Letter: How the West has failed Russia

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The Independent Online
Sir: Your leading article 'One way to help Yeltsin' (11 March) identifies Boris Yeltsin with political and economic reform, and the Russian parliament as militantly opposed to such reforms. But where is the evidence for this description, which you share with other commentators in the British media?

You go on to say that Mr Yeltsin's proposed economic reforms are regarded by the West as the right medicine. But for which patient? It is true that for the political 'fathers' of the East European 'revolution', the road of change was to a free-market economy, without any social-democratic ingredients. In the turbulent winter of 1989/90, this dream model was based on Ronald Reagan's liberal economic policy and Margaret Thatcher's free-market ideology.

This medicine was offered as a panacea for the economies of Eastern Europe, although they were very differently structured than those in the West, for which the medicine (prescribed mainly by the IMF) was originally designed. The main aim was to apply fast and efficacious surgery, shock therapy. This kind of therapy was applied in Poland, Bulgaria and, to a lesser degree, in Russia. The results have been almost entirely negative, and many of the people (such as Balcerowicz and Bielecki in Poland, and Gaidar in Russia) associated with implementing the therapy have been forced to resign. The anti-reformist forces have not caused these resignations. They result from the failure to fulfil the immense expectations of easy success and whole-hearted Western support.

People cannot be held forever with promises; this is what socialism attempted to do. And they cannot be expected to wait for another 45 or 70 years. Now that they live in democracies, they can easily change governments, parties and programmes. Responding to public discontent, governments have been forced to come up with new policies.

The example presented by Western countries has changed, too. In Washington, under Bill Clinton, free-market ideology has been abandoned and talk about managed trade and industrial policy is now in fashion; there has been a similar shift in Britain. And these are the two countries that, hailing the virtues of a free market, had been strongly influencing the reformers in Eastern Europe. They are now leading the reformers in Eastern Europe to hesitate and reconsider their policies.

The great mistake of the West is that it was not able to provide eastern Europe with a clear answer to which of the many forms of capitalism it was recommending - the French model of the mixed economy, the American neo-liberal model, the centralised Japanese model, or another? The current international economic recession makes the employment of ready-made medicines impossible, and mistakes more expensive and dramatic. For these reasons, I suggest that your readers need to hear not 'one way to help Yeltsin', but some way to help the Russian people.

Yours faithfully,

DIMITAR IVANOV

Sheffield Business School

Sheffield Hallam University

Sheffield

13 March

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