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Toni Schönfelder
A lifetime of innovation

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Toni Schönfelder
A lifetime of innovation

WESTERN AID TO RUSSIA ``LACKING OVERALL STRATEGY`` Western aid to Russia has been hampered by a lack of an overall strategy in Russia and has achieved only mixed results, according to a new report to the US Congress. The General Accounting Office, the independent investigative service of the US Congress, said that international donors "did not have a comprehensive strategy regarding the level, timing and priorities of assistance and how assistance would be co-ordinated". The GAO identified three main obstacles to successful aid programmes: difficult conditions in Russia, including a lack of domestic consensus behind economic reforms; limitations in the design and implementation of programmes; and the size of the challenge. The report cites a US government estimate that Dollars 66bn (Pounds 45.5bn) of international assistance was directed towards Russia until September 1998, since when aid has been limited. This compared with an estimated Dollars 500bn spent by the German government on the economic transition in eastern Germany and international assistance to Poland of about Dollars 36bn in the five years to 1994. It concluded that the challenge of the Russian transition was underestimated by the west. It said a lack of support for the poor had decreased Russian support for reform, and that the transition was made harder by the concentration of power and income in the hands of a few people, a process accelerated by the 1994-95 privatisations. This had led to a re-evaluation of some policy choices, it said. It said donor programmes should in future be structured for long-term involvement in the country, since it was clear that the transition would take longer than expected. Donors might have a bigger impact if they concentrated support on areas where the Russians were open to reforms. But donors also needed to remain flexible so as to adapt to changing conditions. The report was less condemnatory than some observers had initially expected, and was reasonably well received by the International Monetary Fund and other donors. But James Leach, chairman of the Republican House banking committee, which requested the report, said the study showed the money was "worse than wasted". Financial Times, Nov. 3, 2000

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