Russia Emerges From Recession and Loses Economic Reformer
RUSSIAN FINANCE MINISTER Alexei Kudrin announced in a speech to the Russian Parliament on Wednesday that Russia was officially out of recession. After experiencing three straight quarters of severe economic contractions dating back to the eruption of the financial crisis last fall, Russia witnessed growth in the third quarter of this year, and the fourth quarter is all but assured to continue this trend.
But it was another announcement Wednesday that made us reflect on the ups and downs of the Russian economy: the passing of Yegor Gaidar, Russia’s leading economic reformer, who died of a blood clot. Gaidar is known, along with Polish economist Leszek Balcerowicz, as the father of the so-called “Shock Therapy” market reforms implemented across Eastern and Central Europe in the early 1990s.
Though it has been many years since Gaidar has been influential in Russia’s political or economic scene, his is still a name that resonates in the collective Russian mind — albeit in an overwhelmingly negative light. Gaidar’s shock therapy reforms, encouraged and largely shaped by the West, were intended to liberalize the Russian economic system through massive privatizations, instituting concepts that were alien to the command economy of the Soviet Union at the time, including private property, free markets, and a complete lifting of price controls. The reforms led to a total collapse of the Soviet-era social and economic fabric of Russia, an event that is still associated with Gaidar’s efforts, along with those who facilitated them, such as then-Russian President Boris Yeltsin and privatization portfolio chief Anatoly Chubais. (Source: Stratfor)