Yeltsin - the IMF's man in Russia

Boris Yeltsin, who has died aged 76, will be remembered as the populist who helped bring down the Soviet Union and then impoverished the Russian people with Western-funded "shock therapy" market economic policies. Under Yeltsin’s rule, state assets were ripped off and handed to oligarchs, while the democratisation process that began with Mikhail Gorbachev was replaced with authoritarian rule. In 1993, Yeltsin ordered tanks to attack the Russian Parliament and seize the deputies who opposed his policies. As an archetypal Russian nationalist, Yeltsin in 1994 ordered the savage assault on Chechnya to block its moves to independence, leading to the deaths of tens of thousands over the next decade. Yeltsin was feted by the major Western powers, who by contrast were ultra-cautious in their dealings with Gorbachev, offering him little financial support. The reasons are not difficult to fathom. Gorbachev had set out on a course of political revolution to end Stalinism in the Soviet Union – and Eastern Europe - while preserving a non-capitalist economy. He had challenged the Stalinists with moves to free elections and an open discussion on the country’s history. Works by former non-persons like Bukharin and Trotsky appeared in bookshops and were discussed at conferences. Yeltsin, meanwhile, had by 1990 already repudiated the 1917 revolution and was virulently anti-Communist. He denounced Gorbachev’s policies and, by now president of Russia, withheld taxes from the federal government. In this way he helped to destabilise the Soviet Union and make Gorbachev’s policies unachievable.

Soon after helping to thwart the coup against Gorbachev in August 1991 by Stalinist hardliners, Yeltsin took it upon himself to ban the Communist Party and seize its assets – the first of many illegal acts. Gorbachev had won a referendum on a reformed Soviet constitution allowing the republics greater democracy than they had enjoyed under Stalinism. This is what had prompted the August coup in the first place. But Yeltsin eventually achieved where the coup leaders failed in removing Gorbachev. In the decisive months that followed, Yeltsin formed an alliance with the ultra-Stalinist leaders of Ukraine and Byelorussia in a conspiracy to topple the Soviet Union itself by the end of the year. On December 31, 1991 Gorbachev left the Kremlin and the USSR was no more. Its end ushered in a full-blown counter-revolution of a social character as Yeltsin’s regime restored a wild, mafia-type of capitalism in Russia supported by the International Monetary Fund. The major Western powers encouraged Yeltsin to bring in a constitution that concentrated massive power in his hands. With Harvard economists like Jeffrey Sachs in key positions, Yeltsin ended all price subsidies to drive the economy towards the market. Inflation rose by 2000% in 1992. Millions of Russians saw their savings wiped out while others struggled to buy the basic necessities. The privatisation programme soon followed. All the assets developed under the Soviet Union by the sacrifices of countless millions were effectively given away, creating a group of powerful oligarchs. Next time you watch Chelsea play, just remember where owner Roman Abramovich’s money came from. While the oligarchs took their ill-gotten gains abroad, the government failed to pay pensions or the wages of workers in the state sector. In 1998, the Yeltsin government went bankrupt, defaulting on its international loans. The rouble lost three-quarters of its value. Yeltsin, who was now an alcoholic, had one last political act to carry out. He appointed his successor in the shape of Vladimir Putin. With the help of state-controlled television and some unexplained bombings in Moscow blamed on Chechens, Putin eventually became president of Russia and has ruled the country since 2000. Today Russia boasts more billionaires than any other country – and the lowest life expectancy rates of any developed nation.

Paul Feldman, communications editor