The Russians love their dictators, I’ve heard Americans say. I suppose one could argue the point. But Westerners who think Russians are hostile to a free economy are just plain wrong. The 25% of the population that voted for the nationalists in the last parliamentary election were not voting against capitalism; they were protesting the hardship caused by “shock therapy,” the ill-conceived economic policy that resulted in skyrocketing inflation, high unemployment, a fuel shortage, and a decrease in food consumption, all of which have left 90% of Russians living below the poverty level. Still, if the 1991 coup plotters—the Communist party, the KGB, and the army—couldn’t squelch the beginnings of democracy and a free economy, neither can the lack of bread.
Don’t Give up On Russia
In the midst of hardship, the climate for foreign investment in Russia has never been better. But Westerners should learn from the mistakes of the first wave of joint ventures.
A version of this article appeared in the March–April 1994 issue of Harvard Business Review.
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