The former chief of the New York Federal Reserve, now in the
business of raising venture capital for Russian entrepreneurs,
declared Saturday that market reforms in the former Soviet Union
"have reached the point of no return . . ."
"The path may not be in a straight line," said Gerald E.
Corrigan, "but there is no turning back."
Corrigan was speaking at a conference at Washington University
this weekend on promoting increased U.S. engagement, public and
private, in the former republics of the Soviet Union. Most of those
in attendance - nearly 300 senior government and business leaders
and their counterparts from all 12 of the former Soviet republics -
shared Corrigan's upbeat assessment.
There were caveats, however, among them the sober projections
of Washington University's newly named Nobel Prize laureate,
economist Douglass C. North.
The ex-Soviet republics have many of the assets, especially in
the form of skilled people and rich resources, that should
contribute to the creation of prosperous societies, North said.
"But what they don't have at this point is precisely the things
that would utilize those resources and that human capital
efficiently," he said - things like secure property rights, an
impartial judiciary, contracts that can be enforced over time in a
legal structure that is perceived to be fair.
"It took the Western world 500 years," North said, to evolve
that set of rules. Getting it in place in the former Soviet Union,
he predicted in an interview after his speech, is likely to take at
least 50 years.
House Majority Leader Richard A. Gephardt, D-Mo., who organized
the conference, predicted success much sooner than that, based in
part on today's instant global communications.
"They're going to do this a lot faster than this," he said. "I
mean, we were doing this back in horse-and-buggy days."
One of the prime goals of the conference, Gephardt said, was
"getting people in a room and getting them excited" about the
possibilities of setting up investments and exchange programs and
how U.S. government agencies can help them do it.
He added that he hoped this weekend's event could be repeated,
with equally wide representation, in other regions of the country.
Maxim Boyko, the 36-year-old who heads the Russian
Privatization Center, told the conference that for all the surface
turbulence, Russia and its neighboring republics are on the march
to free-market economies.
The selling of Russia's state-owned industrial base, already
one third complete, will hit the 50 percent mark by December,
barely affected by the coup attempt earlier this month, he said. …