EDITORIAL PAGE –Most interesting times

When you live in interesting times, you tend to become used to, well, interesting developments. Change in a changing world, as the saying goes, is the one constant you come to expect.

Giant real estate company Olympia & York Developments Ltd. gets caught with its trousers down in an economic crunch and the next thing you know the Toronto-based firm declares a loss of $2.1 billion for its latest fiscal year. The U.S. state of California, home to all activities healthy and wealthy, runs into budgetary problems and, much to your surprise, says it may have to issue IOUs to its creditors.

And Russia, the largest republic of the Commonwealth of Independent States (CIS), strikes what is described as a “bold reform program” to avoid total economic collapse and — wait for it — talks of placing its ruble on the gold standard.

Somehow, it all seems to fit. Nothing is out of place and yet everything is out of place in the “let’s see you top this” 1990s.

Certainly, Russia and the 14 other members of the former Soviet Union need all the help they can get. Bringing them into the “Western fold” by introducing their powers-that-be to open-market strategies may be the best option we have at the moment, but time will tell if it is the best route to take.

The creation recently by Russia of a single official value for the ruble, based on regular currency auctions, seems elementary enough. Where it leads to will require some keen observation.

What the Russians don’t need (although it is probably inevitable they will get one) is tax legislation so voluminously wordy that few citizens are willing or able to read it, a point made by a speaker at a recent World Gold Council forum in Toronto. Jude Wanniski of New Jersey, a consultant in political and economic affairs, in making fun of official western overtures to Russia, joked about one Washington official’s idea to have the U.S. Income Tax Act translated into Russian as one way to move the system along. No fan of the International Monetary Fund (IMF), of which Russia is now a member, Wanniski has advised the Russians to stand up to IMF officials and not be pushed around by IMF bureaucrats. He sees private investors in the world’s major financial markets who play with their own money and who are willing to stock their portfolios with ruble assets, as being Russia’s salvation.

The loquacious American says he told the Russians that having rejected a 75-year-old system in which a government in Moscow made all the decisions, why would they want to turn their country’s fate over

to foreign governments which wouldn’t be able to assess whether or not an investment is practical any better than the Russians.

As for going on the gold standard, perhaps the Russians better hurry. For more than a few years the world’s second leading gold producer after South Africa, Russia and its neighboring states that make up the CIS have fallen to third spot behind the U.S.

It is now reported that Russian gold output could fall significantly (by as much as 30%) this year and even more drastically next year. State funding apparently is drying up and keeping more than a few mines from resuming operations. As well, the republic’s independents are being singled out by government officials and being denied access to fuel or equipment for their mining operations.