Sergei Glazyev Calls for Long-Term Credit Perspective

Russian Academician Sergei Glazyev yesterday gave a web TV interview to the business news agency RBC, blasting the conduct of the Bank of Russia (Central Bank) throughout the current crisis and in general. He charged that the Central Bank functions as nothing but an arm of the U.S. Federal Reserve System and is strangling the Russian economy.

"Our Central Bank prints rubles only against purchases of foreign currency, and with effectively no regulatory measures with respect to currency," said Glazyev, "and we are de facto a part of the American financial system. Therefore all the instability happening there is automatically reflected here, and amplified." He added that the Central Bank monetary policy means that the real sector of the Russian economy lacks sources of long-term credit for development: "Without this we cannot get on our feet, because we always depend on flows of money from abroad."

Glazyev is famous as the young economist and minister of foreign economic relations who quit the Gaidar government in 1993, when then-President Boris Yeltsin disbanded Parliament for refusing to pass privatization and economic liberalization laws. In 2001, as head of the State Duma's Economic Policy Committee, he invited Lyndon LaRouche to keynote hearings on how national economies could survive the world financial crisis. For the past few years, he has headed the project to form the Eurasian Customs Union, as part of the Eurasian Economic Community and the prospective Eurasian Union. This year he served as an authorized representative of Vladimir Putin during the Presidential campaign; in a statement titled "Why I am supporting Putin," he outlined his hopes for the needed changes in economic policy that a re-elected President Putin might bring about.

Russia's Central Bank is in the news after being ordered by Prime Minister Dmitri Medvedev to step up currency interventions (spending dollars to buy rubles), as the ruble plunged at the end of last week. Since 2002, the Central Bank has been headed by Sergei Ignatyev and Alexei Ulyukayev, both of whom were key members of the London's "Our Men" team from the early-1990s Gaidar government and late-1990s Chubais Finance Ministry.

Glazyev also took his message to the Citizen Gordon talk show on Channel One Russia TV yesterday, and laid it out in a lengthy interview for Zavtra newspaper. He and a team of colleagues have prepared a discussion paper on reorganization of the world monetary system, geared for this month's G20 summit in Mexico. The May 24 Astana Economic Forum in Kazakstan recognized the Glazyev policy paper as the most promising such proposal presented there.

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