Market Reform Architect Gaidar Dies

Yegor Gaidar, the mastermind of Russia’s transition to a free economy that began with painful price shocks in the early 1990s, died Wednesday at the age of 53.

Gaidar died of a blood clot at 3 a.m. as he was working on a new book at his home outside Moscow, said Yelena Lopatina, a spokeswoman for the Institute of Economy in Transition, a think tank that Gaidar established and headed.

President Dmitry Medvedev, Prime Minister Vladimir Putin and dozens of other politicians showered Gaidar with praise Wednesday, even though they had largely ignored him and his economic advice in recent years. One of his last ideas embraced by the Kremlin was the creation of a stabilization fund to collect oil windfalls — a fund that the government is now using to ride out the economic crisis.

“He was saying things they didn’t like about overinflated budget expenditures and overreliance on high oil prices,” said Irina Yasina, a journalist and the daughter of economist Yevgeny Yasin, who served with Gaidar in President Boris Yeltsin’s government.

“He could have helped a lot more. He was thinking 24 hours a day,” Yasina told The Moscow Times.

Yasina interviewed Gaidar just hours before his death, and her voice trembled as she talked.

“He looked the same as usual, and we even agreed to meet on Dec. 29,” she said.

One reason that politicians might have distanced themselves from Gaidar was public anger over his reforms that untied Soviet-era state controls from the economy.

On Jan. 1, 1992, the country woke up to find that the state had set free prices on all goods and services. Store shelves, which had been empty since the Soviet Union sank into the throes of economic collapse in the late 1980s, almost immediately filled with goods. But the prices for the goods, which were mostly imported, were beyond the reach of many Russians.

Inflation jumped to almost 2,000 percent that year, decimating the savings of ordinary Russians.

What was called “shock therapy” in former socialist countries as they started their transition to capitalism was also branded “Gaidar’s reforms” in Russia.

But Gaidar, who served as acting prime minister for just six months in 1992 before public anger forced Yeltsin to fire him, maintained that his bold policies saved Russia from civil war, and many liberal economists and politicians agree with him.

Medvedev described Gaidar as a “brave,” “honest” and “determined” economist in a letter of condolences to his family.

“He took responsibility for unpopular but essential measures during a period of radical changes,” Medvedev said. “He always firmly followed his convictions, which commanded respect from those who shared his views and his opponents as well.”

Putin called Gaidar’s death a “heavy loss for Russia.”

“He didn’t dodge responsibility and held onto his convictions with honor and courage in the most difficult situations,” Putin said in a statement.

Boris Nemtsov, a leader of the Solidarity opposition movement who co-founded the Union of Right Forces party with Gaidar in the early 2000s, told The Moscow Times that Medvedev and Putin owed their jobs to Gaidar.

“I know that many people don’t like him, even hate him, but I hope his death will open their eyes,” said Nemtsov, who served as a deputy prime minister in Yeltsin’s government. “He is one of the founders of the new Russian state. Thanks to what he did, the current leaders can brag of their achievements because there is a private economy.”

Yasina and Boris Nadezhdin, head of the Moscow branch of the Union of Right Forces, said Gaidar managed to push the idea of the stabilization fund through the Kremlin in the early 2000s when oil prices started growing.

Ordinary Russians continue to disapprove of Gaidar’s reforms, a new survey shows. Fifty-seven percent of respondents disapproved of his work in the government in the 1990s, while 17 percent supported it, state-run VTsIOM found in a survey conducted Wednesday. The survey had a margin of error of 3.4 percentage points.

Gaidar’s fall from favor with the powers-that-be began shortly after he became acting prime minister on June 15, 1992. Anger over Gaidar’s reforms grew so strong then that Yeltsin replaced him on Dec. 15 with Viktor Chernomyrdin, a Soviet-style bureaucrat rather than a liberal economist.

In 1993, Gaidar’s Democratic Choice of Russia party garnered 15 percent of the vote in State Duma elections. On that election day, the country also approved a referendum on a new constitution, and the date of the vote — Dec. 12 — has been observed as Constitution Day ever since.

But two years later, Gaidar’s party failed to clear the 5 percent threshold to win seats in the Duma after bitter public disappointment in the free market added to his growing unpopularity. In the meantime, Gaidar was sidelined from Yeltsin’s inner circle, and his influence on economic policymaking sharply declined.

Gaidar returned to politics in 1999 when the Union of Right Forces, built of several liberal parties, including his Democratic Choice, managed to make it into the Duma. As a lawmaker, Gaidar actively participated in drafting economic bills but avoided public politics. In 2003, the Union of Right Forces failed to get into the Duma, and Gaidar resigned from its governing bodies.

“Still he remained the supreme moral and intellectual authority for party members,” Nadezhdin said.

Gaidar shifted his focus to academia, writing several books on macroeconomics, history and political science. A university textbook on modern history that he wrote will be published in the spring, Yasina said.

Kremlin economic aide Arkady Dvorkovich praised Gaidar on Wednesday as Russia’s most prominent and world-renowned economist.

But Gaidar rarely received attention in the national media in recent years. The last time was in November 2006 when he fell ill during a visit to Ireland and claimed to have been poisoned by “open or covert enemies of the Kremlin.” The incident happened the same month that Kremlin critic Alexander Litvinenko died of radioactive poisoning in London. Gaidar’s friends later denied that he had been poisoned.

Several weeks before the incident, Gaidar had looked unwell during an interview with The Moscow Times. His face was haggard, and he spoke with a weak voice.

Gaidar used his last published interview, which appeared in Novaya Gazeta on Nov. 20, to present a new book warning about the risks faced by a state that chooses to strengthen its grip on society and the economy during an economic crisis.

“Russia has survived two such catastrophes, and there should not be a third one,” Gaidar said, referring to the 1917 Revolution and the Soviet collapse in 1991. “I want this to be understood by the country’s ruling elite and by those who disagree with the elite.”

Gaidar is the grandson of well-known Soviet writer Arkady Gaidar and Russian writer Pavel Bazhov. He is survived by his wife, Marianna, the daughter of prominent writer Arkady Strugatsky. The couple has three sons, including one who was adopted, and a daughter, Maria, a liberal politician and an aide to Kirov Governor Nikita Belykh.

A public memorial service is scheduled to be held at Moscow’s Central Clinical Hospital at noon Saturday. No other information about funeral arrangements was immediately available.

Natalya Krainova contributed to this report.