Many people remember in what year the Pavlovian reform led to the final impoverishment of the Soviet people. It is customary to name it by the name of the first and, in fact, the last Prime Minister of the Soviet Union. Let us further consider what the Pavlovian reform of 1991 was: the causes, stages, consequences of the transformations.
Situation in the country
The beginning of 1991 did not portend anything good to the collapsing Soviet Union . Interethnic clashes became more frequent on the outskirts of the country, there was a global shortage in stores, and people lined up in long lines. Gorbachev’s economic reforms did not lead to anything, perestroika did not take place. The government tried to switch from a planned to a market management system. However, the state was not ready for this institutionally - the country lacked the necessary people and bodies. The overwhelming majority of the population could not provide themselves with a sufficient amount of food and industrial goods. People are used to empty shelves. The only positive thing at that time was the stable payment of a modest salary. Of course, the leadership of the country understood that if they started to delay the payment of labor, this would result in mass protests. But the government could not allow this. People, meanwhile, did not require a large amount of material wealth. The population of the USSR is accustomed to restrictions, deficits, isolation. Everyone lived from paycheck to paycheck, trying to provide their families with food first and foremost with housing. According to prof. Volchik, the nature of the existing excess of money supply was caused by the growing dysfunctions of the institutions of the planned economic regime. Inconsistent and chaotic transformations destroyed the centralized system, but at the same time did not contribute to the formation of market regulatory mechanisms and institutions.
Why did the Pauline reform of 1991 begin?
There was a lot of money in the country. However, in the current crisis conditions, they constantly depreciated and turned into meaningless waste paper. The official reason was the fight against counterfeit banknotes "thrown from abroad." In addition, the government decided to seize unearned income of citizens. This statement of causes was the most common for Soviet ideology. Unofficially, it was clear to everyone that the key goal was the elimination of banknotes printed in the late 80s. to fulfill social guarantees accumulated by the population and exacerbating the shortage of consumer goods.
Transformation Organizer
The author of the reform was Valentin Pavlov, a 53-year-old “supporter of state capitalism”, the Minister of Finance. Since 1986, he led the USSR State Committee for Prices. Accordingly, he knew not the ideological, but the real state of affairs. Pavlov has long been looking for different ways to withdraw money from the population, unsecured by goods. After taking a ministerial post in July 1989, he constantly considered the idea of transformation. According to his plan, the reform included not only the withdrawal of excess money, but also help to increase prices, taking into account the cost of services and goods.
Transformation Options
The 1991 Pavlovian monetary reform involved several concepts. Among them were those that were previously used in other countries. Quite paradoxical concepts were developed. For example, as one of the options was the introduction of "parallel money" following the example of the gold dime of the 20s, but in non-cash circulation. Another concept was simply the confiscation of the previous banknotes without exchange and the mechanism of issue credit regulation. Such transformations were carried out in 1948 in Germany by Chancellor Adenauer. As a result , the black market was virtually eliminated . There was another, compromise option that the 1991 Pavlovian reform could follow. People, the compensation of which was supposed to be within the framework of a strictly fixed amount, didn’t have much money. However, the management intended to hold an exchange with a change in the scale of the national currency. In this case, it was envisaged to withdraw savings in excess of a strictly defined amount. The minister insisted on the speedy implementation of the reforms so that people who didn’t have the money, but in the money, would not have time, or would not be able to hand over completely. The Ministry of Finance had no doubt that for the majority of the population there was nothing to save from scanty wages, and only "dishonest people" could hold stash of money in large bills.
Transformation rationale
The Pavlovian reform of 1991 was to be approved by Gorbachev. To do this, it was necessary to justify. Pavlov used a long-known method. In the summer of 1990, he filed a secret note in the name of Gorbachev and Ryzhkov. In it, the minister explains the need to exchange exclusively 50 and 100 ruble bills of 1961. the fact that they are exported in huge volumes abroad. Ryzhkov, being the chairman of the Council of Ministers at that time, requested confirmation from the customs authorities. It was reported from there that, as a rule, ten-ruble banknotes cross the border, and not hundred-ruble notes. The discussion began, as a result of which Ryzhkov was dismissed. Gorbachev, who was rapidly losing popularity among the masses, needed a man who would take responsibility for the upcoming steps. Pavlov perfectly suited this role. On January 14, 1991, his candidacy was approved for the post of prime minister.
Cabinet Management
Pavlov began his activities as prime minister with misinformation. From a high rostrum, he assured that no preparations were made for future reforms. He said that financial transformations are only part of the whole complex of measures that are focused on improving the economy. An isolated reform of money without solving other tasks is pointless, as it will not lead to any results. In addition, the prime minister said that the transformation will cost the economy 5 billion rubles. And at the end of his speech, he pointed out that the banknote production facilities existing at that time would allow accumulating the necessary volume of new banknotes over three years.
The excitement of the people
Soviet citizens, long accustomed to the ideological attacks of the leadership, poorly understanding the essence of a market economy, nevertheless felt some kind of catch on the part of the party. The top officials of the state have already ceased to enjoy any kind of trust. Information about the upcoming reform leaked through acquaintances, so some citizens managed to change their “hundred” and “fifty dollars” in advance. On the eve of the announcement of the exchange, a part of the population managed to "exchange" cash at the ticket offices of railway stations and the metro, in stores, at taxi drivers. However, there were only a few such "lucky ones". Everyone suspected reform, but no one knew when or how it would be carried out. The upcoming changes were discussed everywhere: in transport, in universities, on collective farms, in production, in the army. Most of the population came to the conclusion that "there is really nothing to save," and on the other, "they will deceive anyway."
Pavlovskaya reform of money: the course of the "action"
On January 22, Gorbachev signed a decree according to which 50 and 100 ruble banknotes of 1961 were withdrawn from circulation. and exchanged for smaller new bills. From that moment, the Pavlovian reform of 1991 began. The population turned out to have less money than they expected. Cash exchange in the amount of up to 1 thousand rubles. only three days were produced - from January 23 to 25 (from Wednesday to Friday). At the same time, withdrawing money from accounts at Sberbank was limited to 500 rubles. The exchange was allowed until the end of March, but in special commissions. They examined each case of missing the deadline separately. Along with this, the citizen needed to tell where he got the amount of more than 1 thousand. The presidential decree was read out at 9 pm, when almost all organizations were no longer working. The smartest citizens in a panic began to save their money. Someone urgently sent a transfer, someone bought several plane or train tickets for different flights, in order to subsequently hand them over. However, only a few managed to do all this.
Exchange process
Pavlovskaya reform created huge lines already in the morning of January 23. At the box office of Sberbank there were "delegates" of labor collectives who changed the notes of entire brigades. The management’s calculation for the working days was partially justified. Many citizens simply did not have time to get from production to the box office. However, in some areas, the local administration was moving towards the population. Exchange points were opened at the factory, in post offices. In the queues themselves, conflicts arose, someone became ill. As a result, Pavlovsky monetary reform allowed to withdraw about 14 billion rubles from the population. According to the organizers, of course, it was planned to confiscate more than 51.5 billion out of 133 billion (about 39%). Pavlovskaya reform, in addition, included the freezing of bank savings. These funds were charged 40% per annum. However, they could not be obtained until next year.
results
Pavlovskaya reform sharply reduced national income. Compared with 1990, it decreased by 20%. Along with this, the budget deficit increased significantly. According to various estimates, in 1991 it amounted to 20-30% of GDP. When the Pavlovian reform was over, its organizer made accusations against foreign banks, blaming them for coordinated activities aimed at disorganizing the circulation of cash in the USSR. In the framework of the second stage of transformations, without any prior announcement, prices for consumer goods jumped sharply in the country from April 2, while they remained at a stable level for decades. All this led to the absolute loss of all confidence in the party leadership. The population considered themselves robbed twice.
Conclusion
According to the results of public opinion, Pavlovian reform has become one of the key reasons for the failure of the coup. It is known that it was undertaken by conservatives from the government and the Politburo of the Central Committee of the CPSU in 1991. It is noteworthy that the reformer Valentin Pavlov was also among the members of the State Emergency Committee. Subsequently, he said that at that time, few were aware and believed that it was not an ideological issue that was being resolved. At the end of January of the 91st, the country's population said goodbye not only to the missing banknotes, but also to part of their past. People living in Vladikavkaz who have witnessed these events, and now often remember how, on January 26, a day after the general hype, a well-dressed man with a suitcase appeared at the State Bank building. He opened it and poured a pile of 50-ruble banknotes into the snow and set fire to them. From the point of view of modernity, according to Volchik, this form of reform is absolutely unacceptable. However, if you evaluate the situation as the previous leadership did, then there simply was no other way of financial transformation. Almost all the reforms of the USSR were confiscatory. And this "action" of the early 90s was no exception.