More taxpayer-subsidized IMF aid won’t help

As the International Monetary Fund’s Michel Camdessus wrestles with how to squander still more taxpayer-subsidized financial assistance in Russia, the Center for Security Policy’s William J. Casey Institute today offered powerful reasons why further good money should not be thrown after bad. These reasons are laid out in a nine-page summary released this afternoon of an important Casey Symposium held earlier this fall on the future of Russia.

Among the roughly 200 participants in this half-day event, which occurred on 23 September at Washington’s Park Hyatt Hotel, were four formidable lead discussants: Dr. Judy Shelton, author of The Coming Soviet Crash and Meltdown: Restoring Order to the Global Currency System; Dr. Marshall Goldman, Associate Director of the Davis Center for Russian Studies at Harvard University and Davis Professor of Russian Economics at Wellesley College; Roger W. Robinson, Jr., Casey Chair, President of RWR, Inc., and former Senior Director of International Economic Affairs at the National Security Council; and Thomas Moore, Director of International Studies at the Heritage Foundation and former Professional Staff Member on the U.S. Senate Armed Services Committee.

This discussion clearly established that bad policy decisions by the United States and its Western allies have contributed to the deeply flawed choices that the Russians themselves have made. Specifically, the Symposium pointed to the following mistakes by the Clinton Administration and, to varying degrees, by its G-7 partners:

• Focusing on government-to-government financial transfers rather than measures that would promote entrepreneurialism, small business, small farms, private ownership, and start-up enterprises and individual Russian republics. As Dr. Shelton put it: "Worst of all, we sloughed the Russians off onto the International Monetary Fund — as if the IMF had the secret to economic growth, or even any appreciation for entrepreneurial incentives and creativity."

• Allowing U.S. policy and bilateral and multilateral financial aid decisions concerning Russia to be driven by an unconditional commitment to Yeltsin regime, predicated on the dubious proposition that the latter was dedicated to genuine political and economic reform. This has been particulary irresponsible in light of that regime’s increasingly transparent contempt for such reforms and their proponents — a reality made palpable by the ascendancy of the anti-American, ex-KGB thug Yevgeny Primakov as the de facto Russian President.

• Ignoring the increasingly serious divergence of U.S. and Western interests from those being advanced pursuant to the "Primakov Doctrine" — what Mr. Moore called a "national socialist" agenda for: reasserting Russian influence around the world, generally at American expense; forging (or resuscitating) ominous strategic relationships with the likes of China, Iran, North Korea, Iraq, Syria, Cuba and Libya; and reversing the decline of the Kremlin’s military power. It adds insult to injury that Primakov has secured what amounts to Western underwriting for these initiatives in the form of IMF and bilateral assistance, debt reschedulings, the Nunn-Lugar slush fund, etc.

Last month, Deputy Secretary of State Strobe Talbott — the man who might be said to bear the greatest responsibility in the U.S. government for its part in "losing Russia" — launched the Clinton Administration’s effort to distance itself, at least rhetorically, from its historic open-ended and unconditional embrace of Yeltsin’s government.(1) It remains to be seen, however, whether the Administration will now adopt policies like those identified in the course of this Symposium — policies that will, to the extent possible, encourage genuine reform in Russia and that will protect the United States and its interests against the dangers inherent in a Primakov-led Russia that has little, if any interest in such reforms.

Attached is a copy of the summary of this Casey Symposium.

– 30 –

1. For more on this concept, see the 27 November 1998 issue of the American Foreign Policy Council’s Reform Monitor.