Expert talks about economic results of the State Emergency Committee 33 years after the coup
On the night of August 18-19, 1991, the State Emergency Committee (SEC) was created in the USSR during an attempted coup d'état. It included representatives of the country's top party leadership who disagreed with the policies of Soviet President Mikhail Gorbachev. These people attempted to remove the head of state from power and prevent the collapse of the country, which, according to the creators of this structure, could begin on August 20 during the signing of the Union Treaty, that is, the transformation of the USSR into a Union of Sovereign States, whose republics received the right to secede from this association. RSFSR President Boris Yeltsin came out against the SEC. Society did not support the putschists, and a split was also emerging in the army. As a result, power passed to Yeltsin, and the USSR collapsed. MK discussed the economic consequences of this event for Russia with Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers.
Hello, market!
— How much time passed between the fall of the State Emergency Committee and the formation of the free market in Russia?
— By historical standards, everything happened almost instantly. In the context of a human life, changes happened, as they say, before the eyes of one generation. In the summer of 1991, as a student, I asked my father, now deceased, international chess grandmaster Yuri Sergeevich Razuvaev, who often visited the West and knew life under capitalism very well, to recommend a country for me to emigrate to, especially one with a developed stock market. Being an employee of the State Bank, the USSR State Planning Committee, or the Institute of Economics of the Academy of Sciences did not appeal to me much. But the world of the stock market or investments was a dream worth leaving Moscow for. However, my father said that there was no point in leaving Moscow: Russia would soon replace the USSR. “And when you graduate from university, there will be a stock market,” he predicted. There were a couple of weeks left before the collapse of communism, or the State Emergency Committee. And the Russian Trading System (RTS), or the organized market for shares of privatized enterprises, started working 4 years later — on September 1, 1995.
— Was the transition to a new way of life difficult?
— For some reason, narrow-minded people call August 1991 the first color revolution in the post-Soviet space. However, these are fundamentally different stories. Let's start with the fact that in June 1991, Boris Yeltsin was elected president in one round. The duo of tough Boris Yeltsin and Afghan hero Alexander Rutskoy was doomed to victory. Yeltsin was counting not only on liberals, but also on patriots from among the Orthodox, followers of the White movement… He repeated this trick for the second time in the summer of 1996 with Alexander Lebed. Of course, the decisive role was played by the negotiations between Yeltsin and the security forces. Boris Nikolayevich was also very popular among the latter. It is no coincidence that many of them later took leading positions or became the main shareholders in new financial and industrial companies. Russia rejected the ineffective economic system and decided to build a free market in your country.
—What are the main economic results of the State Emergency Committee?
— Almost everything that exists in Russia today can be directly or indirectly attributed to them. Let me remind you that the putsch itself lasted only three days. It was a difficult time for the country. People were buying up everything they could in the Beryozka stores for foreign currency. On the black market, the Soviet ruble exchange rate fell from 30 rubles per US dollar to 100 rubles per US dollar and never went back. At that time, a bourgeois revolution took place in Russia, that is, a change in the political formation. Not only a market with all its pros and cons appeared in our country, but also freedom of speech, religion, and borders opened. There was a feeling of such freedom that many are still nostalgic for. Today we have a ruble, which we can exchange relatively freely for any other currencies. We have a functioning stock market, which has proven its stability even under sanctions. Today, any Russian can choose whether to work for the state, for themselves in the business sector, or in the private sector. The main result of the State Emergency Committee is that Russia has become a bourgeois country.
“Our dreams have come true”
—You speak about this with enthusiasm. But today, many consider the collapse of the USSR to be a tragedy – not only a political one, but also a personal one…
— Yes, it is now common to shed crocodile tears over the collapse of the USSR. However, in 1991, no one came out to defend the Union and Soviet power. It is worth noting another reason for the popularity of Boris Yeltsin and the idea of the sovereignty of the Russian Federation. The oil fields of Western Siberia were supposed to provide Russia with a smoother transition to the market. In general, looking at the post-Soviet republics, we can conclude that it worked out only where there was oil. I believe that out of the 15 former fraternal republics, only the Russian Federation, Kazakhstan and Azerbaijan fully formed as independent sovereign states. There was information in the press that out of three rubles that the RSFSR earned, two rubles went to subsidies for the union republics and countries of the socialist commonwealth. Boris Yeltsin, of course, went down in our history as far from the best ruler. But I believe that if he had immediately “crushed” rebellious Chechnya, cut Crimea off from Ukraine and exchanged oil and telecom shares for Soviet savings books, he would have received a different assessment in history.
— Well, capitalism has been built in Russia. Do you think there is more happiness?
— In August 1991, we dreamed of a strong capitalist Russia, in some ways similar to the Romanov Empire, in some ways to the USA, Great Britain or Germany. I believe that in the end our dreams came true. They came true not thanks to Yeltsin, but thanks to Putin. Although Yeltsin gave us Putin. Today, Russia is the fourth largest economy in the world. The only poor people in it are those who are sick or lazy. There are over 30 million investors on the Moscow Exchange, and if you count their families, we are talking about 100 million Russians involved in this sphere. This is actually two-thirds of the country's population! We repeated the economic feat of the Germans and the Japanese after World War II. We worked day and night to rebuild the country after the turmoil. Today, 33 years after the collapse of the State Emergency Committee, I find it much more comfortable to live in bourgeois Russia than in the USSR. Another thing is that on the way to today, all Russians had to go through many trials and pay a price that was far from small. Perhaps this is fair: after all, people rarely value what is given for free.
— Why have relations between Russia and the West changed so much over the past decades?
— The West, as always, did not understand anything. Russia got rid of communism itself, without anyone's help. Russians simply refused to memorize Grandpa Lenin and stand in line for three hours for milk. The West confused the collapse of communism with victory in the Cold War, deciding that we are a second-rate semi-sovereign power. This explains the current geopolitical conflict, in which I have no doubt at all. At different times, our country was called by different names: the USSR, the Russian Empire or the Russian Federation. But we were, are and always will be a great nation and a great power.
— What is the main political or economic lesson that can be learned from the collapse of the State Emergency Committee 33 years ago?
— The main lesson is that a government that is not capable of taking strong actions always loses. You can criticize the current government for some mistakes, but only those who do nothing make no mistakes. Russian President Vladimir Putin has never been afraid to take responsibility. There is an old saying: “If you do something, don’t be afraid. If you are afraid, don’t do it. And if you do something, don’t regret it.” The collapse of the State Emergency Committee certainly accelerated Russia’s transition to a market economy, and I think this is a positive thing. The communist economy in the form it had become by the early 1990s was doomed, and in its case, in my opinion, a terrible end is better than endless horror.