Page last updated at 15:26 GMT, Wednesday, 16 December 2009

Yegor Gaidar: The price to pay

By Andrei Ostalski
BBC Russian service

Softly-spoken, tolerant and always respectful, Yegor Gaidar was among the most vilified politicians in the world.

Yegor Gaidar
Yegor Gaidar became quickly disillusioned with the Soviet system

The former Russian prime minister, who died suddenly in Moscow at the age of 53, is rightly associated with the momentous change that came to Russia at the end of the 20th Century.

But the allegation that his so-called "shock therapy" economic programme plunged Russians into poverty and hardship and wiped out their meagre savings is not only a tired cliche, it is a myth - albeit a very popular one.

Yegor Gaidar was born into a family of Bolshevik nobility.

His grandfather, Arkady Gaidar, was both a Red Army field commander known for his courage and ruthlessness and, in his later years, an iconic writer.

His father held a high rank in the Soviet navy and also served as Pravda foreign correspondent.

Tough choices

An easy and swiftly-moving career was practically guaranteed for the young Yegor but he, like many other sons and daughters of Bolshevik revolutionaries, became disillusioned with the Soviet system.

As a well-read economist, Mr Gaidar recognised its inefficiency and fatal flaws, coming to the conclusion that reform was not possible - the system had to be dismantled.

Appointed acting head of the government in the new non-communist Russia in 1992 by Boris Yeltsin, Mr Gaidar inherited a country that was quickly falling apart.

A mountain of foreign debt was choking Russia. Immediate default and massive state bankruptcy seemed unavoidable.

The system of food provision had collapsed, leaving the shelves of the country's shops literally empty.

Even the customary long queues were gone - there was nothing left to queue for.

The prospect of massive starvation, riots and possibly an all-out civil war loomed large over a huge country.

Mr Gaidar's young and inexperienced government may have made many mistakes - but the fact remains that in 1992 it managed to save the country, lifting it as if by magic from the quagmire where it seemed doomed to sink.

There were only two solutions - either introducing martial law and severe rationing, or radically liberalising the economy.

Reinventing the economy

The first option meant going all the way back to the Stalinist system of mass repression.

Bread shop in Moscow
Russians saw their savings evaporate when the currency was devalued

The second meant a colossal change, a journey - or, rather, a race - through uncharted waters with an unpredictable outcome.

Only the second option was acceptable to Mr Gaidar, who freed up trade, allowing the market, rather than faceless bureaucrats, to set consumer prices.

The devaluation of Russia's currency had occurred before he took charge.

The last communist government of Valentin Pavlov orchestrated it by stealth in early April 1991, when prices were drastically raised and hyperinflation unleashed without the population at large noticing - there were no goods in the shops anyway and new price tags were not even printed.

The lifting of price controls created an incentive for producers to produce and the shops to trade - and that filled the shelves with goods.

That was the moment when the people of Russia noticed that everything had suddenly become very expensive.

Savings - meagre as they were by world standards - lost any value.

The population - used to the stability and stagnation associated with flat prices that had not changed over decades - was deeply shocked.

At the same time, Mr Gaidar persuaded Western creditors that he was deadly serious about profoundly reforming - in fact, reinventing - the dying Russian economy, and the Soviet debt was restructured.

The country was saved both from bankruptcy and from starvation.

The following years were excruciatingly painful for Russians, as their country went through an unprecedented transformation from a totalitarian economy to a market one.

Modest lifestyle

The current Russian government is popular to a great extent because it is perceived to have reversed the liberal policy of Boris Yeltsin and Yegor Gaidar.

The latter, in particular, has come to symbolise the chaotic 1990s and all the tribulations of that time.

One of his famous colleagues, former deputy prime minister Anatoly Chubais, said that Russia was incredibly lucky to have had a brilliant economist and a person of great personal courage at its helm at one of the critical junctures of its history.

The majority in Russia disagree: they consider Mr Gaidar a villain who for no good reason stole their savings and took away the country's treasured stability.

His admirers believe that monuments to him, as the saviour of the nation, should be built across Russia. His many detractors would rather spit on his grave.

Mr Gaidar, when appointed prime minister, accurately predicted the future, calling himself a "political kamikaze". He said simply: "Somebody just has to do it."

And, by the way, he was one of very few Russian men of power who lived very modestly until the end of his days, not having amassed a personal fortune.

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