Who lost Russia?

As Moscow teeters on the brink, Russian experts blame years of bad American advice.

Published September 1, 1998 7:00PM (EDT)

WASHINGTON -- As President Clinton flies to Moscow for an uncertain summit with President Boris Yeltsin, a whiff of recrimination is already in the air. Amid the steady drumbeat of criticism over the Monica Lewinsky affair, a troubling new question is being considered: Who lost Russia?

Never mind that Russia is not yet lost and that its political and economic crises could still stabilize. But with Wall Street's 513-point plunge Monday, fanned by continued global uncertainty -- and by Russia's prolonged political crisis in particular -- concern is deepening about the fragile young democracy.

"It could get much worse," Stephen Cohen, a Russian specialist at Princeton, told PBS's "Newshour with Jim Lehrer," referring to the crisis in Russia. "It will get worse, I'm absolutely convinced of it.

"Russia's economic collapse will mean social pain, social anger, vengeance, hatred," Cohen said, reminding viewers that all this would be playing out in a country that was not long ago the second superpower. "Leave aside the nuclear weapons. If this country spins out of control, if this country becomes an Albania or Indonesia scenario, you're talking about a major political catastrophe as well."

No one in Washington has yet publicly raised the question of who lost Russia, but scholars and experts who follow Russia for a living accept with a sort of weary resignation that such a debate is now inevitable and could claim victims in the administration. If it comes to that, some of these scholars say, the first to wear a scarlet "R" on his forehead will be Vice President Al Gore, the administration's most outspoken proponent of the reforms that have decimated the Russian economy and fomented the current political crisis.

"The front guy in the administration is Gore," Cohen said in an interview with Salon, noting the vice president co-chairs the U.S.-Russia commission on reform with now-acting Prime Minister Viktor Chernomyrdin. "That's been his baby. Of course you can't find him now. He's hiding. This will hurt him in the presidential primaries when Democratic challengers say this policy was Gore's and he'll have to take responsibility."

Other scholars reject the question itself. "Russia was never ours to lose," says Marshall Goldman, a Russian specialist at Harvard University. "It's the Russians who lost Russia. We worked on the margins. We gave them advice. But we didn't force them to adopt it. We always do this, torture ourselves about who lost Russia, who lost China. It's a mistake."

Cohen says Russia probably will have to return to some form of state-controlled economy to weather the current crisis. During the Great Depression, he notes, President Franklin Roosevelt used the government to put Americans back to work, and it is not unreasonable for Russia to do the same. The problem today arises, he says, when these practical solutions run up against the "monetarist orthodoxy" that has become the ideological fashion of the times.

"The danger is that the United States will start screaming, 'Communism! communism!'" Cohen says. "That kind of a debate will be completely dysfunctional. We have to open our mind and say to the Russians, 'OK, the policy that we recommended to you failed. Let us hear what you propose. We'll try to help you. We will not scream that this is a return to communism because we realize that the Russian state has got to reenter the world economy. It's got to come back from this crisis and stabilize things."

But even as Cohen and other scholars warn against the dangers of an ideological debate over Russia, they cannot resist some finger-pointing themselves.

The story of America's current involvement with Russia, they note, goes back to the Bush administration, which formulated the policies when the Soviet Union collapsed in 1991. In the wake of that historic moment, then-Secretary of State James Baker toured the former Soviet republics and got the leaders of those countries to sign onto a 14-point "bill of rights" that allowed them to qualify for American assistance.

But American aid back then was counter-productive, says Barry Ickes, a Russian expert at Penn State. "It consisted of subsidies for imported food, which Russia didn't need," he says. "At that point, a ruble stabilization fund would have helped. But that would have had to have been combined with policies that closed down money-losing industries. And that simply didn't happen."

While American champions of Russian reform like Harvard's Jeffrey Sachs argued strenuously for greater loans from the International Monetary Fund for ruble stabilization, experts like Goldman argued against it. "They couldn't have absorbed it," he said, reflecting on conditions in Russia back then. "They didn't have the institutions. There would have been even more capital flight."

Joining Goldman were scholars like Cohen and Peter Reddaway at George Washington University, who warned against a cookie-cutter approach to transforming Russia's old command economy into a free-market system. In response to those who sought to pattern Russia's transformation after the Polish model, they warned that what worked for Poland would not necessarily work for Russia. "Poland's market system had been dormant and simply needed to be awakened," Goldman says. "Russia's market system had been decimated and you couldn't reawaken it with a prince's kiss."

After Clinton took office in 1993, the Democratic administration launched a "missionary crusade to transform Russia into a copy of American's economy and junior partner in world affairs," Cohen says. While the administration waved fistfuls of money at Moscow and expressed its unqualified support for Yeltsin, the main industrial pillars of the Russian economy were being taken over by a small group of oligarchs, who managed to evade paying any taxes. As inflation soared and the lot of the ordinary Russian worsened, the only advice that the Clinton administration could provide the Russians was to "stay the course on reforms," Cohen says.

"Why is the creation of a bunch of monopolies and corrupt bankers reform?" Cohen asks. "In America, reform was when we brought those types of people under control.

"Every time Clinton and Gore say, 'Stay the course' to Russia, it provokes more anti-Americanism," he adds. "These policies have completely de-modernized Russia. Russia is full of more anti-Americanism now than I've ever seen in my life, and I've been in this business for 30 years."

For Cohen and other scholars, the main question now is whether Clinton will use his visit with Yeltsin to deliver a message of "compassion and understanding" to the Russians. "It's an interesting moment," Cohen says. "Can we, America, be undogmatic? Can we revisit facts, revisit old ideas, be compassionate, not start screaming, 'The communists are back, the anti-reformers are running things?'"

Even if Clinton delivers such a message, the other question is whether anyone in Russia will hear him. Last week, even when it appeared that the Russian parliament would accept Chernomyrdin as prime minister in exchange for a softening of economic reforms, a number of respected foreign policy hands called on Clinton to postpone his visit until the political situation in Russia clarified. Now, with the parliament's rejection of Chernomyrdin's appointment, Clinton's visit has been stripped of an operating government. To make matters worse, parliamentarians will be on vacation during Clinton's trip.

"Last week, there didn't seem any point in going. Now, it makes no sense at all," says Ickes, who rejects the administration's explanation that Clinton is going in order to show support for Yeltsin at his time of need. "That's a ridiculous argument," Ickes says. "Yeltsin's weakness doesn't come from a lack of Western support. The forces arrayed against Yeltsin are anti-Western, anti-American, anti-IMF, who accuse Yeltsin of being a puppet of the West. So Clinton's visit isn't going to help Yeltsin. On substantive issues, there's not much Clinton can accomplish. The administration already has said they're not bringing any more money. So the question then becomes: What's the point?"

The point, answers Goldman, is that a last-minute cancellation would have aggravated an already serious crisis. "If he doesn't go, it would be worse," Goldman says. "Then it's a vote of no-confidence. The Russians need to be encouraged to face up to their problems. The days when Clinton could come over and say, 'Do it this way' are over. But he can say, 'Come on, let's get together. It's important that the country pull itself together in this time of crisis.'"

By Jonathan Broder

Jonathan Broder is Salon's Washington correspondent.

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Al Gore Bill Clinton Communism George W. Bush Russia