#14 - JRL 8175 - JRL Home
TITLE:
RADIO INTERVIEW WITH YEGOR GAIDAR, DIRECTOR OF THE INSTITUTE FOR THE ECONOMY IN TRANSITION
[EKHO MOSKVY RADIO, 15:00, APRIL 15, 2004]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)

Vorobyov: Good day, I am Alexei Vorobyov. We are again in Studio 14 with Alexei Venediktov and we are broadcasting live from here. "The Rumors of Death Have Been Exaggerated" is the title of the article written by Yegor Gaidar. Yegor Gaidar heads the Institute for the Economy in Transition and he is our guest.

Good day.

Gaidar: Good day.

Vorobyov: Well, the officially announced topic is "The Future of Liberal Forces in Russia. The Possibility of Reviewing the Outcome of Privatization. The Article 'The Rumors of Death Have Been Exaggerated'." And actually this is Mr Gaidar's answer to Mr Khodorkovsky, isn't that so?

Gaidar: Yes, I will only specify that this is not an answer to Mr Khodorkovsky, this is the first part of the answer to Mr Khodorkovsky.

Vorobyov: It is just that the article was published.

Gaidar: Yes, and to set the record straight, it is not an answer to Mr Khodorkovsky but rather to a group of comrades who posed under the pseudonym of "Mr Khodorkovsky". I wrote an article and it will appear in full form next week in Yezhenedelny Zhurnal and in an abbreviated form, a part of it is published in the newspaper Vedomosti and Vedomosti intends to publish another part a little later.

Vorobyov: And does it not seem to you that as regards Alexei Venediktov somehow it turned out to be an article which is somewhat "far between".

Venediktov: Probably this is because there is no second part.

Vorobyov: So far it is not published.

Gaidar: You will agree that this is no issue.

Venediktov: But you answer the question: what is to be done?

Gaidar: This is not a question to the author, it is a question to the publishing house. Under a Soviet-Russian tradition, the first newspaper that I had to offer this material is the newspaper Vedomosti which I respect. The newspaper Vedomosti said that according to its norms which I quite understand as a person who has worked with the printed media, that the maximum they could do was to print it in two parts.

It also seemed to me that this is not the most logical solution but I understand that there is editorial logic and the editorial rule.

Vorobyov: You admit your guilt vis a vis the Democrats or at any rate you do it in the form of theses and at any rate it could be possible to formulate certain assumptions in the article.

Gaidar: Well, you know...

Vorobyov: Who is to blame for your not taking the reforms to completion?

Gaidar: I would say that many things we did imperfectly and I had occasion to refer to this many times. And I am indeed convinced that we made mistakes and there is no doubt about that. Strictly speaking a mutiny may not end well otherwise the name is different.

But when they suggest that you repent for resorting to this style and you get the suggestion to repent from a group of comrades with an outlook you understand, well, I believe it is not a very pleasant pastime.

Venediktov: Okay, I apologize. And here is the question from Shura from the village Sviblovo: "In short, why don't you work to correct your errors?"

Gaidar: The work on errors is in my numerous articles and books devoted to the history of Russian reforms. Indeed myself and Anatoly Chubais probably understand better than many others where there were tactical mistakes, where there were compromises which have probably been paid dearly for. It is clear. At issue actually is not this. Let me tell you briefly how I see the situation.

Russian history demonstrates that such materials of course tell you more about the structure of consciousness of those who do the signing or the agreeing -- my grandmother in 1937 agreed that she was a Japanese spy and that I will have to condemn her for this, but then she was rehabilitated but what about the peculiar structure of thinking of those on whom it depended to decide how many people will languish in prison. So the first reproach to the Liberals is your defeat at the election. Yes, it is a reproach, serious and substantive and it is necessary to think what is to be done to rectify the situation and I think it is possible.

But then we continue the pattern of thinking. In the process, the cosmopolitans generally take the blame for many things. If those who are overly young do not know the Russian political parlance, I will remind them that from the year 1950 in the Russian political parlance -- not when we discuss culture, the word "cosmopolitans" is not about Byron, or Pushkin, it is about Jews, or rather over the word that the anti-Semites label them with. So it turns out that here it is cosmopolitans who are to blame. Russia is alleged not to need democracy. What kind of democracy is it when a person who according to the authors of the article is a non-Democrat, is more democratic than 70 percent of population. And then you need to bow to the current authority.

This system of thinking and the heavy tears over the liberal defeat at the elections -- are they to your liking? In my opinion, the people who wrote this on the day of the liberal defeat at the election opened a bottle champagne and celebrated the event merrily hopping around. But of course there is the profound and sincere hatred of Russian liberals, all the way to the familiar salmon with horse radish and so on. Where does it come from? From defeat at the election? No. It is my profound conviction that they cannot forgive us not the defeat at the election, they cannot forgive us hunger in 1991. You know that in the Soviet times I was not representing an average family and I held not some average jobs and I have a very good idea of the latter-day Soviet elite's notions of their own people.

There was the profound notion that all Democrats were cowards and that you only had to smash the table with your fist and they would all run away helter-skelter. In 1991 we did not run helter skelter but they did. And they will never forgive us as long as they live.

Venediktov: Now let me engage in some ungrateful exercise, and let me describe myself as Mikhail Khodorkovsky.

Gaidar: Now let us agree that he is not Mikhail Khodorkovsky but "a group of comrades".

Venediktov: Nevertheless, he says that it is his thoughts. So let us proceeding according to the topic. I will be one of that group of comrades, a nameless comrade, agreed?

Gaidar: Let's.

Venediktov: The first thesis. What is your attitude to the thesis that the defeat of Liberals at the election is the consequence of the real attitude of most of the population, 90 percent of population to how the reforms were conducted and personally to you, Yegor and to Anatoly Chubais?

Gaidar: I think that this thesis is in many ways correct. The article has another very amusing statement. It says that the social stability is the condition and the prerequisite of the stability of reforms. When I read this I understand that there are people who wrote this. They have never carried out any reforms because nobody conducts reforms only to have fun, out of reasonable people that is. The reforms are carried out when the old system has complete disintegrated or in a state of a profound crisis and thus the reforms are unavoidable because reforms bring changes. And even a potential change that leads to something better is always traumatic and on this score there is a colossal number of proverbs and sayings in all countries of the world.

This change in some ways changes life for the better and in some for the worse. Nobody in a democratic country thanks people, the authorities for improvements because they are perceived as reality. So far so good. Our people have for decades lived on rations and shortages and standing in the lines. Now they have naturally forgotten about these things and are they expected to thank him for that? No, because it is very natural to live without rations, in conditions of a convertible currency and the stores full of products. And of course when life gets worse, the authorities are always to blame.

In this connection it is the same in the entire post-socialist space. The political process is like the swings. The Liberals come and they start making reforms, painful but necessary and then they lose the elections. Other people come. It takes them some time to find out that they have to do the same that the Liberals tried and then they also lose the elections and so on.

Venediktov: So in this connection I wish to say that you are a member of the group that wrote the Khodorkovsky letter because analysis reveals many important coincidences. For example, when Khodorkovsky refers to "we", he means obviously a group of people.

Gaidar: A group of people. Honestly speaking, in 1991 when the country broke up and famine was looming I didn't notice any group of people by my side. So, let's refer to "them".

Venediktov: OK. "Them". They say... they put part of the blame on the so-called "old liberals" -- Gaidar, Chubais and they say that they must go. And you write: "new leaders should come along and the style should change". That's a quotation from your article.

Gaidar: Even if I reread Mein Kampf and find a set of propositions that are impossible to deny such as the truth that the sun rises in the East. What am I to do? Some of Hitler's judgments and mine may coincide.

Venediktov: You have dodged the question actually. It is a question of principle: new people, new style, new liberalism.

Gaidar (?): Of course, there is a need for them. No question about that. I am writing about the Polish experience in my article. I have an unscientific method of predicting political developments in Russia, except that this method works. When my friend Leszek Balcierovicz in 1989 was appointed finance minister and vice premier, I felt for some reason that reforms in this country could start, too. But when Solidarity lost the 1993 elections, I realized that Russia's Democratic Choice may have serious problems in 1995. When they united all the liberals, four former premiers, etc. and won the elections in 1997 I knew what we had to do and we did it with SPS and made a good showing in the 1999 elections, and then managed to implement many reforms.

When against the background of economic growth and rising living standards which are in Poland much higher than in the socialist times, and the liberals suffered a crushing defeat in 2001 I realized that we may have problems in 2003. And when I saw how they then reorganized themselves and promoted new people and developed a civil platform and worked out a new style -- by the way, all the opinion polls show that the government has 30 percent approval and may have a serious chance in the next elections -- I realized that serious work lies ahead similar to that we did after 1995 to restructure our part of the political spectrum. It is always a difficult process. It is a process involving the new people. You can't appoint them. You can't say, now you will be the leader. Leaders arise by themselves, they evolve, they become recognizable. Yes, one should not neglect that part.

Venediktov: And of course, my central question is about the attitude to the institution of president and President Putin in particular. There exist two theses, yes? It's in the second part of your article which is why I am putting this question to you. There is a thesis that "the president is more liberal and democratic than 70 percent of the country's population". That is the first thesis. And the second thesis is: "This administration is legitimate and one should cooperate with it."

Vorobyov: A slight correction: "He almost looks more liberal than 70 percent."

Venediktov: OK , that's a matter of style. Let us look at the context. Do you agree?

Gaidar: First, yes, the administration is legitimate. I don't think that the presidential elections were a model of democratic elections. But let us not kid ourselves. If the elections had been held according to all the democratic rules, absolutely according to all the democratic rules, I don't think you have any doubts that President Putin would have won all the same. So, of course, he is legitimate.

The second thesis is about democracy. The underlying message, in my view, is different. You should read it behind the lines. And I think this is really the core of the article. And in fact, I answer it in my second article in Vedomosti and in the second part of the article in Yezhenedelny Zhurnal. The question is, in a country where the president who is not a democrat is nevertheless more democratic than 70 percent of the country's population, is democracy in Russia a) possible and b) necessary? This is the key question raised in this article leaving aside such rubbish as repentance of the liberals, cosmopolitans, the stylistics of 1934-53, etc.

Unlike much else, this question is not devoid of inner content. I am a liberal by convictions and I am convinced that freedom is a value in itself. I am convinced that Russia needs freedom. But at the end of the day we are talking not about my convictions but about reality. Russia had democratic experience in the cities, in the north-western states, but that was a long time ago. The first attempt to build a democracy in Russia, in the broad sense, occurred in 1905-1917 and ended in a bloodbath. The last attempt did not end in that way, but it wasn't terribly successful, let us face it. We've been told many times that first we should ensure stability, economic recovery and then gradually form the basis for genuine democratic institutions. I am sure you have heard this argument, including in the West, many times.

But I would not say that this makes no sense. It's just that one should understand the logic. There is a correlation between levels of economic development and stability of democracy. This has long been known. If there is a traditional agrarian society, it usually corresponds to a more or less stable monarchy. Where there is post-industrial society, there usually is stable democracy. There are rare exceptions, but they are exceptions just confirming the rule.

And there is a time period which a state passes when it undergoes industrialization, urbanization, growth of education levels. They are characterized by an unstable democratic regime, an authoritarian regime. This is the time when all revolutions happen. We are now living through this period.

True, we are close to the end of this period. We are close to the upper limit after which an open democracy becomes a norm. But the transition is not over yet.

One should realize what is meant here. The formation of authoritarian regimes is a possible response to instability challenges characteristic of such transition processes. Such things as one dictator, statues, the Turkmenbashi on whom everything depends and who is irreplaceable...

Vorobyov: This is a mobilization period.

Gaidar: Well, yes. The problem of such decisions has also been known for quite long -- that is their inner instability. That is intended for ensuring stability, and on the whole in such a well- educated and urbanized society like today's Russia, it is impossible to explain people for a long period why someone they have not elected is the ruler and decides on the ways they should live.

Therefore, sooner or later, the dictator either flees himself or he is thrown down, or killed. This destroys the whole structure based on one individual. Contracts, asset distribution systems, etc.

An alternative solution tested in the world for decades, which I believe is in many respects shared by a substantial part of the political elite is the formation of what may be described as a closed or, if you like, managed democracy.

This is what I call a closed democracy. This is a regime. What is this like? Mexico after the revolution and until the end of the 1980s. Japan after World War II and until the end of the 1980s. Italy after World War II and until the end of the 1980s. What does that mean? You have opposition and it is in parliament, rather than in jail. It is possible to criticize the government not only at home, but also in newspapers with small print runs...

Venediktov: And at radio stations with small audiences.

Gaidar: And at radio stations with small audiences, and in mass media outlets have no access to mass audiences. Elections are held regularly, one can freely move out of the country and come back, and repressions against opponents are rare. As a rule, repressions under such regimes are applied to traitors having left the ruling party and usually under the pretext of selective corruption cases. By the way, this is well described in literature. I am not inventing anything. I can give you lots of references.

Ernesto Che Guevara who knew a lot about revolutions wrote that it is virtually impossible to overthrow such regimes through revolutions. The reason is that there is stability for a long period, there are all apparent elements of democracy. So, what else can one wish to protect a country against abrupt turns related with a young democracy.

Venediktov: So, Yegor, do you see this behind the letter written by a group of individuals and presented as Mikhail Borisovich Khodorkovsky's letter?

Gaidar: Yes, this is precisely what I see behind it. I see all the deep-rooted, rather than superficial idea, rather than all sorts of silly words. This is the idea behind the letter written by a group of individuals.

Venediktov: And you seem to disagree with the idea. So, what is to be done?

Gaidar: I disagree with the idea for the following range of reasons. I know well what a closed democracy is. Yes, it is stabililty. But there are three characteristic features which are inherent in it. By the way, they are well known. First, a closed democracy has such a structure that widespread corruption is always present there for many decades. This is a sort of a political process whose inalienable part is corruption. This does not mean that democracy itself, a functioning democracy is a guarantee against corruption. This is not true. But the absence of democracy in the framework of such a regime definitely guarantees that corruption is widespread.

If one recalls that corruption is not anything new in Russia, that it has deep roots here, if one recalls Peter the Great, one can imagine what trajectory for this sort of development we are setting for Russia -- not for a day, not for a year, but for decades -- by having chosen this course of development.

Second, the record shows that such regimes can carry out radical reform -- take Chile under Pinochet. Functioning democracies are also sometimes capable implementing rather radical reforms such as in Britain under Margaret Thatcher. As for reforms where there emerge strong lobbies, groups of influence, as deep-going reforms inevitably have a certain effect on private interests, a regime which looks strong and stable cannot implement reforms.

Take Japan, one of the world's most developed nations. It has faced a most grave economic crisis during the past 15 years. Everyone is speaking about what reforms should be carried out in Japan, but no one can do anything. Everything is blocked and nothing can be done about it. This is the second aspect.

Third. If we want to be able to compete not in the sphere of oil and gas, but also in high-tech sectors, the key issue for us is our ability to reproduce and keep skilled personnel in the country. But the record also shows that this is not only a matter of work pay, as quite often major firms pay quite a lot to their employees in Russia today, it is rather that people who are quite able to compete in the world labor market, want their opinions to be heard when problems of a country they live in are being discussed.

By the way, I had a chance to discuss this with my colleagues in Singapore. Singapore is perhaps the only post-industrial society where there is no functioning democracy. On the whole -- I will not give you names, given the nature of the regime -- they admit that yes, this is a fundamental problem for them.

Vorobyov: Let me remind you that we have Yegor Gaidar here, the head of the Institute for the Economy in Transition. You have heard him explain his position and expand on certain provisions of his article. In fact, this article is a printed reply to Mikhail Khodorkovsky or a group of individuals who wrote a letter on the crisis of liberalism in Russia, signed by Mikhail Khodorkovsky. Our question to the listeners is directly related to the topic. If you find that Gaidar and his ideas are right, call 995-8121, if you side with Khodorkovsky -- 995-8122.

Venediktov: Is there a crisis of liberalism in Russia? Simply speaking, naturally the crisis is not the result of the election. The election is like a thermometer. Have the elections -- both parliamentary and presidential -- shown the crisis of the liberal idea, liberal practices, liberal leaders?

Gaidar: I think that's true, yes. But it is worth separating several issues. The first one is economic liberalism. You know, it's very difficult to speak about liberalism. When I speak in America or Britain, the two countries from where the word "liberalism" reached us via the French language, but of course, it has a Latin root, I still always have to explain what I have in mind: is it liberalism in the British sense or in the American sense.

In Germany the Liberal Party was an alliance of economic liberals and political liberals. First, economic liberalism. There is no crisis of economic liberalism in Russia. In Russia, for all its problems, a large part of the liberal agenda in the economic field has been implemented over the past years. What the government is doing and preparing on the whole is within the framework of the development and continuation of that agenda. It's another question that I may not like how it is being done.

Venediktov: It's a question of the practice of liberalism.

Gaidar: That is another story but there is no question that we are in an economy that represents a continuation of the liberal economic trend implemented with varying degrees of success.

Venediktov: So, all the calls for social responsibility of the oligarchs and business fit into the liberal paradigm? The calls of the government, I mean not the man in the street but the government: Fradkov.

Gaidar: Yes, Fradkov. But I am speaking not about calls, I am speaking about the reforms that are being discussed, planned, and so on. Yes, further on, we switch to the second topic. In Russia there is no crisis of liberalism, but there is a crisis of democracy. You can also use if you like the expression "political liberalism". That is certainly true. The fact that the market, private property in Russia have taken root in recent years is indisputable. Yes, there are arguments as to whether property should be redivided. But nobody argues challenges the view that it should remain private property. The argument is about whether the market could have been created in a more effective way, with greater foresight and consideration. I agree with that, but no one is going to give up the market.

So, all this has taken deep root. Of course there is room for making a lot of blunders, but it will remain part of Russian reality. But political freedom has not taken root in Russia. And what happened recently has highlighted the extent to which it has not taken root.

Vorobyov: I will remind you of the question for the interactive polling. It will literally take a minute, who do you think is more right: "Yegor Gaidar -- 995-81-21 or Mikhail Khodorkovsky -- 995-81- 22 in their dispute over the crisis or the failure of liberalism in Russia?" So, it is either Mikhail Khodorkovsky or a "group of comrades" if you wish say that it is a crisis of liberalism in Russia. Yegor Gaidar, assumed to be Yegor Gaidar, is perfectly real in our studio and he says that the rumors of death are greatly exaggerated.

Venediktov: I would still like to ask Yegor Gaidar the question that we discussed in the first part, coming from Eduard Khairi from Moscow: "Do you feel your guilt vis-a-vis the population of Russia for a country being plundered by a crowd of sons of bitches and fraudulent dealers?"

Gaidar: Yes, it is a good question!

Venediktov: It is a triple question. And in this connection the choice is always between freedom and incidentally the discussion arouse when three years ago or a little earlier when the well known events occurred over the NTV and when your colleague and friend Oleg Kokh spoke of a conflict between property and freedoms. And this is precisely the crisis of liberalism, isn't it? The crisis of liberalism arouse at the time when the Liberals had to choose between property and freedom.

Gaidar: Alexei, you know all that story.

Venediktov: No, I am talking of today. I simply chose a bright term. Yes, it is a question of wellbeing. People wish to live well, wish to be healthy, they want to have children who they want to study and so on. They want not to have to beg alms , they wish not to starve. On the other hand, there are freedoms and so it is much more important to put the question as to what is more important: wellbeing or freedom. It is a funny question but it is ever present... What are people prepared to sacrifice -- freedom for wellbeing or wellbeing for freedom? This is the question of liberalism.

Gaidar: Yes, this is correct. It is not to comment on the history of the NTV, considering that you know its genesis very well.

Venediktov: Today it is exactly three years.

Gaidar: It is a topic for a separate conversation and I am always prepared to discuss the topic. In general this is indeed quite a tragic story but it began a little earlier. I remember very well when you came to me and you said with tears in your eyes that you will have to sell Ekho to Gusinsky. I perfectly remember that.

Venediktov: Yes.

Gaidar: The fact is that indeed such a problem exists. It is not an eternal problem. There is no such problem in Britain, there is no such problem in France, there is no such problem in Germany. And there is no such problem in the United States. There is no such problem in practically any country which is wealthier than we are by just 15-20 percent in terms of per capita GDP.

The gap is very small. This may be the most distressing part. We have paid an incredible price to create prerequisites for viable democracy in Russia. Not a bogus democracy as in many CIS countries, but a functioning democracy. Two or three years ago we had a functioning democracy. I am absolutely sure of that. And now, for the sake of a semblance of stability to sacrifice it again, remembering our history, remembering that it was the inflexibility of existing regimes that exacted the price of two revolutions in the 20th century, and that a revolution, contrary to what was written in Soviet era history text-books, is anything but a romantic adventure, but always a terrible strain on society. One would hate to see that happen again.

As someone who was at the head of the government during a revolution I would not like to see someone else having to tackle similar tasks that must be solved to emerge from a regime of a closed democracy.

Vorobyov: We have 40 seconds left. It's time to announce the results of our poll. In five minutes we got 4,400 calls.

Venediktov: And some people say nobody is interested in liberalism.

Vorobyov: What is the balance do you think?

Gaidar: I don't know. I don't want to make a guess.

Vorobyov: The idea of Gaidar or the idea of Khodorkovsky?

Gaidar: I am eager to hear.

Vorobyov: Fantastic. Let me tell you. It's 53 percent, well, who got 53 percent? Gaidar got 53 percent and Khodorkovsky got 47 percent of the 4,400. And let me just share one observation with you. In the beginning and even in the middle 65 percent voted for Gaidar and 35 percent for Khodorkovsky. The trend reversed when you argued so convincingly that we have no crisis of economic liberalism in Russia, but we do have problems with political liberalism. The final result then is that in the last 1.5-2 minutes it became 53 percent versus 47 percent.

Venediktov: Let me say this. When Mikhail Khodorkovsky is released -- and we hope he will be released from jail -- I would like you Yegor to meet with him here. I am sure you will meet with him in other places as well, but I want you to gather here and in the face of the people who are not indifferent to the fate of Russia, above all our listeners, to continue the discussion in mode when both interlocutors are free, and not in jail. And in an equal position.

Gaidar: Yes, I would welcome such a discussion. But one has to bear in mind one circumstance. Someone who has emerged from a jail - - and I can imagine the circumstances -- you shouldn't think that even if he is out of jail that he is totally free. In this connection, let me stress again that a person who has come out of prison, and I can have a rough idea of the formula, I think that even if he is at large he is not completely free. In this connection I will stress it again that I have no grievances to air with Mikhail Borisovich, no moral claims with him because to ask a person to be a hero, you have to be yourself like that. Khodorkovsky can allow himself that luxury. And I believe that we cannot permit ourself the luxury.

Venediktov: It is a remarkable ending for this meeting coming from Viktor from Togliatti. He has already sent this message to us twice: "Based on the results of the voting, Moscow's assumedly educated elite remains true to itself."

Gaidar: (Laughs.)

Venediktov: It is 15:45. Time for news. I thank you all.