俄罗斯的社会安全网

I take exception to Deputy Treasury Secretary John Robson’s skeptical views on Western aid to the former Soviet Union [op-ed, Dec. 27]. The seemingly endless decline and disintegration of the post-Soviet economy could still be reversed, even at this advanced stage, but only with Western help. To be effective, the help should take the form of an internationally financed social safety net, distributed directly to the unemployed and needy in the form of hard currency—dollar or Deutsche mark bills.

Given the fact that the minimum wage in Russia is $ 6 a month, the cost of such a scheme would be well within the range of an IMF program: I believe $ 10 billion a year would be sufficient for the entire former Soviet Union. The benefits would be incomparably greater because the scheme would have several multiplier effects and would set into motion a virtuous circle.

The most important benefit would be the introduction of a hard currency. The ruble has never served as a full-fledged currency, and incipient hyperinflation has only made matters worse. In the absence of a medium of exchange, the economy functions largely by barter. And in the absence of a store of value, there is large-scale capital flight. Insofar as hard currencies are used in internal transactions or hoarded, they need to be imported, draining an already depleted economy. Introducing a hard currency into general use would remove these handicaps, in addition to bringing direct benefits to the recipients.

The social safety net would also provide a powerful incentive to shut down loss-making enterprises. A large number of enterprises operate with negative value added, but they are kept going because their workers need to be paid. If they were paid by foreign assistance, the factories could be idled and the raw materials and energy that go into production could be sold for more than the output. That would be another multiplier effect.

The introduction of a hard currency would deprive the government of its ability to finance the deficit by printing money. This may be considered a negative because in the first instance it would accelerate hyperinflation, but the opposite is true. Unable to finance its deficit, the government would be forced to balance its budget. Given the benefits of the assistance scheme, this would no longer be impossible. The internationally financed transfer payments would go to reduce the deficit both directly and through the multiplier effects. With a social safety net in place, commodity subsidies could also be reduced; people could be asked to pay more for bread and oil. At the same time, tax and customs and excise revenues could be protected by levying them in hard currency. This would create the preconditions for balancing the budget and stabilizing the currency.

Whether the government would take advantage of this opportunity is open to question. The beauty of the scheme, though, is that it would work even if the government continued to founder. And if the government did seize the opportunity, it could work wonders. The self-reinforcing loop of disintegration and despair could be reversed and replaced by a virtuous circle. If that happened, the inflow of private investment and domestic capital creation could set the economy on a growth path.

One other issue needs to be mentioned: The breakup of the Soviet Union into 15 independent states has had a devastating effect on production and trade, because Soviet industry was highly concentrated and without alternative sources of supply. The introduction of a hard currency could go a long way toward re-establishing trade among the newly independent states.

Many of these advantages could be secured by simply recognizing a hard currency as legal tender, but that would be inconceivable without the scheme proposed here. The social safety net makes radical currency reform, with all its attendant benefits, palatable. It is an offer that would be hard to refuse.

Now that the Gaidar government has fallen, the introduction of a hard currency becomes the only hope for currency reform. Yegor Gaidar tried to stabilize the ruble and failed. His successors will not even try. Hyperinflation is already built into the economy, but its implications are not properly understood. When it is actually experienced, there will be an attempt to reimpose wage and price controls. That attempt is bound to fail, but the consequences would be disastrous. The commands of the central government would be resisted, and the country would take a great step toward civil war, anarchy and chaos. The fact is that a reform-minded government may not be able to do much good, but a hard-line or “patriotic” government can do a great deal of damage.

Once introduced, the scheme would serve as a powerful lever against a change of government in the wrong direction; no government can replace $ 10 billion at the current exchange rate.

Of course, if the scheme were implemented, the exchange rate might fall. But that is a problem that would arise only after hyperinflation had been brought under control and the domestic currency stabilized. By that time, the government ought to have the resources to take care of its own needy and unemployed.

Where is $ 10 billion to be found? The obvious place is the International Monetary Fund, because the IMF has a mandate from the Group of 7 that it has been unable to fulfill. Since a conventional IMF scheme would be doomed to failure, it is time to try an unconventional one. There is only one major obstacle: The IMF is prohibited by its charter from treating one country differently from the others. But there are ways of circumventing this obstacle. For example, a special facility could be established for countries that have broken into many pieces.

An intergovernmental arrangement among the G7 might also be feasible. They would jointly guarantee a $ 10 billion loan to the successor states of the Soviet Union. One country— the United States or Germany—could volunteer to provide the cash that would be distributed, and the other countries would agree to share the burden if and when the banknotes were exported. The cost would be substantially less than $ 10 billion.

In sum, even if the scheme failed to generate a virtuous circle, at least it would discourage the Russian government from moving in the wrong direction. With a functioning currency, and without too much hindrance from the government, the economy could be expected to show some improvement eventually. The aid would not be wasted as it would be if it were given to the government directly. It would serve a humanitarian purpose, and it would cost much less than what is likely to be expended if nothing is done to prevent the descent into a black hole.

Considering the alternative, this scheme is definitely worth pursuing.