Media

Insight Magazine
September 2, 2002
Vol. 18, Issue: 32

Looting Russia's Free Market (Excerpt)

Kelly Patricia O'Meara

"Janine Wedel, professor of public policy at George Mason University and author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, tells Insight that "the U.S. supported the creation and the thriving of the oligarchs by supporting privatization. The entire policy apparently was to underwrite Anatoly Chubais et al., and the Harvard clique. Much of the economic aid went to them, including USAID money and also hundreds of millions of dollars from the World Bank and IMF [International Monetary Fund] loans. The Harvard people were intimately involved in the 'reforms,' and especially privatization, which were thoroughly corrupt in the way that they were implemented. It was devastating to many Russians."

But, Wedel says, "The damage is done. Privatization in Russia is largely over and those who got the spoils got the spoils. These things had a beginning and an end, but the end continues in a big way. It's very hard to underestimate the effect of privatization on economics, politics and society in Russia. Think of a country in which practically everything is state-owned and all of a sudden there are all of these enterprises and natural resources to divvy up. Just think of the politicized corrupt processes that might go on. It's hard for us to imagine, but essentially in Russia a few at the top got almost all of it. With this privatization the people who got it got it forever, and realistically there's no going back."

Wedel concludes: "What happened in Russia is really egregious, and the answer to the problem is that you can't have a monopoly on policy and information and a clique on both sides dictating policy and information. That's just a program for disaster. The monopoly on Russian reform was almost 100 percent given to the Harvard/Chubais group with little independent information being considered, and it was enabled at the highest levels of the U.S. government. A lot of Russians believe the U.S. deliberately set out to destroy their economy. What happened in Russia certainly goes against the grain of any sort of reform in the traditional sense of the word - meaning progress."

Full text of the article available in PDF format.