Publication: Monitor Volume: 4 Issue: 194

At a conference held on October 20 by the “Union of Labor”–the political arm of the Russian Federation of Independent Trade Unions–Yuri Luzhkov called for the criminal prosecution of those who organized the “government GKO pyramid.” Luzhkov–Moscow’s mayor and a leading contender to succeed President Boris Yeltsin–was referring to the Russian government’s short-term treasury bills, which were introduced under former Prime Minister Viktor Chernomyrdin as a way of financing the budget deficit. In August, the government of former Prime Minister Sergei Kirienko had declared a ninety-day moratorium on GKO payments when it ran out of funds to cover the debts. Luzhkov also said that organizers of pyramid schemes such as the notorious MMM fund should be brought to justice. Among the companies Luzhkov mentioned in his list of pyramid schemes was AVVA–the All-Russian Automobile Alliance–which was set up in the early 1990s by financier Boris Berezovsky. Berezovsky and Luzhkov are known to be political enemies.

Luzhkov also charged that privatization had been carried out with Bolshevik methods. He then called for “an obligatory review of the results of privatization in Russia.” While the Bolsheviks in 1917 nationalized all property, he said, “[Anatoly] Chubais gave 100 percent of the property to criminals”–which resulted in property winding up in the hands of “ineffective owners.” Luzhkov said he was convinced that this was a deliberate policy. He said he was not advocating total deprivatization, but added that “if an enterprise works normally, leave it alone, but when it is loafing, it is necessary to return it to the state, which must re-establish production process.”

Luzhkov made many of the same points in a separate address Thursday to the ninth congress of the Russian Union of Industrialists and Entrepreneurs. Luzhkov told the assembled industrial chiefs that the government should support the “real” economy, including machine-building, the chemical and automobile industries, and agriculture. He advised the audience to ignore “the Gaidars and Chubaises, who will begin to howl that this is a deviation from the market and a betrayal of the reforms started in the country.” These and other comments–he charged that privatization had “plundered and ruined the country’s economy”–were wildly applauded by the audience (Russian agencies, October 20).