Column | Russia carried out a catastrophic economic reform in the 1990s – Now the price is being paid in Ukraine

In the 1990s, Yegor Gaidar brought economic reform to Russia, the consequences of which are now paying a hideous price. Why did Finnish politicians still praise him until the last few years?

In autumn In 2005, I sat in the Diana auditorium in the center of Helsinki with about 60 other people.

The public had paid 900 euros for the afternoon to the Rkp’s presidential candidate Henrik Laxin at the fundraising seminar.

As a candidate for the Finnish-Swedish minor party, Lax had attracted a confusing speaker to his fund-raising seminar.

Four rows ahead of me sat a small, round-cheeked man.

It was himself Yegor Gaidar!

in Russia was chaos in the early 1990s.

Gaidar had been elected as Prime Minister, who had previously promised as Minister of Economy in 18 months to transform the collapsed system of the Soviet Union into a Western market economy.

Gaidar initiated a hyper-radical economic reform that has often been called the biggest robbery in world history.

And that’s where he pasteurized – at Henrik Lax’s seminar. Praising Western market liberalism and democracy.

Lax is a likeable man. He shook hands like Obama and proclaimed the gospel of human rights, democracy and the Swedish language.

I asked Lax what the hell Gaidar came here for. Lax said he called Gaidar in Moscow and asked.

“He had to make extremely difficult decisions, without which Russia would not have reached where it is now. Throughout its history, the Russian people have not had the opportunity to take responsibility for their own social affairs. Gaidar isn’t down there. It’s only appropriate to ask the critics what they could have done better,” argued Lax.

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In the last few months I’ve been digging into the history of the Soviet Union and Russia: Nonfiction books, documentaries, podcasts, magazine articles, whatever I can get my hands on. Everything has worked. I’ve been like a mixed user who got lost in the bathroom medicine cabinet.

In December, I stared at the British with bloodshot eyes by Adam Curtis a recent seven-part documentary TraumaZone, which covers the years 1985–1999. First the end of the Soviet Union, then the beginning of Russia. Curtis makes collage-like films with a lot of documentary material and a nice sociological touch.

He doesn’t explain things outright, but leaves room for thoughts.

When TraumaZone discussed the worst trauma of the new Russia, the radical economic reform in the early 1990s, a familiar round-cheeked man entered the picture.

You can probably already guess who.

Do you have to? to judge a ruler – or indeed any human being – by his past or by what he has become?

Economist Yegor Gaidar was a man of reckless actions. He freed the Soviet economy from almost all regulation in one fell swoop and promised a miracle cure for the paralyzed system.

Gaidar proclaimed what many in the West wanted to hear.

Well, what do you think, how could it happen?

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The oligarchs controlled, bought and extorted giant state-owned companies. Social security was an unknown concept. Economic reform was called for for shock therapy.

The store shelves were empty. If there was anything else in the Market, it was hyperinflation that skyrocketed prices. State property was sold in reckless auctions: from sewing factories to military radars, from fighter jets to bread factories.

The disaster was so deep that even the average life expectancy of Russians collapsed. At the turn of the millennium, the feeling of emptiness was filled by an unknown KGB colonel Vladimir Putinwho promised discipline and order, and won the election.

Rkp’s sympathetic presidential candidate Henrik Lax, on the other hand, despite Gaidar’s appeal, came in seventh place in the 2006 presidential election with a vote share of 1.6 percent.

Gaidar had also impressed another Finnish politician.

I interviewed the ex-prime minister Esko Ahoa in December 2018.

Aho held numerous important positions that were linked to the Kremlin. The most significant of them was membership in the board of Russia’s largest bank, Sberbank. Aho was still on duty in the morning of February 24, 2022, when the Russian invasion army rolled into Ukraine.

Aho praised Gaidar. He had even translated Gaidar’s book into Finnish Destruction of an empire (Finnish translation 2014). In the still relevant book, Gaidar harshly scolded the Soviet Union and warned Russia against imperialism.

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“Even Putin listened to him,” Aho said of Gaidar.

Aho and Gaidar were friends until December 2009, when Gaidar died of a blood clot. Gaidar was suspected of being the target of a poisoning attack in November 2006, but he survived it.

Why Gaidar became a pet of the West? How did he end up as the main attraction of Rkp’s candidate?

Because at the beginning of the 21st century, he proclaimed what many in the West wanted to hear: barked at the East, praised the West and demanded the most liberal economic policy.

The fact was, however, that with Gaidar’s guidance, the state property of the Soviet Union had been robbed to about ten oligarchs in the 1990s.

In Curtis’s documentary, there was a clip of a demonstration in Moscow in 1995. You could feel the fury. The people considered Gaidar to be the biggest villain.

“Mafia to hell! Mafia to hell!” the Russians roared.

It could very well be that Gaidar was sincerely striving for good.

But without shock therapy Russia could have ended up on a different development path. For what, we don’t know.

What we know is that the political consequences of the trauma are now paying a hideous price in Ukraine.

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