TAKEALL-- SARATOV OBLAST'S REFORM PLANS EXPLAINED
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Keywords:
Collection:
Document Number (FOIA) /ESDN (CREST):
0005516717
Release Decision:
RIFPUB
Original Classification:
U
Document Page Count:
3
Document Creation Date:
June 24, 2015
Document Release Date:
January 31, 2011
Sequence Number:
Case Number:
F-2010-00651
Publication Date:
August 13, 1993
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C00175461
Page: 10 of 13
CLAS UNCLASSIFIED
CLAS UNCLASSIFIED
APSN PM2408103593C
DOAT 930813
SLIM Moscow IZVESTIYA in Russian 13 Aug 93 First Edition p 4
AUTH Aleksandr Kislov: "Saratov's Industrial Generals Fight for Reforms and
Want To Turn the Shadow Economy Into a Normal Economy"
SOBS [Article by Aleksandr Kislov: "Saratov's Industrial Generals Fight for
Reforms and Want To Turn the Shadow Economy Into a Normal Economy"
SUBJ TAKEALL-- Saratov Oblast's Reform Plans Explained
Full Text Superzone of Message
1 ]
2 [Text] Saratov -- At a recent meeting in Saratov with Premier Viktor
Chernomyrdin, the directors of the oblast's major enterprises put on the
table a package of proposals aimed at making market reforms more radical,
at the center of which was a project elaborated by Aleksandr Yermishin,
general director of the aviation plant. The premier approved the project
and issued the relevant working instructions to the leaders of several
state committees and ministries.
3 The Director as the Mainstay of Transformations [subhead]
4 Yermishin's office contains models of Yak-42 aircraft, the plant's main
output, and a machine of an intrinsically new design that is reminiscent
of a fantastic "flying saucer." The series-produced machine will soon
receive its international certificate and will join the "Boeing"; it will
cost $21 million. The "saucer" has already been made up in metal, and
preparation for series production is now underway. The aviation plant,
transformed not so long ago into a joint-stock company of the closed type,
is confidently increasing production in the most difficult conditions of
the transitional period. However, our conversation with the director was
not about this.
5 "Reforms should be conducted only with the active participation of
enterprise leaders," Aleksandr Viktorovich said. "They are the framework
which is keeping the economy from final collapse. In Saratov, for
example, defense enterprises have great weight. How could the state leave
us without an arms program? To this day, you see, there isn't one. If
only the government would summon up the courage and declare that there
will be no orders."
6 "Nevertheless, you and your colleagues have risen above the grievances?"
7 "But surely grievances are not the point? We have simply realized that
this potential will disappear unless it is utilized."
8 However, I think that Saratov's industrial establishment was prompted to
get involved in reforms by more than just a patriotic desire to
participate in the reconstruction of Russia. Being pragmatists, they
extrapolated the development of events in conditions of continuous war
between the branches of power and came to the conclusion that the road
ahead leads into the abyss. Anyway, everyone realizes'that the way back
is barred.
9 To continue to build up grievances against the government, accusing it of
neglecting the collectives' needs and asking for loans to pay wages,
although easy enough to do, is not promising. And here Yermishin proposes
a mechanism with whose aid it would possible not only to preserve the
collectives but also to secure their future.
10 Cadres Plus Investments -- the Survival Formula [subhead]
11 I have before me a memorandum "On the Mechanism for Collaboration Between
the U.S. and Russian Governments in Converting Russian Enterprises and
Approved for Release
19
C 0 0 1 7 5 4 6 1ing Private Investors from Both Countries in This Process," prepared
uy voctor of Sciences Aleksandr Yermishin in conjunction with scientists
from the U.S. National Academy of Sciences. It was submitted to the
attention of participants in a meeting of Russian and U.S. delegations on
conversion and privatization held at the end of May this year.
12 PM2408103593TAKE1
13 [Text] Several factors were the prerequisites for the emergence of this
program of reforms in Saratov Oblast. First, the severe shortage of
capital for investments and for increasing the working capital of
enterprises. Second, the fact that money for conversion is not always
used for its appointed purpose. Third, the center of gravity of
conversion should inevitably shift to the regions -- it is impossible to
run this process from a single center.
14 The mechanism is as follows. The Russian and U.S. Governments. would
guarantee and sponsor a pilot scheme of reforms in Saratov Oblast,
creating for it initial resources in the form of a conversion and
privatization fund. This fund would be held in trust by a joint-stock
company of the closed type, whose founders would be the professionals
themselves -- the economists and organizing managers. Sociological
research has been carried out in the oblast, in the course of which nine
people were selected who enjoy the trust of the governmemt, the
administrations, and the soviets, and are respected by enterprise
directors. Money would be lent at interest, on the condition of carrying
out the conversion and privatization of, say, 10 major enterprises. In
addition, contracts would include a requirement to ensure a certain level
of employment, the necessary consumer basket, and the production of goods
people need by the enterprises which are converted.
15 But the main emphasis is placed on attracting private investments to the
program, both Russian and foreign. Governor Yuriy Belykh has set the task
of finding such investors in the oblast. According to Aleksandr
Yermishin, today it is possible to speak with confidence of 10 billion
rubles which entrepreneurs of Saratov Oblast are ready to invest in the
program of.reforms.
16 This money will be channeled through specially created investment and
insurance companies and a mortgage bank into enterprises of a subsidiary
company which will carry out specific conversion and privatization
projects.
17 The More Bans, the More Violations [subhead]
18 In short, a consortium is being set up in the oblast which should ensure
the real progress of reforms on the basis of market laws and using the
mechanism of the economic interest of the subjects of the market and its
own employees.
19 "We intend to live in Saratov for a long time, and want to bequeath a
normal economy to our children and grandchildren," Aleksandr Yermishin
explained. "This is why we are striving for the market. We are in favor
of traveling this part of the road as quickly as possible, under the moral
control of society. Right now state money ends up in private hands
anyway. Everyone knows the 'price' of bank credits, licenses, and quotas.
These figures are quoted openly in the newspapers. But the negative
effects in our economy can be turned into positive ones. There is such a
law: The more bans, the more violations. Why should credits go only to
state structures? Why should the man who distributes them receive a
miserly wage, constantly tempted by bribes?
20 "We are mastering the principles of the market economy.. And we do not
intend to sit on state money. No, we will squeeze the maximum benefit
from it for ourselves, but our profits should be directly linked to the
efficiency of our work for society.
21 "On the subject of 'laundering' money. If a private person gets hold of
money, it can erode society, but it can also cement it together. Yes,
billions were made from the sale of vodka, for example, when the state
gave up its monopoly. This money takes three paths. First -- to the
West. We beg the G-7 for aid to carry out reforms, they give us 3
billion, although there are already 100 billion 'Russian' dollars, as U.S.
000175461ists have informed me, circulating in the United States. Second:
When people have money 'burning holes' in their pockets, it endenders
criminal situations. And finally, there is a third route. Turning money
into property, into means of production, so that it works here, in Russia.
Legally. With profits for the country of their owner. If the law
enforcement organs tell me that someone is untrustworthy, I will have
nothing to do with him. However, I will not carry out an investigation
into where an investor's money comes from
22 "I took part in a top-level conversation in the General Prosecutor's
Office. I say: A rule-of-criminal-law [ugolovno-pravovoye] state has
already been built in the country. The period of initial accumulation is
ending; capital has formed in certain sectors, and everyone knows this.
What remains? Either to allow these tendencies to develop further, in the
same direction, or it is time to summon up the courage and admit that the
shadow method of accumulating capital is not always criminal. There are
market structures which possess a great deal of money. They are actually
asking themselves the question: What next? Those who wanted to go abroad
have done so. Obviously, it is necessary to create conditions in which
money works for society.
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24 [Text] "On the whole they agreed with me. Organized crime has a serious
economic component. Why not try to diffuse this situation by legislative
and economic measures? It is more comfortable for someone to work in a
normal, rather than a shadow environment.
25 "Our plan also provides for a civilized mechanism for lobbying for
reforms. This is what the experment is for -- in order to have an
opportunity to freely go to the government or parliament and give
first-hand information on the progress of transformations and make
proposals as to where the 'rules of the game' need to be changed. For
example, it is already clear that there is no use even thinking about
developing reforms unless the Criminal Code and tax legislation are
amended and the draft laws on private ownership of land and on mortgages
[zalog] are dug out from parliament's backlog. You politicians--can argue
all you want to, but let people produce their goods, bake their bread, and
milk their cows."
26 Politicians claim that, in the current situation of dyarchy, a decisive
role could be played by an alliance of politicians who support the
president and pragmatists representing Russia's business circles. In this
case reforms would receive the powerful social base they so badly need.
In conditions of relative equilibrium of the forces clinging to power on
the political stage in Moscow, practical leaders and the collectives
standing behind them would ensure that the reformers prevail and, most
importantly, would confirm the inevitability of transformations with
weighty economic arguments. (endall) 13 aug 24/1156z aug WC
255
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