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Return on Investment

Russia Beyond the Headlines

Conventional wisdom – and Republican presidential candidate Ron Paul – say that providing financial aid to foreign countries is a shameful waste of U.S. taxpayers dollars. However, a recent story in the New York Times suggests that this common believe, believe it or not, American politicians could actually be wrong on this point.

According to the story, in 1989, Congress approved legislation allowing the investment of U.S. federal funds in the former communist countries of Eastern Europe and Central Asia – to help them develop market economies. Far from being wasted, these investments turned to be quite successful, having generated a lofty $2.3 billion in returns. Part of the proceeds was returned to the Treasury, but some of the money has been stuck in Congress for years. Now, the Obama Administration wants to redirect a $50 million generated by the U.S.-Russia Investment Fund into a “civil society fund” that would underwrite democracy promotion in Russia.

The timing of the announcement is hardly coincidental. The Obama Administration has finally gotten serious about repealing the Jackson-Vanik amendment, the notorious relic of the Cold War that still deprives Russia of the permanent normal trade relations status as a punishment for restricting Jewish emigration in the 1970s. The effort has been met with a stiff resistance by the Republicans on Capitol Hill. While agreeing with the White House that the amendment should go – as keeping it on the books now, that Russia is joining the WTO, will hurt interests of American companies – Republicans argue that something else should be put in place to hold Moscow accountable for what they habitually call “human-right abuses.”