According to various reports, the Russian government is reconsidering the neoliberal policy that has served Russia so badly since the collapse of the Soviet Union. If Russia had adopted an intelligent economic policy, Russia’s economy would be far ahead of where it stands today. It would have avoided most of the capital flight to the West by relying on self-finance.
Washington, however, took advantage of a naive, gullible and demoralized Russian government which looked to Washington for guidance in the post-Soviet era. Russians thought that the rivalry between the two countries had ended with the Soviet collapse and trusted American advice to modernize the Russian economy with best-practice Western ideas. Instead, Washington abused this trust to saddle Russia with an economic policy designed to carve up Russian economic assets and transfer ownership into foreign hands. By tricking Russia into accepting foreign capital and exposing the ruble to currency speculation, Washington made sure that the US could destabalize Russia with capital outflows and assaults on the ruble’s exchange value. Only a government unfamiliar with the neoconservative aim of US world hegemony would have exposed its economic system to such foreign manipulation.
The sanctions that Washington imposed – and forced Europe to impose – on Russia show how neoliberal economics works against Russia. The policy’s call for high interest rates and austerity sank the Russian economy – needlessly. The ruble was knocked down by capital outflows, resulting in the neoliberal central bank squandering Russia’s foreign reserves in an effort to support the ruble but actually supported capital flight.