Yegor Timurovich Gaidar (; ; 19 March 1956 – 16 December 2009) was a Soviet and Russian economist, politician, and author who was the acting Prime Minister of Russia in 1992 and simultaneously held several other cabinet roles. Gaidar was also in the State Duma from 1993 to 1996 and from 1999 to 2003 as a member of Democratic Choice of Russia and the Union of Right Forces.
Gaidar was the son of a Soviet naval officer and graduated from Moscow State University. He worked in economic research institutes before joining a commission that advised Soviet President Mikhail Gorbachev in the 1980s. Following the dissolution of the Soviet Union, Gaidar was the chief architect of Russia's controversial shock therapy reforms, which brought him both praise and harsh criticism. He entered the cabinet led by President Boris Yeltsin as Minister of Finance, Minister of Economy, and Deputy Prime Minister for Economic Policy, serving from 1991 to 1992. He was also the First Deputy Prime Minister of Russia in 1992, with Yeltsin and later himself as acting prime minister, and again from 1993 to 1994, in Viktor Chernomyrdin's cabinet, where he was also the acting Minister of Economy. Gaidar became widely unpopular for his reforms to transition Russia to a market economy, during which the country experienced hyperinflation and mass impoverishment, and the parliament pressured Yeltsin to remove him. He left the government in early 1994, when the administration decided to take a more gradual approach to economic reform.
Many Russians held him responsible for the economic hardships that plagued the Russian Federation in the 1990s, although liberals praised him as a man who did what had to be done to save the country from complete collapse. Gaidar founded the party Democratic Choice of Russia, and as a member of that party was elected to the State Duma in the 1993 legislative election. He stopped supporting Boris Yeltsin due to the First Chechen War. Democratic Choice of Russia failed to win any seats in the 1995 election, but Gaidar returned to the Duma in the 1999 election when his party joined the Union of Right Forces electoral bloc. He was an advisor to Mikhail Kasyanov, the prime minister in the early administration of President Vladimir Putin. After the electoral bloc failed to keep its seats in the 2003 election, Gaidar left politics and returned to academic work, though he was still consulted for economic advice. He went on to publish several books on economics. Gaidar died of pulmonary edema provoked by myocardial ischemia in 2009.
Early life and education Gaidar was born in 1956 in Moscow, RSFSR, Soviet Union, the son of Ariadna Bazhova and Pravda military correspondent Timur Gaidar, who fought in the Bay of Pigs Invasion and was a friend of Raúl Castro. His paternal grandfather was Soviet writer Arkady Gaidar and his maternal grandfather was writer Pavel Bazhov. They had both been devoted Bolsheviks that fought in the 1917 Russian Revolution. Despite the Turkic-sounding surname, Gaidar was Russian; his grandfather, originally called "Golikov", adopted the name "Gaidar" from the Khakas language as a nom-de-plume.
Because his father was a Soviet Navy one-star admiral and was often posted to "hot spots," it has been speculated that he was a member of the GRU, Soviet military intelligence. Yegor Gaidar spent part of his childhood at his father's postings. He was in Cuba during the Cuban Missile Crisis in 1962, and was in Yugoslavia in 1966, where, as he later said, he saw a socialist country with a market economy, open political discourse, and fully stocked shops. His father noticed that he had a talent for mathematics and entrusted him with keeping business expenditure reports, which was the start of his interest in economics. According to Gaidar, the Soviet reaction to the 1968 Prague Spring, along with the turn of Yugoslavia away from the Soviet model and radical economic reforms in Hungary, had an impact on his views. He later studied at Moscow State University's Faculty of Economics, where he learned about Marxist theory as well as other economic thought. One of Gaidar's professors explained to his students in private in the 1970s why he thought the Soviet economy was on the verge of collapse, and was only propped up by revenue from oil exports.
During his studies, Gaidar reached the view that any form of socialism, including market socialism, was destined to fail. Despite this, he continued to use Marxist methodology, including the Marxist explanation that the genesis of economic systems was the development of productive forces.
Political and economic career Gaidar graduated with honors from Moscow State University in 1980 and worked as a researcher in several academic institutes. He studied liberalizing reforms in socialist economies. After obtaining his doctorate in economics, Gaidar was put in charge of the economic policy section of the party's ideological journal, Communist. In 1990 he became the head of the economic section of Pravda. Gaidar was a member of the Communist Party of the Soviet Union until it was dissolved in August 1991.
The perestroika reforms allowed Gaidar and other young economists to publish their ideas in the party's official journals, and his position in newspapers increased his influence in party ideological circles. He supported the reforms of President Mikhail Gorbachev and became a member of the commission under the Soviet Politburo to study ways to improve the management of the economy. During this time Gaidar met Gorbachev on several occasions, and participated in the introduction to government terminology such terms as radical economic reform, market, individual entrepreneurship, unemployment, poverty, and inflation, among others. Gaidar thought that the government should focus on liberalization and financial stabilization. Gorbachev was receptive to advice from liberal economists, but he was also under pressure from traditional forces. Meanwhile, the Soviet economy was experiencing a deep crisis as oil prices declined significantly between 1981 and 1987, undermining the Soviet Union's ability to import consumer goods such as food using energy revenue. Gorbachev rejected a 500 Day Plan for reform that was proposed by some economists in favor of a less radical version, and without a timetable. Gaidar criticized the plan as being too radical, but in April 1990 he wrote that "the time is past when the economy could be stabilized without difficult and unpopular measures." In late 1990 he organized the Institute for Economic Policy.
Gaidar joined Yeltsin's government in 1991 because he was known by Alexei Golovkov, a member of the Russian Supreme Soviet who worked with the secretary of state of the Russian Soviet Federative Socialist Republic, Gennady Burbulis. After Yeltsin was elected as president of Russia in June 1991, Golovkov spoke to his associates about Gaidar's work in the journals Pravda and Communist. Gaidar first met Burbulis during the August 1991 coup attempt. Burbulis was tasked with assembling a new cabinet in his role as secretary of state, which would also be responsible for reform. Gaidar advised Yeltsin's associates to seize control of the Soviet central government and subordinate them to the Russian government in order to preserve the union, but this was not done. However, they gave Gaidar the opportunity to try his economic ideas in practice. Burbulis convinced a reluctant Yeltsin of Gaidar's radical economic proposal to "jump start" the Russian economy, which Gaidar believed was necessary to prevent economic collapse. Yeltsin later met Gaidar and accepted his proposal. He was impressed with Gaidar's ability to simplify complex economic ideas and his promise of a quick reform that would produce results within a year.
Economic reforms and premiership
While in government, Gaidar advocated free market economic reforms according to the principle of shock therapy. President Yeltsin took effective power in the Russian SFSR after the August 1991 coup attempt, and in November 1991 a new cabinet took office with a mandate to implement radical economic reforms. It was led by President Yeltsin in the place of a prime minister, and Gaidar as deputy prime minister for economic policy. Gaidar was the chief architect of the reform, and, along with Anatoly Chubais and Boris Fyodorov, and foreign advisors Jeffrey Sachs and Anders Aslund, became known as the "radical liberal reformers" who wanted a quick transition to a market economy in Russia. At the time of their appointment, Gaidar and the other Russian reformers were in their thirties and were unknown, and were also called the "young reformers". The dissolution of the Soviet Union and the creation of the Russian Federation occurred in late December 1991, and the reforms began with the lifting of Soviet-era price controls on 2 January 1992.
In November 1991 Gaidar said that the reforms would follow examples of other Eastern European states and would begin with the liberalization of price controls and strict austerity. He also claimed that the broad structural reforms that some economists argued were necessary for the transition to a market economy would take too long. In essence, Gaidar wanted the immediate liberalization of prices and trade while simultaneously achieving macroeconomic stabilization by reducing the money supply and cutting government spending. Once this was achieved, privatization would be the next stage. In October 1991, Gaidar had said that under shock therapy prices would rise to no more than 200%. However, in January 1992 alone, prices rose by 300%, and as much as 1,000% in the first three months. In February, Gaidar said the reform would continue and would lead to improvements in the next ten months. He also resisted calls from other officials to resign, including Alexander Rutskoy and Ruslan Khasbulatov, and did not answer their questions. Gaidar called on the Russian Central Bank to reduce money printing, which was needed to control hyperinflation and make the reform successful, and called on the IMF to provide more funding for a currency stabilization fund.
On 7 April 1992, as the cost of living skyrocketed, the conservative Congress of People's Deputies moved to take away from Yeltsin the powers that were granted to him for economic reforms. Gaidar argued that continuing the reforms was the only way forward. Gaidar and his cabinet later offered to resign, which led the U.S. to threaten to withhold financial assistance. Under pressure from G7 countries and the IMF, including a visit from U.S. Treasury Secretary Nicholas Brady to Moscow, Congress voted on 14 April to affirm its support for the Yeltsin cabinet's reform. Gaidar said that vote by Congress was a sign that the reform must continue, but added that some measures would be taken to provide assistance, such as tax cuts and subsidies to farmers and investors. Gaidar, despite having hinted at the loss of foreign support, later denied that foreign pressure played any role in the vote. At the end of that month, the IMF granted membership to Russia, and advised the government to cut subsidies to factories as a way of reducing inflation.
In 1991 Gaidar started out as the minister of finance and minister of economy in addition to being deputy prime minister. In a cabinet restructuring in February 1992, Andrey Nechayev was given the economy portfolio. In early April 1992 Vasily Barchuk became the finance minister, while Gaidar remained deputy prime minister. Gaidar said that the changes would allow him to be in a single post that focused on the overall economic reform. He became the first deputy prime minister, and on 15 June 1992, Gaidar was named acting prime minister by Yeltsin. Stabilization and privatization were more politically complex, and the Gaidar cabinet grew to have one first deputy prime minister and seven deputy prime ministers, compared to one and two, respectively, at the start of the year.