Two Years of Economic Reforms in Russia. Main Results

The goal of this article is the presentation of the general results of the Russian economic reforms in the period from November 1991 to November 1992, with particular emphasis on macroeconomic policy and the failed attempts at fiscal stability. Such a profile of the article results from the personal interests of the author, the specific condition in which Russia found itself after the collapse of the USSR (the existence of a rouble zone with a series of independent central banks), as well as from the importance of macroeconomic balance (often under appreciated) in the success of the process of transformation from a planned to a market economy. Furthermore, macroeconomic policy is precisely the factor of the chosen strategy of transformation, which most differentiates Russia from the countries of the so-called Visegrad group. The article will also leave out a deeper analysis of the political situation, even though it has had a significant influence on the course of the reform process. The article will focus mainly on the second year of the Russian transformation. This is due to the possibility of presenting rather current economic results, as well as formulating more advanced conclusions. Furthermore, the initial program assumptions and the course of events in the first year of transformation (1992) have been the subject of analysis for a number of studies [Aslund and Layard, 1993; Blanchard et al., 1993; D1browski et al., 1993]. It must however be clearly emphasized that it is still too early for formulating definite evaluations of what has occurred in Russia in the years 1991-1993. This will require, as the Polish example illustrates, a somewhat longer time span. An additional complication is the low quality of statistical data dealing with Russia. This is in regards to not only the GDP statistics or inflation, which, in light of the experiences of other post-communist countries, seems obvious, but also such things as monetary and fiscal statistics. Due to this, the conclusions presented in this article should be treated as introductory, and might be corrected as new events unfold and more accurate statistical data can be attained. The content of the article has been organized as follows: Point 2 presents a concise view of the characteristics of the starting point of reform at the end of 1991. Point 3 describes the process of the liberalization of the domestic prices and market. Point 4 deals with the meanders of the liberalization policy in foreign trade. Point 5 presents a synthetic picture of the privatization policy Point 6 describes macroeconomic policy in 1992, while point 7 - the stabilization efforts of 1993. In point 8 there is a short history of the collapse of the rouble zone. Point 9 contains conclusions and an attempt to forecast future events.