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■ Russia is not like any other country in the world. The 

 development challenge is different from developing and middle 

 income countries and those of Central and Eastern Europe. These 

 differences are profound and rooted in the history of the Russian 

 people. Vfhile its economy is now in a shambles and dysfunctional, 

 Russia has high educational levels and immense wealth. Unlike 

 Eastern Europe, it is not trying to recapture its pre-communist 

 past, but is overcoming a legacy of 75 years of communist 

 totalitarianism and 1,000 years of dictatorship. 



■ Russia lacks the fundamental underpinning of a democracy and 

 free market generally referred to as civic society. This 

 Jeffersonian idea suggests that democratic societies require an 

 independent or associative sector as an intermediary between 

 individuals and their government and businesses. It is the basis 

 of the social safety net where people look to doing things 

 themselves rather than rely on government for solutions. Civic 

 society is the breeding place for social movements, such as for the 

 environment and women's equality, which can totally change cultures 

 and politics. Within this context, self-help institutions 

 (including a cooperative movement by smallholder family farmers) 

 are a critical mechanism to organize many individuals to tackle 

 social and economic problems including the natural inclination of 

 capitalism to form monopolies and economic elites. 



■ Russia is different because its organizations appear to 

 function like those in the West, but do not. Basically, communist 

 institutions carry names such as banks or parliaments, and concepts 

 such as money or investment, yet they are based on entirely 

 different premises. The first challenge of anyone working in 

 Russia is to try to understand how things operate there and avoid 

 assuming that the underlying assumptions are the same. Our goal 

 must be to offer different models and ideas and let them choose 

 those that are appropriate and can be adapted to their situation. 



Now, I would like to make five recommendations: 



1. We should focus our U.S. assistance efforts in agriculture for 

 a number of reasons: The food sector can respond to free market 

 changes more rapidly than industries, if incentives are put in 

 place. Private farming, small-scale processing, private shops and 

 food marketing are among the few occupations that individuals can 

 undertake, compared to more capital intensive activities in other 

 sectors which will require years to restructure, privatize and 

 modernize. Food availability and the cost of food are politically 

 sensitive and improvements would be a major departure from the 

 communist past and present early evidence that reforms are 

 succeeding. Finally, Russia represents a major market for U.S. 

 feed and other food commodities for the foreseeable future. We can 

 build business partners for mutual economic benefit. 



