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Date: Mon, 23 Nov 92 12:15:13 EST
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11/23/92


TITLE Garner Criticism, Praise Karen M. Lundegaard In Washington
Jeffrey Sachs describes the root of Russia's economic problems in
simple terms.


"Stalin loved steel mills. He had total disrespect for piz-
zerias," Sachs said recently.  He puts Russia's solution in sim-
ple terms, too: "Stop the steel production. Give us some piz-
zerias." But that is the only simple thing about Sachs' ideas.
As Boris Yeltsin's chief foreign economic adviser and the archi-
tect of Poland's economic reforms in 1989, Sachs advocated a
swift and bold restructuring of industry along free-market lines,
the slashing of budget deficits and the privatization of
government-owned businesses.  At the same time, he has called for
massive debt forgiveness for those heavily indebted nations,
similar to Jeffrey Sachs

plans used successfully in Latin America.  Though Sachs'
prescription for "shock therapy" has stirred controversy in
international circles, he remains one of the most respected Amer-
ican economists and sought-after foreign advisers.  "He has de-
voted his life and his energy to finding a solution to an impos-
sible problem: moving from centralized planning to a market econ-
omy," said Gabriel Schoenfeld, senior fellow in Russian studies
at the Center for Strategic and International Studies. "Russians
call him the Karl Marx of the 20th Century." That may be ap-
propriate. Sachs' economic interests are grounded in childhood
trips to the former Soviet Union. He remembers a visit to Eastern
Europe when he was 16 years old as a turning point toward com-
parative economics.  When he was leaving East Berlin, the only
place he could find to spend his money was a bookstore.

"But the only English-language books," he said in a recent inter-
view, "were things like 'Historical and Dialectical Materialism'
and 'Marxist Economic Philosophy' and so forth. So I loaded up my
backpack with these


Sachs' Reforms Win Praise And Criticism

things and read them and was obviously quite interested." "I came
back from the trip that summer and started delving into economics
more deeply, reading Schumacher, Galbraith, Keynes, as much as I
could get my hands on. And I've been doing it ever since," he
said.  A driving motivation for Sachs is trying to understand how
different societies solve basic economic problems. He has fueled
that passion by advising top government officials in Bolivia,
Peru, Slovenia, and several other Latin American and Eastern Eu-
ropean countries.

Impressive Accomplishments


Sachs' achievements strike some as remarkable, considering his
age: 38.

By the age of 29, he was a full professor at Harvard University
where he received his undergraduate and doctoral degrees. In the
past two years alone, he has co-authored three books.  He has
been on leave of absence from Harvard for three years but plans
to resume teaching in February and relegate his advisory work for
Yeltsin to weekends.  In a long election year filled with cries
of "Put America First," Sachs has been outspoken over his frus-
tration at the West's response to Russian reforms. He called U.S.
policy on Soviet reforms "disgraceful," and "almost shocking
neglect." In an op-ed article published in the Washington Post in
September, he criticized the International Monetary Fund for "su-
perficiality" in its concern for reform, claiming the organiza-
tion is "barely present in Russia." One of the main complaints of
Sachs' critics is that he does not really care for the people he
purports to help.  High unemployment rates are often the result
of his economic "shock therapy." As government guarantees of em-
ployment end, the economies adjust to a new reality of uncon-
trolled prices and private production.

But Sachs is adamant that his ideas will, in the long term, help
those living in the nations of the former East Bloc, not hurt
them.  "I spent an enormous amount of my time, of my life, of my
waking hours, trying to figure out how to help ease the burdens
on these people," Sachs said. "I have done as much as any person
in trying to help get assistance, in trying to help cushion the
hardships that they face."

"I've been an advocate for a decade on debt relief . . . (after)
authoritarian or totalitarian governments racked up enormous
debts and thereby caused enormous hardships to people trying to
emerge in democratic life," he added. "I've raised funds for
currency stabilization, social welfare spending, emergency provi-
sion of help." He added that many who criticize his ideas "don't
understand the nature of economic disease, and they don't under-
stand the nature of economic reform. I find it something like a
casual bystander looking into an emergency room watching a sur-
geon making a cut and screaming, 'Look how he is killing the per-
son.' "


Critics Of 'Polish Prescription'

Sachs has come under fire for his insistence on applying the
"Polish prescription" to Russia. Critics say differences between
the two countries - their size and population, Russia's political
instability and greater dependence on the military- industrial
sector, among others - dictate a different approach.  "Russia is
not Poland," said a Russian journalist visiting the U.S. who re-
quested anonymity. "It is obvious that the reforms are not work-
ing. There is great inflation. Exchange rates are unbelievable.
People are very unhappy - with everything." Despite the criticism
and praise, for Sachs, helping former East Bloc countries is a
sweet reward after a long hatred of communism.  "People in com-
munist countries lived miserably, and now they suffer a terrible
legacy," he said. "Every area of performance was dreadful - cul-
tural repression, scientific repression, material deprivation,
deprivation of human rights. This was a terrible system." In ad-
dition to his childhood visits, Sachs knew the situation first-
hand from numerous trips with his wife, Sonia, to her native
Czechoslovakia in the 1970s and 1980s.  He spoke of sneaking into
people's apartments to converse with friends -closing the win-
dows, closing the shutters and still being fearful that a neigh-
bor would report the meeting. And he faced state police who
pressed him for the details of where he had been and with whom he
had stayed.  One of the fruits of his labors is watching his two
children, Lisa, 10, and Adam, 7, grow up in a different world
than the one dominated by the Cold War that he encountered in his
youth.

The children have visited more than 20 countries, with a "feeling
of awe and respect for the breadth and diversity of the world,
but also an awe over the fact of how interconnected it is."

Worries Remain


All is not rosy. Sachs warns that, despite many of the positive
changes that have taken place, he worries about the future.  "I
fear that if reforms in Russia unfold, we will not just enter a
short period in which new reforms will come up, but could face a
situation of growing instability and even possibly ultimately
chaos and internal violence," he said.  But with greater Western
involvement, Sachs feels, "It could still be headed off. It could
still be solved."

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