Factors behind the Russian crisis

Several factors contributed to the crisis in the Russian financial system that began on “Black Monday” in August 1998. However, behind these factors lies a deeper problem of a different dimension, says Professor Shigeki Hakamada, Department of International Politics and Economics, Aoyama Gakuin University, Tokyo. Put simply, Russia lacks the fundamental requirements of a modern civil society and market economy. Those requirements are a well‐established social order and an ethos conducive to maintaining such order: that is, an emphasis on contracts, trust, legal order, and civic responsibility. Russia must now devote its energies to improving its investment environment through serious self‐help efforts, which means striving to overcome the problems arising from its low‐trust society.