September 13, 1999
LAWRENCE -- When Russian budget officials meet with city, county and state budget officers in Lawrence and Topeka and with farmers in Pratt this month, University of Kansas economist Mohamed El-Hodiri hopes they will see "that power resides with the individual citizen, not with the experts, not with the government."
El-Hodiri has spent nearly four years in Russia learning that the concepts of democracy and an entrepreneurial economy are difficult to grasp in a country where all power was centralized in the capitol. At KU, El-Hodiri directs a transition studies program for the Institute for Public Policy and Business Research. He is also a professor of economics and of Russian and East European studies.
On Sept. 14, El-Hodiri will be host to a group of 18 Russian officials arriving in Kansas for a three-day visit. A second group of 18 Russians will arrive Sept. 28. Their visits are part of a fiscal management training project for Russia's Ministry of Finance.
El-Hodiri has directed the project for two years concluding this October. The project is funded with a World Bank loan to the National Training Foundation of the Russian Federation and is contracted to Barents Group LLC, an international consulting firm based in Washington, D.C.
"In Russia, it all starts and ends in Moscow," El-Hodiri says. "Almost anywhere in the world whoever runs the capital city has the power. I want them to see that in Lawrence you don't have to go to Washington, D.C., to find out what a county sheriff's officer or a city sanitation worker is paid." In comparison to other countries, U.S. cities, counties and states run themselves independently of the federal government.
Russian fiscal managers at city, county or state levels may prepare budgets but they don't spend any of the money budgeted, El-Hodiri says, explaining the Catch-22 dilemma that keeps Russians from paying taxes. "The reason they are not paying taxes is that income is zero. Workers are not paid."
Fiscal managers in Russia also deal with two levels of authority, formal and informal. El-Hodiri says it is impossible for formal authorities to ignore the informal authority, known as the Russian Mafia.
"I like to say that I have been teaching the transition from a centrally managed economy - Russia pretended to be a communist economy - to a more entrepreneurial economy," El-Hodiri says. "It took 600 years to set up what we have in this country. England and France were setting up the law and order that formed the basis for our market economy."
El-Hodiri was also in Russia from 1994 to 1996 as an economic adviser to parliament, sponsored through the U.S. Agency for International Development, and in 1958, as a graduate student from the University of Cairo, Egypt.
His recent experiences in Russia revealed to him: "I have no idea about economics. Economists are not talking about real humans or making real decisions."
El-Hodiri says he plans to write three new texts on economics - one from an individual perspective, a second from a group perspective and a third from a moral perspective.
El-Hodiri says he is pessimistic about Russia. "Throughout history everybody has been trying to help Russians. They need to find their own way. The Greeks converted them to Christianity. The Tartars tried to covert them to Islam. We're trying to save them from communism. We need to ask what it is they want."
In 40 years, El-Hodiri says little has changed in Russia. "The people are kind, gentle and sweet and they have been exploited by everybody."
A schedule of the Russian officials' visits follows. A list of the members of the group and their Russian offices is available on request.