How the Russian desaster of the 90s could be prevented?

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As we know Russia suffered a massive crisis in the 1990s, the healtcare system collapsed (something that still have effects even today), along with the greatest recession in Russian history, but this we all know

My question is: Starting at the fall of East Germany, how could we prevent, or at least diminish the crisis that is going to happen in Russia? According to some pro planned economy friends I have the problem was that there was a huge animosity towards privatizations and so they privatized as much they could without any planning on the consequences

So, what do you think?
 
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Archibald

Banned
Have Nikolai Ryzhkov winning the Russian presidential election of June 1990 instead of Yeltsin. Yeltsin could be assassinated in 1986 or 1987, he had a troubling serie of accidents at the time. Yeltsin was a reformist allied with Gorbachev hence he was a target for Soviet conservatives or the military that wanted to preserve statu quo. Gorbachev clashed with Yeltsin, he saw him as a rival and late 1987 he humiliated him to such a point that Yeltsin atempted suicide.
I often wonder what Ryzhkow could have done instead of Yeltsin. Makes no mistake, Ryzhkov is no saint.
 
The West dumps massive Marshall Plan type aid into the former Soviet Union and moves much slower on pushing the transition to a market economy. Membership in NATO and the EU is held out as a goal as is integration into the economy of the West. A market economy is considered a secondary goal to building democratic institutions. Russia is viewed as a 20 year project rather than a candidate for a shock transition to a market economy. Privatization of the economy is delayed by several years.
 
The West dumps massive Marshall Plan type aid into the former Soviet Union and moves much slower on pushing the transition to a market economy. Membership in NATO and the EU is held out as a goal as is integration into the economy of the West. A market economy is considered a secondary goal to building democratic institutions. Russia is viewed as a 20 year project rather than a candidate for a shock transition to a market economy. Privatization of the economy is delayed by several years.

Any politician in America or Europe who as much as proposed this would have been very likely shot down, though. The Soviets had just lost a deep, multi-decade, nuclear-armed struggle of ideologies for the fate of the world - or so it seemed. The "end of history" idea had strong support at the time, the fall of the Soviet bloc meaning that liberal democracy and market economy would now be the future for everyone. In those conditions, the Western political establishments would not go out of their way to commit massive resources and effort to save the Soviet Union from a predicament it had according to the mainstream of Western conventional wisdom of the time created for itself.

So while this kind of a plan might seem fruitful and fair in retrospect, in the actual real world of the early 1990s, I'm afraid it would have been impossible to push through even if it was seriously proposed by noteworthy leaders - and it wasn't. In any case, even if the West somehow commits massive resources to helping the USSR/Russia, it will come with strings attached. It is just realpolitik - you don't give such huge aid in exchange for essentially nothing. If such huge aid is realized, it is very hard to imagine a setup where the Soviet/Russian economy would be declared off limits for Western corporations, etc, when the Western governments generally subscribed to the idea that the free market would be a solution to the problems plaguing the Soviet/Russian economy, not a problem itself.
 
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So while this kind of a plan might seem fruitful and fair in retrospect, in the actual real world of the early 1990s, I'm afraid it would have been impossible to pushthrough even if it was seriously proposedby noteworthy leaders - and it wasn't.

I beg to differ it certainly was debated, Nixon and many elder leaders who remembered the early Cold War and how difficult to deal with a competent expansionist Russia could be said it had to be done or Russia would revert to dictatorship, but Bush 41 was no Truman on the issue of asking for big money for foreign countries right before an election.

Bush Cites Limits On Aid To Russia

Published: March 12, 1992

WASHINGTON, March 11—
Responding to criticism by former President Richard M. Nixon that he has not done enough to support democratic reforms in the former Soviet Union, President Bush said today that his Administration does not have a "blank check" to finance extensive aid programs.

Mr. Bush did say that his Administration was now considering contributing to a multibillion-dollar international fund to stabilize the ruble, a key ingredient for economic reform in Russia. While other Administration officials have said United States support for such a fund was under consideration, this was the first time Mr. Bush himself had expressed his interest.

Bush Response

Nevertheless, when asked about Mr. Nixon's criticism at a White House news conference, Mr. Bush said: "Where we might have a difference, is we're living in a time of constrained resources. There isn't a lot of money around. We are spending too much as it already is. So to do the things I would really like to do, I don't have a blank check for all that. I think the question should be addressed to President Nixon."

Mr. Bush's White House news conference was held in the morning, just a few hours before President Nixon, in an address to a foreign affairs conference across town, repeated his criticism of the American and Western response to the collapse of Communism and the breakup of the Soviet Union.

The 79-year-old Mr. Nixon, for his part, spoke for 30 minutes without notes or a lectern, and appealed to President Bush and Congress to join together in a bipartisan effort to transform the former Soviet republics into democracies. He said they should employ the same vision and energy that President Harry S. Truman used to persuade Mr. Nixon and John F. Kennedy, when they were both young Congressmen, to support the beginnings of the Marshall Plan 45 years ago.

"All of the pollsters are telling their candidates, don't tackle foreign policy, and particularly not foreign aid, because foreign aid is poison as a political issue," Mr. Nixon said. "They're wrong and history proves it. In 1947, I recall vividly as if it were yesterday what Harry Truman did."

In that year, Mr. Nixon said, President Truman's approval rating was 35 percent, and the Congress was overwhelmingly Republican controlled.

"And yet, I remember Harry Truman -- jaunty, some said a little cocky -- coming down before a joint session of the Congress and asking for millions of dollars in aid to Greece and Turkey to prevent Communist subversion and possibly Communist aggression. It was a very tough vote for two very young and both, as history later indicated, rather ambitious young Congressmen." Kennedy and Nixon Together

The liberal Democrats in Mr. Kennedy's Massachusetts district were against military foreign aid, said Mr. Nixon. And the conservative Republicans in his own California district were against all foreign aid.

"Under the circumstances, however, after considering it, we both voted for it," he said, "and a majority in that Republican House and the Senate voted for that program and that was the program which later was developed into the Marshall Plan and later into NATO, which not only contained Communism but bought the time that was essential for Communism to fail."

The next year, recalled Mr. Nixon, Harry Truman won the election for President. What is more important, he added, is that that action by a Democratic President was supported by a Republican Congress.

http://www.nytimes.com/1992/03/12/world/bush-cites-limits-on-aid-to-russia.html
 
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I beg to differ it certainly was, Nixon and many elder leaders said it had to be done or Russia would revert, but Bush 41 was no Truman on the issue and put his election over asking the country for cash for the former USSR.

Well, that article proves Bush supported "contributing to a multibillion-dollar international fund to stabilize the ruble", not creating a massive, comprehensive, decades-long project to essentially rebuild the entire Soviet/Russian economy Apollo 20 outlines in his post. That would be another thing entirely.

In general, the article supports my main argument - there would not be enough support for such a massive project in the West in those conditions and at that time. And if through some international miracle such support (and such massive funding) could somehow be found, the project would definitely come with many, many strings attached.
 
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Well, that article proves Bush supported "contributing to a multibillion-dollar international fund to stabilize the ruble", not creating a massive, comprehensive, decades-long project to essentially rebuild the entire Soviet/Russian economy Apollo 20 outlines in his post. That would be another thing entirely.

In general, the article supports my general argument - there would not be enough support for such a massive project in the West. And if through some international miracle such support (and such massive funding) could somehow be found, the project would definitely come with many, many strings attached.

I think I noted in some similar thread in the past that we should look at Greece and other similar cases how the "Russian Marshall Plan" would be handled. Russia really wasn't a free market economy in the 1990's but the state retained significant controls over the economy, it continued to support inefficient companies and protected its businesses against foreign competition. While these seemed like good ideas initially, in the long term they had very harmful effects on the development of Russian economy and greatly helped to create a class of oligarchs.

There are quite few problems involved in the implementation of plan like this too. Who decides where the money will go? To be honest, if left to the Russian government, it is quite likely that rather soon we get headlines how billions of dollars of aid money have just disappeared somewhere. OTOH, taking into account the political environment in Russia at the time, would they really be ready to let foreigners to decide where to put money? Especially as they will soon be demanding that the economy should be opened up and factories in monotowns closed? Comparisons with the historical Marshall Plan are also problematic as that plan supposed that the recipient country had a government which actually could handle reconstruction. In the case of Russia, that is much more questionable.
 

Archibald

Banned
Such was the chaos in Russia, what is needed is not some massive dump of money (that will mostly end in the hands of corrupted oligarchs) but a decent leader.
 
Any politician in America or Europe who as much as proposed this would have been very likely shot down, though. The Soviets had just lost a deep, multi-decade, nuclear-armed struggle of ideologies for the fate of the world - or so it seemed. The "end of history" idea had strong support at the time, the fall of the Soviet bloc meaning that liberal democracy and market economy would now be the future for everyone. In those conditions, the Western political establishments would not go out of their way to commit massive resources and effort to save the Soviet Union from a predicament it had according to the mainstream of Western conventional wisdom of the time created for itself.

So while this kind of a plan might seem fruitful and fair in retrospect, in the actual real world of the early 1990s, I'm afraid it would have been impossible to push through even if it was seriously proposed by noteworthy leaders - and it wasn't. In any case, even if the West somehow commits massive resources to helping the USSR/Russia, it will come with strings attached. It is just realpolitik - you don't give such huge aid in exchange for essentially nothing. If such huge aid is realized, it is very hard to imagine a setup where the Soviet/Russian economy would be declared off limits for Western corporations, etc, when the Western governments generally subscribed to the idea that the free market would be a solution to the problems plaguing the Soviet/Russian economy, not a problem itself.

Yes, the politics were exceedingly difficult. However, the fact remains that the way Russia was handled in the 1990s by the West was a disaster. We had one shot at it and bungled it badly. The result is what we see today: a kleptocratic autocracy headed by Putin and dominated by plutocrats. The emphasis on building a market economy over building democratic institutions was terribly wrong, as was the idea of market system triumphalism, which terribly underestimated the difficulty in transitioning Russia to a market system after 75 years of Communist rule.
 

CaliGuy

Banned
The West dumps massive Marshall Plan type aid into the former Soviet Union and moves much slower on pushing the transition to a market economy. Membership in NATO and the EU is held out as a goal as is integration into the economy of the West. A market economy is considered a secondary goal to building democratic institutions. Russia is viewed as a 20 year project rather than a candidate for a shock transition to a market economy. Privatization of the economy is delayed by several years.
If possible, this would be the solution to this AHC. However, Western advisers would need to be in such prominent positions in the Russian government that they would be able to prevent the robbing and looting which (aspiring) oligarchs will attempt to do.
 
The West dumps massive Marshall Plan type aid into the former Soviet Union and moves much slower on pushing the transition to a market economy. Membership in NATO and the EU is held out as a goal as is integration into the economy of the West. A market economy is considered a secondary goal to building democratic institutions. Russia is viewed as a 20 year project rather than a candidate for a shock transition to a market economy. Privatization of the economy is delayed by several years.

Corruption would have sucked it all up.

Russia was completely out of money (so waiting to sell stuff off was close to impossible), had a big backlog of suppressed inflation, world oil prices were badly depressed, and they had to reckon with the damage of Soviet mismanagement (for example, a lot of the resource extraction projects the USSR had going turned out to be actually losing money because the leadership then figured resources were resources, they didn't consider that the cost of moving and extracting them would go way up as they got further into the interior).

The whole thing is less Yeltsin's fault specifically than is commonly imagined. The post USSR States were completely fubar from the Soviet legacy in every possible way. Very hard to avoid.

Remember, the whole *reason* the USSR fell apart was because it was bursting at the seams economically. Yeltsin inherited the whole mess and didn't have a magic way to fix it.
 
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