Paul Mitchinson is a part-time writer and a full-time father of two. He writes when he can. » more about me

It’s OUR Problem

National Post, 4 March 2000

Book Review
Days of Defeat and Victory (Jackson School Publications in International Studies), by Yegor Gaidar
University of Washington Press, 332 pages

As former Russian president Boris Yeltsin settles into his retirement years, he leaves a troubling legacy. Behind the bustling marketplaces, the gleaming domes of rebuilt churches and the rickety framework of a young democracy, a full-blown social crisis has quietly unfolded: Drug crimes increased fivefold between 1991-1996; the murder rate is now double that of the United States; poverty claims more than one third of the Russian population, which is increasingly falling victim to its associated diseases — tuberculosis, diphtheria, polio, anemia; by 1994, the average Russian man was dying before reaching the age of 58 — younger than in Egypt, India or Bolivia.

What went wrong? Or, as Russians have asked themselves for centuries: Who is to blame? According to a near-consensus of the Western media, we are. Specifically, it was the West’s prescription of economic “shock therapy” — dreamed up by such economic gurus as Harvard’s Jeffrey Sachs, cheered on by such journals as The Economist, harshly imposed by the International Monetary Fund, and mindlessly embraced by such early reform prime ministers as Yegor Gaidar and Anatoly Chubais — that led directly to Russia’s disastrous spiral of social and economic decline. As Jonathan Steele huffed in The Guardian last year [Jan. 8, 1999], “a little contrition from The Economist and its fellow travelling theorists would not come amiss.”

Perhaps. But you won’t find any contrition in Days of Defeat and Victory, the memoirs of Yegor Gaidar, the first post-Soviet prime minister of Russia and architect of its first round of monetary reforms. In fact, you won’t find much about the West at all in this book, positive or negative. Jeffrey Sachs, an important economic adviser to the Russian government during Gaidar’s tenure in the early 1990s, is a no-show. So is Harvard. The IMF doesn’t even rate a full page. Gaidar insists that “shock therapy” — the crash course in price liberalization and privatization pursued fitfully throughout the former Eastern bloc — was a sad necessity forced on him by the legacy of Soviet Communism and by simple budgetary realities. Instead of taking the easy way out, saying, “The Devil (and the IMF) made me do it,” Gaidar stoutly defends his economic reform plan as a Russian solution to a Russian problem.

This perspective will be disorienting to even casual readers of Western media sources. Sadly typical was a cover story in The New York Times Magazine last August that angrily demanded, “Who Lost Russia?” But when you begin to look at Russia through Russian eyes, not as something to be “won” or “lost” by the West, then matters look rather different. As Gaidar makes clear, any plan of economic reform, gradual or sudden, popular or loathed, was never going to lead to a miracle — the obstacles were simply too great. During the 1980s, Russia’s last Communist rulers squeezed the last worthless rubles out of an obsolete military-industrial complex, leaving the country economically, politically and spiritually bankrupt. Russia’s gold reserves were plundered, making monetary reform virtually impossible: more than 1,000 tons were shipped abroad in the last three years of Mikhail Gorbachev’s rule alone. Its hard currency reserves were similarly drained, while foreign debt soared. And while the country teetered on the verge of insolvency, it couldn’t even feed itself — a series of disappointing harvests led to massive imports of grain.

This is what makes comparisons with economic success stories in Poland and the Czech Republic so specious. Gaidar points out that Poland’s last Communist government began price liberalization on its own, weathering the inevitable storm of hyperinflation, but leaving its successor with more or less sound finances. A struggling private sector also had managed to survive in Communist Poland, unlike Soviet Russia. The communist ethic of legalized theft had penetrated far deeper into Soviet Russian society, and uprooting it was far more difficult. Even today, the irresponsible and demagogic behaviour of the Russian Parliament’s Communist deputies, eager to exploit genuine popular grievances, has effectively stymied reform.

Gaidar, to his credit, is about as demagogic as a university math professor. “I’m more at home in a library than anywhere else,” he writes. “I’ve never craved constant contact with other people.” Perhaps this is his fatal weakness — indeed, the weakness of Russian reformers in general. In fact, had Yeltsin not stooped to outright anti-Communist demagogy in his 1996 re-election campaign, he, too, would undoubtedly have been defeated. Russia has been depressingly unable to unite its pro-reform politicians around a single, charismatic, politically responsible and democratically astute leader. Gaidar’s informative, though bloodless, memoirs bear profound witness to this problem. Without such a figure, Russia’s political and economic misery will continue to fester, with or without Western assistance.

Yet, even under the guidance of such flawed reformers as Yeltsin and Gaidar, Russia’s brief democratic experiment has yielded some impressive achievements — three parliamentary elections, and a peaceful transition of presidential power. There have even been recent signs of economic revival. As Anders Aslund pointed out in The New York Times in January, Russian GDP grew 2% last year, and industry more than 8%. The life expectancy of Russian men has rebounded to nearly 62 years. Ironically, the financial collapse of August, 1998, may have had the unintended benefit of finally reversing the decline in the Russian economy, spurring domestic industry and reducing the power of the oligarchs. It may not be enough for the West — it is certainly not enough for Russians. But it may very well be the first faltering steps towards a genuinely democratic and prosperous Russia.