In less than four years, Russia has undergone an astonishing sea change. Macroeconomic stabilization is but the start. Underlying the economy's rapid recovery is the emergence of a common set of fundamental political values. No one questions whether private property should be the basis of economic life. Tight monetary and fiscal policies are now de rigueur (until quite recently printing money to finance the budget deficit was widely considered acceptable). All major political forces (even of the left) support reducing taxes.
In short, the ideological vestiges of communist economics have been swept away. The achievement of broad political consensus means that institutional change can now become more purpose-oriented and consistent. Indeed, the consolidation of political parties has given Russia's government a stable parliamentary majority for the first time since the postcommunist transition began.
But, unlike economic stabilization, near-universal rules do not apply to institutional reform. While there has been noticeable progress on the legal framework of the strategic plan that the government unveiled in 2000 (the so-called "Gref Program," named after Economics Minister German Greff), a breakthrough has yet to be achieved. Of more than one hundred reforms planned for 2000-2001, little more than a dozen were fully implemented.
Many in Russia now seek to accelerate the pace of reform by pursuing closer ties with the EU. Just as the global strategic realignment that has marked the war against terrorism led to quasi-membership for Russia in NATO, the attraction is mutual. The EU's Common Strategy on Russia referred in 1999 to "the future establishment of an EU-RF free-trade area ." By 2001, the EU declared an even more ambitious goal: a Common European Economic Area based on gradual approximation of EU legislation and standards. Romano Prodi's declaration last week that Russia was now a fully-fledged "market economy" is a step toward this cooperative notion.