Austerity Measures, Russian-style

It has finally happened: the economic course originally instituted by Yegor Gaidar is now playing out. The methodical dismantling of the remnants of the welfare state, the new wave of privatization, the refusal to create new jobs and the resulting rise in unemployment — these are the program that our wise government officials think will pull Russia out of the economic crisis.

Ever since the late 1980s, even Soviet leaders were convinced of the invincible power of the free market. But after the default of 1998, an enlightenment of sorts took place that prompted officials to temper their faith in the market with social policy and to stimulate demand and the domestic market. The result was a fairly satisfactory compromise between free-market liberals and pragmatic bureaucrats. These two camps balanced each other out, creating — if not optimal — at least bearable conditions for Russia's economic development.

President 10.0pt;line-height:150%;font-family:"Verdana","sans-serif";mso-fareast-font-family:
"Times New Roman";mso-bidi-font-family:"Times New Roman"”>Boris Kagarlitsky is the director of the Institute of Globalization Studies.

Leave a comment