Russia has devalued the rubble at a time of apocalyptic predictions about the state of the Russian economy. Some observers are warning that the Russian financial crisis "could spin out of control as banks collapse."
The European's evaluation is worse: "Thinking that a rise in fiscal receipts and a trimming of public spending will solve Russia's problems, as the IMF [International Monetary Fund] does, is to miss the self-evident point that the Russian economy is bust, plain and simple. All the statistics about economic activity are probably hokum. The foundation stones of a market economy—a legal structure to enforce mutual obligations, corporate responsibility and transparent accounting—are non-existent."
More than economics is at stake here. The world has a heavy interest in Russian economic stability. The country still has too many nuclear weapons for comfort, and any temptation to sell weapon technology to unstable dictatorships for badly needed cash frightens Western leaders.
In terms of Russian economic well-being, too much was expected too soon. A nation pays a heavy price for 70 years of communism, and the attempted conversion to a free-market economy and a full free-enterprise system has rocked the nation's social fabric. (Sources: The Sunday Times [London] , The European .) GN
