The second collapse of the soviet economy: Myths and realities of the Russian reform

Europe - Asia Studies

Volumn 52, Issue 2, 2000, Pages 207-

  Tikhomirov, Vladimir ^a  

^a UNIVERSITY OF MELBOURNE   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC REFORM; NATIONAL ECONOMY; PERFORMANCE ASSESSMENT;

RUSSIAN FEDERATION;

EID: 0034009354     PISSN: 09668136     EISSN: None     Source Type: Journal    
DOI: 10.1080/09668130050006772     Document Type: Review

References (95)

1. Of course, in addition to other, politically motivated accusations, as put forward during the recent impeachment hearings in the State Duma (13-15 May 1999).
2. The most famous of those cases was the criminal investigation that was started by the Russian Procurator-General's Office against Boris Berezovsky after a popular Moscow newspaper published accusations that Berezovsky and his associates were involved in spying on President El'tsin and his family (Moskovskii komsomolets, 20 January 1999). For a detailed analysis of political struggles inside the Russian leadership in late 1998 and early 1999 see Yuri Tsyganov, 'Political Background of the Economic Crisis in Russia', in V. Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999), pp. 259-291.
3. The most famous of those cases was the criminal investigation that was started by the Russian Procurator-General's Office against Boris Berezovsky after a popular Moscow newspaper published accusations that Berezovsky and his associates were involved in spying on President El'tsin and his family (Moskovskii komsomolets, 20 January 1999). For a detailed analysis of political struggles inside the Russian leadership in late 1998 and early 1999 see Yuri Tsyganov, 'Political Background of the Economic Crisis in Russia', in V. Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999), pp. 259-291.
4. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
5. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
6. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
7. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
8. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
9. See statements on the Russian reform strategy made by El'tsin and Gaidar in late 1991 and early 1992 (Radio Free Europe/Radio Liberty (RFE/RL) Daily Report, 206, 29 October 1991, and 209, 4 November 1991; The Express Chronicle, 46 (223), 5-11 November 1991; RFE/RL Economic and Business Notes, 14-27 December 1991; RFE/RL Daily Report, 243, 27 December 1991, and 1, 2 January 1992).
10. According to the results of a recent opinion poll, which was conducted in late September 1998 by the Russian Centre for Public Opinion Research (VTsIOM), 70% of 1714 respondents supported the nationalisation of major companies that were privatised after the start of reform in 1992 (Interfax, 3 October 1998).
11. The issue of limitations of common myths related to market economies is well addressed in Part I of Joseph E. Stiglitz, 'Whither Reform? Ten Years of the Transition', Keynote Address to the World Bank's Annual Bank Conference on Development Economics (ABCDE), 28-30 April 1999, pp. 4-18.
12. For a good overview of dominant economic views among Soviet reformists see L. I. Abalkin & A. I. Milyukov (eds), Ekonomicheskaya reforma: poisk reshenii (Moscow, Izdatel'stvo politicheskoi literatury, 1989).
13. Many problems of Russian statistics can be attributed to difficulties in the process of reforming and transforming the Soviet system of data collection. Goskomstat's official document, 'Russian State Statistics During the Period of Transition to Market Economy' (http://www.gks.ru/eng/ history/6.htm), outlines some of these problems. For a critical view on some major deficiencies of post-Soviet statistics see James H. Noren, 'Statistical reporting in the states of the former USSR', Post-Soviet Geography, 35, 1, January 1994, pp. 13-37.
14. Many problems of Russian statistics can be attributed to difficulties in the process of reforming and transforming the Soviet system of data collection. Goskomstat's official document, 'Russian State Statistics During the Period of Transition to Market Economy' (http://www.gks.ru/eng/ history/6.htm), outlines some of these problems. For a critical view on some major deficiencies of post-Soviet statistics see James H. Noren, 'Statistical reporting in the states of the former USSR', Post-Soviet Geography, 35, 1, January 1994, pp. 13-37.
15. See, for example, the article on 'The Measure of Labour', by one of the leading economists of the Gorbachev period, Gavriil Popov. The piece was originally published in April 1985 and reprinted later in G. Kh. Popov, Puti perestroiki. Mnenie ekonomista (Moscow, Ekonomika, 1989), pp. 140-144.
16. This becomes evident if one compares the trends of physical output with those of value added. As Table 3 shows, on a per employee basis, between 1990 and 1992 value added in retail and wholesale trade in Russia in constant prices increased by a massive 473.2%. However, during the same period the turnover of retail and wholesale trade in constant prices per person employed in the sector in fact decreased by almost 4% (Table 6).
17. Open Media Research Institute (OMRI) Daily Digest, 25 August 1995; Monitor, 1, 83, 28 August 1995.
18. Open Media Research Institute (OMRI) Daily Digest, 25 August 1995; Monitor, 1, 83, 28 August 1995.
19. A number of recent reports have suggested that 'shuttle trade' has largely collapsed after the August crisis. In September 1998 Associated Press correspondent Nick Wadhams quoted a director of one Moscow tourist firm as saying that, in the period before the crisis, he was organising 'shop tours' for Russian 'shuttle traders'. According to that director, before the crisis more than 3000 Russian 'shuttle traders' were going to Turkey and the United Arab Emirates each week, while after the crisis there was 'a maximum of two flights a week' (Nick Wadhams, 'Money Woes Keep Russians At Home', Associated Press, 19 September 1998). In October 1998 Boris Goubman of Tver State University wrote that 'the [August 1998] financial crisis collapsed the shuttle trade, paralyzing the import of small lots of goods due to the unstable exchange rate' (Institute for East-West Studies (IEWS) Russian Regional Report, 3, 40, 8 October 1998). Similar reports were coming from other parts of Russia (see, for example, the commentary by Floriana Fossato, 'Vladivostok: Political Struggle Amid Economic Crisis', RFE/RL Newsline, 2, 199, 14 October 1998). According to data supplied by Russian customs and statistical committees, in January-April 1999 the estimated volume of 'shuttle trade' operations was 47.9% lower than a year earlier (Prime-TASS, 18 June 1999).
20. A number of recent reports have suggested that 'shuttle trade' has largely collapsed after the August crisis. In September 1998 Associated Press correspondent Nick Wadhams quoted a director of one Moscow tourist firm as saying that, in the period before the crisis, he was organising 'shop tours' for Russian 'shuttle traders'. According to that director, before the crisis more than 3000 Russian 'shuttle traders' were going to Turkey and the United Arab Emirates each week, while after the crisis there was 'a maximum of two flights a week' (Nick Wadhams, 'Money Woes Keep Russians At Home', Associated Press, 19 September 1998). In October 1998 Boris Goubman of Tver State University wrote that 'the [August 1998] financial crisis collapsed the shuttle trade, paralyzing the import of small lots of goods due to the unstable exchange rate' (Institute for East-West Studies (IEWS) Russian Regional Report, 3, 40, 8 October 1998). Similar reports were coming from other parts of Russia (see, for example, the commentary by Floriana Fossato, 'Vladivostok: Political Struggle Amid Economic Crisis', RFE/RL Newsline, 2, 199, 14 October 1998). According to data supplied by Russian customs and statistical committees, in January-April 1999 the estimated volume of 'shuttle trade' operations was 47.9% lower than a year earlier (Prime-TASS, 18 June 1999).
21. A number of recent reports have suggested that 'shuttle trade' has largely collapsed after the August crisis. In September 1998 Associated Press correspondent Nick Wadhams quoted a director of one Moscow tourist firm as saying that, in the period before the crisis, he was organising 'shop tours' for Russian 'shuttle traders'. According to that director, before the crisis more than 3000 Russian 'shuttle traders' were going to Turkey and the United Arab Emirates each week, while after the crisis there was 'a maximum of two flights a week' (Nick Wadhams, 'Money Woes Keep Russians At Home', Associated Press, 19 September 1998). In October 1998 Boris Goubman of Tver State University wrote that 'the [August 1998] financial crisis collapsed the shuttle trade, paralyzing the import of small lots of goods due to the unstable exchange rate' (Institute for East-West Studies (IEWS) Russian Regional Report, 3, 40, 8 October 1998). Similar reports were coming from other parts of Russia (see, for example, the commentary by Floriana Fossato, 'Vladivostok: Political Struggle Amid Economic Crisis', RFE/RL Newsline, 2, 199, 14 October 1998). According to data supplied by Russian customs and statistical committees, in January-April 1999 the estimated volume of 'shuttle trade' operations was 47.9% lower than a year earlier (Prime-TASS, 18 June 1999).
22. A number of recent reports have suggested that 'shuttle trade' has largely collapsed after the August crisis. In September 1998 Associated Press correspondent Nick Wadhams quoted a director of one Moscow tourist firm as saying that, in the period before the crisis, he was organising 'shop tours' for Russian 'shuttle traders'. According to that director, before the crisis more than 3000 Russian 'shuttle traders' were going to Turkey and the United Arab Emirates each week, while after the crisis there was 'a maximum of two flights a week' (Nick Wadhams, 'Money Woes Keep Russians At Home', Associated Press, 19 September 1998). In October 1998 Boris Goubman of Tver State University wrote that 'the [August 1998] financial crisis collapsed the shuttle trade, paralyzing the import of small lots of goods due to the unstable exchange rate' (Institute for East-West Studies (IEWS) Russian Regional Report, 3, 40, 8 October 1998). Similar reports were coming from other parts of Russia (see, for example, the commentary by Floriana Fossato, 'Vladivostok: Political Struggle Amid Economic Crisis', RFE/RL Newsline, 2, 199, 14 October 1998). According to data supplied by Russian customs and statistical committees, in January-April 1999 the estimated volume of 'shuttle trade' operations was 47.9% lower than a year earlier (Prime-TASS, 18 June 1999).
23. Russian statistical surveys show that between 1990 and 1997 there was a significant decline in per capita consumption of all major food products. For instance, consumption of bread decreased by 4.2%, meat by 25.7%, milk by 42.1%, fish by 20%, vegetables by 9.4% and fruit by 18.9% (Rossiiskii statisticheskii ezhegodnik, 1998 (Moscow, Goskomstat Rossii, 1998), p. 249).
24. According to official data, between 1992 and 1997 retail trade turnover in constant prices fell by 6.5%. In the same period Russia's exports in current US dollars increased from 42.4 billion dollars to 70.0 billion dollars or by 65%. In 1992-97 the increase in imports amounted to almost 51%. (Calculated from Rossiiskii statisticheskii ezhegodnik, 1998, pp. 584, 745).
25. In 1997 the share of mineral products and metals in total Russian exports was 71.8% (Rossiiskii statisticheskii ezhegodnik, 1998, p. 747).
26. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
27. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
28. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
29. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
30. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
31. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
32. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
33. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
34. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
35. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
36. In 1993 Russia on average was importing about 22% of the food it needed, in 1994 33%, in 1995 40%, in 1996 37% and in 1997 about 40% (Russian Information Agency (RIA) News Cycle, 24 November 1994 and 9 December 1994; Monitor, 2, 78, 19 April 1996; OMRI Daily Digest, 17 December 1996; Sankt-Peterburgskie vedomosti, 31 October 1997). By mid-1998 about 60-65% of food sold across Russia was imported (Boston Globe, 10 September 1998). However, the corresponding figures for large cities were significantly higher. In June 1995 the level of dependency on food imports of the city of Moscow was estimated at 80% and in September 1998 that of St Petersburg was put at 75% (OMRI Daily Digest, 13 June 1995; IEWS Russian Regional Report, 3, 38, 23 September 1998). In the period after the August 1998 crisis Russia's food imports fell rapidly - by more than four times (Chicago Tribune, 15 October 1998; Mitchell Landsberg, 'Russians Disagree on Need for Food', Associated Press, 7 November 1998; Sergei Klimov, 'Food Aid to Russia: Who Needs It Most?', Prism: A Bi-Weekly on the Post-Soviet States, 4, 24, Part 2, 11 December 1998). That prompted the Russian government to appeal to Western governments for humanitarian aid mostly in the form of food supplies.
37. According to one recent estimate, up to 70% of Russia's young professionals wanted to emigrate from the country (Owen Matthews, 'The New Brain Drain', Newsweek, 19 April 1999).
38. Between 1992 and 1997 Russian R&D spending in constant 1991 prices fell from 6.49 billion rubles to 3.38 billion rubles, or by 48% (Rossiiskii statisticheskii ezhegodnik, 1998, p. 635).
39. For more on the issue of the 'knowledge economy' see, for example, the 1996 report by the OECD Directorate of Science, Technology and Industry, The Knowledge-Based Economy (Paris, OECD, 1996) (http://www.oecd.org/dsti/sti/s-t/inte/prod/kbe.htm).
40. Dale Gray, Reforming the Energy Sector in Transition Economies, World Bank Discussion Paper No. 296 (Washington, World Bank, 1995). In a recent paper Anders Åslund quotes the following estimate from Jacques Delpa: in December 1991 the state-controlled price of crude oil in Russia was equal to just 0.4% of the world market price (Anders Åslund, 'Why Has Russia's Economic Transformation Been So Arduous?' paper presented at the World Bank's Annual Bank Conference on Development Economics (ABCDE), 28-30 April 1999, pp. 5-6).
41. Dale Gray, Reforming the Energy Sector in Transition Economies, World Bank Discussion Paper No. 296 (Washington, World Bank, 1995). In a recent paper Anders Åslund quotes the following estimate from Jacques Delpa: in December 1991 the state-controlled price of crude oil in Russia was equal to just 0.4% of the world market price (Anders Åslund, 'Why Has Russia's Economic Transformation Been So Arduous?' paper presented at the World Bank's Annual Bank Conference on Development Economics (ABCDE), 28-30 April 1999, pp. 5-6).
42. Between December 1991 and December 1992 average prices in the Russian oil and fuel industry increased by 92.7 times, in non-ferrous metals by 52.2 times and in oil refinering by 53.5 times, while the CPI increased by 'only' 26.1 times (Rossiiskii statisticheskii ezhegodnik, 1998, pp. 715, 726).
43. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
44. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
45. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
46. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
47. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
48. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
49. In 1996, of the top 20 Russian companies 18 were producers of electricity, gas, oil, metals and diamonds (OMRI Daily Digest, 4 September 1996). Of these, the largest taxpayer to the federal budget was Gazprom, the Russian gas monopoly. On average, Gazprom is contributing between 20% and 40% of all federal income in Russia (Monitor, 3, 131, 7 July 1997; RIA News Cycle, 21 May 1998; RFE/RL Newsline, 2, 126, 2 July 1998; Interfax, 6 July 1998). The other largest contributors to the federal budget include Russian oil companies and the state-owned savings bank, Sberbank. The position of the latter was significantly strengthened after the August 1998 crisis, which weakened and/or led to the collapse of many of Russia's commercial banks. In 1998 Sberbank became the second largest taxpayer after Gazprom (RFE/RL Newsline, 3, 49, 11 March 1999; Sergei Kolchin, 'The Tax Situation in Russia's Oil Industry Against the Background of the Economic Crisis', Prism: A Bi-Weekly on the Post-Soviet States, 5, 1, Part 1, 15 January 1999).
50. See Ilya Bass & Leslie Dienes, 'Defense industry legacies and conversion in the post-Soviet realm', Post-Soviet Geography and Economics, 34, 5, May 1993, pp. 302-317.
51. Andrzej Kwiecinski, The Slow Transformation of Russian Agriculture, The OECD Observer, No. 214, October-November 1998; Review of Agricultural Policies: Russian Federation (Paris, OECD, 1998).
52. Andrzej Kwiecinski, The Slow Transformation of Russian Agriculture, The OECD Observer, No. 214, October-November 1998; Review of Agricultural Policies: Russian Federation (Paris, OECD, 1998).
53. This thesis was continuously repeated throughout all the years of the Russian reform. To name but a few: Gaidar in December 1992 ('Yegor Gaidar: We Are Again at Cross-Roads', Federal News Service, 24 December 1992); Viktor Chernomyrdin in March 1995 (RIA News Cycle, 17 March 1995); Anatolii Chubais in September 1996 (Rossiiskie vesti, 24 September 1996).
54. This thesis was continuously repeated throughout all the years of the Russian reform. To name but a few: Gaidar in December 1992 ('Yegor Gaidar: We Are Again at Cross-Roads', Federal News Service, 24 December 1992); Viktor Chernomyrdin in March 1995 (RIA News Cycle, 17 March 1995); Anatolii Chubais in September 1996 (Rossiiskie vesti, 24 September 1996).
55. This thesis was continuously repeated throughout all the years of the Russian reform. To name but a few: Gaidar in December 1992 ('Yegor Gaidar: We Are Again at Cross-Roads', Federal News Service, 24 December 1992); Viktor Chernomyrdin in March 1995 (RIA News Cycle, 17 March 1995); Anatolii Chubais in September 1996 (Rossiiskie vesti, 24 September 1996).
56. El'tsin in October 1991 (RFE/RL Daily Report, 206, 29 October 1991); Yavlinsky in March 1993 ('Press Conference by Grigory Yavlinsky', Federal News Service, 25 March 1993); Labour Minister Gennadii Melikyan in November 1993 (RIA News Cycle, 25 November 1993).
57. El'tsin in October 1991 (RFE/RL Daily Report, 206, 29 October 1991); Yavlinsky in March 1993 ('Press Conference by Grigory Yavlinsky', Federal News Service, 25 March 1993); Labour Minister Gennadii Melikyan in November 1993 (RIA News Cycle, 25 November 1993).
58. El'tsin in October 1991 (RFE/RL Daily Report, 206, 29 October 1991); Yavlinsky in March 1993 ('Press Conference by Grigory Yavlinsky', Federal News Service, 25 March 1993); Labour Minister Gennadii Melikyan in November 1993 (RIA News Cycle, 25 November 1993).
59. For some recent views on Communist attitudes towards privatisation see Mikhail Gershaft, 'Where did Nomenklatura go, and where is it Heading now?', Prism: A Bi-Weekly on the Post-Soviet States, 2, 2, Part 2, 26 January 1996; Stephen Fortescue, 'The Communists and the Economy', Russian and Euro-Asian Bulletin, 5, 5, May 1996; Martin Malia, 'Communist Legacy Foreclosed Choices', The New York Times, 27 March 1999.
60. For some recent views on Communist attitudes towards privatisation see Mikhail Gershaft, 'Where did Nomenklatura go, and where is it Heading now?', Prism: A Bi-Weekly on the Post-Soviet States, 2, 2, Part 2, 26 January 1996; Stephen Fortescue, 'The Communists and the Economy', Russian and Euro-Asian Bulletin, 5, 5, May 1996; Martin Malia, 'Communist Legacy Foreclosed Choices', The New York Times, 27 March 1999.
61. For some recent views on Communist attitudes towards privatisation see Mikhail Gershaft, 'Where did Nomenklatura go, and where is it Heading now?', Prism: A Bi-Weekly on the Post-Soviet States, 2, 2, Part 2, 26 January 1996; Stephen Fortescue, 'The Communists and the Economy', Russian and Euro-Asian Bulletin, 5, 5, May 1996; Martin Malia, 'Communist Legacy Foreclosed Choices', The New York Times, 27 March 1999.
62. In recent years the wealth and political influence of the seven so-called oligarchs have attracted most public interest. These include Rem Vyakhirev (Gazprom), Vladimir Potanin (Oneximbank), Aleksandr Smolensky (SBS-Agro Bank), Vagit Alekperov (LUKOil), Mikhail Fridman (Alfa-group), Vladimir Gusinskiy (Most-Bank), Mikhail Khodorkovsky (Menatep Bank). Interestingly, five of these are bankers, while the other two head Russia's largest gas and oil companies (Argumenty i fakty, 16 (965), April 1999).
63. As Joseph Stiglitz, Chief Economist of the World Bank, recently put it: 'While those pushing for privatization pointed with pride to the large fraction of state enterprises that were turned over to private hands, these were dubious achievements. After all, it is easy to simply give away state assets, especially to one's friends and cronies; and the incentives for doing so are especially strong if the politicians conducting the privatization exercise can get a kickback, either directly or indirectly as campaign contributions. Indeed, if privatization is conducted in ways that are widely viewed as illegitimate and in an environment which lacks the necessary institutional infrastructure, the longer-run prospects of a market economy may actually be undermined. Worse still, the private property interests that are created contribute to the weakening of the state and the undermining of the social order, through corruption and regulatory capture'. (Stiglitz, 'Whither Reform?', p. 5).
64. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
65. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
66. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
67. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
68. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
69. See, for example, Joseph R. Blasi, Maya Kroumova & Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca and London, Cornell University Press, 1997); Hilary Appel, 'Voucher Privatisation in Russia: Structural Consequences and Mass Response in the Second Period of Reform', Europe-Asia Studies, 49, 8, December 1997, pp. 1433-1450; M. Boyco, Privatising Russia (Cambridge, MA, MIT Press, 1995); Igor V. Filatotchev & Roy P. Bradshaw, 'The Geographical Impact of the Russian Privatization Program', Post-Soviet Geography and Economics, 36, 6, June 1995, pp. 371-384; Stephen Fortescue, 'Privatisation, Corporate Governance and Enterprise Performance in Russia', Russian and Euro-Asian Bulletin, Melbourne, 7, 5, May 1998, pp. 1-9; Joseph Prokopenko (ed.), Privatization: Lessons from Russia and China, Enterprise and Management Development Working Paper EMD/24/E (Geneva, ILO, 1998) (http://www.ilo.ch/public/english/ 65entrep/papers/emd24.htm).
70. See Pekka Sutela, 'Insider Privatisation in Russia: Speculations on Systemic Change', Europe-Asia Studies, 46, 3, 1994, pp. 417-435.
71. Blasi, Kroumova & Kruse, Kremlin Capitalism, p. 193.
72. In his recent paper Åslund noted that 'the problem of privatization [in Russia] is not that it has enriched the managers, but rather that it has done too little to constrain them and their management theft' (Åslund, 'Why Has Russia's Economic Transformation Been So Arduous?', p. 46.)
73. Promyshlennost' Rossii, 1998 (Moscow, Goskomstat Rossii, 1998), p. 23.
74. Rossiiskii statisticheskii ezhegodnik, 1998, p. 588.
75. Ibid., p. 379.
76. Interfax, 18 November 1998; Russia Notes, 16 February 1999.
77. Interfax, 18 November 1998; Russia Notes, 16 February 1999.
78. In March 1997 Goskomstat was accused of manipulating Russian GDP figures through increasing its allowance for the shadow economy from 20% to 23% (The Financial Times, 25 March 1997; Open Media Research Institute (OMRI) Daily Digest, 59, 25 March 1997; 'Russia shadow economy shown in statistics', Reuters, 4 April 1997). However, data for previous years were not changed accordingly, making the annual 1997 figures artificially higher. The official Russian statistical handbook explained this change in the following way: 'As a result of the introduction of a more precise methodology for definition of GDP components the data for years starting with 1995 are in some cases not comparable with the data for previous years. These [earlier] data will be defined [in accordance with the new methodology] in the future'. (Rossiiskii statisticheskii ezhegodnik, 1998, p. 45.)
79. In March 1997 Goskomstat was accused of manipulating Russian GDP figures through increasing its allowance for the shadow economy from 20% to 23% (The Financial Times, 25 March 1997; Open Media Research Institute (OMRI) Daily Digest, 59, 25 March 1997; 'Russia shadow economy shown in statistics', Reuters, 4 April 1997). However, data for previous years were not changed accordingly, making the annual 1997 figures artificially higher. The official Russian statistical handbook explained this change in the following way: 'As a result of the introduction of a more precise methodology for definition of GDP components the data for years starting with 1995 are in some cases not comparable with the data for previous years. These [earlier] data will be defined [in accordance with the new methodology] in the future'. (Rossiiskii statisticheskii ezhegodnik, 1998, p. 45.)
80. In March 1997 Goskomstat was accused of manipulating Russian GDP figures through increasing its allowance for the shadow economy from 20% to 23% (The Financial Times, 25 March 1997; Open Media Research Institute (OMRI) Daily Digest, 59, 25 March 1997; 'Russia shadow economy shown in statistics', Reuters, 4 April 1997). However, data for previous years were not changed accordingly, making the annual 1997 figures artificially higher. The official Russian statistical handbook explained this change in the following way: 'As a result of the introduction of a more precise methodology for definition of GDP components the data for years starting with 1995 are in some cases not comparable with the data for previous years. These [earlier] data will be defined [in accordance with the new methodology] in the future'. (Rossiiskii statisticheskii ezhegodnik, 1998, p. 45.)
81. In March 1997 Goskomstat was accused of manipulating Russian GDP figures through increasing its allowance for the shadow economy from 20% to 23% (The Financial Times, 25 March 1997; Open Media Research Institute (OMRI) Daily Digest, 59, 25 March 1997; 'Russia shadow economy shown in statistics', Reuters, 4 April 1997). However, data for previous years were not changed accordingly, making the annual 1997 figures artificially higher. The official Russian statistical handbook explained this change in the following way: 'As a result of the introduction of a more precise methodology for definition of GDP components the data for years starting with 1995 are in some cases not comparable with the data for previous years. These [earlier] data will be defined [in accordance with the new methodology] in the future'. (Rossiiskii statisticheskii ezhegodnik, 1998, p. 45.)
82. Ibid., p. 379.
83. According to Goskomstat, in general the state-owned sector in 1997 was even more effective: 'In January-November 1997 the share of loss-making enterprises in the state sector [of industry] was 42.6% while in the non-state sector it was 49.0%'. (Sotsial'no-ekonomicheskoe polozhenie Rossii, 1997 g. (Moscow, Goskomstat, 1998), p. 36).
84. Åslund estimated that in 1997 the level of enterprise subsidies was equal to 4.2% of Russia's GDP (Åslund, 'Why Has Russia's Economic Transformation Been So Arduous?', p. 58, Table 1).
85. See, for instance, the recent Gaidar interview, 'From Central Planning to Markets: Guiding the Transformation of the Russian Economy. Conversation with Yegor Gaidar', Berkeley, Institute of International Studies, University of California (http://globetrotter.berkeley.edu/conversations/ Gaidar/).
86. For more on financial mismanagement in contemporary Russia see V. Tikhomirov, 'State Finances and the Effectiveness of the Russian Reform', in V. Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999), pp. 166-203; V. Tikhomirov, 'Capital Flight from Post-Soviet Russia', Europe-Asia Studies, 49, 4, June 1997, pp. 591-615.
87. For more on financial mismanagement in contemporary Russia see V. Tikhomirov, 'State Finances and the Effectiveness of the Russian Reform', in V. Tikhomirov (ed.), Anatomy of the 1998 Russian Crisis (Melbourne, CERC, 1999), pp. 166-203; V. Tikhomirov, 'Capital Flight from Post-Soviet Russia', Europe-Asia Studies, 49, 4, June 1997, pp. 591-615.
88. Russian Economic Reform: Crossing the Threshold of Structural Change. A World Bank Country Study Report (Washington, The World Bank, 1992), p. 54; RFE/RL Weekly Economic and Business Notes, 17-30 June 1992. These were initial estimates, made at the start of the Russian reform. However, as time passed, estimates of the Soviet debt inherited by Russia were continually growing. Part of that increase can be attributed to the interest that was accumulated on the debt as Russia was regularly rescheduling and delaying its payments. By mid-1999 estimates of Russia's debt obligations inherited from the USSR already amounted to US$100 billion (former Russian Economics Minister Evgenii Yasin, quoted in Vera Kuznetsova, 'Yevgeny Yasin: Wise Old Man of Russian Economics', The Russia Journal, 31 May-6 June 1999; http://www.russiajournal.com).
89. Russian Economic Reform: Crossing the Threshold of Structural Change. A World Bank Country Study Report (Washington, The World Bank, 1992), p. 54; RFE/RL Weekly Economic and Business Notes, 17-30 June 1992. These were initial estimates, made at the start of the Russian reform. However, as time passed, estimates of the Soviet debt inherited by Russia were continually growing. Part of that increase can be attributed to the interest that was accumulated on the debt as Russia was regularly rescheduling and delaying its payments. By mid-1999 estimates of Russia's debt obligations inherited from the USSR already amounted to US$100 billion (former Russian Economics Minister Evgenii Yasin, quoted in Vera Kuznetsova, 'Yevgeny Yasin: Wise Old Man of Russian Economics', The Russia Journal, 31 May-6 June 1999; http://www.russiajournal.com).
90. Russian Economic Reform: Crossing the Threshold of Structural Change. A World Bank Country Study Report (Washington, The World Bank, 1992), p. 54; RFE/RL Weekly Economic and Business Notes, 17-30 June 1992. These were initial estimates, made at the start of the Russian reform. However, as time passed, estimates of the Soviet debt inherited by Russia were continually growing. Part of that increase can be attributed to the interest that was accumulated on the debt as Russia was regularly rescheduling and delaying its payments. By mid-1999 estimates of Russia's debt obligations inherited from the USSR already amounted to US$100 billion (former Russian Economics Minister Evgenii Yasin, quoted in Vera Kuznetsova, 'Yevgeny Yasin: Wise Old Man of Russian Economics', The Russia Journal, 31 May-6 June 1999; http://www.russiajournal.com).
91. Interfax-AiF, 27 April 1999. The increase between the two figures (US$107 billion) also includes accumulated interest on Russian inherited and post-Soviet debts, both current, delayed and rescheduled.
92. In mid-August 1998, when the Russian GKO-OFZ market collapsed, the Russian state debt on internal bonds was about US$67.6 billion (Tikhomirov, 'State Finances and the Effectiveness of the Russian Reform', p. 176). This was in addition to the accumulated external debt, bringing the total state debt accumulated by the Russian government in early 1999 to about US$215 billion. The latter was equal to 80.9% of the 1998 Russian GDP, calculated using the official ruble exchange rate against the US dollar (Sotsial'no-ekonomicheskoe polozhenie Rossii, 1998 g. (Moscow, Goskomstat, 1999), pp. 7, 259).
93. In mid-August 1998, when the Russian GKO-OFZ market collapsed, the Russian state debt on internal bonds was about US$67.6 billion (Tikhomirov, 'State Finances and the Effectiveness of the Russian Reform', p. 176). This was in addition to the accumulated external debt, bringing the total state debt accumulated by the Russian government in early 1999 to about US$215 billion. The latter was equal to 80.9% of the 1998 Russian GDP, calculated using the official ruble exchange rate against the US dollar (Sotsial'no-ekonomicheskoe polozhenie Rossii, 1998 g. (Moscow, Goskomstat, 1999), pp. 7, 259).
94. Interfax-AiF, 27 April 1999.
95. Sotsial'no-ekonomicheskoe polozhenie Rossii, yanvar'-fevral' 1999 g. (Moscow, Goskomstat, 1999), pp. 209, 212.