Russia: the End of a Time of Troubles? Essay Example

trust. Without such a central government, regional and local authorities would continue undermining its power, rendering it ineffective.

Benefits: A strong central government provides guidance for unifying national goals. It has the authority to enforce alignment of local authorities' goals with those of the federal government, resolving inconsistencies between federal and local laws. Additionally, the strong government can implement necessary changes and regain the ability to collect taxes, ensuring a steady stream of funds.

While a strong government is capable of utilizing monetary policy and overseeing judges and local authorities to combat corruption, there are concerns. Granting extensive power to the federal government carries the risk of regressing into a communist or dictatorial regime. The new administration might exert its authority over individuals who are perceived as deviating from its objectives, which could lead to an abuse of power.

Instead of relying on ineffective western advisors who have failed before, it might be more beneficial to let Russia chart its own course during the transition period. Despite potentially taking more time, there is a proverb that "slow and steady wins the race." By permitting Russia to make its own errors, it will ultimately gain valuable insights into the most efficient way of operating.

Following centuries of development, the United States emerged as the dominant global economy. However, concerns arise that this progress may not be successful and could result in Russia breaking up into smaller independent states before resolving its issues.

The problematic relationship between business and government in Russia is demonstrated by the rise of the "Oligarchs." In 1995, Russia faced significant budgetary challenges due to increasing expenses surpassing revenues. To address this, President Yeltsin and the government made

a deal with influential private banks for selling shares of valuable government-owned mineral and oil assets through a one-year auction.

Under the terms of this agreement, if the loan was not repaid within one year, the government would lose control over these assets. The banks collaborated to ensure they acquired these shares at minimal cost while also preventing consideration of outside bids.

The second part of the plan aimed to transfer ownership of strategic resources by preventing the government from repaying their loans. The oligarchs were concerned that a new president might not follow through with the promised auctions, given Yeltsin's underdog status in the upcoming elections. To address this concern, they formed a coalition to support Yeltsin's re-election. Ultimately, their efforts were successful as Yeltsin declared after the election that loan repayment would not be pursued by the government. The relationship between Russia's government and oligarchs revolves around business ethics.

The ethical boundary in business practices needs to be determined, given the prioritization of self-interest by oligarchs. This misalignment with Russia's and the public's interests presents a dilemma for both government and businesses. Excessive government intervention can hinder innovation and efficiency, while a passive government neglects protecting public interests and regulating the economy for equality and free trade. To address this, new regulations and laws should be implemented alongside amnesty for past occurrences. The government is responsible for establishing and enforcing these laws to prevent excessive power acquisition by businesses. Problems arise when businesses control the government; hence it becomes crucial to strictly enforce new laws that curb political influence exerted by oligarchs. Additionally, considering pardoning past events should also be contemplated by the government.

Fostering a forward-looking

approach is crucial. Pros include establishing new business connections and forging a positive foundation to foster cooperation and a competitive atmosphere. On the downside, some individuals may perceive unfairness due to the Oligarchs' illegitimate acquisition of power. The government relinquished valuable resources to the Oligarchs for minimal gain, some of which are essential for the government's operation. As an alternative, it would be wise to uphold existing laws and enforce punishment for those who violated them.

The Oligarchs engaged in theft and numerous illegal activities in order to obtain power. As per the original intention, the government should now redistribute this power. There are several benefits to this approach: firstly, it ensures that monopolies formed by the Oligarchs are fairly distributed, allowing for competition and improved operational efficiency. Additionally, by doing so, the government will regain possession of the crucial assets that the Oligarchs obtained unlawfully.

The intense competition with influential individuals in Russia will have a negative impact on the economy. Smaller companies are worried that the government plans to punish those who have engaged in illegal activities in the past. Illegal acts, including tax evasion, were prevalent during the privatization process, leading to a difficult and uncooperative relationship. Before 1991, there was no Russian Federation, but Yeltsin took control of the parliament and worked towards reforming the legal system and transitioning Russia from socialism to capitalism. Yeltsin's goal was to completely replace the old Soviet economic and legal system with a new one. He vehemently opposed setting a precedent for regaining central authority within the Soviet Union and encouraged regional leaders in Russia to assert their sovereignty as much as possible.

The issue arose when around

25 to 35 percent of regional legislation no longer adhered to federal laws, resulting in a problem. Additionally, taxation caused concerns in Russia as their tax laws imposed taxes on gross revenues rather than profits. This led businesses to face various taxes that in some instances amounted to 110 percent of their revenue. Despite efforts from western advisors to establish a solid legal framework for the economy, the Russian court system remained ineffective.

Russia had various obstacles in developing its legal system, including the absence of an independent judiciary and a dearth of competent judges who could accurately interpret laws within a Russian context. Furthermore, the government's financial constraints prevented the courts from effectively enforcing rulings and maintaining proper functioning. As a result of centuries of corruption and arbitrary practices, Russian society had lost faith in the law and the legal system. These issues significantly impeded the progress of the Russian Federation, making it impossible for Yeltsin's aspirations to be realized unless they were resolved.

The solution to the problem is to completely dismantle the old system and construct a new one that emphasizes a decentralized federal authority while maintaining a balance between federal and regional power. The new government should adopt tax laws similar to those of European countries, with a focus on generating profit rather than revenue. It is also essential to establish an independent judiciary system and provide training for judges to interpret these new laws within a Russian context. The advantages of implementing these changes are that the effectiveness of the new tax laws has already been proven in developed countries and with minor adjustments, they should work well in Russia. In the

long run, this approach will benefit Russia and accelerate the process of reform, ultimately saving both time and money.

Cons - There is opposition to western advisors and their ideas, raising uncertainties about the success of the new system. Additionally, Russians are accustomed to the old system, making it difficult for them to adopt the new one along with its potential side effects. Even with proper implementation, political and economic pressure could lead to system failure.
Alternative - Enhance the current system and gradually implement changes by centralizing authority between the federal and regional levels. Tax businesses based on gross margins instead of revenue, as it better reflects business success. Establish trust between the legal system and society.
Pros - The public already understands the laws and can gradually assimilate the improved system.

The text discusses how a better understanding of acceptable behaviors can be achieved, while also acknowledging that progress may be slower and society may resist change without proper guidance. This Soviet economic system, which relied on resource mobilization, began declining in the 1960s and never recovered. The government recognized the need for change to save the USSR, but Gorbachev's attempt in 1985 was unsuccessful. In 1991, Yeltsin tried to destroy the old system and implement a new one, believing that he could transform Russia in just a year. Thus, he initiated an ambitious plan.

Yeltsin delegated the reform process to a group of young professional economists, who, despite their knowledge, were seen as inexperienced. However, Yeltsin overlooked the impact of Russia's political climate on the progress made by these young professionals, which caused further problems for the future. The group encountered two main issues: implementing

a strict monetary policy to control inflation and managing privatization. Both processes were conducted too quickly for the average Russian citizen to fully comprehend. Moreover, there were flaws in the system and opposition that should have been addressed before starting the actual implementation. Yeltsin's dealings with the Oligarch worsened the situation by granting them significant political power over the president and causing the privatization process to deviate from its original objective.

Yeltsin failed to address important issues such as demonetization, tax reform, and federal authority. Instead, his focus should have been on creating a comprehensive strategy for tackling each problem separately. To achieve success for Russia, the Soviet government should learn from the United States and establish committees.

The committees evaluate the pros and cons of each option before deciding. Although this approach may take time, it guarantees that all relevant information is considered beforehand. Making decisions solely based on immediate success can lead to the depletion of crucial resources in the future. Yeltsin's choice to transfer Russia's valuable assets to the Oligarchs exemplifies this. While it provided instant funds for the government, it didn't ultimately address the underlying issue. Keeping those assets would have yielded greater benefits for the government in the long term.

Pros - Having long-term goals can effectively guide the government towards a better future. Moreover, by concentrating its resources on a few issues rather than trying to solve all problems, the government can focus more and gain a deeper understanding of each problem.

Cons - Short-term goals generate momentum, which is crucial for Russia to make initial progress. Addressing all problems may also reduce their severity until they become manageable.

Alternative - The government should

prioritize resolving as many problems as it can in the short term. It should strive to fix as many of these issues as soon as possible.

Addressing problems publicly, even if they cannot be fully resolved, helps raise awareness. This approach has pros and cons: Pros include the government's ability to tackle more issues in a shorter period of time and informing the public about its efforts to solve all problems. However, a drawback is that while the problems may be acknowledged, the underlying causes might still remain hidden.

Without a deeper understanding of the true problem, any decision made can still be incorrect. The conclusion is that the new government under Putin must not only reform Russia into a capitalist country but also address the issues caused during Yeltsin's tenure. The new government should create a long-term plan to resolve these problems gradually. They must:

1. Establish a strong and reliable central government that people can trust to accomplish tasks. This government needs to assert its authority to develop an effective monetary policy and introduce a new tax system.
2. Revise tax laws to reflect pertinent information and foster collaboration between local and federal authorities.

Currently, the tax system has a focus on generating revenue, which can be a misleading measure of success, and the costs can vary across different industries. The new system should prioritize the gross margin. Additionally, there is a need for clear differentiation between local and federal taxes within the tax systems, and any duplications or similarities in the previous legal system should be eliminated to avoid confusion. A

long-term strategy should be developed, and the government should establish a decision-making committee to debate the relevant points instead of relying solely on one person's judgment. This will ensure a checks and balance system, essential to prevent personal agendas from interfering with national objectives.

4) The final step is to forgive previous offenses and establish a fresh, positive connection with business. By doing so, Russia can shift its focus towards the future rather than attempting to rectify past wrongdoings. Concentrating on historical mistakes will only worsen the relationship and cultivate mistrust.