{
  "id": "RL30161",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30161",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 105376,
      "date": "1999-05-03",
      "retrieved": "2016-05-24T20:45:29.972941",
      "title": "Russia: Primakov's Economic Policy Dilemma and U.S. Interests",
      "summary": "Russia's devaluation of the ruble and default on its debts in August 1998 put it in its most\nserious\ncrisis to date. If trends that created the crisis continue, Russia is faced with a vicious downward\ncycle toward dire economic straits hyperinflation, steep reduction in output and income, default on\ndebts precluding the ability to borrow; political weakness disintegration of central government\npower with increased corruption and instability, and growing military dissent inviting a political\nimplosion resulting in a threatened collapse of Russia's ability to govern. The Russian government,\nforeign donors and investors agree that this is the likely outcome without radical change. The\nPrimakov government and the donors (International Monetary Fund, the major industrial\neconomies the G-7, led by the United States) are negotiating on an Action Program that might, if\neffectively\nimplemented, provide a basis for managing economic revival. Effectively dealing with debt\nmanagement, bank restructuring and reform, budget balancing, and investment generation might\nkeep the major donors and some investors engaged with the Russians and justify domestic support\nof reform. Adjusting now, before the parliamentary and presidential elections of December 1999\nand June 2000, might open the option of proceeding toward comprehensive reform in the manner\nof Poland and other successfully reforming states.\n The choices between the vicious cycle and managed economy are stark and understandable to\nRussians and donors alike. However, the shortfalls in reform that created the crisis also established\nthe wealth and power of the financial industrial groups, the oligarchs, who must change from \"rent\nseekers\" living off politically determined allocations from the State budget and monopoly profits,\nto \"profit seeking\" competitive groups able to contribute to economic growth, reduction of poverty,\nand payment of taxes. This change is crucial to the success of a managed economy scenario.\n The United States has different policy options if either the vicious cycle or managed economy\nscenario develops. Without concrete, fundamental measures by the Russians, the United States and\nall major donors are committed to limiting support to humanitarian aid and some military reduction\nprograms. The United States may in this negative scenario face a hostile Russia still armed with\nnuclear weapons that is viewed by our defense authorities as the number one threat to our security. \nWith a successful Russian economic adjustment strategy, the United States may play a major role\nin responding to Russian concrete reform actions leading all donors to provide targeted assistance\nkeyed to Russian actions and therefore likely to stimulate foreign direct investment from the United\nStates and elsewhere, especially in the energy sector. If successful over time, Russia might then\nmove toward becoming a political ally in peacekeeping and a partner in development of some of the\nmost romising natural resources and technologically advanced assets in the world.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "encoding": null,
          "url": "http://www.crs.gov/Reports/pdf/RL30161",
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      ],
      "topics": []
    }
  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs"
  ]
}