Divergent Western Advice Floods Russia, but Answers Are Few
Please excuse any Russian officials who may feel a bit confused by the latest rounds of Western advice.</br></br>Last week, the chief of the International Monetary Fund came to town promising $1.5 billion in aid - if Russia took steps to increase revenue and close its budget deficit.</br></br>This week, U.S. Commerce Secretary Ronald H. Brown and 29 American corporate chief executives are here on what Brown is calling "a historic mission" to promote business ties. One primary message: Russia needs to lower taxes and tariffs to attract more investment.</br></br>"I don't think there's a contradiction in goals," Brown said today in an interview. "We believe the way to create economic growth, and therefore revenue, is through open markets."</br></br>In fact, the differing emphasis in advice reflects the intractable challenge facing Russia. The government needs to raise more funds to pay for structural reforms without triggering hyperinflation. It also needs to provide a more attractive climate for investors. Unfortunately, no adviser - Western or Russian - seems to have a magic formula for doing both.