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Mind the flies in your soup, Mr. Primakov
By Yulia Latynina, Moscow Times
February 23, 1999

The outline of the economic system the new government is trying to build in Russia is emerging even more clearly. It’s an economy regulated by the state, but free of corruption. In the State Duma recently, Prime Minister Yevgeny Primakov described a real market as one “free from corruption and crime”. Presumably he had his heroic struggle against tycoon Boris Berezovsky in mind.

But Berezovsky is not the only economic virus plaguing Russia. Why, for example, is Primakov not taking a stand against the government decree transferring the high-liquidity Indian debt without a tender to the financing of the agricultural sector – and therefore to the disposal of Gennady Kulik, deputy prime minister in charge of agriculture?

Here’s another odd story: After Fist Deputy Prime Minister Yury Maslyukov’s intervention, the $500 million contract for the supply of the Tor-M1 anti-aircraft systems to Greece fell not to Rosvooruzheniye, which spent about $3 million on the presentation of the systems, but to the Antey concern. Shouldn’t Primakov be called upon to counter the evil rumors emanating from the democratic camp, which claim that Maslyukov;s profit from this deal was in the region of Rosvooruzheniye’s outlay mentioned above?

And, finally, why does the prime minister not raise a protest against a budget that includes, in the opinion of competent economists, around 30 articles that give scope for theft, not least the unprecedented article No. 106 on the possibility of apportioning federal budget funds to commercial organizations?

Primakov;s definition of a “real marker: presents other problems too. In America, as we know, there’s also crime – organized, petty and juvenile. But a marker, so the rumor goes, also exists and the reason for this is simple. In America, the mafia plays risky games and controls prostitutes, but the list of services it provides does not include searching for unscrupulous debtors or protection from the tax police. Individual, irresponsible tax dodgers do exist in America, bun people do not have to resort on tax evasion to survive. In America, people trade in cocaine, not government posts. The level of the regulation of the economy provides the reason for this considerable difference in crime levels.

“State regulation” and “corruption” are two sides of the same coin. Corruption festers in a regulated economy as inevitably as maggots in meat left out in the sun.

To keep meat maggots-free it’s enough to stick it in the fridge. That’s what they do in America. In Russia they appoint a platoon of soldiers to look after the meat with orders to open fire with their Kalashnikovs at any flies that come near it. They’re expensive, these soldiers, and there are plenty of flies. Some flies strike up high-level acquaintances and even get appointed as deputies of the lord of the meat. Or as head of the guards. Complicated issues arise: Which flies can be killed and which still yield a definite tactical gain? Sometimes a fly that has already deposited its eggs is caught amid great celebrations, and the action pass off as a stage in the heroic struggle against meat-hygiene problems.

But the real issue at stake is something different. A regulated economy is not an economy in which something is regulated. It’s an economy in which everything is sold. “Regulating the economy” with one hand and “struggling with corruption” with the other is like curing burns with boiling water.

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