National Review: Russian roulette - the need for US economic aid

THE FEBRUARY 9 demonstrations in Moscow against Boris Yeltsin and his reform plan received wide press coverage in the West. Whether it was just their inherent newsworthiness or a certain schadenfreude on the part of Western media that still hadn't gotten over their love affair with Mikhail Gorbachev was hard to tell. In any event, the precariousness both of Yeltsin's reforms and of his political position is obvious, and only magnifies the dilemma for the West.

In previous editorials, we too have voiced our doubts about whether Yeltsin's reforms go far enough to work and, by extension, whether Western aid is justified. All the flaws of "foreign aid" are well known to conservatives. Where billions of dollars flowed into developing countries in support of statist economic structures to uplift pre-modern societies, the results were predictably dismal. But the Russian situation arguably falls somewhere in between that case (where the requisite social maturity didn't exist) and the Marshall Plan case, where the basic conditions for social and economic recovery were indeed in existence. What the Russians lack are economic institutions like a banking system, certain business skills in management and accounting, and the habits of enterprise which for seventy years were banished to the interstices of the back market. They enjoy certain advantages--a well-educated labor force, a middle class, a high level of technological competence, and even an intelligentsia that is less nihilistic than most (see "Without Marx or Chekhov," page 43). So, there is some chance they will succeed, provided their leaders are bold and wise and they receive some outside help to get them over the immediate pains of economic reform.

Where Gorbachev did not deserve Western aid--and we said so clearly--Yeltsin does. This is the view of former dissidents like Gary Kasparov, who make a case for debt relief as the quicker and most effective form of help. The Administration is plugging away at putting together a stabilization fund to bolster the currency, some time this spring, in cooperation with the IMF. This is all well and good (Poland had such a fund in place on the day it launched its reforms), but time is of the essence. The problem is not only the danger of a political upheaval. There are also compelling reasons of foreign policy. We agree with the Center for Security Policy that, given the sharp decline in oil exports and Gorbachev's unconscionable squandering of gold reserves, the new states in the absence of debt relief may be driven to step up arms sales as their only source of large-scale foreign exchange.

Western aid of whatever kind should, of course, be conditional upon both foreign-policy concessions such as nuclear build-down and upon an accelerated program of privatization (which is, anyway, needed for Yeltsin's price reform to succeed). The aid would help Russia's democrats directly, and the conditions indirectly--by making plain that an anti-Yeltsin coup would halt assistance. That said, no one can be confident that aid to the semi-post-socialist economies of the new Commonwealth of Independent States will have the desired results. With the stakes so high, however, the effort must be made. If we cannot distinguish between aiding run-of-the-mill Third World deadbeats and a historic juncture when European stability is hanging in the balance, we shouldn't be in the business of foreign policy at all.