Geopolitics was behind rejection of advice on Russia

From Prof Jeffrey Sachs.

Sir, Dame Margaret Anstee's letter (August 27) suggests that I opposed social support policies in Russia's economic reforms because of a belief in the healing powers of pure market forces. This is mistaken. During the crisis years I wrote and spoke frequently about the need to cushion the Russian economic transformation through social support partly financed by the west. I appealed to the western powers and the International Monetary Fund to deploy the same supportive financial steps that I had recommended, and that had been used successfully, in Poland: debt relief, a currency stabilisation fund and financing to support outlays for health, pensions and other social sectors.

The Group of Seven rejected my advice vis a vis Russia, not out of economic ideology but because of geopolitics. The US government bolstered Poland as a future member of the western security alliance. It did not support a similar cushion for Russia, which the US government continued to see as a rival or adversary. Poland was, therefore, treated well and Russia treated harshly by the G7 and IMF.

In the days leading up to the August 1991 coup attempt, Mikhail Gorbachev's urgent appeals for western aid to cushion the crisis (the so-called "grand bargain") were rebuffed by the Bush White House. The harsh financial attitude continued into the post-Soviet era.

Jeffrey Sachs,

Director, Earth Institute,

Columbia University,

New York, NY, US