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. Last Updated: 07/27/2016

Soros Bids Adieu, Says U.S. Needs Help

PhotoexpressGeorge Soros preparing to talk to reporters at the Izvestia media center Thursday evening.
After 15 years and $1 billion in charity, international financier and philanthropist George Soros bid an emotional farewell to Russia on Thursday, saying it was time to focus his efforts on a nation more in need of help -- America.

"I was led to come to Russia because of my concern for a prospering open society," Soros told students and journalists at the Higher School of Economics, which was created with his funding. "But now I have to concentrate on what goes on in America. The fight for an open society now has to be fought there," he said.

"This is an emotional moment for me. The foundation as you know it is coming to an end, and it is time for reflection."

Soros came to the Soviet Union in 1988 after hearing that Soviet leader Mikhail Gorbachev had asked the dissident scientist Andrei Sakharov to return to Moscow from Gorky, where he had been exiled. He said he realized "things were starting to change" and he wanted to help.

After rising to prominence as one of the world's richest currency speculators and fund managers -- and probably its most famous -- the Hungarian-born billionaire set up a program in his native country to stimulate dissent in 1984, and then moved on to Russia, where he said a different approach was needed.

"There was no need to undermine the prevailing Marxist system because it was falling apart by itself; the task was to help to build an alternative."

He said it was obvious that the government was in great need of guidance if it was prepared to "study this crazy idea of mine of creating a free market segment within the economy. I was a nobody then."

His plan was ultimately discarded, but it marked the beginning of a long involvement in the country.

As he has so often in the past, Soros criticized the West for coming to Russia's aid too late. "They did not want to spend the money so they gave the task to the IMF."

At the time, he proposed that part of the billions of dollars in loans Russia took from the International Monetary Fund go directly into the pockets of the population in order to kick start economic activity. But it wasn't, he said, and the money "disappeared."

Soros wanted to create an example of how it should be done, so he set up his first project in Russia, the International Science Foundation, and seeded it with $100 million. "We gave each qualified scientist $500, which at that time was enough to survive for a year."

The Soros foundation, formally known as the Open Society Institute, made it possible for roughly half of the country's intelligentsia to survive the rough and tumble years following perestroika, according to the dean of the Higher School of Economics, Yaroslav Kuzminov.

Today there are 15 Soros foundation programs operating in Russia, all of which will now have to learn to operate and attract investment on their own. In December, the Open Society Institute and the U.S. government-funded Eurasia Foundation decided to merge and channel $45 million into various projects in Russia through 2005.

Looking forward, Soros said he was worried about the state of the U.S. media and the administration of President George W. Bush for its handling of the situation in Iraq. "It's quite wonderful to get rid of Saddam Hussein, but you can't do it the way it was done on this occasion, because now what do you do about the Turkmenbashi of Turkmenistan, or [Zimbabwe's Robert] Mugabe?"

But what most of the people in attendance were interested in was Soros' assessment of the fate of the U.S. dollar.

"Tell us what we all want to hear," said former Deputy Prime Minister Alexander Shokhin.

Statements by Soros, known in financial circles as the man who nearly broke the Bank of England, over the past half year that the dollar is worth only a third of its value are considered to have helped precipitate the currency's downward spiral.

"Normally I say that I know exactly where the dollar is going, but I'm not at liberty to disclose it. However, this time I will tell you the truth: I don't know," he said with a chuckle.

The fall of the buck, which has lost a fifth of its value against the euro this year, is a result of manipulation by an administration interested in stimulating the economy at any cost -- including hurting Europe, he said.

"They did not anticipate the violent reaction from the market. They realize they are playing a very dangerous game, [that's why] Bush reassured the markets that a lower dollar is not official policy."

Soros still has a considerable interest in Russia, an investment that many consider philanthropic -- a blocking stake in national telephone monopoly Svyazinvest, which his Mustcom consortium paid $1.8 billion for in 1997 in what remains Russia's largest-ever privatization tender.

Soros, who has called that investment the worst he has ever made, said he was not happy with a proposal to privatize an additional 25 percent minus one share of the company. He said it would make more sense for the government to sell its entire 75 percent stake in one go. "It needs to be broken up into viable regional companies," he said.