of 1999, Russia would be one of America’s top trading partners. But in fact, three years after Pickering addressed his farewell speech to the American Chamber of commerce in Moscow, Russia ranked thirtieth in the list of American trading partners. In 1998, Russia’s gross national product plummeted by nearly fifty percent over the last decade. More than sixty million Russians, which is nearly half of the population, lived below a very low official poverty line. A steep fall in prices of their natural resources --oil, gas and gold consequently led to reducing both the export revenues and tax collection in Russia. Almost an article of faith for Russian reformers and their Western supporters, an assumption made was that Russia's salvation lay in tight monetary discipline, rapid economic liberalization and a massive privatization program. According to Richard E. Rawles, head of the Russian Psychology Research Unit, in University College London, western financial institutions were unaware of “the cultural traditions of Russia and complicated interactions of psychologies and mentalities with social structures” that had been largely ignored.E. Wayne Merry, who was head of the political section from 1991 to 1994, sent a telegram early 1994 which criticized America's "evangelical attempt" to remold Russian society in its own image. Just as Rawles had argued that Russia was physiologically and culturally unprepared for a free market so suddenly, Merry argued that such efforts would almost certainly fail because Russia -- unlike Eastern European countries such as Poland and the Czech Republic -- had little tradition of free markets or the rule of law. The United States, in Merry's view, would end up getting blamed for the failure of “shock therapy”. Reformers were well aware of the risks -- unemployment, social discontent, and opportunities for corruption. Nevertheless, foreign investors disregarded these handica...
