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A HEALTHY REALISM FOR THE RUSSIANS For 40 years I lived in Russia, where communist propaganda bombarded people with images of the United States as the enemy. But this was largely ineffective, since most Russians distrusted such information . Only now that I am in the United States do I understand just how effective media propaganda can be. A case in point: After Yegor T. Gaidar was replaced as Russian prime minister last year by Viktor S. Chernomyrdin, the American media routinely used negative labels like ‘‘former apparatchik’’ in referring to Mr. Chernomyrdin, while asserting that under Mr. Gaidar ’s leadership, a revolutionary shift to capitalism was taking place. These views are incorrect. There is only one true revolutionary among Russian leaders, and that is Boris Yeltsin. But while revolution may bring down an old system, it does not create a market economy. Mr. Gaidar did not privatize a single large enterprise. People simply cannot be ordered to capitalism by executive fiat. More to the point, Mr. Gaidar had no relevant experience. While Mr. Yeltsin is a great politician, he has at least one serious drawback —an inability to admit mistakes. And he made a mistake when he appointed Mr. Gaidar. First, Mr. Gaidar had essentially worked in only one place, at the magazine The Communist. Still, the American media dubbed him ‘‘the progressive leader of economic reform in Russia.’’ In addition, Mr. Gaidar never worked in Russian industry and had no understanding of the Russian economy. He was educated at the Department of the Economic Geography of Foreign Countries at Moscow University, a privileged school mainly for children of high party officials and Politburo members. His doctoral thesis, about managers’ workstyles, was not a dissertation on economics. He began his economic education only when he became prime minister. No country, especially Russia, can afford such on-the-job training. Mr. Chernomyrdin also served the party machine for several years, The New York Times, Sunday, January 24, 1993, F13. a healthy realism for the russians 283 but a critical difference is that he earned his position the hard way, advancing because of his achievements. Starting as a laborer in a petrochemical plant, he worked his way up to being minister of the Soviet gas industry. When the Russian economy was in a bad slide, Mr. Chernomyrdin bucked the tide by finding the means to increase production, not cut it. Mr. Chernomyrdin and Mr. Gaidar do have much in common, including favoring a market economy. But only a few old-timers remain who fail to grasp that Russia has no alternative. The essential difference between the two is that Mr. Chernomyrdin knows from experience what tough choices must be made, understands the economy, and has true managerial experience. His choice of executive deputy prime minister was excellent: the best and youngest Russian financial expert, Boris Fedorev. Unlike Mr. Gaidar. Mr. Fedorov has broad experience in Russian banking as well as with the European Bank for Reconstruction and Development and the World Bank. Mr. Chernomyrdin and his deputy know it is impossible to help Russia without broad involvement in the world economy. Mr. Chernomyrdin inherits a catastrophic Russian economy, in far worse shape than when Mr. Gaidar became acting prime minister. Mr. Gaidar, following the advice of a Harvard professor, Jeffrey Sachs—also ignorant about the Russian economy but hired because of his American credentials—enacted disastrous reform policies. Their reforms were based on liberalizing prices, but when property belongs to the state monopoly, that amounts to nothing more than the monopolization of price increases. Thanks to this ‘‘serious and deeply thought policy,’’ about 95% of Russians now find themselves living below the poverty level and inflation is running wild. I hasten to stress that it was necessary to start reforms, and affirm that I am no supporter of the hard-liners. But only after property belongs to workers can prices be liberalized. It was Mr. Gaidar and his supporters who brought devastation to Russia’s first 200,000 private farmers, who faced bankruptcy when prices for industrial products rose well beyond their reach. Now that Mr. Yeltsin has appointed Mr. Chernomyrdin, he is much stronger than when the unrealistic Mr. Gaidar was at his side. ...

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