ECONOMIC REFORM ICON AND OPPOSITION LEADER DEBATE THE 1990s

On June 30, Anatoly Chubais stepped down as board chairman of the state electricity monopoly RAO UES, which was liquidated the following day as part of a reform of Russia’s power industry. Chubais said that he plans to retire; and if he sticks to that plan, his departure from the scene will mark the end of a career that included the planning and execution of Russia’s controversial privatization program of the mid-1990s.

In a quasi-valedictory published earlier this month in the magazine New Times, Chubais defended himself against the charge that, as Russia’s privatization tsar and a political adviser to Boris Yeltsin, whose re-election campaign he ran in 1996, he played a key role in creating oligarchic rather than market capitalism. Chubais also responded to New Times deputy editor-in-chief Andrei Kolesnikov’s question whether Chubais had “lost the country.” The main thrust of Chubais’ self-defense was that while Russia’s post-Communist evolution fell far short of the idealistic hopes of glasnost and perestroika and the early Yeltsin period, things nonetheless improved, and he and his fellow “young reformers” achieved their basic goals.

“A revolution, even a peaceful one, as was our revolution of the late 1980s-early 1990s, is a very difficult time,” Chubais wrote. “It is a time of hope, but also a time of collapse. The lives of millions are broken; they are forced to adapt themselves to new circumstances. Only later, and not they themselves, but their children will understand that these circumstances are significantly more humane, better than those in which they lived before … Much of what we demanded twenty years ago – a market, private property, open borders – was not only realized, but has been accepted by the whole of society as a natural state.”

There is much today that is bad, Chubais conceded. “To watch television is often simply sickening, and it is even more sickening when you understand that it is not only television, but also a significant part of reality,” he wrote. “But we have built an economic market that is here to stay [and] the institution of private property; individual freedoms remain, a real middle class is forming. What we achieved, what is a plus, is irreversible and was achieved, don’t forget, without a civil war. Where we backed down, what is a minus, is not irreversible.”

Chubais added that no one back in late 1991s would have believed that, by 2008, Russia would have had ten years of economic growth behind it, rank seventh in the world in terms of gross domestic product or have Sergei Ignatiev running the Central Bank, Aleksei Kudrin as finance minister, the “former aide to [St. Petersburg Mayor Anatoly] Sobchak, Vladimir Putin” as prime minister, and a “young lawyer from St. Petersburg (also from Sobchak’s team)” as president (New Times, July 7).

The latter reference, of course, is to Dmitry Medvedev, and Chubais told the Wall Street Journal last month that the new Russian president’s pledges to improve the rule of law, strengthen democracy and implement market reforms were signs that Russia is “going in a liberal direction” (Wall Street Journal, June 25).

Garry Kasparov, the former world chess champion who is now a leading opposition figure, posted a response to Chubais’ New Times piece on the Gazeta.ru website on July 18. The main question that must be answered by anyone trying to understand the historical significance of the 1990s, Kasparov wrote, is: “What was the goal of the young reformers? Was the result achieved worth all the victims that they placed at the altar of shock therapy, voucher privatization, and loans-for-shares auctions?”

Chubais’ claim that Russia has a free market, private property, and open borders is a “deliberate lie,” Kasparov asserted. “What kind of market can you talk about, given a level corruption like that of Gambia and Togo, given the revelations about the state’s shady deal with Baikalfinansgrup [the firm owned by the state oil company Rosneft that won a December 2004 tender for a 75.79 percent share of Yuganskneftegaz, the main production unit of Mikhail Khodorkovsky’s Yukos-EDM], given the creation of huge ineffective state corporations …, given courts that are completely corrupt and dependent on the executive branch?” he asked. “What private property is Mr. Chubais talking about? Can’t any displeasing businessman in our country, from a stall-holder to an oligarch, be deprived of his private property through blackmail, threats, criminal prosecution, or simply murder? And what does the author of voucher privatization think about the ‘Olympics law’, which allows people to be tossed out of their PRIVATE homes onto the streets without a court order? And how can Anatoly Borisovich talk about open borders on the pages of a magazine whose staffer is not allowed into the country because of her noted investigations, which uncovered the corruption of top officials.”

The latter reference was to Natalia Morar, a Moscow-based New Times correspondent and citizen of Moldova who was declared a threat to Russia’s security and denied entry to the country after writing articles detailing alleged corruption by top Kremlin and Federal Security Service officials.

“In Russia there are neither liberal politics nor liberal economics,” wrote Kasparov. “There are the liberal clothes of certain members of the government, their liberal smiles, gestures and leaps. But behind this glamorous uniform hides a real dictatorship: without political competition, without freedom of speech or thought, without freedom of assembly and even without economic freedom” (www.gazeta.ru, July 18).