PROGRAMME TO OVERCOME ECONOMIC CRISIS IN RUSSIA 73 40 years in wars and military conflicts imposed upon it from abroad. All this should be taken into account while opting for particular way of development and managing the economy of Russia. This was completely ignored by the comprador corrupt mafia which came to rule Russia in 1991. Under the label of 'reform' they imposed upon the country the extreme form of the monetarist policy dictated from abroad and carried under control of foreign advisers. This pre-determined anti-national course led to disintegration of the state, destruction of the economic potential of the country, undermining its capacity to complete at the world as well as at the domestic markets, sharp fall in production in leading sectors of the Russian economy. Along with the open neglect of social factors, this course, together with degradation of the industry and agriculture, resulted in degradation of science and culture, sharp decline in the levels of living of 80% of the population and in the expectation of life. Russia is becoming backward appendage of the West, producing mainly raw materials. The privatization in Russia was criminal in nature. It has not brought in its wake structural modernization of the economy and has not created class of effective owners. On the contrary, it has resulted in estimated loss to the economy on the scale of 10 quadrillions of pre-denominated roubles. Ineffective fiscal policy, primitive forms of exchange, barter, use of surrogate money, predatory intermediation in exchange of commodities, usurious forms of credit has made civilized development of market relations extremely difficult. In 1991-1998 period productive investments has fallen by 5 times, the output - by 2 times, export of manufactured goods came to nil almost. The crisis of the financial system in August, 1998 resulted from the increase of the public debt in the form of financial pyramid of the Government short-term obligations, capital flight from the country, instability and loss of faith in the Government. For servicing the public debt the Government has sequestered expenditure of the federal budget, thereby trespassing its obligations of financing social sectors and national security system and withdrawing financial resources from the real sector of the economy. In 1998 the Government had to pay 150 billion roubles for servicing its debt obligations, while estimated budget revenue in this year was expected to be only 120 billion roubles.