Thursday, September 3. 1998
The University Daily Kansan
Section A · Page 3
KU professor gives financial aid to Russia by teaching economics courses in Moscow
By Steph Brewer
Kansan staff writer
For the past seven months, a University of Kansas professor has been riding Russia's economic roller coaster, trying to help the government put on the brakes.
Mohamed El Hodiri, professor of economics and Russian and Eastern European studies, has directed a fiscal-training program in Moscow since January. The program is designed to teach 1,000 of the Russian government's middle-to-high-level managers of fiscal policy how to operate in a free-market economy.
El-Hodiri: Leads a financial training program for managers.
Because of recent Russian fiscal policy difficulties, El-Hodiri has been working hard.
"Everything is in a state of crisis," he said.
Financial problems might force the Russian government to make program cuts. The program was intended eventually to service four cities but may only spread to three.
The program is a collaboration between Barsents Group LLC, a service firm, and the Russian National Fund for Training. The program is being financed by a loan from the World Bank.
EI-Hodiri first became involved with the Barents Group from 1994 to 1996 through a USAID project. Having studied in Russia during the 1950s and being fluent in Russia, he took an interest in their financial situation.
I was just sitting here in Lawrence boiling because a lot of people were giving the wrong advice to the Russians," he said.
American economists advised the Russian government about how to run a free-market economy without considering the differences between Russia and the United States, El-Hodiri said.
By advising the Russians to jump right into a free-market economy instead of proceeding gradually, American economists unwittingly led the country toward disaster, he said.
El-Hodiri said Russia also was at fault for following the advice. He compared changing economies to traveling.
"You move gradually, you build a road and then you travel on it," he said. "You don't travel and expect the road to build itself."
With five three-week courses, El-Hodiri and the Russian government will try to change that mentality. The courses, which were developed by El-Hodiri, his deputy and a team of experts in Washington, instruct the officials in matters of budgeting, treasury operation and fiscal policy.
El-Hodiri and his deputy, Normar Baxter, a consultant with Barents Group, are the only two American members of the program who live in Russia full time. They are assisted by about 40 other American economists and six or seven Russians.
The courses are in the pilot stage. The program also is training 125 teachers who eventually will take over for El-Hodiri and his team.
So far, the courses have been successful. Susan Banta, a manager at Barents Group, said the program was proceeding well.
At a June reception to celebrate the end of the first course's trial run, ElHodrii said the Siberian minister of finance praised the program.
"She said, 'Mohamed, you taught us a lot of economics but the best thing you taught us was democracy." he said.
Not all Russians are so happy. El-Hodiri said he could not even get his own money out of the bank because the banking system was collapsing. Even worse for El-Hodiri is the anger many Russians feel toward America.
"It feels like you're being wrongly accused of destroying a country."
Mohamed El-Hodiri
Russian and Eastern European studies
"People blame Americans for this," he said.
El-Hodiri has tried to explain to his friends that Americans are only trying to help.
"It feels like you're being wrongly accused of destroying a country," he said.
Although El-Hodrii's friends understand his position, he said Americans were in danger because of the general mood in Russia. Regardless, he will stay in Russia until the end of July or until his part of the program ends.
"I'm going to see this through, and that's that." he said.
Maria Carlson, chairwoman of the Russian and East European studies program, said El-Hodir's work in Russia would benefit the University, providing experience he can relate to his students upon his return next fall.
"It's a living laboratory for an economy in transition," she said. "To be living in that laboratory is an incredible experience."
Market rebounds cautiously after Monday's drop
Financial woes in Russia and Asia concern investors
The Associated Press
The Dow Jones industrial average rose as much as 125 points yesterday afternoon — bobbing back above its starting point for the year
NEW YORK — Stocks slid into the close yesterday as investors used a sharp rebound from Monday's selling spree as an opportunity to pull some money out of the market.
— before a late selloff left it down 45.06 on the day at 7,782.37. The Dow failed to build on Tuesday's 288-point rebound from the previous day's 512-point plunge.
The broad market also faltered as another volatile session drew to a close, although some measures managed to escape with modest gains.
With investors still smarting from Monday's plunge, analysts said it was not surprising to
"It feeds on itself. As the gain starts to be given back, that urge to take quick profits gets greater and greater," said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va.
The Dow, which fell as low as 7,400 on Tuesday before staging a rally, is now showing a 1.6 percent loss for the year and sits 16.7 percent below the July 17 record of 9,337.97. At that peak, the Dow was up 18.1 percent for 1998.
Investors may have drawn some comfort from a report showing that orders to American factories jumped 1.2 percent in July, the biggest increase since last fall. There still were signs, however, that the continuing economic crisis in Asia is hurting exports.
and Russia's economic woes. "There's no reason that this market should begin to make an assault at new highs after reaching the lows we reached on Monday."
"The same things that were concerning the market Monday are still here," said Charles White, portfolio manager at Avatar Associates in New York, referring to worries about Asia's
In Moscow, President Clinton sought to reassure investors during a news conference with Russian President Boris Yeltsin.
"The volatility in the world markets, including in our stock market, I think is to be expected under these circumstances," Clinton said. "The right thing to do is to try to restore growth in the economies of the world where there isn't enough growth."
The Nasdaq composite index, which tumbled 140 points on Monday and rebounded by 75 on Tuesday, rose 17.76 to 1,592.85 yesterday as the battered technology group held some of its gains.
But the Standard and Poor's 500-stock index, which is dominated by major companies like the 30 that make up the Dow, finished 3.79 lower at 990.47.
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