MOSCOW – Hidden behind a high concrete wall on
the southern edge of Moscow is a cluster of dachas
for the Russian government elite. Cooks serve up
meals three times a day, while maids deliver wicker
baskets of the best sausage, cheese and vodka for
snacks. Chauffeur-driven black Volga sedans stand
ready to whisk the pampered residents to town.
In this setting, far removed from the everyday
miseries of Soviet life, Grigory Yavlinsky and his
maverick brain trusters are preparing for the coming
Until recently, Mr. Yavlinsky, a 38-year-old economist,
was deputy prime minister of the Russian republic.
He played an important role in drafting a radical
program to create a market economy in the USSR.
In just 500 days – only to have it rejected last
October by President Michail Gorbachev, who ordered
the plan in the first place.
Drafting a Rescue Plan
Now, Mr. Yavlinsky believes, it is Mr. Gorbachev
who is in danger of being knocked flat by impeding
economic disaster. Mr. Yavlinsky is convinced that
misguided Kremlin policies will unleash a bout of
hyperinflation in the next few months, brining the
country to its knees. And when that happens, he
and his brain trusters are determined to be ready
with an economic plan.
For two days this month, Mr. Yavlinsky allowed
a reporter to make an extraordinary visit to government
dacha No 6, a green wooden cottage surrounded by
pine and birch trees, to sit in on the deliberations.
The group has been holed up in seclusion in this
cottage for weeks, attempting to draft a package
of laws on privatization that they hope will end
the state's stranglehold on the economy.
The group knows that its chances for access, both
economic and political, are slim. «The old methodology
and the old approaches must change,» Mr. Yavlinsky
says, «but nobody knows how to do it without force.»
Outsider With Connections
Following the rejection of his 500-days Plan, he
decided his best shot would be to try to instigate
change from the outside. So he resigned his government
post and started work with his closer aides, all
of them in their late 20s and early 30s.
Out of government, he still enjoys considerable
authority. In part, this is because there are so
few others who know enough about the economy to
challenge him. Also, he maintains strong connections
to Boris Yeltsin's cabinet in the Russia republic,
where he so recently worked.
But the challenges facing Mr. Yavlinsky and his
group are staggering: curbing the runaway budget
deficit, regaining control of the money supply,
and ending the waste dumppling Soviet industry.
Mr. Yavlinsky has yet to work out many details.
But he knows the cure will require a full embrace
of free markets - a transformation bound to be painful.
On one afternoon, he sits in the dacha's biggest
room with colleagues working on the privatization
law. The bill, which seeks to create attractive
conditions for a flourishing private sector, is
the culmination of two months work. The group is
already on its ninth draft. But still they pick
over every sentence, question every definition,
a strange cross between the constitutional convention
and a freshman economic class.
«If I buy a car from the government, is that privatization?»
asks Sergei Ivanenko, a 30-year-old economist form
Moscow university. «I think we must limit privatization
to the means of production».
«But we're selling off a whole complex of property,»
protests Alexei Mikhailov, a curly-haired specialist
on finance. «Does the means of production include
land? What about raw materials?»
«The means of production is the correct economic
term,» insists Mikhail Zadornov, Mr. Yavlinsky's
27-year-old chief of staff, who scribbles down changes
on strips of paper and sticks them over the old
«Is it the legal term?» wonders Mr. Ivanenko.
«Yes, yes», Mr. Yavlinsky insists. «It's the right
economic term, and it's politically right too.»
«But we must explain what we mean,» says Mr. Ivanenko.
«All right, then, let's do that next,» Mr. Yavlinsly
Listening to this exchange is Peter Derby, a 30-year-old
American banker of Russian decent. He got involved
with the group after impressing them with some legal
documents he drafted for a Soviet-American joint
venture. Ever since, he has helped out with questions
of Western business practice.
He lugs a heavy volume of US business law around
with him to help answer the numerous basic questions;
such as the exact definition of a stock, and how
the president of a company is chosen. «When you're
building something you go down to the molecular
level,» he says.
The group is looking to the West for more than
advice. If and when their plans are adopted by the
Soviet leadership, they hope the US and Europe will
help to smooth a wrenching transaction by sending
in massive shipments. Vladimir Grischenko, the group's
agriculture expert, even talks of a new «Marshall
Plan» to ensure big cities are provided with enough
food while the system of collective farming is broken
By contrast, they fret that the aid now pouring
in from the West is at best premature. «If anything
is counterproductive,» says Tatyana Yarigina, the
group's only woman and an expert on social issues.
«The aid may just ease the pressure for real reform.»
Looking to the West is by no means universally
accepted here, and Mr. Yavlinsky is sometimes criticized
for his stance. But he is no stranger to controversy.
An intense and quiet-spoken man with a mop of black
hair, he worked in the coal industry for five years
before moving to the State labour Committee. His
career almost came to a halt in 1982, when he published
a study that was deemed heretical. The death of
Leonid Brezhnev in the middle of the controversy
saved him, he now says.
Last year, he was picked by the Soviet government
to join its economic reform committee, working alongside
Leonid Abalkin, a deputy prime minister who had
once been his economic professor. Mr. Yavlinsky
disagreed with Mr. Abalkin's cautious approach and
set about devising his own. Soon after, he quit
the committee and joined Mr. Yeltsin's Russian cabinet.
His big chance came in August, when Mr. Gorbachev
and Mr. Yeltsin ordered a small group of economists
to produce an alternative to Mr. Abalkin's plans.
Mr. Yavlinsky and his aids formed a core of that
group, and 500-days program they produced closely
resembled his own earlier blueprint.
At the dacha, the group's discussions frequently
dwell on ways to overcome the fears of legislators
about foreign capital, unemployment, private farming
and other traditional taboos.
During the discussion on privatization, the group
suddenly decides to insert a clause allowing the
government to renationalize companies in case of
emergencies. Mr. Derby, the American banker, protests
against the idea and says that owners should at
least receive compensation. he is quickly overruled.
«It's just our nonsensical ideology,» shrugs Mr.
«It's no good writing in anything about compensation,»
adds Mr. Ivanenko, standing on the balcony smoking
a cigarette. «The state won't pay anything anyway».
Suddenly the phone rings. Mr. Yavlinsky runs out
to answer it. He returns looking drawn. His nine-year-old
son has been taken to hospital in town with a high
temperature, but the doctors there say they have
no room for him. They suggest he sleep in a corridor.
Mr. Yavlinsky fumes quietly for a while, and then
plunges into a debate over what sectors of the economy
should be exempted from the privatization bill.
Several of his colleagues fret that their plans
would run into a host of political obstacles if
they tried to disband state monopolies on alcohol,
schools and hospitals.
As the debate rages, Mr. Yavlinsky's personal experience
with his son doesn't go unnoticed. Defending the
need for private medicine, Mr. Mikhailov looks at
Mr. Yavlisnlky and says wryly: «We hardly need better
evidence that hospitals should be privatized first