Land.” And Russia was pretty stable, considering all the asses-and-elbows political events of the past decade. With the reelection of Yeltsin, the Russians had voted for a sort-of democratic, kind-of free-market government. And that government’s finances weren’t even a total mess. Inflation was down to between 1.5 or 3 percent a month, nothing to amaze an American old enough to remember Richard Nixon’s wage-price controls. National debt as a percentage of GDP was lower in Russia than in any country in Europe except Luxembourg. Probably this was because only a crazy person or the International Monetary Fund would loan Russia money. But, even so, the 34 percent of GDP Russian debt was a big improvement on America’s 70 percent and Sweden’s 100 percent. And Russia’s budget deficit was only 4 percent of gross domestic product, about the same as the average for European Union countries. Russia’s economic situation defied standard analysis. Russia’s economic situation defied standard analysis because its numbers didn’t add up in any standard way. Russian industrial output had declined by half since 1990, but its export trade flourished. The nation had a $19.9 billion trade surplus. Russia reportedly exported $88.3 billion in goods in 1996—mostly timber, cellulose, ferrous metals, coal, oil, and gas. Russian extraction industries weren’t the flop that the Russian manufacturing sector was, but there was more to it than that. When the Soviet Union collapsed, Russian industries were found to be hoarding enormous amounts of raw materials, perhaps as much as $700 billion worth—in a country with chronic shortages of everything. This senseless inventory glut resulted from a combination of realpolitik cynicism and cynicism of the regular kind. The leaders of the old Soviet Union thought a nuclear war could be won. They meant to survive and rebuild the (now socialist, of course) world. It was to be, I gather, a world made of timber, cellulose, ferrous metals, coal, oil, and gas. The managers of Russia’s industries were happy to go along with the daft stockpiling because they could use these heaps and piles of superfluous stuff for black-market bartering through the tolkachi system. Now many Russian industries were keeping themselves in business by fencing the assets of paranoid Kremlin megalomania. Then there was the matter of Russia’s continuing inflation. The inflation was
Made with FlippingBook - professional solution for displaying marketing and sales documents online