The debate over who lost Russia is intensifying as the U.S. presidential election draws near. Although the United States’ policies toward post-Soviet Russia have been bipartisan, politicians sense that Vice President Al Gore is especially vulnerable because of his cochairmanship of the Gore-Chernomyrdin Commission, launched as the keystone of the Clinton administration’s partnership for peace. This well-staffed and lavishly funded assignment was intended to elevate Gore’s stature, endowing him with the patina of a senior statesman, assuming — as seemed sensible eight years ago — that Russia would eventually make a successful transition.
The financial crisis of August-September 1998 called both premises into question, prompting suspicions that not only were repeated assurances of progress illusory, but that Kremlin kleptocrats might have embezzled billions of dollars of Western aid. The administration at first scoffed at allegations of malfeasance. U.S. Assistant Secretary of State Strobe Talbott, writing in the Economist, dismissed the myth of Russian corruption as a Hollywood fabrication. Then-Treasury Secretary Robert Rubin denied that Russia had provided misleading information to secure IMF loans or misused the proceeds, when the Russian Central Bank — as is now acknowledged — was hiding reserves of $1.2 billion in the Channel Islands and the rest of the funds were disappearing down a black hole. The International Monetary Fund and the World Bank affirmed the soundness of their transition policies and lauded Russian President Boris Yeltsin’s success in winning the battle for monetary stabilization. But attitudes have recently undergone a profound change.
America’s bureaucratic elite has lost faith in Russia’s ability to make the hoped-for transition. Of course, the Gore-Putin Commission (Premier Vladimir Putin replaced former Prime Minister Viktor Chernomyrdin), USAID, the Defense Department, the CIA, the IMF and the World Bank still want to spend the money in the pipeline and expand their programs, but they no longer want to be held accountable for promises they can’t deliver.
This new mood is a realistic response to a spate of disturbing insider revelations. Former CIA analyst Fritz Ermath and E. Wayne Merry, who was responsible for U.S. Embassy reporting on Russian politics in 1993 and ’94 have both blown the whistle on political mismanagement of the partnership for peace, chiding the administration, and the Gore-Chernomyrdin Commission in particular, for censoring bad news collected by the intelligence community about Russian corruption, misgovernance and the misuse of Western assistance. Evidence suggesting that the diversion of IMF loans has mounted, prompting Treasury Secretary Lawrence Summers to declare that if allegations of misappropriation were proven, Russia would be blacklisted by the IMF. And in perhaps the unkindest cut of all, Joseph Stiglitz, the World Bank’s chief economist, accused IMF transition gurus of incompetence.
Incensed, Anders Aslund of the Carnegie Endowment for International Peace, an early Yeltsin supporter, retorted that “Stiglitz is a striking embarrassment to himself and the World Bank. Without knowing anything, he mouths any stupidity that comes to his head.” Perhaps the Economist misquoted him. But the exasperation of think-tank members, entrepreneurs, bureaucrats, and senior politicians like Gore is real. They want credit for their good intentions, absolution for their failures and, after installing “safeguards,” approval to persevere. The promise of greater vigilance may be enough to salvage programs and deflect public criticism from Gore if there are no startling new revelations. But this seems increasingly unlikely.
The latest data released by the U.N. Economic Commission for Europe and Goskomstat (the State Statistics Committee of the Russian Federation) illuminate the explosive potential of the “who lost Russia?” time bomb. They reveal that 11.3 million adults who should have been in the Russian labor force in 1998 were missing; 3.2 million of them died prematurely due to “the trauma of mistransition.” These figures were calculated by subtracting the Russian labor force and population in 1998 from authoritative U.S. Census Bureau projections computed in 1987 and 1993. The labor-force comparison demonstrates that there are 8.1 million surviving adult Russians who should be seeking jobs, but are not, because they are either discouraged, too ill or have turned to a life of crime outside the surveyed civilian labor force. Accordingly, the real level of Russian unemployment in 1998 wasn’t 9.7 million, as officially stated, but 17.8 million.
The population comparison is even grimmer. Not only does it prove that the G7’s “shock therapy” is at least partly responsible for killing 2.4 million male and 0.6 million female workers and peasants; the same data show that an additional 3.1 million people under 15 or in retirement perished between 1990 and 1998 due to escalating suicide, addiction, disease and deprivation. These 6.1 excess fatalities exceed the 4.9 million documentable homicides caused by the famine that Josef Stalin engineered in 1932-33, forced collectivization in 1929-34 and the Great Terror of 1937. Although the complete body count computed from the demographic statistics for the ’30s is higher, at around 10 million, this post-Soviet “negligent” murder is still shocking. The imagery has the potential to blacken the partnership for peace and tarnish Gore’s credibility, even though others, including Yeltsin, the U.S. Treasury Department, the CIA, the IMF and the World Bank, are also partly to blame. Just as G7 leaders should have been aware that Western aid was being misappropriated, Gore should have known that G7 assistance, misapplied, was having murderous consequences and should have striven to defend the hapless. His staff could easily have discovered that millions of Russians were dying prematurely merely by observing that, despite a net influx of 3 million immigrants from the former Soviet Union, the Russian population had fallen from 148.5 million in 1990 to 146.7 million in 1998. The Gore-Chernomyrdin Commission’s failure to detect and expose this calamity, like the administration’s larger mishandling of the post-Soviet transition, could well contribute to the vice president’s political undoing.
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