U.S. Strategy for Responding To Russia's Transformation

US Department of State Dispatch, Oct, 1998

October 2, 1998

Address to the U.S.-Russian Business Council, Chicago, Illinois.

Thank you Ambassador Strauss for that introduction. As our nation's first Ambassador to a democratic Russia, the experience, perspective, and authority you bring to the subject at hand are truly unmatched. I am glad to see Gene Lawson here--he and I started our PhD's at Columbia on the same day.

And I'm very glad to see in this audience some of the old Russia hands who treated me to a stimulating dinner seminar two nights ago. Today they're going to hear me cribbing their ideas--shamelessly.

Ambassador Vorontsov, distinguished guests: I am happy to be in Chicago and delighted to address a group that shared President Clinton's conviction that what happens in Russia matters profoundly to our security and prosperity. Let me now invite you all to sit back, digest your lunch, and formulate some polite, easy questions to ask me after my speech.

When I think about the situation in Russia today, I can't help thinking about a story I first heard on one of my early visits to that country. A train is going through Siberia when it runs out of track. In Lenin's day, the leadership says: "Our workers are strong and brave; they will keep building." Stalin says: "No, they're lazy; threaten to shoot them and then they will build." Krushchev says: "Russia is going forward, not backward, so we can use the rails we've passed over to finish the track ahead." Brezhnev says: "It's too much work; let's close the blinds and pretend we're moving." Gorbachev says: "Open the windows and let's see what happens."

Then President Yeltsin and the Russian people get the train going again. Except it's moving fast, and he keeps changing engineers. And now there are two tracks ahead. One looks tempting, for it goes downhill--but it leads to the abyss. Only the perilous track through the mountains will get Russia to its destination.

As you can guess, that's an old story, but I made up the ending. And the Russians keep writing new ones themselves.

These are, to use the Russian expression, smutnoye vremya--troubled times. The Russian economy is expected to shrink significantly in the coming year. A hard winter lies ahead. To many Russians, it may seem as if the promise of a better future has been betrayed once again. To many Americans, it may seem that the greatest opportunity of the post-Cold War era--building a genuine partnership with a stable, democratic Russia--is now a more distant possibility.

Of course, this is not the first crisis of post-Soviet Russia. Tomorrow will mark the fifth anniversary of the tragic showdown between President Yelsin and the Supreme Soviet. And it was only 2 years ago that Russians were expected to reject Yeltsin in Russia's presidential election.

Each time, there were people eager to declare that Russia's transition was over for good. Each time, some people were ready to substitute soundbite for serious analysis, by asking rhetorically: Who lost Russia?

But that has always been the wrong question. The drama of Russia's transformation from a dictatorship and an empire to a modern democratic state is far, far from over. We cannot say that Russia has lost its way when, in fact, it has just begun its journey. Nor can we say that Russia is ours to lose. We can help Russia make tough choices, but in the end Russia must choose what kind of country it is going to be.

The real question today is what will the new government of Prime Minister Primakov choose? Will it take sensible steps to stabilize the economy without triggering hyperinflation, a currency meltdown, a collapse of the banking system, or shortages of basic goods? Will it reconcile the political and moral imperative of meeting human needs with the imperative of economic revival? Will it recognize that, in fact, it cannot fulfill either one of these imperatives without fulfilling the other?

On the day he was confirmed by the Duma, Prime Minister Primakov told me that the answer to these questions was "yes." He also asked us to watch Iris actions and to wait until his team assembled.

I cannot yet say we are reassured. We have heard a lot of talk in recent days about printing new money, indexing wages, imposing price and capital controls, and restoring state management of parts of the economy. We can only wonder if some members of Primakov's team understand the basic arithmetic of the global economy.

So we cannot say with confidence that Russia will emerge from its difficulties any time soon. Nor should we assume the worst, for there are still plenty of people in Russia who will fight against turning back the clock.

A true and lasting transition to normalcy, democracy, and free markets in Russia is neither inevitable nor impossible. It is an open question, the subject of a continuing debate and struggle. That has been true ever since this great but wounded nation began to awake from its totalitarian nightmare, and it will be true for years to come. That is why our policy must continue to be guided by patience, realism, and perspective.