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. Last Updated: 07/27/2016

The Economy: A New Adviser From the West

It seems that Prime Minister Viktor Chernomyrdin has his own, secret "Jeffrey Sachs." Sachs himself, of course, a Harvard University professor, very publicly relinquished his status as an adviser to the Russian government last January. Sachs' colleague from Stockholm, Anders Aslund, a well-known specialist on the Russian economy, did the same thing. Chernomyrdin's reaction to this was quite cool; however, it seems that the prime minister is not equally indifferent to all foreigners.


Shortly before the arrival of International Monetary Fund chief Michel Camdessus in Moscow, stories appeared, first over Reuters, then in the Russian newspaper Segodnya, about a certain Peter Castenfelt, a Swedish businessman. Castenfelt had been received in Washington by Camdessus as representing Russia's interests.


The head of the Russian mission to the IMF, Konstantin Kagalovsky, had no idea that anyone was conducting negotiations on the relationship between Russia and the IMF -- the meeting between Camdessus and Castenfelt was shrouded in secrecy.


But Castenfelt is no mere self-promoter. He is said to have a letter on his status signed by First Deputy Prime Minister Oleg Soskovets. He must have some kind of document, otherwise, how could he have gone to the head of the IMF? Some Western journalists, after the meeting between Camdessus and Castenfelt, began to hypothesize that the Russian government was looking for alternative channels for IMF negotiations.


I would not dismiss this version, in spite of its seeming absurdity. It is entirely possible that the prime minister offered no objections when a well-meaning Western businessman offered his services as an unofficial mediator. Castenfelt might have promised Chernomyrdin that he would use his personal contacts to convince Camdessus that Chernomyrdin was committed to reforms.


Advisers to the prime minister in Russia are appointed by a special order of the government. It is known for certain that there has been no such order given about Castenfelt. Even so, many of Castenfelt's travels have brought him into direct contact with the leadership of the Russian government.


From this it can be assumed that Chernomyrdin is not against all foreign advisers to his government -- just those who are oriented toward Yegor Gaidar and Boris Fyodorov, as were Sachs and Aslund.


In principle, there is nothing wrong with the appearance of an unofficial Western assistant in Chernomyrdin's circle. But who is this person, who heads an unknown firm with the strange name "Archipelago Enterprises"?


Castenfelt was one of my casual contacts at the World Economic Forum in Davos in January of this year. At that time I had no idea that he had any special role in the Russian leadership, but we had a very nice conversation about reforms and reformers in Russia. The only thing that bothered me was the total absence of any information about Castenfelt in the conference booklet that gives general data on all participants.


Of course, the prime minister has a right to have any advisers he wants. But Sachs and Aslund were well-known economists representing a definite direction in economics. They were fairly predictable in their advice. But what can we expect from a businessman-adviser, when we know nothing about his business?