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Unfiled February 11, 2005
Absolute Ass-lund!
By Kirill Pankratov Browse author

Few characters illustrate the schizophrenic state of western "analysis" of Russian affairs better than the former government advisor, now the director of the Russian-Eurasian Program at the Carnegie Endowment, Anders Aslund. The Russian part of his career has seen so many 180-degrees turns, performed with such suddenness and vehemence, with a total lack of any nuances (or plain common sense), that one would think he must be a choleric Sicilian, not a sanguine Swede.

Aslund started as a high-level advisor of the Gaidar cabinet -- the first post-communist Russian government. Those Gaidar kids -- they didn't go for some run-of-the-mill economic consultants. Only real cranks would do -- the nuttier, the better. Aslund suited them perfectly.

These guys were obsessed with destroying as much as possible, in the shortest time frame. It's called "creative destruction." They didn't quite figure out the "creative" part, but it wasn't too big of a concern of theirs.

A few years later, as things stabilized a bit in the mid-90's, Aslund resigned and began lambasting the government for its "lack of reforms." After Yeltsin's reelection in 1996 there was plenty of euphoria among the western journos and fund managers, and a fleeting uptick of growth in 1997, just as financial crises of 1997-98 began to unravel all over the world and the GKO debt pyramid tottered on the verge of collapse. Aslund changed the tune again, and waxed how Russia "turned the corner" -- thanks to a big dose of his advice, no doubt, and everything now was fine. It wasn't. As the whole shebang went poof in August 1998, Aslund rushed away, announcing the "Collapse of Russia," because, apparently, Russians didn't follow his advice scrupulously enough.

That wasn't, however, the last we've heard from him. Right after the crisis of 1998 Russian economy began to grow vigorously -- completely opposite to predictions of "collapse" from the world's globaloony establishment, exemplified by Mr. Aslund. It didn't take long for intellectual vultures like him to rush to claim credit for Russia's surprising success. According to Aslund, it was only because Russia just began to follow this IMF-pushed program -- right after it led to the financial collapse. "In effect, the Kiriyenko-IMF program of July 1998 has been implemented ever since, and the results are impressive by any standard, showing that a market economy can work wonders in Russia as well," Aslund wrote. If you don't believe me, read it here:

This is absolutely hilarious, such total naked bullshit. Russia is doing much better since 1998 precisely because it discarded the "Washington Consensus" to the dustbin of history, where it rightfully belongs. It's not only Russia that trashed it -- pretty much all the rest of Eastern Europe and Latin America did too. The Argentina default of 2001 -- about four times larger than the Russian one of 1998 and evolving mainly along the same scenario -- was probably the last nail in its coffin. Good riddance.

The essence of this "Consensus" dogma (after stripping some layers of propaganda) is that the government's most important economic task must be to accommodate and please financial markets -- those "fucking bond traders," in Clinton's own words. Open all doors, sell everything to the biggest multinational, at the first sign of trouble jack up interest rates and borrow more -- at higher rates. And keep plenty of "market reformers" around to sweet-talk the IMF and bond traders.

It has some sane tidbits -- few and far between -- but overall this theory has about as much sense as if somebody, unable to pay his mortgage, was advised to splurge on a new car and a mink coat for his wife: presumably credit card companies would be impressed by such a confident and lucrative client and increase his credit limit and may be even think about reducing interest rates. A rather dubious proposition.

The "Washington Consensus" is not particularly fashionable anymore. It's like that nephew that everybody thought was a promising family genius, until he began to suffer nervous breakdowns and ended up in a mental institution -- and then his presence began quietly slipping out of family conversations altogether. Some of the "Consensus" biggest former proponents -- Jeffrey Sachs, for example -- are now sing a completely different tune, without missing a beat.

Claiming credit for the success that came to the contrary of his advice wasn't Aslund's last switch. Everything was going absolutely fine in Russia for him until Putin began his campaign against Yukos, and in particular when Khodorkovsky -- Russia's richest oligarch and a big contributor to the Carnegie office, where Aslund presides -- was arrested in November 2003. In a single day Putin's label changed from "great reformer" to "brutal dictator" and "control freak."

I have to mention that I've had a few little encounters with Anders Aslund. In the summer 2003 I wrote a comment to Johnson's Russia List concerning the book "Darkness at Dawn" by David Satter, a moralistic right-wing kook from the Hudson Institute: Among many responses I've got for this message there was a short, very positive comment from Aslund:

Dear Mr. Pankratov,

Thank you very much for your sound and level-headed rebuttal of David Satter in today's Johnson list. The kind of complete subjectivism that you illustrate is really far too common in the sphere of Russian studies, and it is always a relief to read when somebody is putting things into a sensible comparative perspective. Thank you!

Sincerely yours, Anders Aslund

Next time it was quite different. I happened to visit the "heart of darkness" -- the IMF headquarters for a seminar on Russian economy in December 2003, where Aslund was a panel speaker (recall, this was soon after Khodorkovsky's arrest). During the Q&A session I made a few slightly sarcastic comments about the "Washington Consensus" and IMF advice. This transformed Aslund into one of his fireball modes, which, incidentally, was already captured in this "Aslund Inferno" eXile cover:

There was a passionate rant -- something about those who don't understand these exalted matters and should not be allowed to speak. It was pretty funny.

In recent months Aslund was obsessed about Ukraine -- now that Russia is apparently lost to him, maybe the "orange revolutionaries" will follow his advice with proper enthusiasm.

One has to wonder if there is something deeper, subconscious, at play here. Is he trying to avenge the events of three hundred years ago when Sweden "lost" Ukraine? Incredible as it sounds, there was a time when those Swedes occupied something more than Thai beaches teeming with underage oriental flesh, and far more recently than in Viking times. Throughout most of the 17th century Sweden was the superpower of the northern Europe, rampaging through Germany, Poland and the rest of the neighborhood. It was absolutely horrible -- the pattern of atrocities in the Thirty Years War in Europe was unmatched until WWII. Poland in particular was reduced to shreds -- and spent the next three hundred years bitching and bewailing the lost old glory. It was Peter the Great of Russia who, completely unexpectedly, defeated Charles XII of Sweden in the fields near Poltava in eastern Ukraine in 1709. A few more battles followed, and that was the last anybody thought of Sweden as something which is not ABBA, disheveled flabby blondes and some aging yuppies in the Saabs.

That kind of started a trend. For all their many flaws, Russians were pretty good since then of kicking the asses of the biggest bullies on the block in a major way. Maybe we should do it more often.

Today Aslund is busy pontificating about how Ukraine is ripe for his "case of radical reforms." Right, that's exactly what Ukraine needs now -- after it finally achieved several years of solid growth -- another bundle of bad advice from Washington think-tankers to screw it up. Aslund is like a shaman from a neighboring village, invited out of momentary desperation to tend a sick, feverish patient. He declares that nothing short of massive bloodletting and a big bowl of his own recipe of goat poop and snake liver will do. A lot of bloodletting ensues. The fever subsides, but now the patient is nearly dead from weakness and getting worse. The shaman is pushed away and with a bit of care and common sense the patient is brought back. Everybody sighs with relief. Suddenly the quack is back: "Oh, he is alive and better? That's so good! Now we can really crank up that goat poop concoction!"

Please, don't let these shamans near the patients in your village...

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