The origins of the Russian crisis - conversations with Grigory Yavlinsky. Special program of the Moscow edition of Radio Liberty, part one. I'm at the microphone, Savik Shuster.

In the hospital on Taganka, on the fifth floor in the office of the chief physician of the cardiology department, together with the founder of Obshchaya Gazeta, Yegor Yakovlev, we recorded a conversation with Grigory Yavlinsky for two days in a row, four hours a day. These were the thoughts of the current political leader about what, for the majority, August 17 came like “a bolt from the blue.” As a man who had just looked death in the eye, Yavlinsky began to talk about reality differently. Often in our personal conversations he said this: you require me to be an analyst, while I am a politician. In these two days, two weeks after the heart attack, Yavlinsky was an open politician who understood that an entire era in the history of Russia had ended. What does it mean to be an open politician? And the fact that he is well aware that, being part of the system of power, he is also responsible for what happened in Russia from January 1, 1992 to August 17, 1998.

Grigory Yavlinsky:

A six-year period of very serious economic and political changes in Russia has ended. I hesitate to call them reforms or even transformations, but they can be called changes with all responsibility. This period ended logically, politically. This is a whole stage in the history of Russia. But the last months after August began to cause me more and more concern because the discussion in society about what to do next, how to get out of this situation, seemed to go in circles. Everything started to repeat itself. And the concerns that arose. They are connected with the fact that if you go in a circle again, then, from my point of view, with one hundred percent probability you can be sure that everything will repeat again from the beginning.

Savik Shuster:

Every significant event in the modern history of Russia has a date: August 19, 1991, October 4, 1993. And what is August 17, 1998, a day that for many became a real tragedy?

Grigory Yavlinsky:

The event of August 17 has a direct cause, a direct trigger, as it were, that set in motion all the consequences that arose after August 17. There are medium-term reasons that relate to the politics of the last three years, which inevitably led to August 17th. And there are fundamental reasons, the concept of the entire economic reform in Russia from January 1, 1992. In 1992, reforms began in Russia and a certain concept was used as the basis for these reforms. The meaning of this concept consisted of three points. By the way, it looked like three components of the same Marxism. Maybe it was less like Marxism and more like Bolshevism.

The idea behind the entire economic reform in Russia was that Russia should achieve economic growth. How to achieve economic growth? The following formula was proposed. It is necessary to reduce inflation as much as possible, bring it to several percent per year. It is necessary, secondly, to establish a constant exchange rate of the ruble against the dollar, and thirdly, as a political prerequisite, it is necessary to elect Yeltsin as president. These economic and political conditions will ensure economic growth in Russia.

Those who dealt with the Russian economy, the Russian government of Gaidar and, after this, the government of Chernomyrdin, essentially, from an economic point of view, the government of Chubais, faced a fundamental task - how to ensure these two economic conditions. The Russian leadership was faced with a very specific task. How to implement these first two conditions. Not only did they have to be achieved in a very limited time without special efforts to transform the entire Russian economy. What do we need to do? We need to simply push aside all the economics that interfere with this task. The solution to this problem is hampered by the entire non-competitive post-Soviet economy. Naturally, the only competitive industries that remain are those related to the export of oil, gas, and partly the military-industrial complex, because arms sales markets have shrunk very much. This problem was solved quite simply - funding for this entire part of the economy in all forms was stopped. A huge number of industrial investment programs were cut. Everything that was possible in the social sphere was categorically reduced. So what happened? Most of the economy switched to barter, to exchange in kind. According to our data, by the beginning of 1998 barter accounted for 75 percent. Today it is more than 80 percent, including all money surrogates, including bills of exchange and so on, everything that is not related to real money turnover. This was essentially a very veiled, strange, ineffective form of bankruptcy for all these enterprises that simply ceased to participate in economic turnover. They began to resolve this issue in order to ensure employment, in order to provide jobs. The main feature was that it did not allow taxes to be collected. Consequently, it became impossible to form a budget. It was very difficult to get through to Western experts, not to mention senior Russian economists, that the problem is not just the Tax Code, but the problem is that you have no one to collect taxes from. Bad tax system - more than 200 taxes and you collect taxes often up to 80 percent. We can return to this topic and see why there was such a large tax collection. For oil and gas workers, taxes formally amounted to 58 percent of the total. But since they received only 30 percent in money, and everything else was bartered, and taxes were taken from them only in money, then in fact they had to give 108 percent of everything they received in money. The inability to collect taxes led to a completely empty budget. It was impossible to pay the army, the school, it was impossible to pay for the maintenance of the state apparatus. That is, state finances have fallen into a terribly deplorable situation. And here we come to the medium-term reasons. In order to cover this deficit, it was necessary to start borrowing money. At first, money was borrowed in the country, then there was a shortage of it - they began to borrow it abroad. They began to absolutely copy the Mexican experience, invite more and more non-residents, and the notorious GKO pyramid has already appeared here.

What did you expect? That these three sources and three components should lead to economic growth. And as soon as economic growth appears, then by collecting taxes from this part that is growing economically, we will cover our interest, what we owe. How, at the end of 1997, Chubais funny and solemnly proclaimed that our economic growth was 0.4 percent. Why was such a figure needed? Ridiculous, incongruous, not indicative of anything. Then, to convince world investors and all those from whom they borrowed that economic growth is about to appear and the fact that we are not collecting taxes today is not scary. Economic growth will appear next year, and we will collect money from it to pay off debts. They began to borrow more and more for this business.

Egor Yakovlev:

These people who made state bonds, all these things, the next barter, did they not suspect that August 17 would come? Or were they so frivolous and hoped that “after us there will be a flood”?

Grigory Yavlinsky:

The formula I mentioned began to bear fruit. The fruits of this formula were the following. In 1997, all conditions of the formula took place. Yeltsin is president, low inflation, stable exchange rate. Only one thing did not happen - growth did not appear. Therefore, Chubais came up with this 0.4 percent, something began to collapse. Dependence on foreign capital became enormous, and growth did not appear. The trap of primitive, accelerated reform, which was laid back in 1992, opened its mouth with might and main and was just waiting for the moment to slam shut. We have already moved to 1998, new external conditions have appeared - this is the Asian crisis.

The Asian crisis in relation to our situation was not the main root cause, but it was an impetus. He created such a nervous environment. Investors began to move. And what, essentially, happened to these people who lent us money, what essentially happened to them? Because of the Asian crisis, they began to take a closer look at what was happening in Russia. And this close look at what was happening here suddenly amazed them. Listen, they don’t collect taxes, but how will they pay us? Listen, their public finances have collapsed. Where will all this come from? And this began to scare these investors. Then, an even closer examination showed them that the system operates very much on the basis of internal agreements, internal transactions, internal all kinds of closed, completely non-transparent relations. And so, step by step, looking more and more closely, excitement began among investors. These were the conditions in which 1998 began.

However, our banks have always been particularly inclined to pursue exclusively adventurous policies. Banks carried out actions in two directions. Firstly, they pledged state bonds to Western banks and, according to the data we have, the volume of this operation amounted to about $40 billion by the beginning of August. And secondly, they entered into forward contracts, that is, contracts for August-December 1998 to sell currency at the rate that was at the beginning of the year, relying on the stability of this rate. Banks had approximately $3 billion in unsecured loans at the outset of this process. With this money they bought state bonds, then they pledged these state bonds in foreign banks. Then they received money against this collateral, bought new T-bills, pledged them again and made a profit based on the difference in the interest they paid for the loan and the profitability of the securities they traded. And the yield on the securities was incomparable. Because the loans had to bear significantly lower interest rates than on these securities. From this difference they had very, very large incomes.

Savik Shuster:

And yet, the spring of 1998 was truly capricious in the political life of Russia. Prime Minister Chernomyrdin was suddenly removed, with great difficulty the Duma approved Kiriyenko in his place, and the government of young reformers began to correspond, at least as far as age was concerned, to this journalistic cliché. The spring of 1998 seemed much more stable and warm in financial life. What happened?

Grigory Yavlinsky:

The instability of the Russian market led to the fact that the quotes of these securities, by the way, both corporate and government, began to decline. The condition of the pledge was that if the quote of the security decreases, that is, if it becomes cheaper on the market than the price at which it was pledged, you must pay extra in dollars, that is, you must pay the difference in foreign currency. This increase in what had to be paid simply increased over the course of days. Do you remember what the fever was like? To do this, banks were forced to buy huge amounts of currency. That's why the Central Bank had such huge problems. On the one hand, to maintain the ruble exchange rate, and on the other hand, to sell such a quantity of currency, because these seven largest operators needed it, the banks needed to immediately pay off these margins. Throughout July they went to the market in order to immediately buy as much currency as possible. After receiving the loan, the Central Bank spent up to $300 million a day in order to maintain the exchange rate and at the same time sell this currency. And it was necessary to pay in the West according to the margin. They began to dump all the state bonds they could. The debt, as I already said, was very large. And by mid-August it became clear that they were losing their ability to pay. They can't. There was hope for getting a loan. The loan was received. It was immediately used to pay off the debts of these banks, for these very large sums. Then the reserves all ran out and there were no more opportunities. Then came the discussion on August 17th. On August 17, the largest banks had to pay for these obligations. Well, for example, let's say Menatep had to pay $800 million on August 17th. Friday was August 14th. The Minister of Finance Zadornov, the Chairman of the Central Bank Dubinin, Kiriyenko, Chubais and, according to numerous sources, Yegor Gaidar sat at the same table. There was a completely natural solution to the problem - the ruble exchange rate cannot be maintained. The ruble is devalued freely, on a market basis. As for debts under state bonds, this issue is also quite simply resolved, in these conditions it is painful, but simple. The state covers all its obligations in rubles. This leads, of course, to inflation, to the fact that the dollar becomes, according to our calculations, not six rubles, but 16-17, by the way, what we have is all this money is paid. Well, the losses are significant, but a default is not declared, simply devaluation occurs and all these events occur. The ruble exchange rate that was set by our bank did not correspond at all to the capabilities of our economy.

It is enough to give you such an example. The ruble to dollar ratio was almost the same as the French franc to dollar ratio. There - approximately 5.5, and we had approximately 5.5, well, 6. Now compare the capabilities of the French economy and the Russian economy. This also applies to the fundamental issues of the formula. The ruble exchange rate does not correspond to the capabilities of the economy. The competitiveness of the economy is significantly lower than the established ruble exchange rate. It is artificial, with all the very serious troubles that follow. Well, in other words, all this could have been done and the ruble exchange rate could have been brought to its natural position. Of course, this meant big losses, but the entire payment system would not have been destroyed. There would not have been such a deliberate rollback, but in this case a problem arose - what then should be done with these banks? What to do with these banks? The fact is that if they are not helped in any way, they will be declared bankrupt, their accounts will be seized abroad, and they will have very big problems.

The final decision that was made (adopted by Kiriyenko and all these advisers - Chubais, Gaidar), it essentially meant that Russia, as a state, assumes all political, financial, economic, macroeconomic responsibility. The word “macro” is very suitable here; Russia takes upon itself macroeconomic responsibility and all macropolitical responsibility for all of them, and Russia takes it upon itself because the government prohibits these seven banks from paying off their debts. By the way, as if they could do it. It prohibits them from doing this for 90 days. And here I must tell you the most interesting thing: I am looking forward to November 17th with interest. 90 days are running out and I don’t get the impression that after November 17 they can pay anything. Maybe this is the government that said for six months or a whole year that it was going to fight the oligarchs. One of the members of this government, First Deputy Prime Minister Boris Nemtsov, convened a special meeting to combat the oligarchy. In the end, this is the essence of the system, in the end (this government) made a decision simply to cover 6-7 people at the expense of the country’s authority, all its capabilities, and so on. The pattern of what happened on August 17 worked something like this.

Savik Shuster:

Remember on August 14, the Russian President announced that there would be no devaluation of the ruble. The world, and even the country, believed Boris Yeltsin’s words. On August 17, the opposite happened. How could the President of the Russian Federation be put in such an awkward position?

Grigory Yavlinsky:

Yes, to some extent it is difficult for people involved in the financial markets to imagine that the president is making a statement that has nothing behind it. They may not believe that this will last long. They may doubt how accurate his forecast is, but to imagine that there is nothing behind this at all, there is simply absolutely no background, to imagine that the people surrounding him, informing him, put the president in the position of a complete ignoramus or a random person in the political arena. It's hard to believe, very hard, because it violates role-playing things. It's like it's very hard to believe that the doctor is deliberately giving you bad medicine. You may think that this doctor is better or worse, but that he deliberately gives you bad medicine or that he is so incompetent that he does not even understand what he is doing and saying, how he makes a diagnosis, this is extremely difficult to believe.

Egor Yakovlev:

You quite accurately listed those people who were at the meeting on the night of August 17 and who made the decision. These people, including Kiriyenko and Chubais, what motivated them? Your personal interests? Responsibilities to certain banks that had to be bailed out or, let’s say, the desire to somehow not put the state into bankruptcy. What was the main thing in their decision?

Grigory Yavlinsky:

It is necessary to distinguish between the three points that you listed. One of them is what personal motives they had. This I cannot answer. I don't know. As for the national motives, the design of the decision made indicated that in this sense, it was a cynical, defiant decision, which quite obviously could not bring anything positive for the Russian state simply by definition. It severed our relationship with the world. It showed that we were ready to renounce our obligations to anyone, unilaterally, while violating our own Russian laws. Because when making this decision, the Civil Code of the Russian Federation was violated, which directly prohibits the state from unilaterally abandoning its obligations. And the Civil Code says that if you bought his securities, bonds or something from him, the state does not have the right to cancel them. You can sue, and the court is obliged to return everything to you, because the state cannot unilaterally refuse either the terms, the amounts, or anything. This is written as a fundamental article of the Civil Code, the meaning of which is that you are equal to the state. What is the Civil Code - this is a document that describes the relationship between a person and the state, for the first time in Russian history, as equal subjects. All civil law is built on this. The entire market economy is built on this. If this is not so, then nothing else matters, because today you build a house for yourself, and tomorrow it is taken away from you. Today you open your own business, and then everything in your business will be confiscated. The third position is that objectively this decision was made in favor of a narrow group of the largest Russian banks. At the same time, I must say that from a professional point of view, the decision was made completely unprofessional, that is, anti-professional. Because it was possible to get out of this situation through devaluation, or through refusal to pay external obligations. History knows these and other examples. But to do both at the same time was very rare.

So, this high-risk formula that was conceived is what I would call it - “high-risk formula.” It was in itself an extremely dangerous, adventurous story. It ended accordingly. To quickly implement this formula, the system reproduced a number of things, a number of features, such as the Russian oligarchy, such as the opacity of the system, the semi-criminal nature of this system, this 80 percent barter, various artificial ways to suppress inflation, unreformed budget expenditures, constant deception of international financial organizations. It was like a formalization of the idea, which sounded like this: the end justifies the means. A familiar Bolshevik idea. We need everything quickly, within 2-3 years. We will have the most unprecedented pace of privatization, we will have the fastest rate of reduction in inflation. Here we come to this. This formula that existed, for its solution, required such a development of events that led to August 17.

Egor Yakovlev:

The fact that August 17 will come was known a little earlier for people who are sufficiently literate in economics and management. Well, let’s say I have to tell you that Kadannikov told me about 3 weeks in advance August 17, even the day of the week when all this would happen, because the time for payments was approaching. How much earlier could it have been foreseen on August 17th.

Grigory Yavlinsky:

It was clear that this was going to happen. It has been clear for a long time that we are facing a large-scale financial crisis. Because there was an exaggerated development of the GKO market. Non-residents were actively attracted to this market. The market for corporate securities was greatly promoted or heated up. Because they said that the securities were all undervalued, we needed to buy them quickly. All this was in very sharp contrast and very sharply contradicted the deepening crisis of the real sector. Well, it’s clear that if the entire economy is at a standstill, and this is happening in the financial markets, it’s clear that this gap must somehow end with something. Something must happen to him. But in what forms, when this will happen, it was difficult to see. Only someone who knew that it had to be paid could answer this. Well, and besides, it was difficult to guess that the state would take over everything. What is the thesis that this oligarchic system, that it is being implemented in such a literal sense, is simply in such a completely, completely literal sense. When they asked the question - why do you say that this is an oligarchic system. Was it explained why? But it seemed, you know, like, in a word, imperialism. Well, it is something, but how to catch it is very difficult. Something like that, something in general terms, in words like “capitalism”... But that this oligarchic system is such a tangible thing that the state is ready to collapse, just to do everything in order to protect this ridiculous part of the population. By the way, they abandoned all those who worked for them. Look who's on the street today. The reductions in banks have been absolutely colossal. But that's not all.

Egor Yakovlev:

Grigory Alekseevich, when you talked about the triad formula, which was not confirmed, well, the formula that was supposed to end with an increase in production - it was not confirmed, it turned out to be a trap that swallowed, in general, practically the Russian economy. Who owns the copyright for this trap? Was it done, so to speak, by the insidious West, which wanted the collapse of Russia, or was it done, say, by Chubais, who is pursuing his career? Or did Berezovsky and Gusinsky do this, who made their own capital?

Grigory Yavlinsky:

This means, judging by what is happening in the world today, and today, indeed, there is a financial crisis on a global scale, this problem, which I have sort of identified, is the problem of the last two decades, the problem of the main economic direction, the so-called “mainstream”, this is the problem of illusions that have arisen in Asia. This is a problem connected, let’s say, in the most clear form, because this trap that I talked about today, this formula, in fact, this formula in such a successful form also worked. It worked successfully and was called “Reaganomics”. It has driven economic growth in the United States to this day. It is this formula with a stable exchange rate, with very low inflation. What was the point of "Reaganomics"? This is a combination of the budget deficit, which was then very large in the United States, with hard money policies. The way out of the situation of budget deficits and hard money policies came through tax cuts for corporations, economic revival and high interest rates, and rates then for attracting foreign capital were up to 20 percent. The only problem was that the Americans paid in their own currency, unlike us. There was no need for them to stay on course. They were masters of the situation. As soon as foreign capital left, they raised interest rates and pulled it back into the American market. For us, it all happened completely differently. What did Wall Street offer us? In this sense, he offered what worked great for him. For decades, America secured economic growth for itself with the very “Reaganomic” scheme that I just talked about. But the fact that we had a leadership and a government that did not want to invent anything on its own, did not want to understand anything, did not want to analyze anything, what was happening in its own country, how Russia differs from the United States, how the Russian post-Soviet economy differs from the American one. The style of reform in this sense was when the Russian government simply came to the IMF and, instead of saying - here is our program, help us implement it, it came and said - what do we need to do in order to get money from you? And then - further more. Then interests appeared here, foreign capital came. He has already begun to ensure that the rules of the game do not change. So that the conditions are met. And this is how the trap worked. Although politically at that time Russia could put forward any reasonable program and it would be politically supported, even if the IMF did not understand it very well and did not treat it very well. It was like complete helplessness.

Egor Yakovlev:

Could you name those who are personally responsible for August 17 in the country's leadership?

Grigory Yavlinsky:

The Prime Minister all this time was Viktor Stepanovich Chernomyrdin. But it’s even very difficult to blame him. Believe me, I have no personal connection, but I think that neither before, nor during, nor after, he never understood what was happening there. Therefore, it is very difficult to blame him. Who took the risk consciously, I can say. I believe that Anatoly Chubais took risks consciously, that is, he understood that he was taking a risk. He wanted to slip through, he was going at random. He acted when there was controversy over the Tax Code and it was explained that even according to this “Reaganomics” formula, these taxes need to be reduced to the limit. And when they convinced us that the issue, generally speaking, was not in the Tax Code, but the point was that there was no one to take taxes from, well, there was no one to take taxes from, don’t you understand, no one wanted to accept this at all.

Savik Shuster:

After August 17, people in the West started talking about the collapse of the Russian banking system. But was she even real?

Grigory Yavlinsky:

What is a bank in the USA? What is a bank in Europe? What is a bank in Canada? This is an economic institution, the meaning of which is to take money from the population and invest this money in industry, then receive some interest, and return it to the population. What were banks in Russia? These were institutions that specialized in taking money from the budget and sending it somewhere to Cyprus or Malta or Switzerland, and then using this money to buy Russian Eurobonds, in a word, Russian Eurobonds. That is, these were not banks. These were financial companies. There were no banks as engines of the economy. The concept of the banking system, as the concept of a system developing the economy, when banks as private investors think about what is better to invest in - textiles or forests, forests or mechanical engineering, mechanical engineering or aviation - such a question has never arisen for any of our banks. They didn't do any of this at all. And how could they do all this if the interest they received from transactions with securities, which were carried out simply by telephone, was 30-40 in good times, and in times of crisis 60-100-150-200 percent. Why invest? What forestry industry? Apart from drugs and weapons, no one will give you such a percentage at all. This system could hardly be defined as a “banking” system. She took her first steps towards people, towards the population. But a significant part of it, the main part, it worked in a completely different way.

Savik Shuster:

Can we finally say that August 17 marked the end of a stage in the financial history of democratic Russia?

Grigory Yavlinsky:

You know, I wanted to say that it wasn't quite finished. On September 15, payments under forward transactions were to be made. They are carried out every month on the 15th. As of September 15, the amount of payments on forward transactions, on transactions in the form of forwards, was about 4 billion dollars, at an exchange rate of 7 - 8 rubles per dollar. If the exchange rate were at 20 rubles per dollar, as it was in early September, then Russian commercial banks would have to pay their Western partners 12.2 rubles per dollar at a time due to the difference in the exchange rate. This is more than 2 billion dollars, even at the rate of 20 rubles per dollar. But here Russia again showed the whole world that it is a special country. Commercial banks came to an agreement with the Central Bank, with its now new chairman and, together with him, their reserves, within a few days they strengthened the ruble exchange rate by the morning of September 15 to 7.5 rubles per dollar. That is, they said - but we have such a market. They all agreed because they had to pay, and they did it for one day, they all made a different rate - 7.5 rubles per dollar. To do this, they used a new mechanism for electronically fixing the ruble exchange rate and literally a miracle happened. It is no longer Russian banks, but Western banks that owe Russian banks 30 kopecks for every dollar.

Egor Yakovlev:

We have to give them credit...

Grigory Yavlinsky:

To give credit where credit is due, it must be said that, in fact, analysts assumed that they would owe not 30 kopecks on that day, but 70 kopecks, and only Russian inconsistency let the banks down so that they did not bring this matter to 70 kopecks, because during the performance called “currency trading” they did not all arrive on time and not all of them completed all operations on time. It is clear that after such a heroic leap the ruble was weakened again stacked back to where it was literally a week ago. As long as such swindlers are dealt with, this will continue. You said that the stage ended on August 17. So, I’m telling you that nothing ended. The logic that underlay the refusal of obligations on the domestic debt is as follows. Since devaluation has become absolutely inevitable, including the depletion of the Central Bank’s reserves, it was clear that refinancing is coming. debt through the issuance of new issues of GKOs was possible only at the most insane interest rates - 100-200, no one could buy them at other rates, because GKOs were turning from a source of additional income into an object of financing. For example, all budget revenues in March were spent on paying off interest. okay, everyone who invested in these T-bills will make some noise and calm down, but we simply don’t have that kind of money. Analyzes show that there was no direct need to announce such a waiver of obligations. It was possible to continue paying, including through the issue. In the first two weeks of September, the emission for the maintenance of Inkombank amounted to 12 billion rubles. Why couldn’t the same money be used for other purposes - to pay off the debt on the T-bills? And then we would have passed August-September without. problems. And during this time it would be possible to carry out negotiations on the restructuring of the debt under the GKO. This is what I said, that all this could have been done calmly before October. Or maybe it did not need to be done at all, because it was possible to go through the devaluation. But a very interesting detail emerged that Russian commercial banks were actively pushing for the decision to waive their obligations.

Egor Yakovlev:

Of course, these are not just investments, these are people’s wages.

Grigory Yavlinsky:

Yes, that’s all, everything that was in the bank, the whole state seemed to have lent it in this way, and given it to you in the form of a receipt. But our banks distinguished themselves. They also decided to pawn these receipts. This is what I told you. They took these receipts and began to pawn these receipts. Then they used this money to buy additional receipts and all this turned into another such additional pyramid, that is, they built a pyramid of commercial debt, similar to the pyramid of government debt. That is, there are two pyramids. And two pyramids collapsed. Why people didn’t start smashing banks and there wasn’t even anything similar to what happened with MMM - because people understood perfectly well that, in the end, it wasn’t the banks that were deceived. The state did this to them. Because these banks took on obligations from the state, and the state easily refused them and said, “We won’t pay anything!” Why? Yes, we have no money. We won't. You can't go down this road anymore. No more. Russia is simply a country that will not be able to cope with such things many times over. It will just crumble and that's it.

To be continued