Post on 25-Jan-2023
The University of Haifa
School of political science
Department of National Security
National Security Studies Program
Course: National Security: The Practitioners’ Perspective
Seminar paper:
“Destruction of Russian society during 1991-1996”
Lecturer: Dr. Dan Schueftan
Student: Olga Sukhman
2014
Content
Introduction…………………………………………………………………….3
Chapter I. Reforms during 1991-1996 and its impact on
the society………….6
Chapter II. Main social problems……………………………………………..11
Summary……………………………………………………………………...18
Bibliography…………………………………………………………………..20
2
Introduction
National security is a giant concept, which
includes both interior and exterior threats. Besides,
the crucial issue is that there is no national security
without a nation. The key component of a state is its
own society, which is the start point. The goal of this
seminar paper is to provide integrative analysis of
Russian society during the presidency of Boris Yeltsin
in 1991-1996 and to estimate outcomes of economic
reforms on common people lives. The research question
must be the following how democratization affected the
3
Russian society? The idea is not to give proposals for
the future development of Russian society, as this
issue will be out of the table for a long time, but it
is a good case study for understanding the mistakes of
what is estimated and what happened in reality, and
that it is tremendously ignorant to start fundamental
transformation so rapidly without any preparation
throughout your own society.
Even though soviet society was not the best pattern
of values, there was a strong nation, which in last 23
years does not exist anymore. The transition period of
wild democratization destructed Russian people and it
is difficult to see any solution in closest future. The
way democracy was building in Russia is the most
ineffective attempt that can be imagined. The worst
mistake, which was done by Russian government, was not
logical focusing on its internal problems, but external
position satisfaction with political elite interest in
enrichment.
4
Russian society often faced difficulties in all
periods of existence; there has always been a clash
between tradition and modernity. The issue, where do
they belong to the East or to the West seemed to be
unresolvable. There were a lot of painful actions,
however the transition period in the 90-s is likely to
be one of the most destructive. Starting from the
Perestroika we can see how unprepared was Russian
officials to reorganize one system and build a new one.
The key aspect was unbelievable difference between
actions and reality, their understanding of the
outcomes of the reforms, which were held and lack of
midterm and long strategy. After the destructive
processes were launched, there was no attempt by senior
officials to take responsibility and prevent failure,
what concluded with authoritarian regime and Putin came
into power. For the purposes of preparedness for the
next possible unstable situation, it is crucial to
5
analyze mistakes of the past, especially the key
component of national progress – the society.
We can distinguish some variables, which are
important for this research: values of society, socio-
demographic situation, social structure, education,
medicine and social guarantees. Focusing on the list of
criteria above it will be easier to analyze the impact
of system transformation on common people.
Chapter I. Reforms during 1991-1996 and its impact on
the society
6
Back in the USSR there was a system of centralized
planning economy. The government was the one, who make
all decisions: investment, consumption, prices and
income. Gorbachev thought to change the whole system
and replace it with fully functioning market economy.
In the beginning Perestroika seemed to be successful,
however by 1988 a large budget deficit, high inflation,
rationing and etc. became a true. There were many
reasons of it most of them political, despite they
coupled with peoples’ fear of mass unemployment.
Yeltsin took power in July 1991 and on the 28th of
October the first step was taken – extensive
liberalization of prices was announced, although the
situation was difficult and this measure aimed to save
nation from starvation (this issue is still
disputable), it became a disaster. The main problem of
economic reforms was that they were done partially, so
liberalization of prices could not gain any goal
7
without proper monetary policy, as well as
institutional change. During 1992-1993 Russia has
continued its drive towards market economy via a
program of macroeconomic stabilization, foreign trade,
privatization, institutional reforms and etc. The
result of these measures was the rapid decline in the
standard of living. For example, “by June 1992,
consumption of basic foodstuffs stood at late 1950-s
levels and pensioners received benefits two time below
the basic wage. All in all, whereas in 1991, 55 per
cent of the population lived below the poverty line, by
mid 1992 an estimated 90 % were said to be in such
position”1. The cost of living increased twelve times
between March 1991- March 1992. “Inflation by the end
of 1992 was 2600 %, meat prices rose 26 times while
that of milk and other diary, basic foodstuffs by 100-
125 times, butter and sugar by 130-160 times; transport
costs by 13-23 times, health care by 20 times, the cost
1 Gennady Osipov. Reformation of Russia: Myths and reality (1989-1994). M., P.122
8
of childcare places by 32 times and so on. These trends
compared with the rise of wages of only 10 per sent”.2
As a result a staggering 82 per cent of families said
that they could not cope in 1992, compared to only 20
per cent the year before.
Furthermore, Russian industrial production was
falling dramatically, by October 1993 it “was 56,2
percent of its 1990 level: unemployment stood at 1
million and exports had fallen by 12 per cent while
imports declined by 20 per cent”.3 In 1994 Yeltsin made
a decisive move towards the market. The following
measures were about to be taken: “financial
stabilization, the removal of artificial constrains on
competition within Russia’s internal market,
privatization, clear-cut guarantees on property rights,
the introduction of a bankruptcy program and the
transfer of resources from inefficient to efficient
2 Russian society in transition. Edited by Christopher Williams, VladimirChuprov, Vladimir Staroverov. A., P. 11.3 Ibidem. P. 11.
9
sectors of economy”.4 However the goal of a stable
economic growth was not reached, as after facing
pressure from extremist the right and left Yeltsin
began a U-turn. This meant “a relaxation of
macroeconomic policy; great maneuvering between the
various economic and political groupings supporting
manufacturing industry; a closure of the external
market; the placing of restrictions on competing
foreign goods and services and greater targeting of
domestic consumers".5 It is obvious that transition
could not happen in 2 years, and U-turn was even more
painful, as a result unpaid wages totaled trillion of
rubles, industrial output was down by 27 percent, GNP
fell by 17 percent and 24,8 million Russians were
living below the poverty line by October 1994. Economic
indicators for the first half of 1995 showed that
aforementioned crisis had deepened. The number of poor
4 Ibidem. P. 11.5 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 11.
10
rose from 307 per 1000 in 1994 to 474 per 1000 by mid-
1995.
In his book The Struggle of Russia Boris Yeltsin
wrote: “I will use shock therapy on myself and not just
one time. Sometimes it takes a sharp break or rupture
to make a person move forward or even survive at all”.6
‘Shock therapy’ had a high social cost of
transformation. It involves the rapid and simultaneous
pursuit of a package if reforms intended to privatize
the economy and promote economic growth. It was assumed
that these policies would create material difficulties
in a short term, but would ultimately bring efficiency
and prosperity and would promote general good of
society. Market reforms were accompanied by inflation,
increased unemployment and fiscal restraint.
Privatization allowed wealthy elites to emerge, but the
middle classes and vulnerable social groups often found
them worse off than they had been under socialism.
6 Chandler. A. Shocking Mother Russia: Democratization, Social Rights, and Pension reform in Russia, 1990-2001. T. P. 3.
11
Price liberalization led to reduction of purchasing
power and at the same time introduced more fear and
uncertainty, such as unemployment. “Reasons of reform
failure: defects of itself, the government’s
inconsistent approaches to reform, lack of commitment
to reform and the failure of the West and international
institutions to offer enough support for reform”.7
One of the explanations of such dramatic
consequences of economic reforms is within elite
theory, thus the political power of nomenclature elites
has not been transferred to other political groups but
passed of the old elite, who named themselves democrats
to another section of the same elite. “They were
creating capitalism instead of communism, but their
actions legitimized the notion, associated most of all
with Stalin, that the transformation of society
justifies any human cost”.8 Even though there are much
7 Chandler. A. Shocking Mother Russia: Democratization, Social Rights, and Pension reform in Russia, 1990-2001. P. 7.8 Statter David. It was a long time ago, and it never happened anyway: Russiaand the communist past. N.H. P. 5.
12
more elites in Russia (managerial, bureaucratic,
intellectual etc.) all of them wanted the same thing-
to maintain the new status quo and not challenge it.
The key question in 1990-s in Russia was not who was in
power but how it was used. Another important issue is
the role of the West, as IMF and many advisers have
forced changes of a ‘shock therapy’ nature upon Russia,
what concluded in shock without therapy. According to
theirs predictions inflation might increase in the
shirt term by 3-5 times, however the reality was not
the same.
Another aspect of these changes was a growing gap
between rich and poor with an awful tendency, when
criminals were becoming powerful whereas knowledgeable,
educated people lost their importance. The impact of
this change was tremendous on young people, but we will
speak about it in the second chapter. “By the beginning
of 1995, Russia had a very thin layer of rich people at
13
2,5-3 percent”.9 There were two groups of richest
people: politicians and mafia (later) with small amount
of real businessmen, which was an outcome of economic
reforms. Privatization was done through vouchers, which
were distributed through people, however, no one
explained what and how they can do with it and only
people who were connected to the government knew what
to do. Furthermore, people faced tremendous poverty and
were changing these vouchers to any amount of money or
even on a bottle of vodka. In the beginning of 1990-s
the list of richest people included “V.V. Zhirinovsky,
B. Yeltsin, A. Yakovlev, M. Gorbachev, A.I. Volskiy
etc. – all politicians, K. Zatulin – a businessman, M.
Khodorskii – entrepreneur and A. Karpov – a chess
player”.10 A “New Millionaires” survey of 1992-93
discovered that people in the list were 35 years old
average, natives of Moscow and of intelligentsia
background. Some of them had a CPSU, Komssomol or KGB9 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P.116.10 Russia facing a choice. Moscow obozrevatel. P. 41.
14
connections and backgrounds”.11 These figures showed
that common people were destructed. Soviet people were
very naive and believed that politicians must be
committed to people’s best interest. They could not
take immediately responsibility of their life after 70
years of prohibition of doing it. New politicians made
everything to cheat to them and took all that they
could from all natural resources without thinking about
future of the country.
Another crucial aspect of 1991-1996 was a
criminalization of business sector, the principle
‘whatever is not prohibited legally is permissible’
became crucial for surviving and getting profit, as
legislative institutions were very weak. It was spread
all over morality, mentality and values of many
Russians. The means were: setting prices, the quality
of goods and services, endangering people’s health and
life and so forth. According to Michael Joseph “30 per
cent of the starting capital in the private sector was11 Ibidem. P.12.
15
of the criminal origin while 51 per cent of sales
operations had the similar ties”12, although real
figures must be much higher. Russian criminals were
trying to imitate Western counterparts to become
successful, however through their own methods. The sate
was doing nothing to cope with organized crime, the
reasons could be different, on the one hand they could
not do it because of resource constrains, on the other
hand, it seemed that many of criminals were regime
supporters and both groups got benefits as their
interests were similar.
Finally, the way economic reforms were held in
Russia was wield. The most important problem was that
they were partial and very fast, there was no
transition period for people to cope with changes step
by step. The outcomes were enormous poverty,
criminalization of market, and lack of real resources
in governmental hands to continue, what they started.
12 Joseph Michael. Comrade Criminal: The theft of the Second Russian revolution. P. 112.
16
The impact on the society was tremendous, it was in all
spheres of theirs lives, in the next chapter we will
try to concentrate on demographic and social welfare
system to show what effect of destruction of old system
without building a new one was in those sectors.
Chapter II. Main social problems
In the first chapter the main goal was to show the
impact of economic and political change on the society,
however, the key issue, which must be changed was the
values of people. It was crucial for them to understand
for what goal they were suffering and where they were
going, despite no one tried to explain it and social
welfare system became much worse than it was during
communism. There were no real means (money and
knowledge) to optimize communist social welfare system
to a new market economy. This issue was very difficult,
17
that was the reason government was trying to postpone
any solution till the day when there was no money in
budget to pay.
The key spheres for any healthy society except
economic development are the following: demographic
situation, youth policy, education and healthcare. We
will see what happened in these spheres during 1991-
1996.
To begin with demographic situation the impact of
transformation was far from positive. “The birth rate
has declined since 1985 from 16.6 per 1000 population
to 9.6 per 1000 in 1995. In the meantime, the death
rate has increased from 11.3 per 1000 population in
1985 to 15.7 per 1000 in 1995. The overall difference
between the birth rate and death rate has also
increased from 5,3 to 6,1 per 1000 population in this
decade”.13 The reason of such statistic was an ‘abnormal
death rate’. The worst figures in the number of deaths
13 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 57.
18
increase were from 1992 to 1995, as it grew from 15
percent to 64. On the one hand, the answer for roots of
such a catastrophe was in “the drastic deterioration in
medical services, mass poverty, a poor diet for tens of
millions of people, growing unemployment, stress,
anxiety over an uncertain future, alcoholism and so
forth”.14 On the other hand, the same reasons matched to
people undesired giving birth to children. Although,
economic problems were crucial, the aspect of poor
health among women because of ecological situation was
important as well. Moreover, the level of marriages was
falling, while divorces were rising. The family
institution was in the same situation as demography.
“In the early mid-1990s, every second marriage ended in
divorce; many children- 16 per cent- were born out of
wedlock; 12 million were said to live in a ‘social-
risk’ families”15. Furthermore, government expenditure
on schools, kindergartens, hospitals and maternity14 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P.57.15 Ibidem. P. 62.
19
facilities were reduced dramatically since 1986. All
this led to the lack of interest of people in anything
except surviving, what gave freedom of actions to
politicians.
Second aspect of new Russia, which must be vital
for rebuilding of the state was youth policy. In the
research on this topic Prof. Chuprov was trying to
analyze the position of youth in terms of transition
from school to work and the data was the following.
Nearly one-third of his 1994 sample “considered the
work as the only mean to achieve other goals and there
was a great decline of young workers in state
structures”.16 Young people were open to new
opportunities, however their attitude towards hard work
was not positive, they knew that there were other ways
(business = criminal) to become successful. “During
1990-1994 there was a 40 percent increase in the
16 Ibidem. P. 129.
20
proportion of young people willing to engage in illegal
activity to solve money and other worries”17.
In educational sphere situation was not positive as
well, old system was sufficient for soviet needs, but
did not answer a new reality. Universities needed time
to reorganize and to analyze new market demands. Plenty
of people with higher degrees could not find a job and
the tendency was to work on any job that you can find,
the same was with colleges and professional schools.
Many people were trying to get degrees in management,
economy and marketing, and good job could be found
mostly in international companies. There were opened
many private universities with poor quality, as the
only they needed was money. In overall terms, “there
was less interest in technical subjects (down by 37,6
percent), social studies (down to 29,2 percent), but a
greater stress on business studies (up to 53
percent)”.18 In December 1995 when Uriel Procaccia was17 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 132.18 Ibidem. P. 133.
21
invited to Moscow to teach a course for students he
memorized: “My job was to initiate my young disciples
into such Western ideas as the corporate form,
commercial paper, and the other main subjects. Having
detected many a blank expression among their young,
eager faces, the reason was that no one ever took the
trouble to familiarize them with the fountainhead of
all private law-contract.”19 “Several of my Russian
colleagues had only very fleeting notion of what
contract law might be all about, and an astounding lack
of curiosity to find out”20. All cash payments were
closely scrutinized for fear of counterfeit. All
economy was about barter and some primitive mechanism.
Politicians gave freedom of actions to the society,
which was controlled for so long without understanding
that it could not be effective.
“More than 50 percent of young workers and
specialists between 1990-1994 had jobs that required19 Procaccia Uriel. Russian culture, property rights and the market economy.C. P.1.20 Ibidem. P. 2.
22
lower or different skills. In 1994 more then 30,5
percent of young people were indifferent towards their
work. Only 25 percent of Russian young people linked
education to social advancement and only 10 percent to
a career”.21 In reality many young people became
dependent on parental support, figure increased from 81
percent in 1990 to 88 percent in 1994, and the tendency
was becoming much worse.
In western societies civil activity is a norm for
development, however for Russian people it was
something very new, that was true for 1991-1996 and is
still the same, “young people were indifferent to all
forms of socio-political activities”.22 The majority of
young people believed that the responsibility for
carrying out the reforms lied with the President; they
saw a strong leader as essential to solve all the
21 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 130.22 Chuprov Vladimir. Russian youth; characteristic of integration processes.
A., P. 34.
23
difficulties facing Russia. It is evident that soviet
background was still there. The most painful thing was
that all these figures were about urban people, the
situation in the rural districts was much worse; they
became victims of agriculture sector collapse.
Finally, it is important to pay attention on social
welfare system, concentrating our attention on
healthcare and pension system. Economic crisis and
falling production have led to difficulty collecting
tax revenues. As a result of the shortage revenue, the
state has lacked the capacity to grant and index
pension and healthcare reforms according to the Russian
people’s demands. There was a growing gap between needs
and resources. Moreover, the difficulties were added by
bad demographic tendencies.
The issue of soviet healthcare system quality is
very disputable, still it was much better than it
became afterwards. In 1991 a substantial health reform
program ‘On safeguarding the health of citizens’ was
24
started, but the whole project was closed after
collapse of the USSR Ministry of Health in November,
with a transfer of many resources, staff and etc. to
the new independent states. During 1992 the reforms
were restarted, “under ‘shock therapy’, the following
aspects were emphasized; preventive medicine; a reduced
state role in health care; the introduction of national
medical insurance; the need to put healthcare on a more
commercial basis; and finally a greater involvement of
foreign firms in the development of the Russian health
sector”.23 In reality once again reforms, which sounds
reasonable for westernization, was held awfully, one of
the reason was that there was no money in budget to
make all these changes. Medical staff was dissatisfied;
one indication of this was the strikes in January and
April 1992 and again in August 1993. They were among
people with high income in the USSR, but in modern
Russia those who work in public hospitals still receive
23 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 195.
25
one of the lowest salary. Until nowadays quality is
poor in both private and pubic hospitals, while in
private the only thing, which is important is profit,
so it is easy to imagine what was happening during
1994-1996, while during the first 3 years old system
was more or less appropriate. The overall decline in
health status was due to failing food consumption;
inadequate funds to promote environmental protection;
by tight budget constrains and declining health
expenditure. “During 1992- 1994 it became evident that
Yeltsin administration could not cope with healthcare
crisis, 86% of people thought that new government was
not in a position to provide ‘good social services’”.24
In 1994 Russia was ranked 68th in the world in terms of
healthcare. In addition to all economic problems there
were: 30 percent of Russia’s water supply was not up to
WHO standards, diet did not contain all elements that
24 Russian society in transition. Edited by Christopher Williams, Vladimir Chuprov, Vladimir Staroverov. P. 197.
26
people needed, most diseases were rising, morale among
medical staff was becoming lower.
According the example of healthcare system failure
the same situation was in all spheres of social welfare
system. “The fate of pensions was an excellent
illustration of how the dramatic, state-sponsored
institutional changed that accompanied Yeltsin’s ‘shock
therapy’ reforms triggered intense political
controversy and social discontent”.25 Most pensioners
were not asking a cash-strapped government to support a
lavish lifestyle: this was about much more modest
expectations, namely, being able to live adequately
throughout the whole month, without always having to
queue up for one’s pension. “The growth in social
activism among the elderly has helped maintain pension
reform at the top of the formal political agenda”.26
That fact led us to one important conclusion in the
SU depended on a social contract, whereby the state25 Chandler. A. Shocking Mother Russia: Democratization, Social Rights, andPension reform in Russia, 1990-2001. T. Preface.26 Ibidem. P.10
27
provided considerable social benefits to the citizenry
in return for social stability27. The outcomes of
Yeltsin policy was that there was no opposition, no
civil society and no even those welfare state which was
in the USSR to fight for any changes in social welfare
system.
27 Chandler. A. Shocking Mother Russia: Democratization, Social Rights, and Pension reform in Russia, 1990-2001. P.13
28
Summary
Nothing is more wonderful than the art of being
free, but nothing is harder to learn how to use that
freedom. This seminar paper was dedicated to provide
integrative analysis of Russian society during the
presidency of Boris Yeltsin in 1991-1996 and to
estimate outcomes of economic reforms on common people
lives. The democratization affected Russian society
very painfully. What happened to Russia seemed to be a
final victory of the West in Cold war and the only
lesson from it is that people must understand that they
have to take responsibility over theirs life. Although,
29
the solution sounds easy it was and still is very
difficult to born any responsibility in the society
where there was government control in all spheres of
life. Russian people have a different set of values
where humanism, individualism, authority, wealth are
not the same concepts that are in the West.
“Westernization was more about means to preserve her
oriental heritage against the advancing Western foe,
rather than as an independently chosen way of life”28.
Through the whole research body there was an
attempt to show partial character of reforms, which
were held by Yeltsin administration. There was no clear
strategy and no estimation of outcomes. The way
transition was done made Russian people suffering from
poverty, illnesses, uncertainty, decreasing social
welfare system quality and quantity. All these figures
were presented in figures according different
statistical sources. People in Russia got a lot of
28 Procaccia Uriel. Russian culture, property rights and the market economy. P. 279.
30
foreign products and goods, but they lost their values
and identity. They were afraid of each other and hate
each other, as the only value for survival became
money. The gap between government with its politics and
population was growing tremendously fast. In new Russia
government was not committed to its nation best
interest, there was no attempt to attract people to
make decisions about state’s future, during this period
there was no place for civil society. Even though,
first Russian president is considered to be weak, the
key issue in Russia political culture of a new period
is that politicians use power for enrichment and do not
care about population, while last do not understand
that it is theirs responsibility to influence on the
government. That is why many Russian people would like
to reborn the USSR because there were clear values and
politicians were working for people, although ideology
was far from ideal. During 1996 presidential election
leader of Communist party G. Zyuganov was very close to
31
Yeltsin, moreover, according to some sources final
results were falsified.
The period of 1991-1996 was very painful for
Russian nation, there was no strict plan of transition,
the destruction of institutions and systems, which were
working quite well in the USSR was a very easy process,
although building new happened to be much more
difficult thing.
Bibliography
1.Cameron Ross. Federalism and democratization in
Russia. Manchester University Press, Manchester,
2002.
32
2.Chandler Andrea, Shocking Mother Russia:
Democratization, Social Rights, and Pension reform
in Russia, 1990-2001. University of Toronto Press
Incorporated, Toronto, 2004.
3.Chuprov Vladimir. Russian youth; characteristic of
integration processes. Academia, Moscow, 1994.
4.Hahn Jeffery. Federalism, Democratization, and the
Rule of Law in Russia. Oxford university press,
Oxford, 2002.
5.Joseph Michael. Comrade Criminal: The theft of the
Second Russian revolution. London, 1994.
6.Lane D. S., Cameron Ross. The transition from
communism to capitalism: Ruling elites from
Gorbachev to Yeltsin. St, Martin’s Press, New York,
1999.
7.Osipov Gennady. Reformation of Russia: Myths and
reality (1989-1994). Academia, Moscow, 1994.
33
8.Procaccia Uriel. Russian culture, property rights
and the market economy. Cambridge University Press,
Cambridge, 2007.
9.Russia facing a choice. Moscow obozrevatel. Moscow,
May 1995.
10. Russian civil society: A Critical Assessment.
Edited by Evans B. Alfred, Henry A. Laura,
Sundstorm Lisa Mcintosh. M.E.Shape, New York, 2005.
11. Russian Politics. Challenges of
democratization. Edited by Zoltan Barany, Robert G.
Moser. Cambridge University Press, Cambridge, 2001.
12. Russian society in transition. Edited by
Christopher Williams, Vladimir Chuprov, Vladimir
Staroverov. Dartmouth, Aldershot, 1996.
13. Shevtsova L. Russia lost in transition. United
Book Press, Washington, 2007.
14. Statter David. It was a long time ago, and it
never happened anyway: Russia and the communist
past. Yale University Press, New Haven, 2012.
34