For the past six years our governments have been living from one International Monetary Fund infusion to the next. In the first stage we are short of money and hold hasty talks with the IMF. Next, we receive the money with after considerable difficulty. Then we forget our promises, get into a crisis and ask for money again.
The Russian authorities have learned the craft of pulling the wool over the eyes of the West, and the West has learned to pretend not to notice it. For political reasons, the West periodically tosses money at us. The main idea is to keep us quiet and non-threatening. The West does not believe that any economic reforms are underway in Russia, and so it simply aims at producing the appearance of decency with the help of the IMF missions and negotiations.
It should be recognized honestly that we have lost six years, increased our debt by $20 billion to the international financial organizations alone and have completely failed to conduct reforms. And now we ask to write off part of the debts. We want to get new credits, but in fact we are not planning to reform anything. Yet another gift of charity from the West does not solve a single problem apart from producing the overall image of something positive going on. Is this worth increasing our debt?
The problem of our budget consists of collecting taxes and other debts. This requires strong fiscal bodies and a true tax reform -- that is, the establishing of order. At the same time, we cannot have a realistic budget, because no one in Russia can predict the level of inflation or the currency rate. It is impossible to expect that economic activity will grow under the current conditions of instability and lack of encouragement. The circle closes.
Still, with today's level of federal revenues we have no funds for the army, law-enforcement bodies, education or health care. It becomes increasingly obvious that the state is falling apart and is not coping normally with its most elementary functions. Periodic financial injections from the West delay only slightly the need to take decisions that are a matter of principle.
This is how we have been living since the days of Mikhail Gorbachev: They give us money for reforms, and we immediately lose motivation to conduct these reforms. Fighting corruption, tax and pension reforms, restructuring of industry, eradication of the system of barter and nonpayments, unemployment, agrarian problems -- all these issues and many other questions must be resolved today. But this calls for the political will to stop seeing things in terms of "surviving another week, holding on for another month."
The new government has been in charge for two months now, and it still has no economic program of its own. We hear nothing apart from words about continuation of the course of Yevgeny Primakov, who did not have a program either. The attempts to formally satisfy the IMF demands resemble the attempts of a schoolboy to make the quiz results match the table at the end of the textbook.
One cannot help seeing the dead-end nature of today's situation. If it hadn't been for the four-fold devaluation of the ruble and the increase of oil prices, our country would be standing on the brink of a crash. Today we get gigantic profits from exports, but we do not collect taxes and do not pay our debts. The shadow economy is at least equal to the legal one, capital flight is measured in billions of dollars, and the amount of cash dollars circulating in Russia is several times larger than the overall ruble mass. Had we had a reasonable economic policy, we would be able to repay all the foreign debts and to build up the budget.
I am certain that the prime minster should address the IMF and reject any new credits until the moment when we have a real plan of action and have started carrying it out. In a similar situation in August 1993, as the finance minister, I refused to receive an allotment of the IMF loan, and I am proud of it. The shame should be on those who dragged Russia into a debt dungeon. Getting new credits today is absolutely against the national interests of Russia.
The writer is a former finance minister of Russia.