AFTER years of difficult reforms, the Russian economy appears to
be on the brink of actual growth for the first time in post-Soviet
Dynamic market-oriented companies, and the new vitality of many
privatized old enterprises, are moving into a rough equilibrium
with the old rusting economic behemoths of the Soviet era, whose
production continues to plummet.
Since the end of official communism in 1991, Russians have seen
their incomes shrink, their savings vanish, and the economy
contract on a scale that Americans have not experienced since the
But a study released last week by the Organization for Economic
Cooperation and Development is forecasting a probable growth of 2
percent in Russia's gross domestic product (GDP) next year. And it
added that Russia could be nearing a boom that would mean 10
A Western economist in Moscow says that Russia's productivity
growth is probably passing zero - that is, moving from decline into
expansion - right about now, in the fourth quarter of 1995.
Industrial production, wages, and the standard of living have
plunged deeply in Russia since the end of the Soviet Union. In
1994, GDP shrunk by 15 percent. In 1995, it is projected to shrink
another 5 percent.
But 1996 is increasingly predicted to be the year that
post-Soviet Russia begins to show overall growth as an increasingly
All these predictions are hung with warning signs, however. Just
as Russia's economy appears ready to reap the benefits of market
reforms, the political climate is leaning back toward stronger
state control. Some of the least-popular politicians in the
country, in fact, are those most closely linked to the reforms.
Chief among them is Yegor Gaidar, whose party is having trouble
finding any coalition partners in the upcoming elections.
Polls, early signature-gathering, and other signs indicate that
Communists will make the strongest gains in parliamentary elections
this December. In an early local election in Volgograd last week,
Communists swept 22 of 24 seats.
Nonetheless, a radical change in the direction of economic
policy is unlikely. Even Russia's Communists are not actually
Marxists anymore. But at the same time, some Russian analysts see a
leveling-off of privatization for a time as the public registers
its desire for stronger state control of the economy.
Russian sentiment is not hard to understand. …