Does the West Underestimate Union Threat?

During the days when the Russian and Belarussian presidents were signing agreements on integration last week and the head of the International Monetary Fund, Michel Camdessus, was in Moscow, I was in Holland, with a small group of Russian journalists.


Several hours before my departure, I spoke with Camdessus in his luxury suite in the Metropol Hotel and tried to understand through the diplomatic responses that this high-level, experienced international official gave me, what the current thinking about Russia is. What do those who are tied to Russia not only by curiosity, but by the need to make decisions that amount to millions of dollars, think about what is happening?


When I asked Camdessus whether the IMF is concerned about the consequences of a possible unification of Russia and Belarus, he did not give me a straight answer. He seemed far more worried about the real crisis in tax collection in Russia than the hypothetical entry of a new member in the Fund -- a Russian-Belarussian Confederation instead of the former two members, Russia and Belarus.


In my view, international and national officials underestimate the potential for trouble of the rash unification of Russia and Belarus along the lines laid out by Belarussian President Alexander Lukashenko. I believe that the union of the two countries on Lukashenko's conditions or under the rule of Lukashenko is conceivably more dangerous than a victory of a leftist candidate at future presidential elections in Russia.


There is even less fuss about the possible union among Western entrepreneurs who do business in Russia than among politicians. I was convinced of this in Holland, where the Dutch Embassy in Moscow and Foreign Ministry had invited my colleagues and me for the 300th anniversary of the first embassy of Peter the Great to the Netherlands.


Indeed, the Dutch seemed far more enthusiastic about this date than the Russians. Leo Brandel, from the Dutch company Agrisulting, reminded us that Peter I studied not only shipbuilding in Holland but agriculture. The tsar had created something like an agricultural company, Amsterdam, not far from Moscow.


Three hundred years later, in 1992, the "Dutch countryside" in the Moscow oblast was relaunched. When the government of the Netherlands decided to extend 30 million guilders to Russia in agricultural aid, they looked for specific companies in which to invest the money.


Brandel, who was already acquainted with the Moscow oblast thanks to his collaboration with the European Bank for Reconstruction and Development, proposed starting a project in Kolomna. The Dutch Agriculture Ministry supported the idea and the Kolomna Assistance Program has brought fairly good results in its four years of existence.


True, as is often the case with international aid, problems have arisen with the Russian tax authorities. The Dutch do not understand how the government can tax income that it reinvested in the development of production. The Russian tax authorities view the Dutch money quite differently and seem not at all averse to taxing it.


But the Dutch have not lost their optimism and look at many things in Russia more calmly than we do. Perhaps this is because they are risking only money after all, and we are risking our country.





Mikhail Berger is economics editor for Izvestia.