mulgated. 49 On August 8, 1990, the Council of Ministers passed the Resolution on Small Enterprises. 50 On December 10, 1990, the Supreme Soviet of the U.S.S.R. promulgated a new Investment Law. 51 On July 1, 1991, a new Privatization Law was enacted by the Supreme Soviet. 52
Despite this rapidly evolving legal framework, the privatization process appears to be bogged down in bureaucratic inertia. This is true in part because it is a highly complex process, but also because there is a shortage of knowledgeable personnel who can expedite the new process of privatization.
Despite efforts by the government to codify legal rules, prospective foreign investors continue to express concerns over such matters as employee rights and foreign ownership issues in privatized firms. Overall, the role of foreign investors in the privatization process is still unclear, 53 and it is unlikely that American firms will rush to participate in Russia's privatization process in the near future.
Extrication from the economic morass left by the Soviet Union's collapse likely will prove to be the challenge of the century for Russia and the other republics. As is the case in most bankruptcies, considerable sacrifice will be expected and old ways of doing business must be changed. As may be seen from the abbreviated list of concerns discussed above, mere tinkering with the details will not suffice; a major sea change in the social and political economy is essential.
The new Federation Treaty of spring 1992 was an important, although inconclusive, step toward meaningful reform. Many problems were unresolved by the treaty, however, and new issues were raised. One thing is certain--a massive commitment to reform is essential to place the former states of the Soviet Union on a sound economic foundation. It remains to be seen whether the surviving political system is up to the task.