Improvement in Russian Marketplace

[Deb Palmieri on Russia Table of Contents]

The following article was published in the Russian Commerce News, July-August 1995. The Russian Commerce News is the official publication of The Russian-American Chamber of Commerce®.

Improvement in Russian Marketplace

Why is the Russian marketplace looking better and better? There is no doubt, as Anatoli Chubais recently pronounced, that Russia is on the verge of emerging from its crisis. Numerous indicators point in that direction. The decline in production for the first five months of '95 was 5% compared to 21% during the same period 1994. This period witnessed a strengthening of sectors including metallurgy, chemicals and petroleum products. Production promises to increase in 1996 without a doubt. Inflation is decreasing. It declined from 18% in January; to 11% in February; 9% in March; and 7-8% in April and May. It should continue to slowly decline. The ruble has experienced a remarkable rally and has gained strength against the USD, at this writing approximately R 4,516 to the dollar, its strongest standing in recent memory. Russia enjoys a trade surplus and foreign trade is unquestionably a bright spot in the economy. Its trade surplus reached $4.46 bn in the first four months of '95, compared with $3.5 bn the same period in 1994.

The basic institutions of a market economy have developed remarkably quickly from ground zero in 1991, including the legal infrastructure, taxation system, banking system, securities and stock market and so on. While not perfect, these institutions will grow and mature with time. And for the first time in the last five years, the government for the most part met its budget targets for first quarter 1995. There are other positive indicators. These include remarkably rapid progress in integrating with the global economy through participation in international economic institutions including the IMF, World Bank and International Finance Corporation. It is essential that the U.S. wholeheartedly support Russia's entry into the World Trade Organization (WTO), successor to GATT.

Recent events underscore a steady and reliable trend towards cooperation. An emotional celebration of the 50th anniversary of Victory Day in Europe brought world leaders to Moscow to pay tribute to Russia's contribution to defeating the fascists in World War II. The fourth Clinton-Yeltsin summit which followed in its footsteps yielded no fireworks but steady talks on important issues including Chechnya, NATO, and nuclear sales to Iran. The U.S. agreed that Russia should become a founding member of the post-Cold War version of the Coordinating Committee on Export Controls (COCOM).

Instead of constantly scrutinizing Russia's weaknesses and shortcomings under a microscope, it's time we commend Russia's leaders and people for the good job they are doing and the fortitude, determination, creativity and stamina they have exhibited in overcoming obstacles and making ends meet under the most difficult of circumstances. Time and progress march on, and Russia is keeping in step without missing a beat. The Russian-American Chamber of Commerce salutes Russia, its people and government for its fine track record of progress during the first half of 1995.

Deborah Anne Palmieri
Russian Commerce News, July-August 1995