November 6, 1991 It is this date that can be considered the starting point of economic reforms in Russia. The authorities have set themselves the task of ridding the country of the communist past as quickly as possible. It was impossible to do this without radical changes in the economy, which had existed for many years in the form of a planned economy.
Gaidar's reforms served as a lever that created a free market in Russia. The government of that period liberalized retail prices, reorganized the tax system, and created a new foreign trade system. All these abrupt changes were soon called "shock therapy".
Price liberalization
On October 28, 1991, a few days before the appointment of Yegor Gaidar as Deputy Prime Minister for Economic Policy, Russian President Boris Yeltsin delivered a keynote speech at the Congress of People's Deputies of the RSFSR. The head of state announced the need. It was the most important feature of the classical market economy. The initiative of the president was adopted by the congress delegates almost unanimously.
The beginning of Gaidar's economic reform was to be carried out as soon as possible. It was planned that the liberalization would be announced as early as December 1. This was opposed by the union republics, which still had a single ruble zone with Russia. Gaidar's reforms were remembered by compatriots by the name of this economist for a reason. Although Boris Yeltsin, who used his presidential powers, defended the new bills before parliament, the development of all projects lay on the shoulders of Yegor Timurovich and his team.
The actual beginning of Gaidar's economic reform came on January 2, 1992, when the presidential decree "On Measures to Liberalize Prices" was adopted. The changes made themselves felt instantly. The state stopped regulating 80% of wholesale prices and 90% of retail prices. The federal government temporarily retained control only over socially significant consumer goods: milk, bread, etc. This reservation was not taken in vain. Gaidar's economic reform was carried out in conditions of social turbulence, when the population was left empty-handed after the crisis of the planned system and the collapse of the Soviet system.
Gaidar Program
In preparing its program, the government proceeded from the point of view that Russia does not have any "special path", and it needs to adopt all the main features of Western market economies. Until the end of 1991, it was still unclear what agenda the Russian authorities would choose. Various politicians and economists proposed their projects: Yavlinsky, Shatalin, Saburov, Abalkin, etc.
In the end, Gaidar's program "won" after all. It was not only economic. The reforms were supposed to form a new national statehood in the country through the construction of market relations, the place of which was empty after the collapse of communism. Yegor Gaidar outlined his ideas in the documents Immediate Economic Prospects for Russia and Russia's Strategy in the Transitional Period. According to these projects, the reforms were carried out on the basis of the principles of privatization, liberalization and financial stabilization.
Gaidar's team identified three main problems that the young state inherited from the Soviet Union. These were inflationary, payments and systemic crises. The last of these was that public authorities had lost their own ability to regulate the flow of resources.
It was planned, first of all, to restructure and significantly increase the overall level, as the Rakovsky government once did in Poland. Gaidar believed that in this case, inflation would persist in the country for about six months at first. However, this project had to be abandoned. Calculations showed the authorities that the country simply could not withstand the crisis for another six months. Therefore, it was decided to start a radical liberalization immediately. Time has shown that neither one nor the other way promised the economy anything good.
Economic collapse
Price liberalization led to many negative consequences that were inevitable with such a forced pace of change in the economy. The new order in the market was at odds with monetary policy - in the summer of 1992, domestic enterprises lost their working capital. In the spring, the Central Bank began to issue a large number of loans to industry, farmers, former Soviet republics, etc. This was done in order to cover the budget deficit. However, at the same time there was a colossal jump in inflation. In 1992, it reached the level of 2,500%.
The collapse occurred for several reasons. First of all, the catastrophe erupted due to the fact that before the liberalization of prices there was no replacement for money, which would rid the country of obsolete Soviet rubles. The new currency appeared only in 1993, when Gaidar's economic reform had already been completed, and he himself left the Government.
Hyperinflation has left a significant part of the Russian population without a livelihood. In the mid-90s, the share of low-income citizens was 45%. The Soviet deposits of the population in Sberbank depreciated, having lost their purchasing power. The government blamed the crisis on the Supreme Council, which forced it to issue additional currency.
The issue of additional money supply began to be practiced in the last Soviet years, when the state used it to finance domestic spending. When Gaidar's reforms began, this system finally collapsed. The former paid the Russian enterprises in the same rubles, which only aggravated the crisis even more. In the summer of 1992, as a countermeasure, special non-cash cards were created with the help of which settlements with the rest of the CIS countries began to be carried out.
Parliament vs Government
Gaidar's economic radical reforms were subjected to harsh criticism from the people's deputies from the very beginning. As is known, on April 6 they opened their VI Congress. By this time, the government received a fairly close-knit opposition, which was based on agrarian and industrial lobbyists, dissatisfied with the reduction in state funding.
At one of its meetings, the congress adopted a resolution in which the main claims against the Government's policy were formulated. E. T. Gaidar’s reforms were called the cause of a number of economic problems: a drop in the standard of living of the population, the destruction of former economic ties, a production decline, a lack of money, etc. In general, the Government’s inability to keep the situation in the country under control was noted. The deputies believed that Gaidar's reforms were carried out without regard for the opinion of society and business owners. In the resolution, the congress delegates suggested that the president change the economic course, taking into account all their proposals and reservations.
In response to the deputies' attack, the Government, together with Gaidar, submitted a letter of resignation to Boris Yeltsin. In the attached report, the ministers criticized the proposals of the congress, noting that if the government follows this course, state costs will rise to over a trillion rubles, and inflation will reach the threshold of 400% per month.
The resignation was not accepted, but Yeltsin still made concessions to the deputies. He introduced new people into the Government - the so-called "red directors", who lobbied for the interests of the owners of large enterprises who received their positions in the Soviet years. Georgy Khizhu and Vladimir Chernomyrdin were in this cohort.
This was followed by attempts to stabilize the financial situation. To do this, the Government has cut public spending and introduced new taxes. In May 1992, inflation dropped slightly. Another requirement of the Supreme Council was fulfilled - the monetary policy was significantly softened. The Government also allocated 600 billion rubles to pay off debts to miners and other striking workers of large enterprises.
In July there were reshuffles in the leadership of the Central Bank. The new head, Viktor Gerashchenko, who had already held this position in the Soviet Union, opposed Ye. Gaidar's reforms, which implied cost cuts. In the second half of 1992, the volume of lending to the Central Bank increased by 3 times. By October, the budget deficit was reduced by 4% of GDP compared with August figures.
Beginning of privatization
In June 1992, Yegor Gaidar became Prime Minister. That same summer, privatization began in Russia. The reformers wanted to implement it as quickly as possible. The Government believed that Russia needed the emergence of a class of owners that would become the backbone and support of the state's economic policy. The privatization of enterprises took place in conditions when plants and factories actually went bankrupt. Businesses were sold for next to nothing. Purchases took on an avalanche-like character. Due to numerous holes in the legislation, transactions were made with violations and abuses.
When the reforms of E. T. Gaidar had already ended, in the mid-90s, loans-for-shares auctions were held in Russia, at which the largest and most important enterprises in the country passed into the hands of new owners at many times lower prices. As a result of these transactions, a new class of oligarchs emerged, which led to an even greater social gap between the rich and the poor.
Supporters of the reform of the Gaidar government and privatization believed that it was necessary to abandon the old Soviet system of the national economy with excessive monopolization and centralization as soon as possible. The forced pace of sales led to numerous excesses and mistakes. According to opinion polls, about 80% of the Russian population considers the results of privatization illegitimate.
Vouchers
For mass privatization, a voucher was introduced - a privatization check, which was intended to be exchanged for assets in state-owned enterprises. It was transferred to private hands. It was planned that with the help of this tool, municipal enterprises will become private property.
In total, about 146 million vouchers were printed. Citizens who received the check could use the paper to subscribe to the shares of an entire enterprise or to participate in an auction. You can also sell paper. Residents of the country could not participate in privatization directly. They needed to corporatize their enterprises or transfer vouchers to check investment funds (ChIFs). In total, more than 600 such organizations were created.
Practice has shown that privatization checks have actually become objects of speculation. Many owners of these securities sold them to merchants with a dubious reputation or invested in CIFs, hoping to receive significant dividends. As a result of this practice, the real value of securities fell rapidly. In such conditions, the population began to strive to get rid of vouchers as soon as possible. Basically, they settled in the hands of shadow traders, speculators, officials and the administration of the enterprises themselves.
Due to its haste, privatization (the name of Gaidar's economic reform) took place under conditions of price liberalization, when the value of the voucher fund became dozens of times less than the real value of enterprises. According to estimates, speculators were able to buy the 500 largest factories and plants for $7 billion. However, in fact, they were estimated at 200 billion dollars. It was the so-called "wild capitalism", which allowed 10% of the population to establish control over the national treasure. The main income was brought by the export of gas, oil and non-ferrous metals. Enterprises with new owners not only did not return profits to the Russian economy. They did not even go to pay off the rapidly growing external debt of the state.
agricultural policy
In 1992, the beginning of Gaidar's reforms was also marked by changes in the countryside. New forms of farms began to play an important role in the agrarian economy. Closed and open joint-stock companies, cooperatives, as well as limited liability partnerships appeared. In total, they accounted for about 2/3 of the agricultural sector of the economy. The crisis hit hard on all these new farms. There was a shortage of agricultural machinery, vehicles, mineral fertilizers, etc.
The government adopted a program to eliminate the remnants of the Soviet system - state farms and collective farms. In March 1992, there were approximately 60,000 individual farms in Russia. By autumn, their number had increased fivefold. However, due to a lack of technology, they still could not provide the country with a sufficient amount of crops. The regression led to the fact that by the mid-90s, production fell by 70% compared to the last Soviet season. The farmer was unable to feed Russia, and all because of a significant increase in prices for reagents, equipment, etc.
Defense industrial complex
In 1992, the state drastically reduced arms purchases. During the Soviet era, the military-industrial complex became too bloated. The lion's share of the budget was spent on it. In the context of the economic crisis, the state simply could not provide jobs for most of the enterprises, which led to their bankruptcy and sale to third parties.
The problem with research and development work (R&D) has become especially acute. The procedure for financing this complex was destroyed, because of which highly qualified teams fell apart and were left without work. It was then that the so-called "brain drain" began - the emigration of scientists, engineers, designers, etc. They massively left for Western countries in search of a better life, while their enterprises were idle.
The government, reforming the defense industry, made several serious mistakes: it did not start restructuring or transferring factories to the reserve. Some experts say that the authorities did wrong when they removed the restriction on the import of consumer goods, which left enterprises without a niche in the market.
Gaidar's resignation
In December 1992, Yegor Gaidar resigned from the post of Prime Minister. His departure became a compromise in relations between the Supreme Council and the President of Russia. It was assumed that the agreement would allow for a painless referendum on a new constitution. However, the deputies refused to fulfill their obligations, which led to a conflict between the Government and the President. It ended with the events of October, when Moscow experienced several days of street fighting.
In that crisis autumn, Gaidar once again returned to the government and became the first deputy chairman there, as well as the minister of economy. He finally left the top leadership positions on January 20, 1994. By this time, all the main economic reforms of E. Gaidar had already been carried out, and the country lived in a new economic reality.
Positive results of reforms
Back in December 1992, on the eve of his first resignation, he summed up his work. The Head of Government at the 7th Congress of People's Deputies emphasized the main successes of the authorities. The tax system was reorganized, privatization and agrarian reform began (reorganization of state farms and collective farms), the fuel and energy complex was restructured, oil companies were created, and spending on the purchase of ammunition and military equipment was reduced.
Economy Minister and Gaidar's colleague Andrey Nechaev named other important steps taken by the Government during the crisis period. In addition to the price liberalization already described above, the state allowed free trade and settled foreign debts by opening credit lines in the West. The Gaidar reform of 1992 reduced the budget deficit. Important tax innovations were the introduction of taxes on oil production. The planned system of the economy remained in the past. The state began to resort to state orders. In the field of investment, the relationship between the authorities and private entrepreneurs has become key. Trade with the former Soviet republics was structured in a new way - it switched to world prices and market principles.
E. T. Gaidar, whose economic reforms led to the restructuring of all financial relations, advocated the establishment of commercial principles in the export of weapons for the army. An important innovation was the adoption of the bankruptcy law. With the advent of a market economy, the first investment companies were created, as well as stock exchanges, which could not exist in the USSR.
"Shock therapy"
After the collapse of the Soviet Union, Russia found itself at a crossroads that had not yet been in the history of mankind. A huge state with 70 years of life under communism and a planned economy behind it needed to move to a civilized market model. In 1991-1992 no other country in the world has carried out such a forced experiment on itself. Two years before Russia, similar transformations began in Poland and Czechoslovakia, but they still did not give a visible result and existed only in the form of outlines.
The essence of Gaidar's reforms boiled down to the fact that the Government had to literally blindly, at its own peril and risk, operate on the sick economy of its country. True, something was nevertheless adopted from former comrades in the socialist camp. For example, temporary jobs have been created in Russia, similar to the Decree on Free Trade in Poland. These measures made it possible to fill the street stalls. True, these changes had their costs. Such trade took on strange forms - new kiosks arose chaotically and without any regulation.
The economic reform of Ye. Gaidar's government (the transition from a socialist economy to a market economy) began too late. In fact, time was lost back in the late 80s, when the first serious signs of a crisis appeared. The Soviet resource-based economy was in the throes of falling oil prices, leading to queues at stores and the rationing system even before Gaidar's reform began. The name "shock therapy" was given to the changes deservedly - the system had to be changed in emergency conditions.
· holiday prices
· introduction of free trade
· entrepreneurship development
· privatization(transfer of state property into private hands - in the autumn of 1992, citizens of the country received privatization checks - vouchers, which gave the right to purchase shares of enterprises; it was assumed that a wide layer of owners would be created in the country; citizens received little from voucher privatization, since vouchers quickly depreciated in the face of inflation; most of the vouchers were sold or invested in privatization funds, which soon ceased to exist; controlling stakes were bought up by the administration of enterprises, which became their owners; carried out the privatization Chubais).
G Gaidar's reforms were led by international financial institutions (International Monetary Fund-IMF). The government received loans if it followed the recommendations of the IMF, this led to the formation of a huge public debt).
The results of the Gaidar reform:
- standard of living was set back 10-15 years
- most residents are below the poverty line
- depreciation of money savings of citizens kept in the State Bank
- price liberalization caused a sharp jump in inflation
- prices increased 26 times in a year (officially)
March 31, 1992 representatives of the Russian Federation on the one hand and representatives of the constituent entities of the Russian Federation signed federal treaty , according to which the powers of the Federation and its subjects were delimited
December 1992 - Gaidar resigned and a new government was formed headed by Chernomyrdin (head of government 1993-1998), who also followed the market course.
Against the backdrop of a rapidly deteriorating situation in the economy and the social sphere, relations between the executive and legislative branches between the president on the one hand and the Supreme Soviet and the Congress of People's Deputies on the other became aggravated. A dual power has developed in the country: in opposition to Yeltsin, Chairman of the Khasbulat Supreme Council and Vice President Rutskoy.
In the aggravated situation of dual power, Yeltsin issues a decree on September 21, 1993. announced the dissolution of the Congress of People's Deputies and the Supreme Soviet. At the same time on December 12, 1993. Elections to the Federal Assembly were called. The Supreme Soviet did not recognize Yeltsin's decree, and the 10th Congress of People's Deputies, which met urgently, stripped Yeltsin of his presidential powers, transferring his duties to Rutskoi. The deputies headed by Khasbulatov and Rutskoi decided to defend the White House.
October 3-4, 1993 - armed clashes near the White House and the television center building. The White House has been taken over. Opposition leaders were arrested.
Due to the inclusion of Yegor Gaidar on November 6, 1991 in the Government, it is with this date that the beginning of transformations in the country's economic sector is associated. The task of the authorities was clear - as soon as possible liberation from communist oppression. These goals implied significant changes in the planned economy of the country.
Gaidar's reforms served as an impetus for the creation of a free market. Abrupt changes, which consisted in the liberalization of retail prices, the reorganization of the activities of the tax service and the creation of foreign trade levers, are called “shock therapy”.
Price liberalization
The appointment of Y. Gaidar as Deputy Prime Minister in the field of economics was preceded by a speech by President Boris Yeltsin at the Congress of People's Deputies of the RSFSR on October 28, 1991. It was announced that one of the key components of market relations had to be introduced.
On December 1, a public announcement was made of the liberalization course to be implemented as soon as possible. The Union republics opposed the upcoming plans, which still support a unified system of monetary settlements in rubles with the Russian Federation. New bills were voiced by the head of state, but Yegor Timurovich and his own team were involved in their drafting.
Decree of January 2, 1992 "On Measures to Liberalize Prices" proclaimed a course of change, which immediately declared itself. The regulation of 80% of the wholesale cost of goods and 90% of retail prices has been cancelled. The authorities control only the most necessary products: milk, bakery products and some others. The principle of turbulence operates in society, under the influence of which, as a result of the collapse of the planned system and the Soviet form of government, the population is in a beggarly state.
Program
In preparing the basic concepts, the government is guided by the fundamental principles of market management by Western powers. Before the final decision, the options proposed by the leading experts of that time - Yavlinsky, Shatalin, Saburov, Abalkin were considered.
Gaidar's concept prevails. Along with transformations in the economy, there is a need to renew the national statehood, which was empty after the disappearance of the communist order. The main directions are placed in the documents:
o Russia's Immediate Economic Prospects.
o "Strategy of Russia in the Transition Period".
The crisis points formulated are: inflation, payments and a built-in system, as a result of which state institutions are unable to manage resources. Restructuring is required in conjunction with an increase in the overall level, following the example of Poland in the Rakovsky government.
The expected six-month period of inflation was beyond the power of the country, so the project was not recognized. As a result, immediate radical liberalization is planned. As time passes, both paths turn out to be erroneous, not promising positive changes.
The collapse of the economy
Liberalization has caused numerous negative consequences. The reasons were drastic changes. Monetary policy in 1992 takes away working capital from enterprises. To pay off the budget deficit, the Central Bank issued many loans to production, farmers in the countryside and the former Soviet republics. Inflation in this period reaches 2500%.
The reason for the collapse is the lack of a replacement for the money supply, which would save the country from obsolete Soviet rubles. The new currency comes into circulation only in 1993. The number of people with low income is 45%. Previous deposits of people in Sberbank depreciated.
Privatization
The process presupposed the emergence of a class of owners - reliable support for the course being pursued in the face of total bankrupt plants and factories, when they were sold almost for next to nothing. Due to the avalanche nature of such actions, transactions were accompanied by serious abuses.
In the 90s. after the termination of the reforms, loans-for-shares auctions will be held to transfer the most significant enterprises to new owners at an extremely low cost. The phenomenon gives rise to a class of oligarchs, which further widened the distance between the wealthy and the impoverished part of the population.
The reasons for the extremely negative consequences are considered to be the desire for a rapid rejection of the Soviet economic system with enhanced monopolization and centralization. Accelerated sales lead to unforgivable mistakes. Polls of sociologists show that privatization by 80% of the country's citizens is recognized as illegitimate.
Voucher system
A privatization check is an integral component intended for exchange for assets at enterprises. Transferred to private hands, it opened the way to private ownership. 146 million vouchers issued. The public is not directly involved in the process, but can:
Invest paper as a share in an enterprise at the place of employment.
Transfer to a check investment fund. The number of such organizations exceeds 600.
In reality, they turn out to be numerous objects for speculation. To make a profit, the owners alienated them to dishonest merchants or invested in CHIFs in the hope of receiving solid dividends. With the imminent fall in their value, people begin to rapidly get rid of vouchers that are deposited with merchants, officials and administrative resources who are in the shadows.
According to estimates, 500 largest factories and plants were purchased at speculative prices for $ 7 billion, with a real estimate of $ 200 billion. "Wild capitalism" allowed 10% of the population to manage the national treasure. A lot of finance comes from the export of natural resources - gas, oil and non-ferrous metals, but the new owners are in no hurry to return the profits, due to which the amount of external debt increases significantly.
Agricultural sector
In 1992, changes penetrate the village. A different type of management is emerging - closed and open joint-stock companies, cooperatives and partnerships, which in the total mass occupied 2/3 of the farms that were directly affected by the crisis. There was a shortage of agricultural machinery, machinery and fertilizers for work.
Survivals of the former system in the form of state farms and collective farms were eliminated everywhere. In 1992, 60,000 individual farms of farmers were formed in the country. Lack of equipment greatly reduces the harvest. In the 90s. production is reduced by 70%. Due to the increased cost of reagents and equipment, farmers are unable to provide the country with the necessary amount of food.
Defense and industry
In 1992, the purchase of weapons was reduced due to excessive spending of the budget in the USSR under the military-industrial complex. Due to the crisis, enterprises were closed due to bankruptcy and resold. What is happening has affected the research and design bureaus.
Highly qualified personnel are losing their jobs. The period will be marked by an intense "brain drain" abroad - scientists, engineers, programmers, designers and other categories of specialists. The miscalculations were:
In the absence of restructuring.
Transfer of plants to the reserve.
Removal of restrictions on the import of goods, which had a negative impact on domestic enterprises.
Resignation
In December 1992, Yegor Gaidar voluntarily submits his resignation, which becomes the reason for a compromise between the Supreme Soviet and the president. In 1993, the deputies renounce their own obligations, which causes a new conflict, which escalated into street clashes, called the October events.
Returning to the Government, the reformer remains in the post of Minister of Economy and leaves the chair only on January 20, 1994, upon the final completion of economic reforms. A new reality is coming.
Positive points
Before the first resignation, E. Gaidar tries to objectively evaluate his personal activities in office. Positive shifts in the economy were:
Changes in the taxation system.
Privatization process.
Transformation of the agricultural sector.
Restructuring of the fuel and energy complex.
Establishment of oil production companies.
Reducing the cost of purchasing military equipment and equipment.
The right to free trade, the repayment of debts, and the reduction of the budget deficit are commendable. ET Gaidar welcomed commerce in the export of weapons. Investment companies and stock exchanges are being created that are absolutely unrealistic in the Soviet era.
"Shock therapy"
Due to a regime change unprecedented in the world, the Russian government is engaged in an economic recovery in an extremely difficult environment. Some nuances had to be adopted from partners in the socialist camp. Temporary work places were created by analogy with the Decree on Free Trade in Poland. The stalls on the streets were partially filled, appearing chaotically and without proper management.
Reforming the government of E. Gaidar is carried out with a significant delay. Time is running out in the 80s. at the onset of the crisis. The resource-based economy of the country of the Soviets is in the throes of falling oil prices, which led to store lines and the rationing system long before Gaidar's transformation. The name is quite justified in view of the changes that took place in a truly extreme environment.
Edition: History of Russia: XX century. Allowance for applicants to universities
§ 2. The Russian economy in 1992–2002
Reforms of E. T. Gaidar
The economy of post-perestroika Russia, the constitutional structure of the country had to come into line with the new political system, which meant a transition to a market economy, the demonopolization and privatization of enterprises, the creation of a class of private entrepreneurs and owners, and the strengthening of the power of the president. At the Fifth Congress of People's Deputies of the Russian Federation (October 1991), B. Yeltsin came up with a program of radical economic reforms, providing for the liberalization of prices and wages, freedom of trade and privatization. Considering the current difficult economic situation, the deputies generally approved the program and even gave the president additional powers to carry it out. The economic reform program developed by the Deputy Prime Minister of the Russian government E. T. Gaidar provided for the liberalization of prices, and then the privatization of the public sector of the economy. The three-fold increase in prices expected in 1992 (in 1991, compared to 1990, prices increased 2.6 times) was planned to be compensated by 70% with social benefits, wage growth, pensions, and scholarships. After the annual implementation of the reform, society should have felt the first positive results.
On January 2, 1992, Russia took the first step towards a market economy: pricing was no longer regulated, trade became free. According to E. Gaidar's plan, this was supposed to return to money the role of a spontaneous regulator of prices and production, to lead to the destruction of the monopoly of intermediaries in the trading network. However, the underestimation of the monopolization of production, as well as the self-removal of the government from control over the formation of prices, led to their uncontrolled surge at the beginning of the year. In January 1992, prices increased by 1000-1200%, and by the end of the year they had increased by at least 26 times. At the same time, wages increased in 1992 only 12 times. The reform did not provide for the indexation of savings deposits of the population, which led to their simultaneous depreciation. The government's hopes for large-scale foreign exchange assistance from the West did not come true either. Under these conditions, the Yeltsin-Gaidar government was unable to fulfill the promised social guarantees during the implementation of reforms. But the main positive result at the initial stage of the reform was the rapid filling of stores with goods, the elimination of commodity shortages and queues.
In February 1992, the government published a memorandum on economic policy for 1992. The main goal was to stabilize the financial system, create a deficit-free budget by ending subsidies to unprofitable enterprises and industries, and reducing social payments to the population. It was assumed that the stabilization of Russia's finances would lead to an increase in foreign and domestic investment in the Russian economy. The document also noted the expediency of freely setting prices for energy carriers and bringing them up to the world level by the end of 1993. The release of prices during their stabilization in the following months, the saturation of the market created the prerequisites for the second stage of reforms - the privatization of the state sector of the economy. The proposed reform program received the support of Russian President Boris N. Yeltsin.
The reduction in the winter-spring of 1992 of state subsidies to enterprises (to reduce inflation, according to E. Gaidar's plan) was rebuffed by the directors' corps. Although industrial products became much more expensive, most enterprises, including the oil and gas industries, turned out to be unprofitable after price liberalization. This was explained both by an increase in tariffs for the transportation of goods and energy carriers, and by a drop in consumer demand and a targeted reduction in government orders. The problem of mutual non-payments has aggravated. By June 1, 1992, their amount reached about 2 trillion rubles. The directors of the enterprises insisted on obtaining a preferential state loan with further coverage of debts on mutual settlements. This point of view was supported by the Supreme Council and the Central Bank of Russia. On June 28, 1992, the Central Bank provided such a loan to enterprises. New financial resources, not provided with goods and services, poured into circulation, which increased inflation. The collapse of the industry was averted through loans and a new round of hyperinflation. The average growth rate of the money supply in the second half of 1992 increased from 11.4% to 28% per month.
The government of E. Gaidar (since June 1992, he acted as prime minister) saw a way out of this situation in replacing state subsidies and loans with foreign investments, as well as investments by private individuals. Thus, the key issue was the privatization of the public sector. According to the scheme developed by the State Property Committee of Russia, headed by A. Chubais, two main options for privatization were outlined. The first of them provided for the preferential acquisition by employees of about 50% of the shares of their enterprise. The second option is the acquisition by employees of enterprises of a controlling stake of 51% on more stringent conditions. But in both cases, a significant part of the shares was concentrated in the director's corps. The remaining shares went on sale to Russian citizens in exchange for special privatization checks.
On August 19, 1992, the President of the Russian Federation B.N. Yeltsin issued a decree "On the introduction of a system of privatization checks in the Russian Federation." On October 1, 1992, the issuance of vouchers (privatization checks) to the population began at a nominal value of 10 thousand rubles (voucher privatization).
In 1992, 24 thousand enterprises, 160 thousand farms, 15% of the trading network were transferred to private ownership. As a result, 40 million nominal shareholders appeared in the country, while most of the enterprises were controlled by financial groups that bought vouchers from the population. Privatization fulfilled its task halfway: having created a layer of owners, it turned out to be economically ineffective, not giving the expected growth in investment. Criticism of the government intensified, which could not stop the decline in production and the impoverishment of the population (about 44% of the inhabitants of Russia were below the subsistence level). The decline in production in the country for the first nine months of the reforms amounted to about 20%. At the end of 1992, in terms of national income, Russia was at the level of 1976; in terms of consumption structure, it was at the level of the 1960s. All this contributed to the development of a social crisis and led to a fall in the popularity of the Gaidar government.
In such circumstances, the president decided to change the composition of the government, which in December 1993 was headed by V. S. Chernomyrdin. The first period of Russian reforms in the economy, known as the Gaidar reforms, has officially ended.
Economic development of Russia in 1993–1996
In 1993, the government moved away from previous ideas about the role of state intervention in the economy, no longer absolutizing the free market. The new course in the economy was determined by V. S. Chernomyrdin, a representative of the oil and gas complex. During these years, the government took into account the interests of Russian industry to a greater extent, especially export industries, replenishing the budget with foreign currency. It was announced that the goals of the Cabinet of Ministers in 1993 were financial stabilization, lowering inflation rates to 5% per month, and support for domestic producers.
On February 8, 1993, the "Civil Union" was registered in Russia - a centrist movement associated with industrial circles and created by A. Volsky. One of his program points was the requirement for the state to take measures aimed at supporting its industries. The Chernomyrdin government tried to establish contacts with such organizations, demonstrating its readiness to return to a partial state order. At the same time, it had to take into account the much more radical (liberal-market at that time) views of the President of Russia and resist the pressure of the parliament, which advocated a full return to the system of state orders and state loans. The political confrontation between the executive and legislative branches of power in 1993 narrowed the government's initiative and hindered its effective work.
Despite a number of measures taken, the decline in production continued. Only a significant decrease in inflation rates can be attributed to the positive results of the year. Compared to 1992, it has decreased by 2.8 times. Meanwhile, these results should not be exaggerated: over the year, prices have increased by almost 10 times. The Chernomyrdin government failed to stop the continuing decline in industry. The level of production in 1993 was 59.8% of the 1990 figures. 7.8 million people were unemployed (10.4% of the country's active population), and unemployment figures continued to increase.
Following the results of the parliamentary elections in December 1993, in which the pro-government and pro-presidential movements won only about 1/3 of the votes, the president somewhat adjusted the economic policy of the Chernomyrdin government. In 1994–1997 State support was felt by some branches of the domestic, primarily mining, industry.
Compared with the first years of reforms, due to the strengthening of state regulation of economic processes, the inflation rate slightly decreased, and the rate of decline in production also decreased. In 1994, the price growth dynamics compared to 1993 decreased by 3.1 times. However, it was not possible to achieve financial stabilization, which was shown by the scandalous termination of the activities of JSC MMM, Chara, Russian House of Selenga, Tibet, Vlastelina and other financial pyramids that skillfully used rampant inflation for fraudulent purposes; "Black Tuesday" October 11, 1994, when the dollar during the day rose by almost a third - from 3081 to 3926 rubles.
Economic policy of the government in 1995–1996 focused on export industries. The positive balance of Russia in trade in 1996 amounted to about 40 billion rubles. Economically prosperous areas began to appear in the country, specializing in export industries (gas, oil, metal). The largest financial and industrial groups (FICs) in the country were formed on the basis of the fuel and industrial enterprises. Among them are Interros (ONEXIM Bank, Norilsk Nickel, Novokuznetsk Iron and Steel Works), Lukoil (7 oil producing enterprises, 23 oil refineries, 3 financial and investment companies), etc.
Most of the regions of Russia that are not connected with the oil and gas complex, the production and export of raw materials, still remained in a deep economic crisis. The decline in industrial production in the country as a whole was about 4% per year. By the end of 1996, the decline in production volumes in comparison with the Soviet period reached 60-65%, which was higher than the indicators of the period of the Great Patriotic War. It was not possible to create a stable financial system in the country, the salary delays for state employees were up to two years.
Economic development of Russia in 1997–2000
On March 6, 1997, President Boris N. Yeltsin's annual address to the Federal Assembly announced the beginning of a new stage of liberal socio-economic reforms. Among the priorities of the renewed composition of the government, which soon included B. Nemtsov and A. Chubais as vice-premiers, was the development of a program to reduce the budget deficit and pension reform, the elimination of wage arrears by December 31, 1997, and the fight against corruption.
However, the work of the new government was reduced mainly to the regulation of financial and tax flows within the country. Among the most important decisions of the Cabinet of Ministers are the sequestration of the 1997 budget in the social part, Russia's entry into the Paris Club of creditor countries, the placement of new loans of Eurobonds and State short-term obligations, and a new stage of privatization, primarily of the fuel and raw materials industry. Attracting additional financial resources ($6 billion in foreign loans against $2 billion in 1996), stopping the financing of the military campaign in Chechnya, proceeds from privatization, and austerity policies have allowed, according to official data, to achieve an increase in gross domestic product in Russia by 1% the first half of 1997. At the same time, it should be noted that the outstripping growth of production in the light industry, which amounted to more than 9%. This was the first real success in the recent history of the Russian economy in the entire post-perestroika period. True, it should be noted that the growth was achieved through the massive attraction of investments and loans, which meant an increase in state obligations to external and internal creditors.
Inflationary processes remained a serious problem. In August, preparations began for the implementation of the monetary reform. It was started by the Decree of the President of the Russian Federation of August 5 “On changing the nominal value of Russian banknotes and the scale of prices”. Since January 1, 1998, the Russian ruble has been denominated 1000 times. Such a measure contributed to the strengthening of the national currency, the stabilization of economic processes.
The rating of the Chernomyrdin-Chubais government began to grow. Considering the most important task to ensure the continuity of the transfer of state power, B. Yeltsin decided to use the situation to prepare for future presidential elections. March 23, 1998 Chernomyrdin and Chubais were dismissed. They were replaced by the young reformer S. Kiriyenko.
For the new prime minister, the pressure of internal and external debt on the country's economy became more and more obvious. In 1996, its maintenance costs accounted for 13% of all federal expenditures, in 1997 - 24%, in 1998 - 30%. The new government tried to pursue a tougher economic policy, which included higher tax rates and trade duties. This approach led initially to a rise in prices (by 10%), and then to the deepest financial collapse in the recent history of Russia. The day of August 17, 1998 actually marked the financial bankruptcy of Russia: the depreciation of the national currency and, as a result, the inability of the state to pay its external and internal debts. The government and the Central Bank of Russia announced the devaluation of the ruble and the beginning of the revision of the state's debt obligations, including a moratorium on payments on loans received from non-residents of Russia (for a period of 90 days). The financial crisis has passed into the stage of uncontrolled growth of prices, which in a short time increased by more than 4 times. The situation of the vast majority of the country's population, including the middle strata of society, worsened again. Under these conditions, the resignation of the Kiriyenko government became inevitable.
According to the State Statistics Committee of Russia, the population of the country with incomes below the subsistence level in August reached 33 million people.
On September 11, the Russian government was headed by E. M. Primakov, heading for the stabilization of the economy. Active support for domestic industry and agriculture was announced. Increased personal income tax rates, while reducing the taxation of industrial investments, VAT. The easing of the tax burden on the “real economy” (Primakov's figurative expression, meaning manufacturing industries), along with a reduction in imports to Russia (caused by the fall of the national currency), contributed to the revival of domestic industry. The similar course of the government has received support of parliament.
Measures were also taken to strengthen the national currency. Thus, tighter control was introduced over the activities of exporters - they had to sell 75% of foreign exchange earnings on the stock exchanges. Stricter customs regulations were introduced. Along with the growth of world oil prices, this contributed to the payment of external debts and attraction of funds to the country's economy.
For the first time, there has been a real reduction in government spending on the apparatus. During the first half of 1999 Russia's economic situation stabilized. However, the approaching presidential elections dictated their terms, and the Primakov government resigned. The next two cabinets of ministers (S. Stepashin and V. Putin) were mainly engaged in political tasks, postponing serious economic reforms until the final decision on the issue of power.
On March 19, the economist Yegor Gaidar, one of the main ideologists and leaders of economic reforms in Russia in the early 1990s, would have turned 60 years old.
Opinion polls with enviable constancy place the politician in the category of the main national anti-heroes, although over the years the degree of this dislike is weakening, reports T.
If in 2002, according to VTsIOM statistics, 55% of Russians considered Gaidar's reforms destructive, then in 2010 a similar epithet was applied to them by 23% (however, another 15% believed that there was no need for them at all).
At the same time, the number of those who fully approve of the actions of the Yeltsin-Gaidar government increased: from 2% in 2002 to 7% in 2010. The numbers are still teetering on the brink of statistical error.
But on the other hand, apparently, the supreme leaders of Russia belong to this category of the population. Thus, after Gaidar's death, current President Vladimir Putin called him a "true citizen", a "patriot", a "strong-spirited person" who, having led the transformation process, "showed the best professional and personal qualities."
The Russian service of the BBC decided to summarize some of the common statements about the merits of the politician, accompanying them with as few words as possible arguments and counterarguments. Theses to the disputes that will inevitably unfold around the name of Yegor Gaidar for a long time to come.
Gaidar ruined the economy, the country was plunged into disaster
The transformational decline that occurred in Russia in the post-reform years was indeed enormous and, according to some estimates, unprecedented for the state in the absence of wars, epidemics and natural disasters:
The shadow economy grew from 10-15% of GDP under Brezhnev (according to the most generous estimates) to 50% of GDP in the mid-1990s
Income inequality has increased: the so-called Gini coefficient increased from 26% in 1986 to 40% in 2000
In the first years after the collapse of the USSR, there was a doubling of crime
Mortality in 1990-1994 increased by 60%
The share of spending on R&D fell from 3.5% of GDP to about 1%
The aggregate index of industrial production in Russia only in 2008 reached the level of the early 1990s
("Economics of Russia. Oxford collection"; other sources).
However, it would be too incorrect to attribute all the consequences of this transformational recession to the policies of Yegor Gaidar:
Firstly, he came to the government only in November 1991, when the process of transformation in the country was already in full swing.
Secondly, it is difficult to blame Yegor Gaidar for the formation of structural distortions in the Soviet economy: in particular, for the accumulation of a gigantic "money overhang" (money not backed by goods), which forced the Soviet government under the chairmanship of Valentin Pavlovan to begin monetary reform.
Thirdly, Gaidar is hardly to blame for the fact that prices for the main Soviet export resource - oil - have been falling since 1980, forming a budget deficit: first due to the overproduction of the resource, and in 1991 - in connection with the end of the Gulf War. "
Gaidar saved the country from mass starvation
This point of view is as popular among Yegor Gaidar's associates as it is unpopular among his opponents.
In the book Forks in Russia's Modern History, Gaidar himself wrote about the situation that had developed by the time he came to the government, as follows: "The country was still bankrupt, foreign exchange reserves were close to zero. According to optimistic forecasts, grain reserves were enough until about February-March 1992…"
"The choice of the option of accelerated price liberalization and forced removal of trade restrictions prevented a catastrophic scenario in the country's food market in the spring of 1992," he noted.
Opponents of this view argue that there was no food disaster:
First, the USSR had strategic grain reserves, which economist Andrey Illarionov estimates at 48 million tons, which was enough to feed the people for a year in the absence of a new crop.
Secondly, even the dying system of food distribution, according to politician Grigory Yavlinsky, “did not cause fear that everything was about to die,” because a new system was gradually replacing it: yes, “it was chaotic, strange, perverted, shady ", but it's quite functional.
Thirdly, Gaidar, speaking of the depletion of grain reserves by March 1992, everywhere refers to a document that indicates the corresponding danger in March 1991 - that is, a year earlier than the described potential catastrophe
The policy of the Gaidar government led to the fact that the savings of Russians depreciated
"... According to today's self-confidently grinning face of a politician, one does not see embarrassment: how, by ruining savings deposits, he threw tens of millions of his compatriots into poverty (destroying the basis of that very "middle class" that he swore to create), "- wrote in 1998 about Yegor Gaidar Alexander Solzhenitsyn, quite exhaustively reflecting the opinion of the majority of Russians about the achievements of Gaidar's reforms.
This opinion is refuted by a number of researchers on the following grounds:
The first steps towards freezing the deposits of the population in the Savings Bank were made by the Soviet government as part of the monetary reform of Prime Minister Valentin Pavlov on January 22, 1991, according to which citizens of the USSR were forbidden to withdraw more than 500 rubles per person per month
Yes, a few months later the ban was lifted, but at the same time in April they raised official prices by 65-70%. It was still far from next year's inflation of 2508.8%, but the purchasing power of money began to decline rapidly
In fact, there was no money in the Savings Bank, because in 1990 the government of Nikolai Ryzhkov withdrew all 369 billion rubles accumulated by Soviet citizens to finance the budget deficit.
There are also counterarguments:
- The Soviet authorities seized the money, but only as borrowed funds, which were supposed to be returned. The problem is that the annual rate on these credit resources was at the level of 5% (that's how much the government paid Sberbank for using the money), and neither the Pavlov government nor the new Russian authorities, including Gaidar's team, went for a radical increase in the rate.
- As a result, the real savings rate of the population was, according to some estimates, minus 60.8% in 1991 and minus 94.4% in 1992. Thus, in 1991, citizens' savings depreciated by almost 61%, and the following year, the remaining amount devalued by another 94.4%.
It was impossible to simply take and release prices, as Gaidar did
On January 2, 1992, the Yeltsin-Gaidar government released from regulation prices, which had previously been set by the state for decades of Soviet rule. This process is called price liberalization.
So far, Russian public and academic discourses have not formed a unified approach to this reform.
- Managed to eliminate the trade deficit
- The country was saved from imminent famine (“Anyone who remembers the absolute emptiness of the shelves in the fall of 1991 and the real threat of famine in large cities understands why price liberalization was then accepted without much discussion,” wrote one of Yegor Gaidar’s associates, now rector of the Academy of Public Administration under President Vladimir Mau)
- The internal convertibility of the ruble was ensured (that is, they prevented the transition to barter, when money costs nothing and it is easier for people to exchange goods)
Opponents of reform in this form point to the following circumstances:
- The huge accumulated "money overhang", that is, the insecurity of money in goods, with simultaneous liberalization should have led to an increase in inflation - and it happened
- It was impossible to release prices in a situation where the entire economy of the country is state-owned, as a result of which huge monopolies begin to dictate prices (not prices are liberalized, but monopolies are being liberalized)
- In the absence of restraining mechanisms, price liberalization led "not to the creation of mechanisms for market competition, but to the establishment of control over the market by organized criminal groups that extract super profits through price gouging," wrote economist Sergei Glazyev.
The Gaidar government laid the foundations for future economic growth in Russia
To give an exhaustive, more accurate assessment of the legacy of Yegor Gaidar is the task of the future. In the meantime, without falling into any of the extremes, we can only state that he really laid the foundations of the financial and economic structure of modern Russia, whatever this structure may be.
- In addition to price liberalization, the creation of a financial market, and privatization, Gaidar also participated in the development of the Tax Code, the Budget Code, and legislation on the Stabilization Fund of Russia.
- Many associates and simply supporters of Gaidar occupy key positions in the state and academic hierarchies (head of the Ministry of Economics Alexei Ulyukaev, rector of the RANEPA Vladimir Mau)
- The rise in prices for energy resources of the times of Vladimir Putin was superimposed on the economic institutions already created by that time and functioning
At the same time, it was in the 1990s, according to some economists, that the structure of the Russian economy finally came to the resource type.
The post-reform years have become "a period of rapid de-industrialization of the Russian economy and its transfer to a resource-based track, and the increase in world fuel prices since 1999 seems to have strengthened this trend," wrote Vladimir Popov, chief researcher at the Central Economics and Mathematics Institute of the Russian Academy of Sciences.
In 2004, Mikhail Khodorkovsky, in his article "The Crisis of Liberalism in Russia," came to the same conclusion: it was then that Russia firmly settled on a raw material needle (however, it was not specifically about Gaidar, but about liberal rule in general).
Subtotal
To sum up these thesis notes on the debate about Yegor Gaidar, one can say the words of the French moral philosopher La Rochefoucauld, who in the 17th century said: "Philosophy triumphs over the sorrows of the past and future, but the sorrows of the present triumph over philosophy."
As long as the 1990s are alive and "bleeding" in the minds of the majority of the Russian population, no dry academic discussions about Gaidar's legacy will overpower this powerful emotional field. Yes, and academic discussions, as the above discussions partially show, do not seem to be completely cleared of emotions yet.
