Yeltsin Boris Nikolaevich reforms - economic and political: pros and cons, consequences

The head of the "government of the reformers", before the presidency, promised sovereignty to the regions and weapons to the military. Over the years of governing the country, Boris Yeltsin proposed such changes, the consequences of which the Russian society will praise and curse for a long time, but it would be necessary to analyze.

Yeltsin Government Reforms Today

Boris Yeltsin had “crusts” for twelve working professions, but went to party work. He rebelled against the conservatism of the CPSU and left the party, taking a place at the top of the democratic opposition. The president, a month after the election, a putsch struck, wanted to finally knock out the resources of the command economy, but led the country to default.

Almost synonymous with default today is the name of Boris Yeltsin. Other strong associations include racketeering and “raspberry-colored jackets,” poverty and unemployment, the fiercest first Chechen campaign and emigration, the president’s ridiculous public appearances, and the complete collapse of Russia's authority in the world. As well as the failed economic and political reforms of Yeltsin. However, not everything is so simple here, not all Yeltsin’s attempts to direct the country along a positive vector were unsuccessful. This was to be done on new, not clearly formulated, and therefore many, still unclear ideological positions and in a precarious economy. Controversial transformations, but not entirely negative. The pros and cons of Yeltsin’s reforms are now even clearer than in the nineties.

New reforms for a new country: positive

The new Russia of the Yeltsin period is characterized by several advantages, usually they are not questioned, although critics have less consistency in assessing their quality. However, let’s call them:

1. Yeltsin Russia was welcomed by Europeans and Americans. Boris Yeltsin often met with politicians and heads of state, demonstrating a complete readiness to agree with them and do his best to build a market economy in Russia. Some of this point would probably be transferred to the next part of the article - about the minuses, but in the nineties our country could hardly afford to aggravate international relations, although it was not possible to achieve real friendship - economic and political.
2. There is no censorship in the country, and representatives of creative professions are no longer being watched. There is no control either in the cultural sphere or in the media. Proclaimed freedom of speech.
3. Privatization. Russians become owners of apartments and enterprises as a sign of a confident move towards democracy. They still argue over the enumeration of points of positive influence on market reforms of Yeltsin.
4. Freedom of choice of power began with Boris Yeltsin.
5. Many banks appear, especially small ones. But they served mainly the interests of a new class - the new Russians, as well as the owners of factories and companies.
6. Yeltsin’s political reforms with a democratic course: a multi-party system, resolution of impeachment and parliamentary elections.
7. Tax reform in Russia in 1991 is the first stage, the foundations of the tax system are being laid.
8. The iron curtain collapsed completely - the borders are open.

So, not all positive points are absolutely those. Some were in doubt then.

New reforms for a new country: negative

Destroying the Soviet Union, the initiators hardly imagined what would happen next. Having abandoned the planned economy, they seemed to consider any planning a relic of the Soviets. The shortsightedness of such an almost romantic position will soon have a bad effect on the population and the state system. Perhaps it was not good to make plans for more than a month. As the well-known “five” of the economic block of the early nineties is later recognized, they worked just that way. Problems were not generally predicted, but tried to solve. Tasks were not set, more often became hostages of the conditions that created these tasks.

Unsuccessful transformations and consequences of Yeltsin’s reforms:

1. The war in Chechnya. Russia was weakening before our eyes, nationalists in the regions took advantage of this. Independent Ichkeria was proclaimed in the Chechen Republic, ethnic cleansing of Russians began. Yeltsin sends troops to Chechnya. This caused a split in parliament. Yegor Gaidar, who led the Democratic Choice of Russia party, announced a protest with party members, but he could not influence the decision. Yeltsin has a new opposition line, a democratic one. Anti-war rallies were held in Moscow, the media was full of statements against the war. A great tragedy, of course, did not flare up in the government and parliament, but in Grozny, Gudermes, Argun and other settlements. Poor equipment of troops, consisting mainly of conscripts, mediocre command and a demoralized army. They give different data on losses, from 4 to 14,000 dead. The war in Chechnya, or as it was called the establishment of constitutional order in the Chechen Republic, damaged Yeltsin's reputation as a ruler capable of acting in a critical situation and deprived him of the political dividends received at the dawn of new Russia.
2. High criminalization, rampant gangsterism, corruption and racketeering. Yeltsin's market reforms proclaimed freedom of ownership, and some understood it as an indulgence in the exercise of the right of the strong. Gang groups appeared in Russian cities that, without fear of anyone or anything, seized business, killed competitors and opponents, dissenters and witnesses of crimes. Law enforcement officers often did not intervene in the showdown, there are known cases of police participation in crime. Often, jobless people went to gangs, mainly young people who fell under reduction, as well as those who wanted to easily cash in. The era of contract killings has begun.
3. Unemployment and delayed wages for months, massive cuts in production and liquidation of factories. Agriculture and industry were particularly affected. The effects of Yeltsin’s reforms are still felt on these areas.
4. Default is the main drawback of Yeltsin’s reforms. Economic experts say that it was possible to avoid the depreciation of the ruble if it were not for the president’s earlier decisions or sanctioned by him in the economy and social sphere. The Russians became impoverished.
5. The USA and other “friends” of the new Russia are no longer taking into account the interests of the country.
6. Yeltsin’s constitutional reform was promising, but in fact and practically did not work. Laws did not fight racketeering and corruption. The average Russian turned into a "little man", as in the classics novels. The pessimistic mood of the people intensified and did not promise Yeltsin a credit of trust.
7. People began to leave the country - in search of work, security or professional prospects. Many specialists and scientists are leaving. Another loss due to transformation.

Today, two points of view are singled out in assessing the fruitfulness of Boris Yeltsin’s reforms. Some say that the “concussion” of Russia in the 90s gave it zero stability. Opponents believe that the two thousandths were saved by the government that succeeded, and crises were the consequences of the reforms of Yeltsin and the reformers like him.

Market economy - a new course for Russia

The beginning of Yeltsin’s reforms began with the reorganization of the economy. The post-Soviet era began under the sign of the market. Boris Yeltsin, barely accepting the country, led it back to capitalism, which the victorious revolution in 1917 renounced. By the way, the nature of the apprehension of the financial block of the Yeltsin government about today's return of the planned economy is interesting. Reformers of the 90s consider destructive the appeal to the economic experience of the Soviets. True, they cannot formulate a clear justification for the position.

So, Boris Yeltsin directs Russia to the market, and the West approves this major reform.

The new government is headed by Yeltsin, but he entrusts the thirty-five-year-old Yegor Gaidar with economic transformation schemes. Other young reformers adjoin it: thirty-six-year-old Anatoly Chubais and Peter Aven, thirty-nine-year-old Alexander Shokhin and thirty-eight-year-old Andrey Nechaev. They were called "Harvard Boys." They did not graduate from Harvard, but studied Western economic theory.

How to check the theory

Boris Yeltsin forbade young reformers to get into politics, but gave complete freedom in attempts to build an economy. Gaidar and colleagues begin to put theory into practice with price liberalization. They decided to fill the shelves, giving free rein to pricing, so as to achieve a balance of supply and demand. Everyone was against the idea of ​​Gaidar, except for Yeltsin. And from January 1, 1992, everyone starts to cost as profitable to the seller. Prices soared dozens of times for some products.

Real incomes of the population fell by half, and all this against the backdrop of growing unemployment. The government could either pay subsidies or introduce a card system. But the budget fell apart and the “cards” could not be supported. And the people would not approve. They left the situation alone, continuing to explain then and now that price liberalization is a painful procedure, but the only possible one in the realities of the nineties.

“Outlandish” products for the Soviet people appeared in stores, but there was nothing to buy. There was only enough money for the most necessary. They introduce a “living wage” and call for freedom of trade to help.

Trade liberalization

They sell almost everything. Stalls, street rows with trading grandmothers, a lot of clothing and car markets. Shuttles are scientists and artists.

But a large revenue was available to the "sellers" of oil, gas and non-ferrous metals. Moreover, the difference between high world prices and low domestic prices promised a profit of a thousand percent. For assets in the "dashing nineties" fought with weapons and gangs. Due to the lack of efficiently functioning state institutions, they begin to share the market with all available methods. Later, reformers will say that they could not have foreseen such a force of criminalization, believing that businessmen would not go beyond petty marginal showdowns. But the business acquired a "roof", cash and assets, often defiantly neglecting the law.

At this time, “new Russians” appear. They enriched themselves in minutes when incomes of ordinary people hardly kept up with expenses.

Privatization

When the process of “voucher privatization” was launched in Russia, it was assumed that in this way Soviet enterprises would gain new effective owners. The need for reform was attributed to the "red directors". So called the leaders of powerful enterprises that used their status as a “feeder” and quietly from the state worked on “gray” sales schemes.

Yeltsin and his government created a class of owners and proclaimed the superiority of private property over state property. Loud statements about the rights of everyone to acquire property at a nominal price were actually fictitious. Only workers at highly profitable enterprises could get a small benefit, and there were few of them. In addition, they begin to conduct closed auctions. The promised equal rights to state ownership did not work.

All attempts to stabilize the situation failed. "Pavlovskaya reform" led to the nullification of deposits. They tried to turn on the printing press, but it did more harm than good.

Gaidar’s departure, the first “pyramids” and GKO

All attempts to achieve a reduction in public debt were unsuccessful; only deferred payment was achieved. Debts forgave Greece and Poland, but not weak Russia. Economic stress exacerbated the political crisis. In December 1992, deputies demanded a change in the head of government. Later, Yeltsin proposes the candidacy of Viktor Chernomyrdin, who soon made many mistakes.

In 1993, the exchange of Soviet rubles to Russian began. They took only 35,000 rubles and only two weeks. Sberbank branches lined up. Yeltsin decides to increase the amount to one hundred thousand rubles and the deadlines by the end of the year.

The era of financial "pyramids" begins. “MMM”, “Selenga”, “The Lord” and other smaller ones appear. The authorities observe their activities from a distance, there was no political will to intervene, nor was there a suitable law. But later it will be announced that Yeltsin’s economic reforms in many ways discredited precisely the “pyramids”.

Moreover, in parallel with the "pyramids" in Russia there are government short-term bonds to replenish the budget. The state issued bonds and sold them. The proceeds were divided into two parts. One went to cover the budget deficit. On the other - through the subsidiaries of the Central Bank, the state bought its own T-bills. At first, T-bills brought money, but by the beginning of the ninety-eighth year the budget deficit will be huge.

Distribution of state property

During privatization, powerful Russian enterprises circumvented this process, formally remaining state owned, but such firms were regulated only by directors and, occasionally, also by a narrow circle of management. A “collateral” privatization has begun, approved by the government, in which enterprises were redeemed with state money.

The Ministry of Finance transferred money to banks controlled by oligarchs. An “auction” was appointed, the winner of which, on the security of the shares of the enterprise, provided a loan to the state, consisting of its own funds. And when the state did not pay the loan, the shares remained with the new owner. More than ten enterprises, including Norilsk Nickel and Yukos, went into private hands at such “auctions”. Mikhail Khodorkovsky, for example, paid for the state-owned company with a deposit from the Ministry of Finance, which was placed with him by economists.

Default and riot of miners

In 1998, the ruble was denominated: a thousand rubles turned into one. This year, the Asian financial crisis came to Russia, and oil prices plummeted to twelve dollars a barrel. The authorities tried to keep the ruble “afloat”, the Central Bank let the currency go and the “rail war” began. In May, miners blocked the railroad tracks and demanded the resignation of Boris Yeltsin, as well as the dissolution of the State Duma and the government. Demands to return the mines to the state run into opinions about the restructuring required in the coal industry, with the liquidation of mines and jobs.

In August, a default struck, Western economists predicted it, but in Russia the president did not agree with the forecasts and publicly stated that there would be no default. But he arrived, the state declared itself bankrupt, the government acknowledged that there was no longer any opportunity to keep the ruble in the currency corridor. The Russian ruble fell one and a half times, and banks stopped issuing deposits. Premieres changed: Kiriyenko, Primakov, Stepashin, and then Yeltsin announced that he was leaving the post of president of Russia.

Yeltsin's reform results

In the image sense, the main reforms of Yeltsin became an absolute defeat. Especially the economic reforms of Yeltsin. After the surrender of the socialist economy, the nineties Russia became a country of victorious cash. The business elite created pocket banks, and the government “donated” factories and enterprises without receiving any budget benefits.

The government did not show responsibility for its people, who were undergoing shock therapy from reform to reform. Reforms were more like experiments, creating a constant threat of scarcity and hunger.

Is it possible to build a new Russia by other reforms? They still argue, as well as about Boris Yeltsin’s presidential capabilities and resources. Even on the eve of the election, the first to vote was business. Expensive and large-scale election campaign "Vote, or lose." Most of all, businessmen who were afraid of the victory of the presidential candidate and rival Yeltsin communist Gennady Zyuganov did not want to lose . Most likely, then all market "achievements" would have to be returned.

The transformations did not lead Russia to progress, but only slowed down the development of the country, hitting the economy and almost every Russian family very painfully. Some say that everything would have worked out if there had been no connivance on the part of the authorities on the processes destroying the country. However, this time has passed, and now it remains only to analyze past mistakes in order to prevent their recurrence.