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Moscow Times
October 16, 2001
Facing WTO Life Sentence
By Boris Kagarlitsky

The attacks in New York and Washington have provided the impetus for a new round of rapprochement between the United States and Russia. After several years of cool relations and confrontational rhetoric, the Russian government is demonstrating a willingness to be a military and political ally. It's another matter that the Kremlin, strictly adhering to free market principals, is trying to sell its friendship for the highest price.

In a strange way, the Kremlin is trying to get from the West what the West has always dreamed of extracting from Russia. Moscow is talking about joining the WTO and about strengthening ties with NATO, even discussing the possibility of joining the alliance. In other words, Russia is seeking complete integration with Western institutions in which it will not have a great deal of influence. Effectively, Russia is placing itself on a level with Estonia and Poland, whose only strategic foreign policy goal for the past 10 years has been integration with the West.

The Kremlin and the West, of course, somewhat differ in their understanding of what is meant by integration. However, in this case the devil is not at all in the detail. The Russian elite's goals largely coincide with those of the Western elite. The degree to which these goals coincide with the needs of society at large is another matter.

The NATO issue is pretty simple. Full membership is rather unlikely for the simple reason that it requires huge expenditures. Either all military technical standards would have to be revised, the army rearmed and reorganized, or NATO would have to be reorganized -- which is unlikely to happen. Thus, in the best case scenario there could be some kind of associate membership. This would mean that Russia would be drawn into the policies of the alliance without having full-fledged decision-making powers. In exchange, Russian arms manufacturers hope to gain access to certain markets, such as rearming our former Warsaw Pact allies in NATO.

Membership in the WTO, on the other hand, has of late been one of the top priorities of Russia's oligarchs. In the early 1990s, Russia's newly formed business class feared the presence of major Western investors in Russia. Western companies had much greater resources and experience and could have bought up all of the country's choice assets in two ticks. Now that the divvying-up of property has basically been completed, the oligarchs are in a strong position. After three years of economic growth and high oil prices, they have accumulated sufficient funds for expansion beyond Russia's borders. To achieve this, they are willing to remove many restrictions protecting the domestic market.

Russia's WTO membership will undoubtedly work in favor of Russia's transnational corporations, with negative implications for small and medium-sized businesses. This has been the experience countries from Africa and Latin America to South Korea.

Russia's accession to international organizations fits well with the new wave of neo-liberal reforms proposed in German Gref's economic program. The government, which announced that it was pursuing this course a year ago, has still not bitten the bullet of program implementation, possibly fearing it would destabilize the social situation. But it's another matter if sacrifices are made not for nothing, but in the name of "integration with Western economic organizations," with the promise that at the end of it our standard of living will be no worse than that of Germany or France.

The problem with WTO accession is not just that some will emerge as winners, while others -- probably the majority -- will emerge as losers. Any decision carries costs with it. What's worse is that a large section of society and even a considerable portion of the business community has not only been excluded from the decision-making process, but also from so much as debate of the issues. The majority of Russian citizens did not really have a clue what the International Monetary Fund was until it started to dictate the rules by which we live. Similarly, today they don't really understand what the WTO is and what the implications of membership are.

The Soviet system at least in theory allowed for the revision of decisions taken. The system of international institutions, created by the democratic West, is founded on irreversibility. It is almost impossible to revise or reverse decisions once they are taken. WTO membership is comparable to a life sentence without the right to have the sentence reviewed. The only difference is that we are to sentence ourselves voluntarily.

Boris Kagarlitsky is a Moscow-based sociologist.

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