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Western Press Review: From Reform To Stock Markets, It's The Economy

  • Don Hill



Prague, 1 April 1997 (RFE/RL) -- Economic conditions in Russia, the United States, Ukraine, Poland, and the Czech Republic attract Western commentary.

JOURNAL OF COMMERCE: Yeltsin changes ministers like other people change socks

In the U.S. newspaper today, Washington bureau chief Leo Abruzzese comments on the latest spasm of economic reform in Russia. He writes: "Boris Yeltsin changes cabinet ministers like most people change socks. In pursuit of economic restructuring, Mr. Yeltsin has been shuffling reformers, quasi-reformers and anti-reformers in and out of his government for years.

"The result has been an economy that runs poorly and often is on the brink of chaos. Now, however, Mr. Yeltsin seems to have made up his mind. This month he chose a group of radical reformers to run his government. This offers the best hope yet of an orderly economic future for Russia.

"That's good news for the United States, since a stable Russia will feel less threatened by Washington and will be more receptive to closer business and economic ties. But the changes are even more important to the Russian people, who live in a society where workers aren't paid, living standards are declining and law and order is just a rumor.

"If Russia's newly empowered reformers are to make a difference, however, three things must happen: They must be tough enough to fight through the entrenched opposition; they must have the right economic plan; and, most of all, they must have the continuing support of Mr. Yeltsin, who is still the strongest and most influential politician in Russia."

LONDON INDEPENDENT: Russia's tax deadline is a decisive moment

A drive in Russia to reverse endemic tax evasion culminates today with a tax return deadline. In an analysis, Phil Reeves writes from Moscow today: "For the nation's beleaguered treasuries (today's deadline) is a decisive moment, an opportunity to discover if the government has made any progress with a massive campaign to bring an end to an epidemic of tax dodging. The problem is one of the country's gravest economic maladies, spoiling efforts to switch to free market economics, and souring its relationship with its lenders at the International Monetary Fund."

LONDON GUARDIAN: Russian tax officials were stunned by queues of taxpayers

James Meek is Moscow offers an analysis on the same topic today. Meek says: "Confusion and chaos reigned across 11 time zones yesterday as hordes of Russians fought bureaucratic obstacles in a final attempt to throw off their reputation as a nation of tax dodgers and settle their accounts with the revenue."

He writes: "Tax officials, stunned by the queues of people volunteering to beat (today's) deadline for filing tax returns, struggled to cope with the influx." Meek writes: "The rush to tax offices was only partly due to good citizenship. The government, desperate for income to pay its debts, has announced draconian penalties for tax evasion, including up to three years in prison."

LOS ANGELES TIMES: The interest rate is the only number anyone cares about in the U.S.

In the United States, a strong two-day fall in the stock markets stands as a key issue. The paper today carries a commentary from New York by financial markets consultant Charles R. Morris, who writes: "(U.S) Federal Reserve Chairman Alan Greenspan finally stopped teasing the financial markets last week and raised interest rates. The action came after months of 'will-he, won't-he' speculation, and some up-and-down dithering in the stock and bond markets. Although the stock market tried to slit its wrists Thursday, Greenspan's action was extremely modest."

Morris comments: "What counted was the symbolism of Greenspan's action: It was of a piece with his recent jawboning of the stock market."

For the Clinton Administration, Morris writes: "The rules, in fact, are simple. You can start as many new government programs as you like -- just as long as they don't cost any money. The current level of federal debt is fine -- in fact, the bond community probably likes it because it gives them such leverage -- but you can't let it grow any more. And no matter what you do, President Clinton, keep your eye on interest rates, because that's the only number anyone really cares about."

NEW YORK TIMES: Rarely has the stock market had two bad days in a row

Staff writer Floyd Norris says in an analysis published today: "While the stock market has had any number of bad days, there have rarely been two in a row when prices fell sharply."

He writes: "Investors with a long holiday weekend after a day on which the Dow Jones industrial average fell 140 points had plenty of time to get in their buy orders. And it appears they did not. (Yesterday), the Dow plunged 157.11, with efforts to rally being crushed by renewed waves of sell orders."

Norris writes: "That could indicate that the market, in choosing among fears, is deciding that its main worry is that the economy will become so weak that it brings on a recession, or at least a slowdown in corporate profits."

WALL STREET JOURNAL EUROPE: Russia's arms industry faces stiff competition

For many years, Russia's arms industry has been a source of revenue and foreign exchange, even in hot competition with market-driven competitors in the West. In today's edition, Matthew Brzezinski analyzes a new source of competition -- market-driven competitors in the East. He writes that at an arms show in Abu Dhabi last month: "The Russians also faced stiff competition from an unlikely source, their longtime brothers in making arms, from the Ukraine (and) ex-Warsaw Pact countries such as Poland, Bulgaria and the Slovakia half of former Czechoslovakia. They're all luring potential buyers away from Russia with rock-bottom prices on Soviet-designed hardware."

INTERNATIONAL HERALD TRIBUNE: The Czechs face an uncertain economic future

In an analysis, Peter S. Green writes today about the apparent faltering of the Czech economy under economist-Prime Minister Vaclav Klaus. Green writes: "These are not easy times to be (Klaus), Central Europe's last reigning Thatcherite." Green says: "In recent months, the dream has frayed, leaving the Czech people to face an uncertain economic future and leaving Mr. Klaus increasingly vulnerable to political attack." Green continues: "His critics say he is yesterday's man, bereft of the ideas needed to lead his country through the next stage in its free-market transition."

LONDON INDEPENDENT: Poles are angry at what they see as a political move to crush the Gdansk shipyard

Julia Kaminsky writes from Gdansk today about the anger and despair of workers at the Gdansk shipyard at the closing of the birthplace of Solidarity, topped by market forces. She writes in an analysis: "They are angry at what they see as a political move to crush the yard by the government, which is composed largely of former communists, and with the bank that denied them a crucial loan to fulfill orders for five ships."

WALL STREET JOURNAL: Motorola pulled out of Ukraine because of broken promises

The top economic problem in Ukraine today appears to be the erratic quality of a government that can't or won't allow a free market to operate. Motorola, Inc., part of a triumphant consortium that won a huge contract to develop cellular phone networks, announced yesterday that it is pulling out and taking $500 million with it. Motorola cited double-dealing and broken promises by the government. Matthew Brzesinski writes in an analysis: "Motorola's complaints are echoed by other Western companies that deal with arbitrary and all-powerful bureaucrats in the former Soviet republic. The frequent troubles that investors confront help explain why Ukraine has attracted the ire of the U.S. government and multilateral lending institutions such as the World Bank."
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