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#11
Nezavisimaya Gazeta
June 17, 2002
Enough "Playing With Democracy and Market!"
Police state enthusiasts work with the Duma to have another Iron Curtain
By Yekaterina Vlasova, Yelena Lashkina
(therussianissues.com)
Each day increases the numbers of those wishing to help the Russian economy find additional budget money. Yet the methods they suggest make one ponder in what kind of state all of us will find ourselves living quite soon.
The entourage of the former Mezhprombank head, Sergei Pugachyov (currently member of the Federation Council), is working on a new economic development program for Russia, described as a program of "economic mobilization." A group of drafters, consisting mostly of representatives of the secret services and other power structures and a sprinkling of economists, plans to complete the work by fall 2000, after which it will be submitted for presidential consideration. Though the document is yet to be finalized, some of its points that have become known to Nezavisimaya Gazeta make one assume that the recently observed invigoration of police interference in the economy is not accidental and seems to bespeak new trends in Russia's political and economic system. It looks like that this country is making strides towards becoming a police state.
The punch of the program is this: the national economy is currently in a state requiring a number of tough measures that imply greater state control - enough "playing with democracy and market."
It suggests introducing state export and import monopoly. To have proper "accounting and control," it is necessary to create state-run transport companies, which will enjoy a monopoly on export-import haulage. Financially, the transport companies will have the services of specially authorized banks.
What is interesting, certain tentative steps in this direction have been made. The State Duma has received two draft laws, one called "On Introduction of the State Monopoly on Export of Individual Commodities" and the other "On the State Monopoly on Mass-Scale Export-Import," both of which have been moved by Yevgeny Ishchenko of People's Deputy. The former envisaged a state monopoly on the export of individual strategic goods, mostly raw materials. In Mr. Ishchenko's view, it is only in this way that Russia can come into its own in the market of raw materials without the oligarchs as intermediaries. The bill suggested a pattern of state monopoly similar to one that had existed prior to 1993.
The other bill suggested a tougher mode of imposition of a state monopoly not only on Russian exports but also on imports. That the bills are at odds with the logic of market reforms and interfere with the rights of economic entities was of no importance for their authors. It must be said for fairness sake that the bills being clearly at variance with the Constitution and their highly dubious usefulness for the economy made the legislators vote against them.
This paper does not know if their appearance is connected with the elaboration of a "mobilization economy" strategy, but their "timely" appearance in the Duma suggests that the authors did undertake some lobbying, the more so that they additionally called for introducing state licenses for export-import operations to avoid flight of capital. If after all a license is obtained, all currency transactions should be via the authorized banks, which will have a duty to control corporate expenditures.
Besides, ideologists of the alternative economic program think it is necessary to analyze expediency of foreign travel, directly linking tourism to capital flight from the country. They come up with a simple calculation: each year 20 million Russians travel abroad, leaving with $1,500 apiece, which they can take away without a special Central Bank permission, plus practically an unlimited amount on plastic cards.
This paper has another interesting document, a draft law "On Tourism," prepared by the Duma committee for culture and tourism and signed by its chairman Nikolai Gubenko. What is interesting is not so much the bill itself designed to revitalize Russian tourism, which is undoubtedly a necessary thing, as a covering letter addressed to President Vladimir Putin. The letter says that tourists annually take out of the country around $11 billion, or 25% of the federal budget, which makes tourism the biggest channel for the outflow of capital. The problem certainly is one of the most urgent, but the proposed remedy, mostly the channeling of tourism to domestic resorts, can hardly be effective.
The program drafters also have plans for industries, which, in their book, ought to operate under obligatory state orders and in accordance with "fair" state prices. But in the still existing market environment a couple of such orders can ruin any company.
As is planned, program enforcement will be with the help of the secret services, which will be told to plant their personnel in companies.
It is an axiom that the stagnant Russian economy calls for earliest possible implementation of effective measures. But if the current authorities are powerless, naturally, the situation is very convenient for lobbying and introduction of all manner of "mobilization models" capable of turning this country into a huge closed shop.
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