“Chubais is to blame for everything” - this phrase of President Yeltsin forever determined the place of Anatoly Chubais in the post-Soviet history of Russia. This person, no matter how you treat him, in the view of many, is responsible for everything. Or almost everything. Hence the assessments: Chubais is either loved or hated just as passionately. In the editorial office of The New Times, two economists who were part of the very first government of the new Russia, Sergey Glazyev and Sergey Vasiliev, argued about Anatoly Chubais.
What did Anatoly Chubais bring to the country more: benefit or harm?
Sergei Glazyev: I am convinced that there is no more harmful figure in our politics. In all areas of activity that Chubais was engaged in, only heaps of ruins remained.
Sergey Vasiliev: **** I would urge not to demonize Anatoly Borisovich, portraying him as the source of all the troubles that have befallen Russia. Without Chubais, it is generally difficult to imagine Russian politics in the 1990s.
Fatal nineties
Glazyev: The result of the privatization campaign, in the form in which it was implemented, was the transformation of our pro-industry into the world's largest cemetery of factories, the curtailment of production, even in the oil industry, efficiency dropped sharply. If we talk about Chubais's other arts, then we will soon celebrate the decade of the default, where he also played an outstanding role, advising Kiriyenko and Dubinin to bankrupt the entire state financial system. I don't even want to talk about such political scams as Yeltsin's election in 1996.
Vasiliev: By 1990, our economy was already a cemetery of factories, and reforms were inevitable. You can discuss individual episodes of privatization, I think Anatoly Borisovich himself admits that check privatization was not well thought out, which led to fraud with vouchers. And I'm quite reserved about loans-for-shares auctions. In general, I consider him one of the largest figures in the political and economic landscape of Russia.
Glazyev: The pre-reform Russian economy may not have been very efficient, but it was the third largest economy in the world in terms of output. And we suffered the most damage during privatization in the high-tech sector - not so much because of check privatization, but because, in order to speed up the process, unified research and production complexes were cut into many independent legal entities. The result was the collapse of technological chains, the most promising industries engaged in the production of quite competitive aviation equipment, some branches of instrument making, and the electrical industry suffered.
Vasiliev: Sergei Yurievich and I disagree on basic interpretations of the state of the Soviet economy. What he is talking about did not exist by 90%, and what did exist was not viable either cut or combined.
Glazyev: We had two quite competitive industries: the nuclear industry and the aviation industry. In the part where the state has retained control, these industries are still the most competitive. The nuclear industry is advanced by all world standards. The military aircraft industry, where the state has retained control, is still successful. The civil aviation industry, where the state has lost control, has been razed to the ground. I'm not saying that privatization in itself led to a drop in efficiency. But it was precisely the method of privatization that was chosen that led to a break in the technological chain.
The only trouble was that there was nothing to eat ... The atom - both peaceful and non-peaceful - did not help much to feed the children.
Glazyev: Reforms were inevitable - I myself participated in them. The question is how to carry out reforms. There is the experience of China with an economic miracle, the experience of Vietnam with very positive results, the experience of Eastern Europe with difficult results, and our deplorable experience. We were all in roughly the same state 19 years ago.
Vasiliev: Vietnam and China are predominantly agricultural countries. In China, the added value was created by the peasantry, it was enough to free the peasants, give them land, for the economy to breathe. With us, however, such a path was impossible, our country was carefully de-peasanted. In China, the party's monopoly has also been preserved. By the 1990s, thank God, we no longer had a party monopoly.
Glazyev: On the other hand, there was a population of better quality in terms of educational potential, a higher level of development of industry, science and technology ... And after 1993, we had a presidential monopoly on power, which replaced both the Communist Party and the state apparatus, so I don’t understand , what is the fundamental difference here - there is a dictatorial regime and here a dictatorial regime ...
Vasiliev: This is again demagogy! Don't you understand that the regime of 1993 in Russia was radically different, because we had a free press plus free elections?
Glazyev: How did the execution of the parliament differ from the massacre on Tiananmen Square?
Reforms and goals
Talk about Chubais inevitably turns to reforms in general. Is the merit of Chubais the fact that today there is a more or less established market environment, the possibility of development, or did it just happen by accident?
Glazyev: Human activity should be assessed by objective indicators. Now, after twenty years, a theory of reforms has emerged that proves that successful reforms are a gradual cultivation of institutions, it must proceed with careful experimentation, consistently, it is necessary to adapt, educate the economic environment. This approach gives success, and attempts to do everything in 200, 500 days lead, like any adventure, to disastrous results.
Vasiliev: When everything is collapsing, as it was in the late 80s, there is no time to grow institutions. It is necessary to treat the situation realistically, these theories are worthless in general.
So, back to the beginning... Was privatization necessary?
Vasiliev: It was privatization that allowed the country to quickly get out of the 1998 disaster. By this time, private property had already been created, it had already somehow settled down, and the process of redistribution of property had begun. And the downside is that due to errors in privatization, private property was not sufficiently legitimate in public opinion.
Glazyev: Chubais formulated the task as follows: to privatize as quickly and as much as possible, and his main idea was not to increase the efficiency of production, but to pass the point of no return to the state economy. Therefore, they privatized anyhow, giving scope to the most dense instincts to seize someone else's and redistribute unearned wealth. So for a narrow group of people, the result of privatization is outstanding: in terms of the number of billionaires, we have taken second place in the world against the backdrop of the impoverishment of the vast majority of the population.
Vasiliev: What, Seryozha, fir-trees, impoverishment ?! If you were talking about impoverishment in 1998, I would understand, but in 2008? It's just cynical. Look at the prevalence of mobile phones in the country!
Columbia University research suggests that more than 60% of fellow citizens do not recognize the legitimacy of property rights in Russia. Hence the problems of politics, and the current redistribution, and applause after the verdict to Khodorkovsky...
Vasiliev: The question is, under what variant of privatization would the result be different?
Glazyev: There have always been alternatives. I worked in that government, it was not homogeneous. There was a positional conflict between the supporters of shock therapy and those who offered a more cautious approach. Apart from me, Soskovets, Shokhin, and Nikolai Fedorov opposed the shock policy. And Chubais with his anti-communism ...
Vasiliev: I would not say that Chubais did this out of anti-communist convictions. There was a practical task: to do everything quickly in order to deprive the communists of a political base. By the way, I want to note: everyone says that Chubais is a voucher privatization. The laws were all adopted before Chubais!
Glazyev: They were redone.
Vasiliev: Not much. I will say more: in 1991, in October, there was a note by Gaidar proposing to abandon check privatization. Just when the government came to power, it became clear that politically it was no longer possible.
Glazyev: As you remember, one forgery was made when checks to bearer were introduced instead of nominal checks. And the forgery was done in a very ugly way. Filatov hid Yeltsin's decree from the Supreme Council for three months, where this substitution was carried out. And it led to chaos with voucher financial pyramids.
Vasiliev: These are unprincipled things.
Glazyev: Fundamental.
So, in Chubais's graduation report, in the "privatization" column, what do you give him?
Glazyev: Catastrophe. Chubais performed the functions of a killer. In practice, we had a criminal privatization.
Vasiliev: Four plus.
Let's go further - loans-for-shares auctions?
Vasiliev: The idea of loans-for-shares auctions is not Chubais, but Potanin. And he put it into the mouth not of Chubais, but of Chernomyrdin. Viktor Stepanovich was the main lobbyist for loans-for-shares auctions, and Anatoly Borisovich, due to the political significance of these auctions, did not resist. The political logic was to tie the oligarchs to power in 1996 and prevent them from allying with the communists. It was a deal with the devil: the long-term political consequences of the loans-for-shares auctions were much worse than the short-term positive ones.
Is this a plus for Chubais or not?
Vasiliev: No, in general, in the negative.
Glazyev: In general, this is a crime, if you call a spade a spade.
Vasiliev: Economically, this scheme worked. Norilsk Nickel really fell apart then, it is well known, now Norilsk Nickel is a successful, large global enterprise.
Glazyev: Look at the oil companies: they turned out to be effective, because there is a colossal natural resource rent. And as soon as oil and metal prices moved up, huge profits immediately began to appear. And geological exploration has been reduced by an order of magnitude. The methods of production that were used after the loans-for-loans auctions by the very same Abramovich or Yukos are fracturing, these are attempts to extract as much oil as possible here and now. They ruined a huge number of wells, any oil specialist will tell you this.
Vasiliev: It's not much different from the 70s, when they killed Samotlor in the same way. Why did I cite Norilsk Nickel as an example, and not oil: there was less price fluctuation and there were organizational problems - outdated management. The management changed and the company began to work normally.
Love for electricity
For the past 10 years, Chubais has been involved in the reform of the electric power industry. How do you evaluate this activity of his?
Glazyev: The essence of the reform is the privatization of generating companies. This is the same “as soon as possible” privatization that has been implemented in other sectors of the economy. But unlike others, the electric power industry is a sphere where a monopoly naturally exists. Therefore, from the very beginning, the reform looked adventurous. And the result is appropriate. We had a unified energy system that provided the country with relatively cheap electricity and worked highly efficiently. There were problems with modernization, depreciation of funds, but these problems remained unresolved. What did we get? Instead of one large monopoly, several large regional ones. From the point of view of the market - it's almost the same thing. But if before the reform we had a 15% capacity reserve, now we have a 5% deficit. The consequence of the reform was a sharp increase in tariffs. At the same time, Chubais, with his usual disregard for the law, invented various ways to abuse his position in the monopoly. For example, there is a multi-level tariff for electricity. There is a special double tariff for the use of reserve capacity, a fee for connecting to power grids.
Due to all the markups, the cost of electricity for new consumers has caught up with the European one. Russia has turned from a country with cheap electricity into a country with expensive electricity. The increase in the electricity tariff is twice as fast as the overall increase in prices in industry, which already speaks of inefficiency. At the same time, the cost of a new kilowatt-hour is three times higher than is accepted in the global competitive environment. As a result of the reform, we have received an increase in the cost of tariffs by about five times, and they will continue to grow. Here is such a reform.
Vasiliev: I really like the genre of political denunciation, which Sergey Yuryevich resorted to, but it would be interesting to hear the same about Gazprom and other state-owned companies. Throughout the 1990s, there was a huge fund of investments in energy: according to my estimates, $6 billion in 1996. However, nothing was invested in generation. As a result, in 2000 we got a crisis in the energy sector. One of the objectives of the reform was to create conditions for the influx of private investment in generation. Further: in 1994-1997, I worked at the Ministry of Economy, there was a working group on the reform of natural monopolies. In 1997, the concept of the reform was approved. The only area in which it was carried out as intended was energy. But such a complex reform could not be perfect. Especially when they endlessly put spokes in the wheels.
And your score?
Vasiliev: A solid "four" with a plus.
Glazyev: We had cheap electricity, today we have one of the most expensive ones.
Vasilyev: We would have had nothing at all if there hadn't been this reform.
Chubais leaves. Do you think it is important to keep Chubais for politics and government, or is it time for him to go into private life?
Vasiliev: Knowing the ebullient nature of Chubais, I cannot imagine him in retirement. And in private business, he will be uncomfortable and petty.
What level of position would you suggest for him?
Vasiliev: Vice-premier, but I don't think it will happen.
Glazyev: Well, if our state wants to destroy something else, then there is no better destroyer than Chubais. He could bring benefits to the country by becoming NATO Secretary General. If Russia wants to destroy NATO, let it call Chubais.
Sergei Glazyev - Academician of the Russian Academy of Sciences, Doctor of Economics, Director of the Institute of New Economics, Co-Chairman of the Union of Orthodox Citizens, Minister of Foreign Economic Relations in 1992-1993.
Sergey Vasilyev is a member of the board of VEB, Doctor of Economics, former director of the Working Center for Economic Reforms, then Deputy Minister of Economy, First Deputy Chief of Staff of the Government of the Russian Federation, Ex-Chairman of the Finance Committee of the Federation Council of the Russian Federation.
