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Investor's Business Daily
August 11, 1999

Russia's Phony Market Economy. (Excerpt)

Brian Mitchell and David Sanders

"Many Russians think that we deliberately set out to destroy their economy," said Janine Wedel, research fellow in Eastern European studies and professor of anthropology at George Washington University.

"The reforms have left many Russians worse off than before the breakup of the Soviet Union, and many blame the Western aid and advice," Wedel said."

...

"Soon after the Cold War ended in the early 1990s, Western aid agencies sent teams of experts on grand tours of Eastern European capitals. The teams rarely stayed more than a few days.

In Poland, they were scoffed at as "the Marriott Brigade" for their habit of staying at Warsaw's best hotels.

"Many were ill-prepared," Wedel said. "They didn't really know much about the countries they were visiting, and often didn't really think it was important to know very much."

Few experts could tell the difference between real reformers and ex-apparatchiks posing as reformers. The experts tended to trust those who dressed like Westerners and knew the right buzz words like "democracy," "free enterprise" and "market reform."

"The local people are not stupid. They quickly figured out what they needed to say and do to get the money," said Wedel, the author of "Collision and Collusion: The Strange Case of Western Aid to Eastern Europe."

In Russia, the experts' early favorites belonged to a tight circle of St. Petersburg ex-apparatchiks, whose leading light was Anatoly Chubais. The "Chubais clan," as it was known in Russia, soon came to control some $4 billion in Western aid, Wedel says."

On the web at Johnson's Russia List, #3434, 11 August 1999.