DATE=12/18/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-243271
TITLE=RUSSIAN ECONOMY (L-ONLY)
BYLINE=BARRY WOOD
DATELINE=WASHINGTON
CONTENT=
VOICED AT: 

INTRO:  A RUSSIAN-BORN CONSULTANT TO THE U-S TREASURY DEPARTMENT,
IGOR BIRMAN, FRIDAY TOLD A WASHINGTON FORUM THAT RUSSIA'S 
ECONOMIC SITUATION IS GRIM AND GETTING STEADILY WORSE. V-O-A'S 
BARRY WOOD REPORTS MR. BIRMAN'S ASSESSMENT IS SIMILAR TO THAT 
VOICED A DAY EARLIER (IN WASHINGTON) BY RUSSIAN ECONOMIST AND 
PRESIDENTIAL CANDIDATE GRIGORY YAVLINSKI.

TEXT:  MR. BIRMAN TOLD AN AUDIENCE AT THE AMERICAN ENTERPRISE 
INSTITUTE THAT AS RUSSIANS HAVE BECOME POORER, THEY HAVE LOST 
CONFIDENCE IN THEIR GOVERNMENT. A RESIDENT OF MOSCOW FOR THE PAST
YEAR, MR. BIRMAN SAYS RUSSIA HAS BECOME THE SICK!MAN OF EUROPE 
AND ASIA. THE ECONOMY, HE SAYS, HAS SHRUNK TO OOLY ONE-HALF ITS 
SOVIET-ERA SIZE.  HE SAYS THE STATE IS CORRUPT AND PUBLIC 
MORALITY EVEN WORSE THAN IN SOVIET TIMES. MR. BIRMAN SAYS WESTERN
AID HAS BEEN SQUANDERED AND THE ONCE  PRAISED PRIVATIZATION OF 
STATE ASSETS EXPOSED AS A SHAM. 

MR. BIRMAN SAYS SEVEN YEARS OF MARKET BASED REFORM FAILED TO 
PRODUCE THE ESSENTIAL SMALL BUSINESS SECTOR OF THE KIND THAT IS 
THRIVING IN POLAND. THE PRINCIPAL OBJECTIVE OF WESTERN POLICY, HE
SAYS, SHOULD BE DO PROTECT ORDINARY CITIZENS FROM THE 
CONFISCATORY POWER OF THE STATE. 

MR. BIRMAN BELIEVES DICTATORSHIP, BUT NOT CIVIL WAR, IS LIKELY IN
RUSSIA.

                         //BIRMAN ACT//

         FOR THE CITIZENS OF RUSSIA THEY DON'T HAVE ANYTHING TO 
         FIGHT FOR. AND PRACTICALLY SPEAKING, NOTHING TO FIGHT 
         AGAINST. SO I DON'T THINK CIVIL WAR IS COMING. 
         DISINTEGRATION, SOME DISINTEGRATION, I'M AFRAID IS 
         RATHER LIKELY.

                           //END ACT//

MR. BIRMAN SAYS IT WOULD BE FOOLISH FOR WESTERN NATIONS NOW TO 
PROVIDE MORE FINANCIAL AID TO RUSSIA.  HE BELIEVES 
HYPER-INFLATION (INFLATION OF MORE THAN 50 PERCENT PER MONTH) HAS
ALREADY ARRIVED. HE CALLS THE AUGUST 17TH DEVALUATION AND DEBT 
DEFAULT A CATASTROPHE.

BY CONTRAST, GRIGORY YAVLINSKY THE OPPOSITION POLITICIAN AND 
DECLARED PRESIDENTIAL CANDIDATE, IS MORE OPTIMISTIC. MR. 
YAVLINSKY TOLD THE CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
THAT CONFIDENCE IN GOVERNMENT CAN BE RESTORED. HE FAVORS 
FAR-REACHING TAX REFORM AND STABILIZATION MEASURES THAT WOULD 
ENCOURAGE THE GROWTH OF SMALL BUSINESS. MR. YAVLINSKI SAYS SEVEN 
YEARS OF FAILED REFORM AND PRIVATIZATION HAVE REACHED A DEAD END.

                        //YAVLINSKI ACT//

         EVERYTHING IS PRIVATIZED BUT THERE ARE NO OWNERS. THERE 
         IS NO ONE TO INVEST. THERE IS NO ONE TO TAKE CARE OF 
         THAT.  THERE IS NO PEOPLE TAKING CARE OF WORKING PLACES.
         THERE IS NO ONE RESPONSIBLE FOR THE FUTURE OF 
         ENTERPRISES. SO WE HAVE TO DO SOMETHING.

                           //END ACT//

MR. YAVLINSKY SAYS IT IS IMPOSSIBLE FOR THE RUSSIAN GOVERNMENT TO
PAY ITS FOREIGN DEBTS. (SIGNED)

NEB/BDW/RRM   

      

18-Dec-98 5:50 PM EST (2250 UTC)
NNNN

Source: Voice of America
.