Newspaper article The Christian Science Monitor

Midwife to a Free Market Yeltsin's Team Is Preparing for a New Breed: Russian Entrepreneurs

Newspaper article The Christian Science Monitor

Midwife to a Free Market Yeltsin's Team Is Preparing for a New Breed: Russian Entrepreneurs

Article excerpt

ONE of the biggest winners in the aftermath of the failed coup in the Soviet Union is the Russian free market. Now that the epitaph of communism as an ideology has been written, and the bankruptcy of highly-centralized, planned economic systems has been exposed, the careful work of Boris Yeltsin's team to put in the institutions that can make a free market work will move to center stage.

While Mikhail Gorbachev has vacillated between free markets and centralized control, the heroic technicians who are committed to making free markets work have all migrated from the Kremlin to Yeltsin's "White House" further up the Moscow river. A new Russian Republic Bank of Foreign Trade has been chartered, under the leadership of Valeri Telegin, whose experience at American business schools and the US Federal Reserve System makes him comfortable dealing with Western bankers in English. He brings broad experience from his days as a deputy chairman of the Central Bank of the USSR.

At the center of much of the work done by Yeltsin's team is the Committee on Antimonopoly Policies, New Economic Structures, and Privatization, headed by Valeri Chernagorodsky. Its "antimonopoly policies" are designed to break up the huge state-managed industrial system that for 75 years has concentrated all activity under a government minister for each industry. Yeltsin's team is already selecting specific monopolies to break into smaller, joint-stock, privately owned com- panies, recognizing that competition breeds efficiency, productivity, and goods on the shelf.

The committee's responsibility for developing "new economic structures" includes work with 11 new "free economic zones" stretching across Russia's 11 time zones. In cooperation with local governors and mayors, the committee has selected model projects and is now seeking partners from the West. As these fragile institutions are given birth and turned out into the world of risk, they will receive favored status by Yeltsin's committee. The goal is not only their own success, but that they become examples to other Russian entrepreneurs and to foreign investors.

Some of these "companies" are military producers employing hundreds of thousands of workers. Others employ a few hundred. But many are attempting to find consumer goods that can replace the military hardware they have been producing. Some general directors of the larger conglomerates have been dragging their feet, hopeful that they would not have to destroy the esprit de corps of effective organizations of skillful engineers. Now that their hopes for maintaining their position has been dashed, the process of "conversion" should move ahead more rapidly.

One example of the smaller-sized military firms is the Slavgorod Radioelectronics firm in Siberia. Its major contribution has been mobile radio electronic gear for the military. …

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