My Travels in the Former Soviet Union

FSU: Building Market Economy Monetary Systems–My Travels in the Former Soviet Union

By Warren L Coats (2020)  Kindle and paperback versions available at: https://www.amazon.com/FSU-Building-Economy-Monetary-Systems-ebook/dp/B08K3WNQK2/ref=sr_1_2?dchild=1&keywords=warren+Coats&qid=1601491694&s=books&sr=1-2

By the end of 1991 the pressures for the Union of Soviet Socialist Republics (USSR) to break up into 15 separate countries climaxed. On December 25, Mikhail Gorbachev resigned as the President of the USSR and the next day the Supreme Soviet voted to end its existence. The demise of the Soviet Union was precipitated by the failure of its system of central planning to deliver an acceptable standard of living for its unfortunate citizens. Thus, Russian and the other now Formerly Soviet Republics wanted to transition into market economies as quickly as possible. They wanted to become what they called “normal” countries and to join the rest of the world.

Of direct relevance to me, my employer, the International Monetary Fund (IMF), suddenly faced the prospect of fifteen new members, each of which wished to convert its branch of Gosbank, the central bank for the USSR, into its own independent central bank overseeing the monetary and financial systems of market economies.

Four months after the USSR was formally dissolved, I was on a charter flight from Geneva, Switzerland, to Alma Ata, Kazakhstan, with eleven other economists to provide technical assistance to the National Bank of Kazakhstan. We knew almost nothing about the people we were to meet, the living conditions we would find, the social customs that we might be expected to understand, and the condition of the former branch of the Gosbank of the USSR that we were to help become a normal central bank. It was a challenging but very exciting undertaking.

In this book, I attempt to share some of the more interesting social, primarily non-economic, encounters of my work in Kazakhstan, Kyrgyzstan and Moldova from 1992 to 1995.

Previous Books

One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina by Warren Coats (2007)   Hard cover: One Currency for Bosnia

Afghanistan: Rebuilding the Central Bank after 9/11 — My Travels to Kabul By Warren Coats (2020)  Kindle and paperback versions available at:  “Afghanistan-Rebuilding the Central Bank after 9/11”

Zimbabwe: Challenges and Policy Options after Hyperinflation by Warren L. Coats (Author), Geneviève Verdier (Author)  Format: Kindle Edition Zimbabwe-Challenges and Policy Options after Hyperinflation-ebook

Money and Monetary Policy in Less Developed Countries: A Survey of Issues and Evidence by Warren L. Coats (Author, Editor), Deena R. Khatkhate (Author, Editor)  Format: Kindle Edition Money and Monetary Policy in LDCs-ebook

Central Banking award

The Central Banking Journal annually awards central bankers (best governor, best central bank, and providers of services to central banks) for their performance.  This year’s ceremony was held in London on March 13 and I was awarded Outstanding Contribution for Capacity Building. Here is a video of my acceptance speech.

 

A Citizen confronts the Bureaucracy

I recently concluded a contract with the National Bank of Kazakhstan to provide technical assistance in their effort to develop inflation-targeting capacity. I am working together with an American and a Czech econometrician, and thus decided it would be best to incorporate as a Limited Liability Company.

I live in Maryland and thus went to the Maryland government’s website and within half an hour had not only filled in the required application and paid the required fee, but had actually received (via email) the official, signed registration and Articles of Organization document for my company “Economic Consulting, LLC.” Sorry about the unimaginative name, I will give it more thought the next time.

Kazakhstan is a signatory of a tax treaty with the United States that requires it to deduct 20% from any payments to me under our contract unless I have provided a number of specific documents. In addition to the above Articles of Organization, I must also provide a certificate of residency for the company issued by the U.S. Treasury’s Internal Revenue Service and certified by an Apostille issued by our State Department. Rather than have 20% deducted, we agreed that the National Bank would not pay me anything until these documents were received. I was on a learning curve that I really didn’t care to be on.

Hence began what I hoped would be an equally efficient e-government interaction with the Federal government that proved to be anything but. For starters, the form 8802 to request the certificate was three complicated pages long and could not be submitted on-line. Thus the printed form and my check for $85 were sent August 27, 2014 to the IRS by U.S. mail. On September 3 my check cleared so I knew the request had been received. One worry eliminated.

A month later on October 6th I received a letter from the IRS that I assumed was the long-awaited certificate. Instead it was an acknowledgement that my request had been received on September 3rd and that the requested certificate would be sent within 30 days. And indeed in another 30 days another letter arrived, but rather than the certificate it was another letter like the last one saying that the certificate would be sent within another 30 days. Shit.

The letter provided a phone number, which I now called expecting a long wait at the end of an automated list of choices. In fact, the wait was only about 20 minutes at which point Karen answered my call. “Oh my goodness. You should not have received those letters (i.e., we should not have sent those letters). Those were the wrong letters because there was a problem with your request.” She proceeded to carefully and politely walked me through the application form to correct the one or two things I had gotten wrong. The confusion resulted from the fact that I will as always file my business expenses and income on Form C of the 1040 rather than filing separately for the LLC. Blaw, blaw, blaw.

Karen gave me her personal business fax number (yes the U.S. government still uses faxes) and said that she would process it right away. As I no longer have a fax machine, I walked down the street to a neighbor’s with a fax and sent it off receiving the normal confirmation that it had been received. Ten days passed. Calling that number had been so successful the last time that I tried it again. After a one-hour wait on hold Ms. Douglas answered my call and assured me that my fax had never been received. A short, pointless discussion followed about the earlier fax and I finally agreed to send it again, this time to her fax number. I needed the exercise anyway. She promised to call me to confirm its receipt, which in fact she did saying that it was now fine and she would process it immediately and I should receive the certificate within ten days. I was excited by the progress, but reflect nostalgically on the 30-minute start to finish, all on-line, incorporation of my company in Maryland.

Ten days passed and it hadn’t arrived so a called again, this time with only a 15 minute wait (note to self: Monday at noon is a good time to call the IRS). Jane informed me that the document had been processed by Ms. Douglas and printed and would now be ship to the Utah center for mailing to me and should arrive within ten days!!! They don’t do this every day, she explained politely. You can’t make this stuff up. I took a deep breath and struggled to keep my voice under control. I reminisced nostalgically about the 30-minute start-to-finish (including delivery to my desk) incorporation of my little company in Maryland.

Jane quickly agreed with me that it would be nice for the Federal Government to catch up with the twentieth century (I meant the 21st century—but would settle for the 20th). Unfortunately, unlike the private sector, which is continually looking for ways to do things better for less, Jane and her boss have no incentive to do anything about the ridiculous process she described to me. The state of Maryland, which seems better organized and better managed, does at least feel a bit of competitive pressure from Virginia and other states, lacking at the Federal level. I am not about to move to Mexico or some other country over this.

The certificate—a one liner confirming my address – finally arrived on December 3, 98 days after my request. Now I can learn about how to get an Apostille and hopefully get paid. I assure you that I have not made any of this up. Please pray for me.

P.S. The State Department office of Authentication informed me by phone with no wait at all that I could not get an appointment (at which time the Apostille could be given while I waited) for 15 days, but that I could drop it off and it would be ready within three days. Sounds encouraging but I am not holding my breath.

P.P.S. As instructed, this morning (December 4) I drove into town to “drop off” my document to be authenticated and was informed that the drop off is only from 8:00-9:00 am — I was too late. Back tomorrow!!!