ENVIRONMENTAL PROTECTION AND ECONOMIC REFORM IN RUSSIA

Abstract

This article focuses on the correlations between environmental protection and economic reform in Russia. Since the 1970s some perceived the Soviet economy to be growing faster than American or other Western economies. It is only now with the collapse of the USSR that an accurate picture of the Soviet economy is presented. The reliance on central planning and the disdain for prices as signals of scarcity have resulted in deep structural problems. The present governments in the former republics of the USSR are having a great deal of difficulty solving these problems. Of necessity environmental reform must go hand-in-hand with economic reform. The two primary thrusts of the economic reform in the former USSR are marketing and privatization. The environmental protection is tied to economic reform through environmental regulations. In Eastern Europe and elsewhere lax environmental regulations are feared to encourage polluting industries to locate in Russia and other formerly centrally planned economies. While this is a real concern lax environmental regulations may prevent Western firms who want to uphold their environmental reputations from entering these countries. In fact a lack of environmental protection legislation can significantly block economic reform particularly privatization. It is therefore in this sense that Russia urgently needs to reform its environmental regulations to protect the environment as well as not compromising economic reform.