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In support of corruption

Since the fall of the Soviet Union, the United States has kept the democratization and transformation to capitalism of Russia at the forefront of its priorities in foreign policy. Money designated to help balance the books of the Russian economy has been used to line the pockets of those in charge. Despite these problems, it is in our best interest to continue to support the Russian government.

Russia itself began several reforms in an effort to establish a capitalist market but used questionable methods to do so. The final result was a handful of former Communist officials and businessmen who bribed themselves into a position to gain massive wealth at the expense of the Russian government. Some cases involved public auctions of real estate in which these capitalists were the only bidders present.

Activities such as this gave the Russian economy a strong jump start but created a foundation built upon corruption that directly contradicts the principles of capitalism. Today this foundation and its corrupt practices are being supported by the International Monetary Fund.

Several U.S. economic aid programs have been initiated in an effort to help establish economic ties with the largest component of its former nemesis. These programs were designed to help Russia in its struggle to maintain a budget and keep the skeleton of capitalism alive. However, funds given through these programs have often been linked to anything but assistance to the economy.

Since the original schedule of loans began in 1992, there have been multiple admissions of guilt, a cornucopia of irrefutable evidence and even more allegations of embezzlement, graft and fraud that have brought the true nature of these loans into question. Some sources report that a portion of the 2o billion given to the Russian government by the International Monetary Fund has been funneled into private Swiss accounts.

IMF publications proclaim they "lend money to members having trouble meeting financial obligations to other members, but only on condition that they undertake economic reforms to eliminate these difficulties for their own good and that of the entire membership." In other words, it will help Russia and keep a balance between economies and other members, provided the loan benefits both Russia and the world economy. Current loans designed to help the Russian economy are benefiting an elite few from Russia.

Recent accusations go all the way to the top of the Kremlin, implicating that President Boris Yeltsin and his daughters have benefited from money laundered through a New York bank and a Mafia ring. Reports indicate this scam involves over $200 million that can be traced back to IMF loans.

If the latest set of allegations against the Russian government are proven, is it time for the IMF to take a stance of "tough love" against Russia and withhold its next scheduled $640 million loan? No.

This could cause a major crash in the Russian stock market, which has only recently begun to recover from a 1998 crash, in which the ruble lost over 50 percent of its value. Confidence in the Russian market by both foreign investors and Russians could possibly hit an all-time low.

The current system could be likened to a mother supporting her son's heroin habit by paying him a sum that allows him to shoot up enough so as not to go into withdrawal. The solution for the mother and the child could be to continue this practice until the son himself decides to enter rehab or for the mother to check him into rehab herself. This would be a nice option for the U.S.

In this case however, the addiction is so bad that were the mother to cut her son off, her son's behavior would be erratic and possibly dangerous to her.

Russia is the world's second largest nuclear power, behind the U.S. While portions of economic aid given to Russia have been funneled into private Swiss accounts or spurious offshore funds, the majority is keeping the economy as propped up as possible. If the Russian economy were to take yet another spill, the consequences could be disastrous.

With one-third of the country's population living below the poverty line, it's safe to say that many Russians don't have much further to fall. If their situation worsens, these people go from unhappy to hungry, and when 55 million people are hungry, they don't have much else to lose.

Russia's transition to a market economy is going to be a slow one and the U.S. must come to accept that. Problems with corruption and financial fraud will be part of the transition for a while. If the IMF and the U.S. continue to support these practices, we will lose some funds to corrupt businessmen. If they cut off Russia from their economic aid packages, we all stand to lose so much more.