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
In this setting, far removed from the everyday miseries
of Soviet life, Grigory Yavlinsky and his maverick brain
trusters are preparing for the coming crash.
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
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 text.
«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 up.
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
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
«It's just our nonsensical ideology,» shrugs Mr. Mikhailov.
«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 of all.