Publication: Monitor Volume: 1 Issue: 130

Nikolai Savalev, a Communist Party economic expert, offered a sneak preview of what the party might seek to do if it is successful in the December 17 parliamentary elections. "The basic branches of industry–food production, oil and gas, metallurgy and petrochemicals–must, of course, be part of the state sector," he said. "The control of inflation is important…but the tight policy aimed against inflation is suffocating enterprises and leading to their death." He predicted that Russia would use tariffs and other trade controls to protect domestic firms from outside competition. Savalev also said foreign investment would be welcome, but he was short on details on repatriation of profits or on whether investors who have already bought shares in strategic firms the government wanted to nationalize would be compensated. (4)

The Communist economic program of state controls, subsidized prices, and help for domestic firms would almost certainly discourage Western investors. As it is, Russians have invested more than $43 billion abroad, according to the European Bank for Reconstruction and Development, while accumulated direct foreign investment in Russia since 1991 amounts to only $6-$7 billion. The well-organized party’s ability to roll back economic reform will depend to a large extent on its performance in upcoming parliamentary elections–it presently leads rival parties in opinion polls–and on what happens in presidential elections due in June next year.