Yegor Gaidar, architect of Russia's free market transition, dies

Photo by Sergey Kuksin,Rossiyskaya Gazeta

Photo by Sergey Kuksin,Rossiyskaya Gazeta

"Yegor Gaidar has died, I cannot currently give any more details," Gennady Volkov said.

Gaidar reportedly died of natural causes when a blood clot became dislodged.

He was one of the young reformers, including Anatoly Chubais and Boris Nemtsov, that President Boris Yeltsin surrounded himself with in the early 1990s and was acting prime minister during the second half of 1992.

The parliament refused to confirm Yeltsin's choice, and Gaidar stepped aside for Viktor Chernomyrdin to become the president's economic adviser.

He was vilified by the public for the hardships caused by his "shock therapy" policy to move Russia from the Soviet planned economy to free-market capitalism and left government in 1994, although he was elected to serve two terms in the State Duma, in 1993-1995 and 1999-2003.

Chubais, the minister responsible for privatization in the early 1990s, praised Gaidar as Russia's savior.

"It was Russia's huge good fortune that in one of the worst moments in its history it had Yegor Gaidar. In the early 1990s he saved the country from famine, civil war and disintegration," Chubais wrote in his blog.

Chubais, who was also demonized over the economic reforms of the 1990s but unlike Gaidar has remained near the center of Russian power, said the former top official had remained an "intellectual and moral leader for all of us."

"Few people in the history of Russia and in world history can be compared with him for force of intellect, clarity of understanding of the past, present and future, and a willingness to take the most difficult but necessary decisions," wrote Chubais, who oversaw the breakup of electricity monopoly UES and now heads the Russian Nanotechnology Corporation..

Gaidar was born March 19, 1956 in Moscow, the son of former Navy admiral and journalist Timur Gaidar and grandson of famous writer Arkady Gaidar.

He is survived by his wife, three sons and daughter.

The professional

The name of Yegor Gaidar is linked with decisive steps in Russia’s transition to a radically new path of development.

Prepared by Yekaterina Vlasova, Tatyana Panina

Yevgeny Yasin, academic director of the state university – Higher School of Economics

It is a very heavy loss, and unexpected. Yegor Timurovich and I parted at 11 o’clock in the evening. We had discussed producing a series of works on issues in Russia’s recent history. We want to objectively describe the “dark days” of the 1990s, and he recently published a book called Power and Property, which includes a large section on this topic. We had plans, we had work to do… We shook hands. And the next day Gaidar was no more.

It’s difficult at first to come to terms with this. But at the same time we have to reflect on it, because a man of very great stature has left us. I would say without fear of exaggeration that a great son of his Motherland has passed away, a man who made an enormous contribution to its well-being.

Many people dislike Gaidar, and consider him to blame for many of the ills that befell our country. There are some who think they could do better. But the fact remains: the country was facing an unbelievably difficult task – to make the transition from a planned economy which had become unfit for purpose, demonstrating the failure of the communist experiment, to a market economy. This could not be a simple matter, because these two systems were incompatible. There was no way one could take an element from one, join it with the elements of another and make it something capable of working. It was necessary to make up our minds, take responsibility for it. People were needed who could do this. And we managed to find such a man. He was Yegor Gaidar.

But during all the years after he left the government, people continued to point the finger at him: “Ah, these reforms of Gaidar’s, they’re shock therapy! He’s destroyed everything!” It was so petty, it did not match the scale of the times. And Gaidar understood from the very beginning that all this would befall him. But he did what he believed was necessary. This is what created the momentum for Russia’s normal development along a civilised path. And we are travelling this path, alas, without a good word for those who essentially gave us this opportunity.

I hope that today at least we shall remember all that. We should give honour where it is due to this great man. And we shall always remember that Russia’s greatness is created not by its great territory or its industry. It is created by people, great people. Just as ancient Athens became famous for Euclid and Herodotus, so Russia has become the country of Pushkin, Tolstoy and Dostoyevsky – and of Gaidar. It is well known that Yegor Timurovich was seriously engaged in developing financial reform. At the moment these reforms perhaps don’t look so sharp, but at some point in the future we shall nevertheless have to take a political decision. We need financial decentralisation, and we need to shift the centre of gravity to the regions. Gaidar also worked on pension reform, which is exceptionally important for Russia today. His main idea was to concentrate major resources in the specific capital of the Pension Fund, i.e. to create the possibility of a painless transition from a distributive system, from the way today’s pensioners live, to being able to ensure appropriate living conditions for future generations of pensioners.

Unfortunately, the crisis has somewhat undermined the possibilities that were linked to this. Nevertheless this idea remains topical, the more so since the first step has already been taken – a decision has been made to move again to insurance principles for creating social welfare funds. This is very important.

And credit must be given to the country’s leadership for the fact that we have been able to reject a single social tax and replace it with insurance payments, although everyone around us continues to kick up a fuss about the fact that in this way we are increasing the pressure on business people and undermining the incentives for business. This is precisely the case where in difficult situations an unpopular but absolutely correct decision has been taken. This reminds me of Gaidar’s style. And I’m glad that his style is at last being used by today’s authorities.

Gaidar’s reforms gave the country a chance to preserve itself

Igor Yurgens, chairman of the board, institute of contemporary development

This is a very great loss for our country, especially now, when all ideas about modernisation and development are in such great demand. Gaidar headed one of the most important “think tanks” working in this area – the Institute for Economies in Transition. True, he never tried to present himself personally as the driving force and the intellect behind all the institute’s projects. But he did a great deal of work, including on exploring the meaning of modernisation.

It is especially distressing to lose him at this juncture, but of course now this is not all one thinks about – one thinks also about the path he travelled. One understands the way many people related to him, associating him with the excessively harsh reforms after the collapse of the Soviet Union. But as someone who studied with him in the economics faculty at Moscow State University and who came across him in my work from the very beginning of his business career, I can say that Yegor Gaidar was one of the most honest, unselfish and amazingly energetic reformers, of whom the country will never be ashamed, although I know very well the negative burden he carried on his shoulders in connection with what he had to get involved in. But the severity of these reforms should not be associated with Gaidar’s name. He did everything he could to make them more gentle.

Remember the time: there were just 60 million dollars of gold and currency reserves in the country, not 600 billion as now. People were carrying their last possessions out of their houses and selling them on the streets. In these conditions Gaidar and his colleagues had no choice left: they had to resolve to carry out reforms that were severe and not the most pleasant. And Gaidar resolved to do so. Essentially he took full responsibility for them. Yegor Gaidar had recently been drawing up some very correct options for pension and finance reforms. I hope that his colleagues from the Institute for Economies in Transition will continue to work on these issues that are so important for the country. If we don’t resolve these issues we won’t have a balanced budget, nor any forward movement.

Nikita Belykh, Governor, Kirov Region (former head of SPS political party)

Yegor Gaidar's death is a very sad event, and his role in modern Russian history is hard to overestimate. He was an authoritative figure not only in economics, but in human decency and responsibility.
Gaidar formed the part of by biography connected to politics, and we regularly consulted on various questions. I discussed my decision to leave the SPS political party and become governor with him; he supported me.
Yegor Gaidar's death is a deep personal loss, but his daughter, Maria Gaidar, will continue to work in my administration.

Alexei Kudrin, deputy prime minister, Minister of Finance

He remained an active scholar and economist to the last day of his life, a man whose opinion was valued by experts not only in our own country but also throughout the world. Yegor Gaidar was a key man who laid the foundations for a market economy and democracy in Russia. He did this at a time when the Soviet system was collapsing and the state’s administration was breaking down.

Boris Gryzlov, speaker of the State Duma

Yegor Gaidar’s actions at the beginning of the 1990s were essential for Russia. Despite the different readings of the country’s development and the various stances of the right wing, left wing and centre, what he did at that time was necessary.

Anatoly Chubais, CEO, Russian Nanotechnology Corporation

It was an enormous stroke of good fortune for Russia that at one of the gravest moments in its history it had Yegor Gaidar. At the beginning of the 1990s he saved the country from hunger, civil war and collapse. He was a great man, a great scholar and a great statesman. There are few people in the history of Russia or of the world who can be compared with him in terms of strength of intellect, clarity in understanding of the past, present and future, and willingness to take the most difficult but necessary decisions. In recent years he had been the intellectual and moral leader for all of us. For me he was and will always remain the highest example of honesty, courage and reliability. I shall feel this loss for the rest of my life.

Vladimir Ryzhkov, leader, Russian public movement, Russia’s choice

The death of Gaidar is an irreplaceable loss for all who hold dear the ideals of freedom, democracy, openness and human rights. He was simultaneously a great reformer, an outstanding politician and a major scholar.


By Irina Yasina

Former acting-prime minister and economic reformer Yegor Gaidar died on December 16 at the age of 53.

Gaidar is a famous name in Russia. Gaidar’s grandfather, the well known children’s writer Arkady Gaidar, commanded a regiment of “Reds” when he was barely 16. Gaidar’s father, Timur Gaidar, was a war correspondent who reported from Cuba during the Cuban Missile Crisis. Yegor Gaidar outdid both his father and grandfather. His contribution to Russian history is comparable to that of the great 19th century reformers — Speransky, Witte and Stolypin.

In the late 1980s communist ideology in the Soviet Union was dying. The country’s 70-year history was also coming to an end. Its achievements were all in the past: the victory over Fascist Germany, Gargarin’s pioneering flight into space. Now the shelves in the shops were empty, the war in Afghanistan was exhausting the last forces, and everything had to be imported: grain, medicine, equipment. During Gorbachev’s tenure, now famous thanks to the word “perestroika”, the Soviet economy was in its final decline. The problems with the economy had long existed, but the drop in oil prices in the mid ‘80s dealt the final blow to the planned system of distribution. By the end of 1991 the Soviet Union was bankrupt. No one would lend it any money — not banks, not governments. Its gold reserves totaled $26 million (today they total over $400 billion).
Attempts at reform had been made under Gorbachev. But they were timid and inconsistent. They tried to improve the economic situation without touching the two sacred cows — state-owned means of production and fixed prices. In the late fall of 1991, after the abortive coup, when the Soviet Union was in its final days, a chance did appear for radical reforms. Not in the USSR, but in the newly independent state of Russia.

True, few had the heart to conduct these reforms. Or rather no one did. Not the academicians, not the ministers, not the factory directors. No one suggested to Russian President Boris Yeltsin that he create and implement a comprehensive program of economic reforms. Yegor Gaidar was then 35. He was the only doctor of sciences (a level higher than a Ph.D.) in the team of young Ph.D.s that he put together. That team became the first Russian government. Its task was to make property private, prices free and trade a legal occupation open to all citizens. Moreover, Gaidar’s team had to complete and formalize the spontaneous collapse of the Soviet Union while avoiding a civil war on the Yugoslavian model — all this in a country crammed with nuclear weapons. As well they had to make sure that no one went hungry. Ships full of grain were docked in Canada and Argentina, but there was no money to pay for crossings, meanwhile Moscow and Leningrad had enough flour to last a few days.

Yegor Gaidar was never the top man in Russia. He was Finance Minister or Acting Prime Minister or Deputy Prime Minister. Someone always hindered his progress — the Soviet-style parliament, the president’s entourage. Nevertheless the liberalization of prices was put through, industry was privatized, and trade became free. It was in Gaidar’s hands that Russia jumped across the chasm between socialism and capitalism.

At what cost? Russia endured several years of galloping inflation, which resulted in the loss of its reserves and the appearance of social inequality with respect to property. This inequality had existed in Soviet times, but it was well hidden. The significant reduction in the military industrial complex under Gaidar alarmed citizens: Russia had lost its status as a superpower. The consciousness of that status in the Soviet Union had at times substituted for people’s daily bread and butter, and other attributes of a worthy life.

Could most Russian citizens forgive Gaidar and President Yeltsin for those terrible trials? Of course not! The passive majority did not blame the communists who had run country into the ground. They blamed Gaidar. As in antiquity, they blamed the messenger. People still do not understand the difference between the words “after” and “as a result of”. They blamed the person who was in charge “after” socialism, the person who did not correct the defects that arose “as a result of” socialism.

In his last years Yegor Gaidar was far removed from government affairs. Sometimes he was asked to act as an advisor. The current powers-that-be have Gaidar to thank for the air bags that helped Russia and most Russian citizens survive the world financial crisis. It was Gaidar who advocated the creation of a stabilization fund and the institution of a bold tax reform. But the current powers-that-be did not like Gaidar; they dubbed the period of Gaidar’s reforms “the fast ‘90s”.

They didn’t like his habit of calling things as he saw them: he called the growth in the share of state-owned property “nationalization”, the increase in budget expenditures “populism”, and the arrest of Mikhail Khodorkovsky “a colossal mistake”. Yegor Gaidar never changed his liberal views and never tried to mask them.

Russia has lost a great reformer, a scrupulously honest man of enormous erudition and wisdom, a courageous and responsible patriot. A genuine patriot, as opposed to those who scream about “great Russia” every chance they get, while rejoicing in the corruption and the censorship and the impunity of bureaucrats. For now, only the most Europeanized segment of Russian society can assess Gaidar’s role in Russian history.
I hope to live to see the day when Russia erects a monument to Yegor Gaidar. I am nearly 46. I’ve got my eye on the time.

Irina Yasina is an analyst at the Institute of Transitional Economy, a weekly economic commentator for RIA Novosti, and a representative of the Open Russia Foundation.

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