Magazine Article

Russia's Virtual Economy

Gaddy, Clifford G., Ickes, Barry W.

1998

Overview

The assumption behind the International Monetary Fund's recent bailout of Russia is that the country is gradually reforming its economy according to market principles. But Russia's economy is much smaller than official figures suggest. Workers, the government, and industry all accept the myth that the manufacturing sector produces value, when in fact what it makes is worth less than the labor and resources it consumes. The result is a mountain of wage and pension arrears and government debt that will continue to provoke crises. The day of reckoning will be much worse if the West does not pull the plug soon.

• Publisher: Council on Foreign Relations,Council on Foreign Relations, Inc,Council on Foreign Relations NY
• Subject: Arrearage / Arrears / Bailouts / Barter / Budget deficits / Capitalism, Russia (Federation) / Cash / Default (Finance) / Economic aid / Economic aspects / Economic assistance / Economic Conditions / Economic crisis / Economic development / ECONOMIC POLICY / Economic reform / Economic sectors / Economic systems / Essays / Finance / Financial crises, Russia (Federation) / Financial crisis / Forecasts and trends / Foreign economic assistance / Foreign policy / Government / Government employees / Government, Role of / Growth / Industrial production / International economics / International finance / International lending / International Monetary Fund (IMF) / Manufacturing / Market economies / Market economy / Markets / National debt / Political risk / Public debt / Public officials / Russia / Russia (Federation), Economic conditions / Russia (Federation), Economic policy / Russia (Federation), Industries / Tax reform / Taxation, Russia (Federation) / Value added taxes / Wages / Wages & salaries