SERGEY PRIKHODKO: AFTER ALL, GAIDAR TOOK THE RESPONSIBILITY
Sergey Prikhodko, Executive Director of the Gaidar Institute for Economic Policy, shared his memories with Gazeta.ru about Egor Gaidar who passed away ten years ago.
In October 1991, Boris Yeltsin, the First President of Russia, took a decision to set up the government of reformers. Actually, there were two economies at that time: state and market prices. ”What does it mean? Stealing was possible. Buying consumer goods cheap at planned distribution price fr om state enterprises and selling at market price through cooperative set up at the same state enterprise by shareholders, who by coincidence were director’s relatives. Difference in prices was tremendous”, said Sergey Prikhodko, Executive Director of the Institute for Economic Policy, named currently after Gaidar.
In such circumstances, no one wanted to take on the revival of a normal economy. Devastation and banditry of the 90s still scare new generation of residents.
The fact that powers of the Prime Minister were limited due to ideological and political reasons added to the collapse of economy.
“In a nutshell, to lead the government meant to lead the government of kamikaze.” Nevertheless, Gaidar took this responsibility, ”Prikhodko said. From June to December 1992, Gaidar was an acting Prime Minister”.
Since then, Gaidar is recognized as the architect of reforms, the author of the country's transition from a planned Soviet economy to a market one.
“Now the reverse process is underway, from the market to the nationalization of the economy,” Prikhodko noted.
From today’s perspective, one can say that Gaidar created a wretched, primitive market but the main thing he did was to fill the store shelves with at least some food.
“Today, of course, you can criticize Gaidar and chuckle: now, they say, they filled the country with cheap“ Bush’s legs ”. However, food appeared. Sorry, but until 1992 the country had nothing to eat”, Prikhodko said.
He remembered a joke popular at that time. A customer entered a supermarket, approached a shopkeeper and begged: ”Please, give me two hundred grams of food”. In other words, people asked for any food.
Negative evaluation of the Gaidar activity is primary associated with the issue, which has not been solved yet. These are the “burnt out” savings of households. These are the deposits valid in 1991.
Everybody had a savings book. “Certain monetary amounts were recorded in the savings book, however, it meant, say, nothing. Actually, there was no money in the country by that time. It was spent already before Gaidar”, – Prikhodko said and underlined wh ere this state budget money was spent for. It was spent for arms race, for example, war in Afghanistan as well for assistance to national liberation movement in different countries of Africa and Asia, support of the socialist Cuba and Vietnam.
“This assistance was called a loan, however, has anyone really returned these loans? According to Prikhodko, larger part of those loans has only recently been written off.
The largest costs of a planned economy are eventually intended to maintain domestic prices. While oil was expensive in the global markets the petrodollars in the budget of the Soviet Union were sufficient for implementation of many crazy projects and needs of the state budget, first of all, for compensation to unprofitable industrial enterprises.
“Speaking simplistically, many enterprises sold their products at the price almost below prime cost on instructions of the Communist Party. That is, they were forced to sell at unprofitable prices. However, the budget made up the difference so that people could receive their salaries, ”Prikhodko explained.
People saved money for a rainy day and also due to a total deficit along with collapsing economy.
Since 2010, Gaidar allies stage an economic forum at the Russian Presidential Academy of National Economy and Public Administration. Vladimir Mau, Rector of RANEPA, told Gazeta.ru that he decided to name this annual forum after Gaidar and this name took hold. The forum enjoys status of a “Russian Davos” and scientists – economists, politicians, business representatives agreed that this event deserves to be named after Gaidar. “Memory about Gaidar signifies in the first instance intellectual requirements, ability to consider issues within broad historical context”, Mau contemplated.
In such circumstances, no one wanted to take on the revival of a normal economy. Devastation and banditry of the 90s still scare new generation of residents.
The fact that powers of the Prime Minister were limited due to ideological and political reasons added to the collapse of economy.
“In a nutshell, to lead the government meant to lead the government of kamikaze.” Nevertheless, Gaidar took this responsibility, ”Prikhodko said. From June to December 1992, Gaidar was an acting Prime Minister”.
Since then, Gaidar is recognized as the architect of reforms, the author of the country's transition from a planned Soviet economy to a market one.
“Now the reverse process is underway, from the market to the nationalization of the economy,” Prikhodko noted.
From today’s perspective, one can say that Gaidar created a wretched, primitive market but the main thing he did was to fill the store shelves with at least some food.
“Today, of course, you can criticize Gaidar and chuckle: now, they say, they filled the country with cheap“ Bush’s legs ”. However, food appeared. Sorry, but until 1992 the country had nothing to eat”, Prikhodko said.
He remembered a joke popular at that time. A customer entered a supermarket, approached a shopkeeper and begged: ”Please, give me two hundred grams of food”. In other words, people asked for any food.
Negative evaluation of the Gaidar activity is primary associated with the issue, which has not been solved yet. These are the “burnt out” savings of households. These are the deposits valid in 1991.
Everybody had a savings book. “Certain monetary amounts were recorded in the savings book, however, it meant, say, nothing. Actually, there was no money in the country by that time. It was spent already before Gaidar”, – Prikhodko said and underlined wh ere this state budget money was spent for. It was spent for arms race, for example, war in Afghanistan as well for assistance to national liberation movement in different countries of Africa and Asia, support of the socialist Cuba and Vietnam.
“This assistance was called a loan, however, has anyone really returned these loans? According to Prikhodko, larger part of those loans has only recently been written off.
The largest costs of a planned economy are eventually intended to maintain domestic prices. While oil was expensive in the global markets the petrodollars in the budget of the Soviet Union were sufficient for implementation of many crazy projects and needs of the state budget, first of all, for compensation to unprofitable industrial enterprises.
“Speaking simplistically, many enterprises sold their products at the price almost below prime cost on instructions of the Communist Party. That is, they were forced to sell at unprofitable prices. However, the budget made up the difference so that people could receive their salaries, ”Prikhodko explained.
People saved money for a rainy day and also due to a total deficit along with collapsing economy.
Since 2010, Gaidar allies stage an economic forum at the Russian Presidential Academy of National Economy and Public Administration. Vladimir Mau, Rector of RANEPA, told Gazeta.ru that he decided to name this annual forum after Gaidar and this name took hold. The forum enjoys status of a “Russian Davos” and scientists – economists, politicians, business representatives agreed that this event deserves to be named after Gaidar. “Memory about Gaidar signifies in the first instance intellectual requirements, ability to consider issues within broad historical context”, Mau contemplated.