Economics, Eurasia, History, Inflation, Politics

The strangulation of Russian economy in the 1990s was a deliberate IMF policy (part 3 in a 6-part series)

… if the notion of billions of barrels of proven oil reserves and billions of tons of gold fills your dreams with visions of red-hot cash flow and ice-cold vodka, then Boris Yeltsin just might find some work for you. – Paul Hofheinz, Fortune Magazine, 23 September 1991[1]

The foregoing article is an excerpt from Chapter 3 of my book “Grand Deception: the Truth about Bill Browder, Magnitsky Act and Anti-Russian Sanctions.” Part 1 is here. Part 2 is here.

Shock therapy gave Russia one of the worst and longest economic depressions of the 20th century, an unprecedented humanitarian catastrophe for a peace time crisis, and a criminally inequitable privatization of public assets. The reasons why things happened this way in Russia generally aren’t well understood in the west. Even among better informed intellectuals, the failure of shock therapy is often thought to be vaguely related to some sinister flaw in the Russian society. It is what Bill Browder characterized as “the dirty dishonesty of Russia,” or “Russia’s evil foundation,” which spawned corruption and criminality of staggering proportions. In this toxic environment, the sweet fruits of western democracy and capitalism simply could not grow in spite of the generous benevolence of Russia’s western friends. Continue reading

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Eurasia, History, Politics

Russian lawmakers’ revolt and the 1993 constitutional crisis (part 2 in a 6-part series)

We created a virtual open shop for thievery at a national level and for capital flight in terms of hundreds of billions of dollars, and the reaping of natural resources and industries on a scale which I doubt has ever taken place in human history. – E. Wayne Merry, chief political analyst at the U.S. Embassy in Moscow (1990-1994)

The foregoing article is an excerpt from Chapter 3 of my book “Grand Deception: the Truth about Bill Browder, Magnitsky Act and Anti-Russian Sanctions.” Part 1 is here.

Economic reforms and privatization were highly destructive for Russia. They were also achieved outside of the legitimate legal framework. To sidestep the government agencies and circumvent the parliament, Yeltsin’s government worked through a network of private agencies and non-governmental organizations set up by Anatoly Chubais, his associates, and their western advisers. One of the most important of these organizations was the Russia Privatization Center (RPC), set up by the HIID and Anatoly Chubais under a presidential decree. RPC’s directors were Andrei Schleifer and Chubais himself. Continue reading

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Economics, Eurasia, History, Policy, Politics

1990s: how Russia decided to go from communism to capitalism (part 1 of 6-part series)

The foregoing article is an excerpt from the third chapter of my book, “Grand Deception,” which I wrote in response to Bill Browder’s bestseller, “Red Notice” but also as a retort to the relentless demonization campaign against Russia and its leadership in the West. Browder, an investor and hedge fund manager who made his fortune in the 1990s Russia, describes his fascinating experience during that time. However, he almost entirely glosses over the broader context within which events played out. Instead, he offers the same terse explanation he had regurgitated countless times in his various presentations and speeches, and it goes like this: after the collapse of the USSR, the government of Russia decided to go from communism to capitalism.[1] They thought that the best way to do this would be by giving everything away practically for free through various privatization schemes. Very rapidly, they transferred the nation’s economic resources into private hands.

But the unusual aspect of this transfer was that the private hands that received Russia’s wealth were not the same ones that had built it up since there were no restrictions on who could participate in the privatization program. As a result, the crown jewels of the nation’s productive resources ended up in the hands of a small group of oligarchs, most of whom covertly represented the interests of various western financiers. Continue reading

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Eurasia, History, Policy, Politics

Grand Deception: the 1990s raid on Russia

As the 2018 football World Cup in Russia draws to a close, many of her foreign visitors were surprised to encounter in Russia an affluent society and a friendly, welcoming host. This makes it difficult to appreciate that only a generation ago, Russia experienced a political, economic and social collapse of calamitous proportions. After the Soviet Union disintegrated in 1991, Russia embarked upon a transition from communism to capitalism. The so called “shock therapy” program, prescribed and guided by western experts resulted in the longest and one of the most severe economic depressions in the 20th century. Today, few people outside of the nations of former Soviet Union remember this dark episode. Fewer still understand it.

Even among the better informed intellectuals in the west, the failure of Russia’s shock therapy transition is largely misunderstood and often attributed to some sinister flaw in Russian society – a flaw which spawned corruption and criminality of staggering proportions. In this toxic environment, the sweet fruits of western democracy and capitalism simply could not grow in spite of the generous benevolence of Russia’s western friends and helpers. Continue reading

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Eurasia, History, Politics, Real life, Truth

How Bill Browder “proved” Vladimir Putin’s corruption

Former hedge fund manager Bill Browder, the faux crusader for human rights, has made very serious claims of corruption against Vladimir Putin, claims which many media personalities in the West have treated as true and factual without ever challenging them. Browder, the go-to expert on Putin’s corruption, presents these claims in his bestseller, “Red Notice.” At first blush, they show Vladimir Putin in a very negative light that may shock the reader. A more careful scrutiny of Browder’s case shows it to be a disingenous, baseless smear, which further begs the question: if this is the best (worst) Browder can offer as proof against Putin, what exactly do the ceaseless allegations of his corruption amount to? The following excerpt from my book (currently banned, but available here in electronic format) examines the merits of Bill Borwder’s assertions. Continue reading

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History, Policy, Politics, Something completely different, Truth

Sandals

In 1893 Mahatma Gandhi went to South Africa, expecting to stay there for just a few months. He ended up staying 21 years as he took up the struggle to restore the dignity and rights to a subdued, disarmed, and enslaved Indian community.

During those years, his chief political opponent was General Ian Christian Smuts who, as the Colonial secretary and later the Secretary of the Interior was responsible for implementing some of the repressive laws against the Indians.

When Gandhi finally left South Africa in 1914, Smuts wrote, “The saint has left our shores, I hope forever.

Years later, an exasperated Winston Churchill asked Smuts – who had meanwhile served two terms as South Africa’s prime minister – why he had not killed Gandhi while he had the chance. Smuts replied, “How could I do this to a man who made sandals for me with his own hands when I imprisoned him.

In later years, remembering Gandhi Smuts wrote: “… I have worn these sandals for so many summers since then, even though I may feel that I am not worthy to stand in the shoes of so great a man.

I posted this story a few years ago in my blog, “The Jubilee.” It was related by Niloufer Bhagwat in her article, “The Political Relevance and Global Impact of Mahatma Gandhi.“ I believe it bears relevant lessons to today’s social and political struggles.

Continue reading

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Central banking, Economics, Eurasia, History, Policy, Politics, Social development

Deflationary gap and the West’s war addiction

In June of 2014, a group of American researchers published an article in the American Journal of Public Health, pointing out that, “Since the end of World War II, there have been 248 armed conflicts in 153 locations around the world. The United States launched 201 overseas military operations between the end of World War II and 2001, and since then, others, including Afghanistan and Iraq.” To be sure, each of these wars was duly explained and justified to the American public and for all those Americans who believe that their government would never deceive them, each war was defensible and fought for a good reason. Nonetheless, the fact that one nation initiated more than 80% of all wars in the last seventy years does require an explanation, which I submit below: Continue reading

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