hour in Yavlinsky's cavernous office, in a relaxed conversation covering the political climate and the promise ahead for the Russian economy - which Yavlinsky regards with qualified optimism, and cautions that the promise cannot be realized without patience, perseverance and a clear sense of the realities unique to Russia, some of which linger from the past. His comments are presented verbatim, from the taped conversation.

The Russian economy is moving upward now, if you compare it with the very low level that we had after the 10 years of the reforms, when we lost about 50 percent of our industrial production compared to 1990 - 50 percent! And we lost about the same in the GDP. We had a very deep crisis in 1998. Since then, we have had comparatively good figures. Generally speaking, I am very optimistic about the future of my country. I believe in the future of Russia, but we have a lot of things to do. We are facing a lot of serious structural economic problems, which are not enough in the attention of our government.

At the moment, government is most favorable to very big companies - they like the old Soviet monopolies - but for the middle-sized and small businesses, we have a very unpleasant situation. The number of small businesses in Russia is much lower than in Western Europe.

The main problem is bureaucracy. In the Soviet time it was not allowed to open a small business. Now it's allowed, but you are threatened to such extent by the local bureaucrats, by the federal bureaucrats, by criminalized blackmailing, that it is very difficult to do this - or you must be a part of it, or you must pay money to the criminal element - it is very difficult to find the clean businesses.

It can be solved, but you need a different policy in the country and different priorities of the government. One of my priorities and of my party is to uphold the right of the people to have property and to start private businesses. It is one of the basic principles of the society.

There is no resistance, as such, to reforms - nobody is saying no - but nobody is doing anything, either. This is the bureaucratic approach. In the Communist time, people would say no, on an ideological basis. Now they say, "Yes, certainly, that's very important." But nobody then takes the next step, because the political structure of the country is not developed - there is no pressure to move on. Bureaucrats in any country would be free to do whatever they want if they have no pressure. They never would be eager to give the possibility to the people to do something, because they think the key issue is to collect money for everything and spend it as they think is right.

In order to overcome that, you have to have a strong civic society, as in your country - people who can resist those things that people don't want. Our government doesn't want to have such forces. It's a long road. It will take time, with the ups and downs.

If you ask me how long it will take to go from Moscow to Beijing, I would say, the answer is very simple - just tell me when you will start then I can tell you how long it will take. We cannot predict until we know when the present situation allows us to start.

We are still in a modified previous system - we are not in the new system yet. We are partly in the previous system, with the mentality, views and morality that come from our previous period.

The difference between Russia and Poland, for example, is that Poland had a political revolution in 1990 and a new political elite came to power. We never had that. We have the same political elite we had before. They changed their jackets and their slogans and they changed the portraits and flags, but they are all the same people. We have a president who was a member of the Politboro and all the prime ministers over the past 10 years were members of the Central Committee of the Communist Party - with no exception. One was the representative of the KGB. So we have all the same people, and we are slowly moving forward.

The euphoria in the western press in '91, '92, '93, '94 - they said everything was fine, now everything was done. "Now we can go this way and that way. Russia is a democratic country." Now, your press is saying everything is bad, everything is corrupt, everything is crazy - it is not true. It was not true before, either.

Russia needs a much more sophisticated, much more responsible approach - you need to proceed with a cool head and a warm heart. I'm not pessimistic. I'm not saying that everything is bad, but we are moving more slowly than I want.

The major problem we have is the problem of power - the old political elite is still in power. You have something very similar - you have a lot of "Cold Warriors" in your government. We all together have a problem with that. They won't manage the situation in the perfect way. You need a new generation of politicians just as we do.

So it's a reminiscence of the past, but in modern conditions - it's a kind of modernization of the previous situation. It's not completely new.

RM: Does Russia encourage and welcome foreign investment in Russian industry?

Yavlinsky: Yes - but I always have a problem with the representatives of your country. Some of them want to have very easy and simple answers. Russia is not living in an easy and simple way. You are asking me a serious question - do you want a complicated answer or a simple one?

RM: I want a complicated answer.

Yavlinsky: Talks and slogans are wonderful. Our government would be happy to have investment. If you say you want to put 2,000 Coca-Cola factories all around Siberia, they would say, "Great!"

But our government is a government of a country that has one very special characteristic - it is a country with unlimited natural resources. The government of a country with unlimited natural resources is a lazy government - because if they need something, they can take it from the ground. They don't need anything sophisticated - they need simple things. If the price of oil is [high], they are free to do nothing.

They say they want investment, but in practice there is no real incentive for the power in government to change. Nobody is investing in the economy - they're investing in the country. They are two different things. You can have very good figures - trade, economic data - but at the same time you can have a country that doesn't protect private property, that allows criminal tools, that has no respect for human rights, and no independent justice. Even having good figures in the economy, under such conditions, you will never have massive investments. In your country, it's a very different story - you have a legal basis, a very special civil environment - you can have better figures in the economy or worse, you can have high inflation or low inflation, you can have better prospectives or worse prospectives, but the country is in the same mood all the time, whatever figures you have.

We have just the opposite situation. We can have good economic figures and an absolutely unacceptable environment as a whole. The key issue is to look not only at the economy, but at the whole political environment. For Russia it's the key. If you want to open this box, that's the key. I think serious people understand that. If you're asking me if it's necessary to make investments in Russia, I will say that if you want to have a harvest in autumn, you have to plant in spring - even if the weather is bad. Now Russia is having bad weather, but it's definitely spring.

We have five parties - we have many views. You have only two. You are almost a totalitarian system, because you have only two and we have a lot. I think you are moving to be more like us. Certainly there are differences, but not very important ones. The differences between our countries are not very big. I like my country, I trust my country, I have hope. I have no doubts. But I think [the road ahead] will be longer and more difficult than one [may like].

Editor's Note: Russia now has six political parties, some of which are coalitions of smaller parties that have come together under similar ideologies to multiply their influence on the government. One of these, a faction known as "Yabloko," headed by Grigory Yavlinsky, was officially organized as a party in December. It is the party of the intelligentsia and the most pro-business.

"To my mind, they are the most realistic," says Svetlana Frantova, our interpreter and research partner for this coverage. "Yavlinsky isn't influenced by anyone - he is his own man, and very principled." This puts him at odds with most of the others: the Unity of Right Forces, a right-wing coalition; the ultra-nationalist LDPR headed by the firebrand deputy chairman of the Duma, V.V. Zhirinovsky; the Unity Movement, which has the largest following among the people and maintains the closest ties to the Kremlin; and the Communists, who "stick to the past as if it is their future," says Frantova.

To understand the Russian political scene, it is necessary to understand the terms "power" and "government" vs. "Duma." The government is the executive branch - the "Kremlin," which includes the president and the ministers of his cabinet who control the country and are often referred to simply as "the Power." The Duma is the parliament, composed of elected representatives of each of the political parties - the legislative branch, like the U.S. Congress, which makes laws. Considerably more power is vested in the executive branch than it is in the U.S. system, which is knitted together by checks and balances among the executive, legislative and judicial. So movement and reform are largely defined by what "the Power" promotes or opposes. This can make advancement slow and complicated, and subject to political self-interest among the coalitions - frustrating to a leader like Yavlinsky, who seeks to build a new system along western lines and without the baggage of the past.

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Equipment Rental in Russia, 2002

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