RUSSIAN GOVERNMENT’S ECONOMIC OPTIMISM DISPUTED…

The government of Yevgeny Primakov is trumpeting the agreement reached last week with the International Monetary Fund for more than US$4 billion in credits. It has also pointed to evidence of growth in certain sectors of the economy as proof that it has managed to stabilize the economy in the wake of last August’s financial meltdown Some data would appear to bear some of this out: A study by the Russian Academy of Sciences’ Economic Institute published at the end of last week found that industrial output had ceased its downward course and registered a slight growth in March and April (Interfax-Vremya, April 30-May 13). Likewise, the State Statistics Committee reported that savings by Russians–in the form of bank accounts, securities and cash–had increased 1.9 percent in the first three months of this year (Russian agencies, May 1).

In a more macro sense, however, the Russian economy has not only not stabilized, but actually gotten worse: Martin Taylor, a Russia specialist at Baring Asset Management, was recently quoted as saying that the “virtual” part of Russia’s economy–meaning that part mired in barter, corruption and dominated by political rather than market forces–had increased from half to around 70 percent of the total economy (The Economist, April 24).

…NOT SHARED BY EVERYONE AT THE TOP.