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Joanna Shelton

I begin this New Year with some personal reflections on America’s erstwhile Cold War adversary, Russia, whose economy is foundering from Ukraine-related sanctions and low oil prices.

Many Missoulian readers are old enough to remember diving for cover under school desks during safety drills, hands clasped above our heads to protect us from incoming Soviet missiles that fortunately never came. Somewhat younger Missoulians recall the 1991 collapse of the Soviet Union and end to the Cold War, a moment that had seemed unthinkable just a few years before. Readers who came of age after 1991 know only Russia and the many independent states that once formed a seemingly invincible Soviet bloc.

I was in the Soviet Union as part of a congressional delegation in August to September 1991, just after a failed coup against then-President Mikhail Gorbachev had thrust future President Boris Yeltsin into the limelight. In Moscow, we witnessed the barbed wire and ring of military protection around the Russian White House and met with senior government officials struggling to understand the implications of a collapsing regime.

In Estonia, one of three Baltic States involuntarily incorporated into the Soviet Union as a result of a wartime German-Soviet pact, our House Ways and Means Committee delegation met with top government leaders on the very day the transitional Soviet government recognized Estonia’s independence. I’ll never forget the emotional meetings we had with officials of a newly free country, who faced the daunting task of managing the transition from a centrally controlled socialist economy to a market-based economy.

Before our congressional delegation left Europe, I had drafted legislation normalizing US trade relations with Estonia, Latvia and Lithuania. Shortly after our return to Washington, that legislation passed the House and Senate and was signed into law by President George H.W. Bush. Within months, similar laws were enacted to normalize U.S. trade relations with Russia and other former Soviet states, part of America’s and the West’s effort to aid those countries’ transition from communism to a hoped-for democratic, free-market system.

Sadly, not all countries of the former Soviet bloc have flourished since the collapse of the old regime, despite Western efforts to incorporate them into the global economy and international institutions. Some countries – Estonia, Latvia, Lithuania, Poland, and the Czech Republic – have done remarkably well. Others – Russia, Ukraine, Belarus, Kazakhstan and other Central Asian republics – experimented to varying degrees with democratic, market-based approaches but quickly became mired in corruption with highly centralized state control of resources and industries. Vladimir Putin’s Russia of today represents the worst of that model, but not for a lack of Western efforts to help Russia build a better alternative.

In 1992, after the collapse of the Soviet Union, Russia joined the International Monetary Fund and the World Bank, opening new avenues for lending and technical advice. In 1993, I helped negotiate a U.S.-Russia commercial space-launch agreement, aimed at allowing Russia to earn money from its missiles in a legitimate way and not through their sale to so-called “rogue” states.

The leading Group of Seven industrialized economies invited Russia to join a new G-8 in 1998 to share in management of common economic and political concerns. In 2012, after 18 years of negotiation, Russia joined the World Trade Organization, gaining lower tariffs and improved market access for its exports to other WTO members.

American officials hoped that as Russia embraced these institutions and their norms, Russia gradually would find its place as a constructive member of the international community, as other countries had before it. But recent events have thrown cold water on these hopes, even as they threaten to ignite a new cold war with Russia.

Putin today exercises nearly uncontested power and is surrounded by a small cadre of loyal advisers and oligarchs who depend on him for their positions and wealth. Economic sanctions following Russia’s annexation of Crimea and incursion into Ukraine are isolating Russia’s economy from necessary finance and imports. Plummeting oil prices and a rapidly falling ruble are devastating Russia’s budget and economy. Emergency measures from Russia’s authorities have failed to stem the rout. Some economists predict the collapse of the Russian economy, if Putin fails to back away from his hardline approach.

There are many losers in Putin’s ego-driven quest for power and control. Perhaps the saddest part of this picture is the impact of Putin’s actions on Russia’s citizens, who suffer falling lifespans, falling incomes, and now face a deeply worsening economy. We don’t know what the future holds for Russia, but we can lament the path not taken.

Correction: An astute reader noticed that in last month’s column, I placed the Bakken oil fields in South, not North, Dakota. I know better. Thanks for the catch, Paul.

Joanna Shelton was Deputy Secretary General of the Organization for Economic Cooperation and Development (OECD) in Paris and held senior positions in the executive branch and Congress in Washington, D.C. She teaches at the University of Montana. Her column appears the first Sunday of each month. Shelton writes from Moiese.

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