Outsiders Can't Fix Russia's Problems

WILLIAM PFAFF

March 18, 1993|By WILLIAM PFAFF

PARIS — Paris.--The argument over what to do to help Boris Yeltsin in Moscow assumes that something supplied from the outside can really help to bring constructive change to Russia.

Mr. Yeltsin's immediate problem is political. But politics is really a secondary issue in Russia right now. The real crisis is economic decline. It is the failure to turn the economy around and begin a reconstruction of industry on modern, internationally relevant terms. Serious as it undoubtedly is, the question of whether Mr. Yeltsin or parliament rules in Moscow is much less important.

This is because Mr. Yeltsin and his rivals in the Russian parliament are fighting over largely nominal power. Real power, able to change Russia, is available to neither of them. Moscow no longer is in command of the rest of the country. Even the army and ex-KGB are divided. I have seen it argued that the only surviving institution in Russia with a working chain of command across the country, capable of taking decisions and seeing them carried out, is the administration that runs the natural gas pipelines.

It must be added that this political struggle is an essentially constructive one. It continues to respect the institutional and legal structures of the new Russia. Representative and constitutional government is functioning, even if it functions demagogically. Mr. Yeltsin has suggested that he might resort to rule by decree or ''presidential rule,'' but until now both he and the parliament have fought by constitutional rules: the rules of a Brezhnev-era constitution, never meant to be truly democratic. This willingness to play by the rules, inadequate as they may be -- or this recognition of the fatal consequences of abandoning the rules, which is perhaps the stronger motivation -- merits great respect.

The debate in foreign capitals over what to do for Russia is framed almost entirely in terms of monetary aid to the country or to Mr. Yeltsin's government. But money is not the problem. A not inconsiderable amount of money has already been supplied, and has made no real difference.

Russia is also on the brink of hyperinflation. In such conditions the value of hard currency aid from abroad is multiplied by the rate of inflation, so that the internal purchasing power of even modest sums in dollars, deutschemarks or Ecus is very great. It does not pay Russia's external debt, but it ought to make a difference to the internal economy.

The internal crisis derives from the failure of the Russians to get results from the aid already given them. In Eastern Europe, even where the political problems are severe as in Romania and Poland, the national economies are moving; things are changing; the population has been given reason to expect something better in the future.

In Russia, economic structures and industry are not changing in any comparable way. The system remains under the effective control of the old bureaucracies or their successors in the regions of Russia, old local authorities and managers, who do not know how to change and often do not want to change, or -- worse -- under new mafias.

Foreign investment is backing off, after bad experiences. Fiat, which had much experience of working in Russia under the communist system, made new commitments in the new Russia, but is now discouraged. The New York Times Magazine two weeks ago gave a discouraging account of the troubles of an American oil company's joint venture in Siberia. It was thwarted not only by local bureaucracy, divided central authority, and local and regional political conflicts, but also by the reluctance of the work force itself to change.

Another recent report tells of a French group that has a hotel now functioning in Moscow to international standards, but whose managers say that if the French supervisory staff were withdrawn, the hotel ''would Russify within two months'' -- meaning that it would lapse to the notorious standards of the dreaded Intourist hotels of the past.

After 75 years of communism, Russian workers simply do not grasp what it is that Western managers and investors are asking of them. The enthusiastic idea of Mr. Yeltsin's former economic chief, Yegor Gaidar, and of his Western advisers, was that ''creative destruction'' in the old industrial system would set society to work creating a new free economy. It has not worked that way. People are ignorant of what to do, and frightened of initiative and change.

The foreign advisers are also at fault because, as Thierry de Montbrial, head of the French foreign- relations institute, has written, they have been demanding of the Russians ''a brutal reform of their entire economy, of a kind our own societies would be incapable of accomplishing in less than a decade even in a single economic sector.'' The Western countries struggle with their ''rust-belt'' problems, their farm overproduction, yet expect the Russians to be capable of revolutionizing their whole system overnight.

The risk is that the idea of the free market itself may become discredited in the eyes of the Russian people. They were told that the market would transform their lives, but it has in general simply made them more miserable -- with no sign of anything better to come.

Institutional and psychological change comes only from within a society. The outside world can certainly supply ideas and examples and education. Its aid can be useful. It can also supply bad or irrelevant ideas, and waste aid. But nothing from outside is going to reform Russia's economy and political society. The Russians (and their neighbors) have to work this thing through themselves, and that is, and will continue to be, a grim affair.

William Pfaff is a syndicated columnist.

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