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The World Today Archive - Thursday, 28 September , 2000
US admits role in Russian economic turmoil
Reporter: Irris Makler
COMPERE: The United States has admitted that its policies contributed to Russia's corruption and economic chaos after the break-up of the Soviet Union.
The US Government is suing Harvard University which had a crucial role in implementing American economic policies in Russia.
Irris Makler reports for us that two academics are being claimed as misusing government funds to promote their own investments inside Russia.
IRRIS MAKLER: Russians call their economy ecliptocrisy because a few people often former communist bureaucrats, became incomparably rich ransacking the Soviet State and stealing its assets.
Tens of billions of dollars in international aid was also misappropriated as the quality of life of ordinary Russians fell. The United States is now belatedly admitting its roll in this process.
UNIDENTIFIED: There is a perception among sophisticated elite in Russia that the United States deliberately set out to destroy their economy. I would never be able to make that case. I certainly don't have the evidence for it.
IRRIS MAKLER: Janine Wedel is a Professor at Pittsburgh University, and the author of a book on post Soviet corruption - Collision and Collusion - the Strange Case of Western Aid to Eastern Europe. She says that in the early 90s two groups monopolised American aid to Russia. One in America centred around the Ivy League university, Harvard and the other in Russia centred around bureaucrat Anatoly Trebias [Chubais].
JANINE WEDEL: They operated this whole sort of almost a shadow government. They were very influential and working together and maximising their own personal and group opportunities and that's what this was about.
So in addition to and sometimes in lieu of representing the governments that they actually were supposed to be representing they were actually working on their own and each others behalf, that is the most interesting and telling aspect of this, but it's important to keep in mind that they could not have done so without the approval of the highest levels of the US government.
IRRIS MAKLER: A Republican report to Congress slams this policy, and the US Justice Department is now suing the two Harvard academics at the centre of the case saying they misused millions of dollars in aid to enrich themselves.
It's also suing Harvard University for failing to supervise the program properly. The academics and the University deny any wrong doing. But Professor Janine Wedel says there are lessons to be learnt from the way in which the United States structured its aid to Russia.
JANINE WEDEL: Why it was done was basically gave aid to a very small group of players and ignored everyone else and that, you know, not only did not serve the cause of economic reform but it created a lot of antagonism in Russia, so it was I think, the policy was destructive and counter productive all around.
COMPERE: Professor Janine Wedel of Pittsburgh University with Irris Makler, our Moscow correspondent.
On line at ABC: The World Today, September 28, 2000.
