BTW the collapse of the SU was a cataclysm. Except for the Baltics, it had almost no positive effects whatsoeve, and meant a logarythmic expanse in human misery. Russia got off easy. It was an absolute horror for people in the other republics. Exactly as Gorbachev said it would be.
Chris Doss The Russia Journal ---------------------------- "Shock Therapy" in Poland and Russia, and Yeltsin's Mistake
INTERVIEWER: When you saw Poland, after the victory of Solidarity, adopt shock therapy as an economic policy, did you think that they had an idea that could be applied to the Soviet Union? Or was the Soviet Union a very different situation?
MIKHAIL GORBACHEV (via interpreter): Well, we recently had a meeting with Mr. Jaruzelski, Gen. Jaruzelski [Wojciech; Polish Communist Party leader 1981-89, president of Poland 1989-90], who attended my 70th birthday. And then we met again to set up a political kind of Davos. There is, of course, the economic Davos summit, and now we are creating in Italy at the Mont Blanc forum a world politics forum which will be a kind of political Davos. And together with Gen. Jaruzelski, we were remembering the past. And without an attitude of goodwill on the part of the Soviet Union towards Poland, Jaruzelski wouldn't have succeeded in the transition. The Poles underestimate what Gen. Jaruzelski did for the country in 1981. When he imposed martial law, he saved the country from chaos. It was a kind of umbrella. He made it possible for the democratic process to develop in Poland. And perestroika was his real opportunity. So first of all it was dialogue, then the Round Table, and then the elections. He was elected president; then Walesa was elected president. It was a normal controlled and guided process. But the understanding was that Solidarity is the people, is the working people. If people want change, we have to accommodate their wishes rather than act in accordance with the wishes of the nomenklatura, of the bureaucracy. So Poland was definitely a pilot project, and the fact that reforms started there was significant.
But please understand no country, no country, can repeat the reforms of another country. Any model, even a perfect model, should take into account the face of development of a particular country, its possibilities, its economic possibilities, its social situation. Every country should conduct its own reforms, should develop its own model taking into account the experience of other countries whether close neighbours or far away countries. There were certain things in the Polish reforms that were useful to us, particularly the overall commitment to market economics, a choice of transition to a market economy. But the situation was quite different there. First of all, in Poland they still had certain market experience even under the socialist system. They still had private property in agriculture; they sold their produce in farmers markets. In the Soviet Union it was all state or so-called cooperative property. Everything was regulated according to plans. It was very strict, and we did not have a market to which people could bring products and exchange products. Prices were set very rigidly, both in industry and in agriculture for collective and state farms. So the situation was very different. The Polish experience was not directly applicable. And even though Poland also had a big military sector, a lot of military orders and defense orders, it was not comparable to the Soviet Union, where half the economy, and some people believe more, worked for the defense sector. It's quite a different story. Of course you cannot make a transition promptly for the defense sector to market economics, because that sector is totally dependent on state orders. And therefore shock therapy, immediate shock therapy in our country, would have been a mistake.
Incidentally, whereas perestroika was a reform that was aimed at evolutionary change, political change, creating an infrastructure for market economics, creating a legal base, a legislative base for the market, it all required regulating, adjusting, training personnel capable of working in a market. We had several generations that had had nothing to do with the markets. You cannot just announce markets and then the markets would emerge over night. And therefore we believed that perestroika could not accept this kind of overnight approach. We believed that it was necessary to have 10 to 15 years at best. I was even saying it will take a generation, and then the mechanism would start working. What did Yeltsin do? Yeltsin broke up the country, using Russia to break up the country. He speculated on people's wishes. He said we'll do it within one year; we will conduct very good reforms, very rapid reforms, and in one year we'll begin to grow, and within three or four years we'll be among the three or four most prosperous nations in the world. I was really amazed at this kind of irresponsible deception of the people. He probably believed what he was saying because he didn't have the vision to start a different kind of reform. And so they just said, "Well, the markets will solve everything. The market will put everything in place."
And, well, Yeltsin did use his kind of shock therapy, and he began in the most developed republic of the former Soviet Union with a lot of possibilities, but it was not ready. Russia was not ready in terms of personnel, in terms of law, and shock therapy resulted in a drama and a tragedy for millions of people. Now, after 10 years of Yeltsin, people finally said Yeltsin had to go. Yeltsin brought the country to a dead end. Two-thirds of the people live in poverty. We have a shorter life span, greater mortality, the population is decreasing, industrial production is one half of what it used to be, scientific centers are being destroyed. It's incredible. Putin, therefore, has a difficult legacy.
That's shock therapy applied in a stupid way. In some countries it is possible and necessary, but it should be well prepared. By the way, Poland did not immediately succeed with its shock therapy. After Balcerowicz [Leszek; former minister of finance of Poland, 1989-91, 1997-2000], serious additional reforms were made, and Poland is now really moving in a stable way. The International Monetary Fund and others also wrote off 50 percent of Poland's debts, so you can see that is also a factor. So it's not as simple as journalists often present it or politicians or some analysts present it, where it's very superficial. Shock therapy, they say, is the way to go; it will save. But no, it does not save. You have to do everything in a very serious and substantial way....