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BORIS KAGARLITSKY, MOSCOW
GUIDED DISASTER
The question “should Russia join the WTO?” has recently given place to the question “why should Russia do that now?” Of course, it is difficult to imagine the time that would be still worse for opening the domestic market. During the economic upsurge it is possible to speak about advantages and disadvantages of joining the WTO, but during the economic crisis we can raise this question only if we try to aggravate the situation deliberately.
Protectionism plays the same role during a financial meltdown as quarantine during an epidemic. The quarantine checks the epidemic, but sometimes it does not work. The same is true for protectionist measures. Anyway, infection should not be spread freely. The world leaders’ agreements as well as the agreements signed within the WTO eventually boiled down only to pointless but still intense squandering of much public money on fighting against the crisis. Using such saving remedies is tantamount to extinguishing a fire by means of kerosene. One should not think that the officials, who throw money about, are so naive that they believe they could save the country from the collapse. They are concerned about the opportunity to help their ‘frindly’ corporations at public expense rather than about the results of their actions. In short, the officials are doing the same things during the crisis as they always do, but in the other way.
Russia’s joining the WTO is supposed to make the country’s international economic commitments irreversible, thus depriving Russia of much of its sovereignty. The Russian liberals have been concerned about ‘irreversibility of reforms’ since liberal politicians, Yegor Gaidar and Anatoly Chubais were in the government. This demonstrates the liberals’ disbelief in their own policy: the policy does not speak for itself, it has not yielded good results yet and should be protected from the society.
One of the main arguments for the WTO is that China has already joined this organization. True, after China had joined the WTO, there was no economic growth in that country, on the contrary, it has more and more problems. But as, on the whole, China’s situation is better than Russia’s, we should follow its example.
Unlike China, Russia does not export the mass industrial products. Opening the markets, it receives nothing in exchange. The raw materials and half-finished products trade is contingent on general tendencies of the global market, while the international trade regime, which is established within the WTO, is of little importance. However, there is another difference between China and Russia. The Chinese authorities make no secret of their authoritarianism. The party makes decisions and the question if the decisions are right or wrong is not discussed. By contrast Russia lays claim to the status of democracy. The officials do not consider the public opinion but, at the same time, it is impossible to forbid the Russian people from discussing the developments. The society is more and more worried by the government’s behavior.
Russia’s joining the WTO presupposes further liberalization of the ‘service market’. The WTO documents imply that the ‘services’ include education, public health, transportation, culture, housing, etc. The social infrastructure will be destroyed completely and its material resources will be ransacked. The social sphere is expected to change in the same way as Russia’s industry did in the 1990s. While the lost industrial production could be replaced with other economic activities, the social infrastructure can be replaced by nothing, it itself saved the society when the industry was being destroyed.
Those steps are planned to be taken right now, against a background of the decline in output, when the society needs this infrastructure more than ever because it is able to withstand the negative market fluctuations. The benefit monetization law, which caused the outbreak of people’s displeasure, showed how the domestic practice was being adapted to the WTO requirements. Today the same thing all over again is offered to us. But the majority of the people do not want to return to the past.
Some industrial sectors, which have strong lobbies in the Kremlin and in the government, seek to be granted a transitional period. The authorities promised that they would give the automobile industry the seven-year period for the adaptation to the new rules, in particular since many factories are about to be closed down. The agricultural branch and the Russian banks also lobby for their interests. But the population, the society, the social and cultural spheres have no lobby.
The authorities’ words about Russia’s joining the WTO are equal to the confession that they are ready to sacrifice the economic sectors or even a part of the population during the crisis for the sake of membership in a prestigious organization. Probably, the authorities believe that such actions are acceptable. After all, officials and businessmen will not die of starvation out of doors.
But the officials should bear in mind that the majority of the population can take a different view of things.
Russian ‘democracy’ is under the control. But one fine day, it can become uncontrollable, can’t it?
Boris Kagarlitsky is Director of the Institute of Globalization and Social Movements
December 12, 2008
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