LOOKING beyond Boris Yeltsin's political troubles, Western investors are searching for ways to ensure that stimulating a market economy in Russia does not spark serious social unrest. They also want to safeguard their investments against meddling by local Russian authorities.
Though there is agreement among financiers and economists that both problems need to be addressed if Russia is to escape its current economic crisis, proposed solutions run from massive injections of Western cash to encouraging the Russians to come up with answers of their own.
One of the most original proposals so far is for international investors to underwrite two parallel funds, each worth $10 billion. The idea comes from the Centre for the Study of Financial Innovation (CSFI), a newly established London think-tank supported by several international banking and industrial groups, including Bank of America, Merrill Lynch, and IBM.
One fund, says Peter Ackerman, the United States businessman who devised the proposal, would create a social safety net to give financial support to Russian workers who lose their jobs through economic restructuring. The other would protect Western investors against expropriation of assets sunk into joint ventures.
``In the shakeout of Russian industry that is needed, about 15 percent of the work force (10 million to 11 million people) are likely to lose their jobs in the first five years,'' Mr. Ackerman argues. ``The safety net would provide them with the ruble equivalent of $180 a year, which is halfway between the current average wage and the state-paid dole.''
The contingency fund would be a form of insurance against local authorities interfering with foreign-funded enterprises, as happened some months ago when a Siberian oil venture, backed by Salomon Brothers, was jeopardized by meddling state officials.
Money for both funds would come from the purchase by Western governments of bonds issued by the Russian government and secured against stakes held by the Russian state in privatized enterprises. Both schemes would be made conditional on Russia implementing an agreed program of land and property reform.
The CSFI-backed proposals, however, are seen by some economic analysts as unrealistic, and even unnecessary. Mark Schaffer, research fellow at the London School of Economics, says that it is up to the Russians themselves to sort out their economic problems.
If unemployment reached 15 percent in Russia, Dr. Schaffer says, that would be manageable, and ``safety net schemes that would be difficult to arrange and implement'' would make little difference. But Ackerman claims that a hands-off approach would be unhelpful and possibly dangerous.
``What is required is a dual program, taking account of both the urgent need for industrial reform and the reality that Russian workers' biggest worry is fear of destitution.''
That fear, Ackerman insists, is ``one of the main obstacles to change,'' and unless it is removed, ``the Russian economy will go on drifting, with inflation bearing heavily on everybody.''
The safety net concept is heartily endorsed by Oxford University's Alex Pravda, one of Britain's leading Russian affairs experts. ``There would have to be a reliable distribution network for making sure the money got to the right people,'' he says, ``but even under current conditions that should be possible.''
Dr. Pravda says the safety net money would need to be targeted to Russia's big company towns, especially those where factories are threatened with closure. ``This kind of approach is far better than orthodox types of aid,'' he says. ``But it is vital that any such schemes be carefully monitored inside Russia, and administered in the West by people who understand Russian economic and social needs.''