AS HE HAD OFTEN DONE in the past, Gorbachev refused to give up. He insisted on adding a political treaty to the agenda of a State Council meeting scheduled for October 11 that involved the heads of the republics and was to discuss economic cooperation. He also asked his advisers to send the new draft union treaty to the republics. Prepared by Shakhnazarov and Sergei Shakhrai, who represented Yeltsin, the draft reflected a confederal vision. But before it went to the republics, Gorbachev insisted on further changes. He wanted to replace references to a “union of states” with “union state,” add provisions for a union constitution, and arrange for the election of the union president by popular vote, not by the parliamentary assembly. Shakhnazarov was opposed to making any changes, reminding Gorbachev that he had already agreed to a confederation, which meant a “union of states,” not a “union state.” Gorbachev was not pleased, retorting, “You are going to lecture me? I don’t need you to tell me that: I studied it in university. . . . The point now is not the wording but the essence of the matter. Be so good as to write ‘union state.’ I do not want to hear any objections.” The draft with Gorbachev’s changes was sent to the republics.18
To Gorbachev’s great disappointment, the political treaty was removed from the agenda of the State Council meeting of October 11. Leonid Kravchuk of Ukraine told Gorbachev that the Ukrainian parliament had voted to suspend its participation in negotiations on the new union treaty until the referendum of December 1, when Ukrainians would vote on their independence. Gorbachev was visibly upset by this major change in Ukraine’s position. Kravchuk had previously taken part in the discussions on the premise that if the referendum did not confirm parliament’s vote for independence, Ukraine would join the Union, which Kravchuk envisioned as a confederation. Now Ukraine was withdrawing from negotiations altogether. Gorbachev proposed that the State Council issue an appeal to the Ukrainian parliament, asking it to suspend its decision not to participate in the preparation of the treaty.
“The Ukrainian parliament will confirm its decision,” responded Kravchuk.
“God be with you, and we will cleanse our soul!” was Gorbachev’s reply.19
With political union off the table, the economic agreement took center stage at the State Council deliberations on October 11. The presentation on the agreement was made by Grigorii Yavlinsky, Gorbachev’s main economic adviser. This was Yavlinsky’s third attempt to convince those in power to accept his vision of economic transformation. The first one was undertaken in 1990 with the development of the 500 Days Program for the market transformation of the Soviet economy. After initially embracing the program, Gorbachev had abandoned it in the fall of that year. In July 1991, working with Jeffrey Sachs of Harvard University, Yavlinsky had prepared another plan for economic reform to be presented at the G-7 summit in London. It was dismissed by first world leaders as insufficient. Now Yavlinsky presented a revised program, adjusted to the new circumstances of a crumbling Union.
Anatolii Cherniaev, who attended the meeting, thought Yavlinsky did an excellent job of presenting the draft treaty to the council. He termed Yavlinsky’s performance “literacy instruction and cultural enlightenment for the illiterate republican presidents.” Cherniaev was appalled by what he regarded as the inability of the republican leaders to grasp the basic principles of a market economy. “The primitivism is striking,” recorded Gorbachev’s aide in his diary. Cherniaev was perfectly right to note that few of the republican leaders, who had risen through party ranks under the Soviet command economy, had a good knowledge of the principles of a market economy. But they clearly understood the interests of their republics and their own interests as leaders when they insisted on joint republican control over the central bank, despite Yavlinsky’s best efforts to persuade them otherwise.20
The position taken by the leaders of the republics boded nothing good for the common financial space, and it did not sit well with Cherniaev or with Boris Pankin, the Soviet foreign minister (and also a product of the Moscow liberal establishment), both of whom attended the meeting. Pankin later expressed in his memoirs the shock he felt on witnessing the debates at the State Council: the formerly all-powerful center “was now squeezed into a single room, and a good half of it was represented by the leaders of independent republics.” Pankin looked with horror upon the new leaders defining the fate of whatever was left of his country. “Who were these unfamiliar new men on the State Council? Who were these new khans from the outer regions of the Soviet Union?” he wrote in retrospect.
Pankin characterized Kravchuk, who reminded him of one of Gogol’s characters, as a “plumpish” man with a “strong sense of self-satisfaction and self-importance.” Ayaz Mutalibov, the leader of Azerbaijan, struck Pankin as “a teenage street thug who had grown up and lost touch with his bad companions but never quite shed his old habits.” Saparmurat Niyazov of Turkmenistan reminded him of “a chairman of a first-class collective farm,” and Askar Akaev of Kyrgyzstan, of “a local educator from the 1920s.” The forty-six-year-old Akaev was in fact one of the leading Soviet specialists in optics and a former head of the Kyrgyz Academy of Sciences. He was also the only Central Asian president who opposed the coup. To Pankin, all the republican presidents shared one key trait—they were provincials who had no idea how to run a great country.21
Both Pankin and Cherniaev felt desperate. For decades they and their cohort of educated and liberal-minded apparatchiks had had to serve party bosses sent to Moscow by the provincial party elite. In Gorbachev, they had finally found a provincial with an amazing aptitude for learning and changing both himself and the country according to their standards. But Gorbachev was now sinking fast, along with the country they loved. Before their very eyes, power was devolving to a pack of colonial administrators whom they found even less enlightened than the old elite, which had acquired some elements of imperial sophistication after spending years in Moscow. The barbarians were taking over Rome.
Yeltsin, who had just returned to Moscow from his Sochi vacation, sat silent for most of the State Council meeting. “Throughout the six hours of the State Council, Yeltsin, as sullen as he was wont to be at the Politburo, did not open his mouth,” noted Cherniaev in his diary. The Russian president had good reason for his attitude. Although he had privately endorsed the Burbulis Memorandum, which set Russia on the path of economic reform irrespective of the wishes and economic needs of other republics, he was politically in no position to come out against the agreement, which allowed the republics to issue currency on their own terms and, as Burbulis believed, flood Russia with worthless rubles and deplete it of its resources. One reason for Yeltsin’s silence was that his government was still divided on the issue of economic reform. Another was the promise he had given Gorbachev to support the economic agreement. And then there was a promise he gave to President Bush.
George Bush had unexpectedly called Yeltsin in Sochi late in the evening of October 8, two days before Yeltsin’s return to Moscow. He repeated his previous offer to Yeltsin: the Russian leader could come to the United States for medical treatment if necessary. But that was not the main reason for his call. The White House was alarmed by news from the US embassy in Moscow indicating that the Russian government was withdrawing its support for the economic treaty. “Clearly this is an internal matter, not really any of my business,” said Bush. “But I just wanted to share one thought with you. Some voluntary economic union could be an important step for clarifying who owns what, and who’s in charge, thus facilitating humanitarian assistance, and any economic investment which might be forthcoming.” Bush was trying to cajole the Russian president into the economic union with a promise of humanitarian help.
Yeltsin admitted to Bush that his government was split on the issue but promised that he would do his best to sign the economic treaty. Knowing Bush’s attachment to Gorbachev, or perhaps even suspecting that Bush might be acting on behalf of the Soviet president, Yeltsin stressed that he was working together with Gorbachev. “I called President Gorbache
v,” Yeltsin told Bush, “and we agreed that on October 11 we will get together in Moscow, hear reports, and then Russia will sign the treaty.” Yeltsin presented this as an actual sacrifice of Russia’s interests. “We understand we have the least to gain; as a matter of fact we might even lose something,” he told Bush. “But we’ll sign because of the bigger political goal—to save the Union. As President I do have that right, even though it may be tough to get through the Supreme Soviet for approval.”22
On the face of it, Yeltsin kept his promise to Bush. On the evening of October 18 the Russian president went to the Kremlin along with the leaders of the other republics to sign the treaty declaring the creation of an economic community of “independent states.” An uneasy compromise was reached on control of the central bank and coinage of currency: the all-Union bank was to be administered by a commission of representatives of the central and republican banks, but the latter had to accept limits on the amount of currency they could issue. There was no indication, however, that Yeltsin intended to honor the treaty: he said right away that Russia would not ratify the treaty unless thirty additional agreements on specific issues important to Russia were signed as well.23
Earlier that day the Russian president had given a speech that threw a wrench into the restoration of the former Union. He announced that Russia was cutting off funds to most all-Union ministries, noting that “the task is to do away with the remains of the unitary imperial structures as quickly as possible and create inexpensive interrepublican ones.” In September, Russia had nationalized oil and gas enterprises on its territory and taken over the revenue they had previously contributed to all-Union coffers. By enriching Russia and bankrupting the Union, the Russian leaders gained a potent new weapon to use against the center. In mid-October, the Russian parliament voted to declare the decisions of all-Union bodies, including Gorbachev’s State Council, nonbinding on the Russian Federation. Yeltsin issued a similar decree with regard to Gosplan, the all-Union economic planning body. Bush’s call made Yeltsin sign the economic agreement, but there was little that the American president could do to ensure that Yeltsin would actually honor it or that his actions would not lead to the further weakening of the Union.24
YEGOR GAIDAR WAS in Rotterdam at the invitation of Erasmus University when he received an urgent call to come back home: Yeltsin wanted to see him. Gaidar knew what the call might mean—the end of his comfortable life as an academic adviser and the beginning of perhaps the most unpopular and painful reform in Russian history. Although Gaidar did not look forward to overseeing it, he was not prepared to reject the prospect. When he told his father what might await him, the old man, who had served as a Soviet military correspondent in Cuba and Afghanistan, could not conceal his horror. Schooled in the Stalinist dogma that freedom meant the recognition of necessity, the elder Gaidar gave his blessing: “If you are certain that there is no other way, then do as you think best.”25
Gaidar believed, as did Burbulis and his entourage, that the plan they proposed was the only way to prevent economic collapse. He also believed that Yeltsin was the only politician prepared to take a risk and implement his reforms. “For a politician, Yeltsin has a decent understanding of economics and is generally aware of what is going on in the country,” wrote Gaidar, recording his first reactions to the meeting he had with the Russian president after returning from Amsterdam. “He understands the tremendous risk associated with the initiation of reforms, and he understands how suicidal it is to remain passive and await developments.” Gaidar’s friends believed that he had fallen under the spell of Yeltsin’s personality and would remain charmed for years.26
Yeltsin was no less impressed by his young guest. He saw him as a representative of the Russian intelligentsia who, “unlike the dull bureaucrats in the government administration, would not hide his opinions” but defend them no matter what. Another quality of Gaidar’s that Yeltsin found attractive was his ability to explain complex economic issues in simple terms. “Listening to him,” wrote Yeltsin, “you would start to see the route we had to take.” He also had a program that no one else was proposing and a group of people ready to implement his plan—a quick, decisive reform that would produce results within a year. Furthermore, Gaidar made Yeltsin believe that if he did not do something drastic about the economy, he would share the fate of Gorbachev, who kept promising reform but never delivered it and was now on his way out.27
Burbulis, who had brought Gaidar and Yeltsin together, believed that they had immediately forged a cultural bond. Like most Soviets of his generation, Yeltsin knew and admired the writings of Gaidar’s paternal grandfather, Arkadii Gaidar; like the natives of the Ural region, he had the highest regard for the writings of Gaidar’s maternal grandfather, Pavel Bazhov, the author of a collection of tales based on Ural folklore and titled The Malachite Casket. “It was a bonding of the rarest sort,” said Burbulis, recalling the first meeting between Yeltsin and Gaidar. “There was a sudden realization: we are from the same lands, the same volcanic origins, the same root.” The growing Sverdlovsk mafia in the Kremlin was finding recruits in the most unexpected places.
The common roots that Burbulis mentioned were not only geographic but also ideological. Both of Gaidar’s grandfathers were devoted Bolsheviks who had fought in the Revolution of 1917. Burbulis believed that Gaidar and Yeltsin shared the particular historical and cultural matrix of early Bolshevism. “There was the utopianism, the mythology of Bolshevik daring, and service to an idea—this is also present in that fellow,” remarked Burbulis about Gaidar. “And that historico-cultural and socio-romantic code—it was all there in compressed form.” Both of Gaidar’s grandfathers had helped suppress peasant uprisings against communist rule. Now their grandson had chosen to lead the country back to a world in which the private property defended by the rebellious peasants would rule supreme. In both cases, the process was extremely painful. The Bolshevik wholesale assault on capitalism was now to be followed by a similar assault on the communist economic system. Yegor Gaidar would take no prisoners.28
ALTHOUGH YELTSIN had given his assent to the Burbulis Memorandum on the Sochi beach, he did not publicize it and probably did not make a final decision on it until his meeting with Gaidar. But once he made up his mind, developments proceeded with breathtaking speed. Yeltsin prepared to present his reform plan and request special powers for its implementation at a session of the Russian Congress of Deputies—the Russian superparliament—scheduled for October 28. A few days before the session, news of the content of the reform and of Yeltsin’s speech reached the Gorbachev circle. On October 22, Gorbachev’s aide Vadim Medvedev noted in his diary, “It seems that a general liberalization of prices will be announced, and that without any connection to tougher banking regulations on currency circulation or limitations on budgetary deficits. . . . The next few days will show where things are heading, but the Russian leadership is obviously inclined toward the extreme choice—full independence for the republic.”29
While Gorbachev was left in the dark about what to expect from Yeltsin’s impending speech, Yeltsin called Bush on October 25 to inform him about the coming major turn in Russian policy, “following the tradition between us in talking about very important matters.” He said, “I will announce substantial economic plans and programs and say that we are ready to go quickly to free up prices, all at the same time, privatization, financial and land reform. All this will be done during the next four to five months, maybe six months. It will be a one-time effort. It will increase inflation and lower living standards. But I have a popular mandate and am ready to do this. We’ll have results by next year.” Yeltsin offered to send his foreign minister, Andrei Kozyrev, to Washington to explain the Russian reform plan, and Bush expressed interest in meeting him. “It sounds like an ambitious program. I congratulate you on a tough decision,” he said. They ended the conversation as old friends, with Yeltsin informing Bush that he had benefited from his two-week vacation. “I am full of energy, playing tennis,
and my heart is good,” he assured Bush. “I am fine.”30
Bush spoke with Yeltsin on October 25, 1991. Three days later, on October 28, the Russian president addressed his parliament with probably the most fateful speech in its short history. “I turn to you at one of the most critical moments in Russian history,” said Yeltsin at the beginning of his address, which lasted close to an hour and was titled “An Appeal to the Peoples of Russia and to the Congress of People’s Deputies of the Russian Federation.” “It is being decided at this very time what Russia and the country as a whole will be like in the years and decades to follow; how present and future generations of Russians will live. I resolutely call on you to embark unconditionally on the path of deep reforms and for support from all strata of the population for that resolution.” Yeltsin declared that the government was planning to free prices and cut spending, including food subsidies.
The first stage will be the hardest. There will be some reduction in the standard of living, but uncertainty will finally disappear, and a clear prospect will emerge. The main thing is that in deeds, not words, we will finally begin to emerge from the quicksand that is pulling us in ever deeper. If we embark on this path today, we will already have results by autumn. If we do not take advantage of this real chance to reverse the unfavorable course of events, we will doom ourselves to poverty and a state with a centuries-old history to destruction.
The Last Empire Page 28