International Relations 101: How did Post-Cold War US Policy Create The Russia Of Today?

An executive summary of the Sept. 2000 Congressional report “Russia’s Road To Corruption,” authors listed here. (btw – free and fair elections in Russia today)

The report accuses the Clinton administration of neglecting foreign policy generally, and getting too chummy with Russian officials who might not have been completely honest:

  • “In 1995, CIA officials dispatched to the White House a secret report based upon the agency’s large dossier documenting the corrupt practices of then-Russian Prime Minister Viktor Chernomyrdin. Chernomyrdin’s private assets accumulated in his official position, according to Russian security sources, ran into the billions of dollars. When the secret report on Chernomyrdin reached Vice President Gore, he refused to accept it. Instead, according to several CIA sources, he sent it back to the agency with the word “BULL****” scrawled across it.”

It argues that if the Russian government as a whole were worked with – not just the Executive at the expense of the Duma – Russia might be a less centralized government. The corruption of a few encouraged organized crime:

  • “The oligarchic economy, created with the advice and assistance of the Clinton administration, also tightened the stranglehold of official corruption over the Russian government and the large sector of the ostensibly ‘privatized’ economy that it influenced. This official corruption both obstructed law enforcement and created a symbiotic relationship between corrupt government officials and organized crime, assisting them in laundering money and in the commission of other crimes.”

The most interesting thing the report brings forth is a firm belief that free-market policies and corresponding deregulation were never given a chance in Russia – and that a lot of what we’re seeing from Russia now is the product of their 1998 economic crash, which the report claims was more devastating than the Great Depression in the US:

The disaster that began on August 17, 1998, spread immediately throughout Russia. Millions of ordinary men and women who had deposited their money in Russian banks lost everything. ATM and debit cards ceased to work. Dozens of banks became insolvent and disappeared. Angry depositors besieged Russian banks, only to learn they had been wiped out.

Millions of senior citizens, whose meager pension income had been suspended for months, were cut off completely. When the dust finally settled in March 1999, the ruble–and with it, every Russian’s life savings–had lost fully 75% of its value.

The devastation of Russia’s economy was worse than what America experienced in the Great Depression. By 1932, the U.S. gross national product had been cut by almost one-third. But within just six months of the 1998 crash, Russia’s economy, measured in dollars, had fallen by more than two-thirds. From $422 billion in 1997, Russia’s gross domestic product fell to only $132 billion by the end of 1998.

At the end of 1929, following America’s disastrous stock market crash, unemployment in the United States reached 1.5 million, representing 1.2% of the total population. The 1998 collapse of the Russian economy was far worse: 11.3 million Russians were jobless at the end of 1998–7.7% of the nation’s total population.

In the Crash of 1929, stock prices fell 17% by year end–and 90% by the depth of the Great Depression four years later. By contrast, the Russian stock market lost 90% of its value in 1998 alone.

So the question I have for you, class, is as follows: Is it possible to blame any Administration for not completely rebuilding the economy of another country it does not have direct control over? (I probably would have gotten chummy with someone more corrupt than the guy Gore knew, if left in charge of anything.)

I’ll grant the report this: if Russia was made genuinely free-market, with the corresponding “rule of law” and respect for the legislative, executive and judicial branch by all people, a lot of the problems we have with Russia today we wouldn’t have. I’m granting the report that assumption based not on some moralism about free markets vs. socialism, but on a more basic premise of needing to root out corruption and keep monopolies apart and weed out Soviet aparatchiks who might use ties to crime and industrialists and friends who are spies to become President of Russia.

But can one country really transform another in such a way? We couldn’t occupy Russia like we did Iraq.

So those are your questions – What incentives for rooting out corruption and keeping crime at bay can one country use to influence another? How can a foreign policy create favorable domestic policies in other nations, apart from outright invasion? And how does one help a people realize that democracy is good (thank God the Shia love to vote)?

1 Comment

  1. am i part of your class?

    anyways, none of this surprises me. some of it pains me.

    gore didn’t bother to read it? just like they didn’t pay attention to any of the warnings about 9/11? scary.

    scary because they’re stupid? scary because the relationship with a branch as important as the CIA is so bad that a major report doesn’t get paid attention to? scary because it was all meant to happen anyway? scary because they were people who didn’t WANT gore to pay attention to it?

    (aaah, i love my question marks)

    at any rate, what’s happening in russia right now is one of the scenarios that back in the early 90s, you didn’t have to have a masters in PoliSci to figure might materialize. much, much more likely than, say, russia turning into a costa rica like gentle democracy.

    in an ideal case scenario, we should have all paid more attention and made more helpful diplomatic and above all economic moves to try and prevent this. i don’t know what countries like france, sweden, japan or germany did but i don’t remember hearing my country, canada, going to any lengths to try and prevent this.

    perhaps part of the problem was that we were all so relieved that the evil empire wasn’t evil anymore, and just wanted to pretend that we all get to play in the same sandbox now, and everyone’s gonna be happy forever amen.

    what can we do NOW? i don’t know. do we have a model?

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