Post-communist meltdown in Russia

• Throughout the entire Yeltsin transition period, flight of capital away from Russia totalled between $1 and $2 billion US every month.¹

• Each year from 1989 to 2001 there was a fall of approximately 8% in Russia’s productive assets.¹

• Although Russia is largely an urban society, 3 out of every 4 people grow some of their own food in order to be able to survive.²

• Male life expectancy went from 64.2 years in 1989 to 59.8 in 1999. The drop in female life expectancy was less severe from 74.5 to 72.8 years.³

Transition costs – shock therapy

• The increase from 1990 to 1999 in the percentage of people living on less than $1 a day was greater in the former communist countries (3.7%) than anywhere else in the world.⁴

• The number of people living in ‘poverty’ in the former Soviet Republics rose from 14 million in 1989 to 147 million even prior to the crash of the rouble in 1998.²

Economic success

Poland was the only ‘transition’ country moving from a command to a market economy to have a greater Gross Domestic Product in 1999 than it did in 1989.¹ GDP growth between 1990 and 2001 was negative or close to negative in every country of in the region with Russia (-3.7), Georgia (-5.6), Ukraine (-7.9), Moldova (-8.4) and Tajikistan (-8.5) faring the worst.⁴

Equality

Slovakia tops the Gini index as the most equal country in the world. Russia and Armenia are amongst the most unequal.⁴

Privatization

Between 1993 and 1995, 20,000 out of 27,000 Russian state enterprises were privatized. The Government sold them for about 10% per cent of their true value.¹

The state rolls back in

Despite its transition to a market economy the bureaucracy in Russia has grown dramatically. The Soviet bureaucracy under Brezhnev (Soviet centralism) made up about 12 million people. It ballooned to 18 million under Gorbachev (restructure). Under Yeltsin (transition) the number of state functionaries in Russia alone exceeded that for the whole Soviet Union in Gorbachev’s time.¹

Soviet resurrections

Of the 20 current presidents of Eastern European nations (excluding the former Yugoslavia) and countries which used to be part of the Soviet Union 11 are former party insiders (called nomenklatura).

The Ego of them all

Turkmenistan ‘President for Life’ Saparmurat Niyazov has erected a golden statue of himself that rotates 24 hours a day so that it always faces the sun and has renamed the months and days of the week to honour himself, his mother and his favourite national heroes.

All monetary values are expressed in US dollars.

1. Boris Kagarlitsky, Russia Under Yeltsin and Putin, Pluto, London 2002.
2. Stephen Cohen, Failed Crusade, Norton, New York, 2001.
3. Martin McCauley, Bandits, Gangsters and the Mafia, Longman, London, 2001.
4. 2003 World Development Indicators, World Bank, Washington.
5. World Guide, 2003/2004, Montevideo 2003.
6. Transparency International, Global Corruption Report 2003, Berlin.

This article is from the April 2004 issue of New Internationalist.

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