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

2626 Words Aug 28th, 2008 11 Pages
Four major problems:
Decision Making
Government and Business
Legal System Trust
Throughout the case, one theme that seems to reappear is the issue of trust. Without trust in the federal government, people take it upon themselves to do what is necessary to survivie. They no longer trust the government to provide a safe environment for them to live. This issue might starts small but gradually affect areas such as the business transaction, the monetary system, the tax system, and ultimately the sovereignty of the government.
Distrust in the government led to an increase in bartering. This leads to two major problems - the inability of firms to pay wages and the inability of the government to collect taxes. Additionally,
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The catch was that if the government chooses not to repay back this loan at the end of one year, then the government would forfeit control of these assets.
In order to ensure that obtain these shares for as low a price as possible, the banks made an agreement that each would have their own share of the pie and that outside bids were magically void. The second part of their plan was to ensure that the government did not repay their loans, thus transferring ownership of the strategic resources. Yeltsin was an underdog for the upcoming elections, and the oligarchs felt that a new president might now honor the pledge auctions. The Oligarchs assembled formed a coalition with the goal to re-elect Yeltsin back to the office. In the end, they were successful and after the election, Yeltsin announced that the government would not repay the loans.
The problem in the relationship between the Russian government and its dealings with the Oligarchs deals with business ethics. Where should the line be drawn between doing business ethically and doing business unethically. The problem here is that the oligarchs are looking out for their best interest, but that interest may not be best for Russia or the public.
The paradox of government and business is that if government interferes too much, then it will slow down innovation and reduce efficiency, but if the government remains passive, then there is no one to protect the publics’ interest,
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