KAI RYSSDAL: Boris Yeltsin first truly got the West’s attention in August of 1991, when he jumped up on that tank in front of the Russian Parliament building. But it wasn’t until January of the following year that he really turned communism upside-down — when he lifted 75 years of Soviet price controls.
Yeltsin died today at the age of 76. And that shove that he gave Russians toward a market economy is still shaking itself out.
Rajan Menon teaches international affairs at Lehigh University. Professor, good to have you with us.
RAJAN MENON: Thank you.
RYSSDAL: A lot of the headlines today, sir, have pointed out that President Yeltsin introduced free-market reforms to the Russian economy. But if you look around the Russian economy today — with increasing state control over a number of key enterprises, and the oligarchs in the Kremlin and in Moscow — what would your vote be on how things have turned out?
MENON: Well, Yeltsin, no doubt, laid the foundation in many ways for a market economy and a democratic system. But many of the ills that we see in the Russian economic and political system today — the increasing control by the state, corruption, cronyism — all of this can be traced back to Yeltsin. Now the one difference, of course, is that whereas the Russian economy contracted severely under Yeltsin — especially after the currency crisis — under Putin, as you know, there have been year-upon-year of solid economic growth.
RYSSDAL: Why was it, then, that President Yeltsin wasn’t able to do more for the Russian economy? Did he just go too fast with his reforms?
MENON: Yes, I think that was part of it. He believed that unleashing market forces would bring stability and prosperity. And when you have a system like the Soviet system, in which prices were set by the state — in which there was virtually no private property — and suddenly transform it, I think you have the foundations for a great deal of chaos. Especially when the institutional requirements for a capitalist system — sanctity of contracts, transparency and the like — were not yet in place.
RYSSDAL: Do you think we’ve come as far as we might in the Russian economy, or might things have been handled better?
MENON: Well, as far as the Russian economy today’s concerned, we won’t know how robust it is, because we have not seen it in the Putin period performing with oil prices being very low. It is largely a hydrocarbon economy. Now, there are those who will say there is much more going on. True enough. But the hydrocarbon sector, oil and gas, it counts for so much of Russia’s exports and its foreign revenues that we have to really ask ourselves: In the absence of sky-high oil prices, what might the Russian economy be like?
RYSSDAL: Let me get this back to President Yeltsin before I let you go. How much blame does he deserve for the state of the Russian economy today as it is influenced by politics?
RYSSDAL: Well, I think the oligarchs, the lack of transparency, the corruption, the cronyism — all of this plus the enormous strides that Russia had to make given the contraction that occurred under Yeltsin — can be traced back to that period. Now, my point is not that all of these things Yeltsin created as an individual. But the Yeltsin system was shot through with these characteristics. And therefore, if you see them in Russia today, you can’t see them in a vacuum because they have an antecedent. A past, if you will.
RYSSDAL: Rajan Menon is a professor of international relations at Lehigh University. He’s a fellow at the New America Foundation as well. Professor Menon, thanks very much for your time.
MENON: All right, thank you.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Donate now to get almost any thank-you gift.