to lead-in page   Updated August 19, 1998, ©1998 by Hugh D. Cox

Why Ordinary Russians are justified in distrusting the United States.

Will Russia Survive - Will Vladimir Putin be elected President?          updated: 02/16/2000

The "plunge" of the ruble in August 1998 and President Boris Yeltsin giving up significant power was the beginning of economic collapse of the Russian "official" economy. Since the "unofficial" economy rivaled the "official" economy, the economy of ordinary Russians cannot be judged except through "survival". Boris Yeltsin, on the other hand, seems to have survived as President. The lower house of the Russian Parliament, the Duma, voted on August 20, 1998 to "request" that Yeltsin resign. Yeltsin countered on August 23, 1998 with another "housecleaning" of officials - but reappointed the same Prime Minister who was "sacked" only five months ago. The changes occurred several times since early 1998.

Yeltsin's resignation on January 1, 2000 was a total surprise! Perhaps he saw that he could leave under the best of bad circumstances while leaving Vladimir Putin as his successor. Putin immediately pardoned Yeltsin and his family for any and all crimes - apparently including future crimes.

President Putin recently gained enormous popularity with ordinary Russians with his war on Chechens. His management of the Russian media to destroy rivals such as former prime minister Yevgeny Primakov and Moscow Mayor Yuri Luzhkov reduced their chances for the upcoming election of the President. Elections will be held in three months. In summary the communists gained some votes in the Duma, but did lose their coalition with similar political parties. The coalition supporting Putin gained equal votes with the communists. Putin seems assured of the presidency.

Vladimir Putin is an unknown leader. His background reveals little about his political intentions because he was a high official in the KGB as a spy in East Germany in the 80's, yet he later was a politician supporting the democracy reforms in Saint Petersburg in the early 1990's. His influence on the internal security services seems to benefit his own political advantage and not the advancement of democracy or economic equity. Unless Putin can address the chronic economic problems of Russia, he will become another "Yeltsin" with no reform program yet will be engaged in military adventures.

The government's major problem is that it cannot collect taxes to pay essential workers - very few businesses or persons earning money pay any taxes. The exact percentages are not known but range from less than 10% to 50% who actually pay taxes. Wealthy individuals and business tzars are the worst offenders since they have "bribed" the Duma members of the Parliament and other governmental officials to exempt them from any social responsibility or tax payments. Vast wealth is hidden or moved outside the nation by a wealthy few. The money "movement" within the Bank of New York exposed in August 1999 is just one example. The incredible wealth of the few cannot exist for long in a society where most struggle to have food, shelter and essentials. The average Russian worker makes less than $100 per month. Within a few months or years, economic collapse is bound to come in spite of the proposed 22.6 billion dollar loan package from the IMF.

The International Monetary Fund (IMF) "bailout" will have little effect on Russia and the economic situation. Milton Friedman, the respected economist, explained (C-Span, August 18, 1998) that IMF funds are really "western" funds advanced to a developing nation's banks so the banks can repay "western" banks when the "western" banks make risky loans to the developing nation. He noted that the IMF should be abolished so that "western" banks make wiser investments in developing nations. "Western" banks can now make unwise investments in Russia because the "western" bankers know that they will be repaid by the IMF. One can only speculate about the billions being transferred in shot periods within the Bank of New York - without bank officials' knowledge.

Many investments in Russia are to entities created by the Russian "government" simply to support continued graft and corruption. There is no pretense that the investment is a "business". Outside investors sometimes invest in such entities so that they can avoid taxes just like wealthy Russian business tzars. Many investments in Russia support corruption and tax evasion to some degree.

NPR reported during July 1998 that large Russian companies were allowed to "pay" taxes by barter of "services". The streets of St. Petersburg are constantly being "improved" to a further degree by companies "paying" their taxes. The city and state have no control of these projects since the companies decide when the taxes are "paid" with enough work.

The economic collapse impacted mostly on those supporting human rights, ordinary working Russians, the elderly and the disabled. The new economic inequities produced urban style gang crime, exploitation of persons who cannot defend themselves (there are 50,000 homeless children in Moscow alone), and ethnic and class hatreds.

Now people are starving. "Potato" thieves who steal from private gardens are being murdered by the owners and prosecutors do not prosecute such cases.

If Russia is making its own way at its own pace, does Russia need outside help?  Our interests in Russia should be strategic to promote ties with the West. We must help Russia make the changes to match those in Europe. And the Russians must make greater efforts to insure equitable individual economic progress. 

Most importantly, Russia needs an independent court and justice system  of adversarial attorneys capable of protecting ordinary Russians. Only the security services can guarantee such justice and they have failed to do so. In short, Russia needs rule of law enforced by the security services.

I left Russia with a great desire that the nation survive in peace, grow in economic strength and equality, and that human rights will continue to grow and flourish.

Why ordinary Russians are justified in distrusting the United States.

Since creation of the Russian nation, the United States has continuously supported President Boris Yeltsin. Yeltsin has failed to establish any effective policies to rescue Russia from economic collapse. His inability to gain consensus with a majority of the Parliament has led to further economic difficulties.

Now Yeltsin's popularity ratings are less than 10% favorable. He is seen as a "puppet" of the West. His policies have destroyed every ordinary Russian's living standards.

In spite of his lack of popularity, Yeltsin refuses to resign. His choices of those who advise him are a continuation of past failed policies. Vladimir Putin, his present Prime Minister, was a high official of the KGB.

The United States supports Yeltsin and his policies as the Russian economy collapsed by the hour. President Clinton went to Russia in 1998 for a media opportunity - and was further hated by Russians.