The Last Empire (38 page)

YEGOR GAIDAR WAS
in Rotterdam at the invitation of Erasmus University when he received an urgent call to come back home: Yeltsin wanted to see him. Gaidar knew what the call might mean—the end of his comfortable life as an academic adviser and the beginning of perhaps the most unpopular and painful reform in Russian
history. Although Gaidar did not look forward to overseeing it, he was not prepared to reject the prospect. When he told his father what might await him, the old man, who had served as a Soviet military correspondent in Cuba and Afghanistan, could not conceal his horror. Schooled in the Stalinist dogma that freedom meant the recognition of necessity, the elder Gaidar gave his blessing: “If you are certain that there is no other way, then do as you think best.”
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Gaidar believed, as did Burbulis and his entourage, that the plan they proposed was the only way to prevent economic collapse. He also believed that Yeltsin was the only politician prepared to take a risk and implement his reforms. “For a politician, Yeltsin has a decent understanding of economics and is generally aware of what is going on in the country,” wrote Gaidar, recording his first reactions to the meeting he had with the Russian president after returning from Amsterdam. “He understands the tremendous risk associated with the initiation of reforms, and he understands how suicidal it is to remain passive and await developments.” Gaidar's friends believed that he had fallen under the spell of Yeltsin's personality and would remain charmed for years.
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Yeltsin was no less impressed by his young guest. He saw him as a representative of the Russian intelligentsia who, “unlike the dull bureaucrats in the government administration, would not hide his opinions” but defend them no matter what. Another quality of Gaidar's that Yeltsin found attractive was his ability to explain complex economic issues in simple terms. “Listening to him,” wrote Yeltsin, “you would start to see the route we had to take.” He also had a program that no one else was proposing and a group of people ready to implement his plan—a quick, decisive reform that would produce results within a year. Furthermore, Gaidar made Yeltsin believe that if he did not do something drastic about the economy, he would share the fate of Gorbachev, who kept promising reform but never delivered it and was now on his way out.
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Burbulis, who had brought Gaidar and Yeltsin together, believed that they had immediately forged a cultural bond. Like most Soviets of his generation, Yeltsin knew and admired the writings of Gaidar's paternal grandfather, Arkadii Gaidar; like the natives of the Ural region, he had the highest regard for the writings of Gaidar's maternal grandfather, Pavel Bazhov, the author of a collection of tales based
on Ural folklore and titled
The Malachite Casket
. “It was a bonding of the rarest sort,” said Burbulis, recalling the first meeting between Yeltsin and Gaidar. “There was a sudden realization: we are from the same lands, the same volcanic origins, the same root.” The growing Sverdlovsk mafia in the Kremlin was finding recruits in the most unexpected places.

The common roots that Burbulis mentioned were not only geographic but also ideological. Both of Gaidar's grandfathers were devoted Bolsheviks who had fought in the Revolution of 1917. Burbulis believed that Gaidar and Yeltsin shared the particular historical and cultural matrix of early Bolshevism. “There was the utopianism, the mythology of Bolshevik daring, and service to an idea—this is also present in that fellow,” remarked Burbulis about Gaidar. “And that historico-cultural and socio-romantic code—it was all there in compressed form.” Both of Gaidar's grandfathers had helped suppress peasant uprisings against communist rule. Now their grandson had chosen to lead the country back to a world in which the private property defended by the rebellious peasants would rule supreme. In both cases, the process was extremely painful. The Bolshevik wholesale assault on capitalism was now to be followed by a similar assault on the communist economic system. Yegor Gaidar would take no prisoners.
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ALTHOUGH YELTSIN
had given his assent to the Burbulis Memorandum on the Sochi beach, he did not publicize it and probably did not make a final decision on it until his meeting with Gaidar. But once he made up his mind, developments proceeded with breathtaking speed. Yeltsin prepared to present his reform plan and request special powers for its implementation at a session of the Russian Congress of Deputies—the Russian superparliament—scheduled for October 28. A few days before the session, news of the content of the reform and of Yeltsin's speech reached the Gorbachev circle. On October 22, Gorbachev's aide Vadim Medvedev noted in his diary, “It seems that a general liberalization of prices will be announced, and that without any connection to tougher banking regulations on currency circulation or limitations on budgetary deficits. . . . The next few days will show where things are heading, but the Russian leadership is obviously inclined toward the extreme choice—full independence for the republic.”
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While Gorbachev was left in the dark about what to expect from Yeltsin's impending speech, Yeltsin called Bush on October 25 to inform him about the coming major turn in Russian policy, “following the tradition between us in talking about very important matters.” He said, “I will announce substantial economic plans and programs and say that we are ready to go quickly to free up prices, all at the same time, privatization, financial and land reform. All this will be done during the next four to five months, maybe six months. It will be a one-time effort. It will increase inflation and lower living standards. But I have a popular mandate and am ready to do this. We'll have results by next year.” Yeltsin offered to send his foreign minister, Andrei Kozyrev, to Washington to explain the Russian reform plan, and Bush expressed interest in meeting him. “It sounds like an ambitious program. I congratulate you on a tough decision,” he said. They ended the conversation as old friends, with Yeltsin informing Bush that he had benefited from his two-week vacation. “I am full of energy, playing tennis, and my heart is good,” he assured Bush. “I am fine.”
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Bush spoke with Yeltsin on October 25, 1991. Three days later, on October 28, the Russian president addressed his parliament with probably the most fateful speech in its short history. “I turn to you at one of the most critical moments in Russian history,” said Yeltsin at the beginning of his address, which lasted close to an hour and was titled “An Appeal to the Peoples of Russia and to the Congress of People's Deputies of the Russian Federation.” “It is being decided at this very time what Russia and the country as a whole will be like in the years and decades to follow; how present and future generations of Russians will live. I resolutely call on you to embark unconditionally on the path of deep reforms and for support from all strata of the population for that resolution.” Yeltsin declared that the government was planning to free prices and cut spending, including food subsidies.

The first stage will be the hardest. There will be some reduction in the standard of living, but uncertainty will finally disappear, and a clear prospect will emerge. The main thing is that in deeds, not words, we will finally begin to emerge from the quicksand that is pulling us in ever deeper. If we embark on this path today, we will already have results by autumn. If we do not take advantage of this
real chance to reverse the unfavorable course of events, we will doom ourselves to poverty and a state with a centuries-old history to destruction.

“Reforms in Russia are the path to democracy, not to empire,” continued Yeltsin, taking up the subject of relations between the Union center and the republics. He announced that Russia would cease to finance most Union ministries by November 1, a mere three days after his speech. Interrepublican institutions would be limited to coordinating relations among the republics, and Russia would not allow the restoration of the old all-powerful center. But Yeltsin was not giving up on the Union entirely. He encouraged Ukraine, whose leadership refused to sign the economic treaty, to join the economic union and threatened that any republics conducting a policy of “artificial” separation from Russia would be charged world prices for Russian resources. He hoped that the former Soviet republics would also sign a political agreement. In the absence of such an agreement, said Yeltsin, Russia would declare itself the legal successor of the USSR and take over all-Union institutions and property—a move opposed by the leaders of Ukraine and Kazakhstan, among others.
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On the following day, Yeltsin asked the Russian parliament to grant him special powers for a year. There would be no elections in 1992, no matter what the results of the transformation. He would personally lead the government and bear full responsibility for the success of the reform. All his requests were granted. “The most popular president is finally prepared for the most unpopular measures. The kamikaze group will be led by Yeltsin,” ran the lead article in
Nezavisimaia gazeta
.

The reaction in the non-Russian republics was cautious at best. “Uzbekistan receives some 60 percent of its goods from beyond its borders; a great deal comes from Russia,” said Islam Karimov of Uzbekistan. “Hence the liberalization of prices in the RSFSR will affect Uzbekistan, and we will be obliged to take defensive measures.” That sounded like an end not only to the old Soviet Union but also to the economic agreement that was supposed to keep the common market in existence.
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The Russian ark was leaving the Soviet dock.

12

THE SURVIVOR

I
N LATE OCTOBER THE CUSTODIANS OF
the Palacio Real de Madrid, the official residence of the king of Spain, received a request from the state administration to remove one of its most magnificent paintings from its walls. The canvas, which featured Charles V, the early-sixteenth-century Holy Roman emperor and king of Spain, was not going for restoration. It was to be stored in a warehouse. The palace was being readied for the opening of an international summit on the Middle East scheduled for October 29, and the depiction of a Christian ruler massacring Muslims was clearly inappropriate for the occasion. Madrid had been chosen over Washington, Cairo, Geneva, and The Hague as the most appropriate venue for the first high-level meeting between Israeli and Palestinian leaders in more than forty years. They agreed to meet with the leaders of Egypt, Syria, and other countries of the region to discuss peace—the beginning of a process that would ultimately lead to the Oslo Accords in 1993 and the longest peace in recent Israeli history.
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There would have been no Madrid conference without the new spirit of cooperation between the United States and the Soviet Union, the two Cold War superpowers that had competed in the Middle East for decades, funding and arming opposing sides in the Arab-Israeli conflict. George Bush and Mikhail Gorbachev served as official cosponsors of the conference.
“President Bush
and
President Gorbachev
request your acceptance of this invitation,” read the letter
addressed to potential participants, including the heads of European and Middle Eastern states and the leadership of the Palestine Liberation Organization. They all agreed to come or send high-level delegations.

The agreement to call a conference was reached during George H. W. Bush's visit to Moscow in July. Paving the road to Madrid had begun eight months earlier in Paris. European heads of state met there in November 1990 with the leaders of the United States and Canada for what was dubbed the peace conference of the Cold War. They took advantage of recent developments in Eastern Europe, the fall of the Berlin Wall, and the disappearance of the Iron Curtain to approve the Charter of Paris for a New Europe—a document that bridged the East-West divide in institutional and ideological terms, laying solid foundations for the establishment of the Organization for Security and Cooperation in Europe.
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James Baker believed that it was there and then that the Cold War had indeed come to an end. His belief was based not so much on the signed Charter of Paris as on the actions of the Soviet Union, whose leaders had agreed for the first time since the Yalta Conference of 1945 to work together with the United States in solving a major international crisis—the invasion of Kuwait by Saddam Hussein's Iraq a few months earlier. In Paris, responding to a direct request from President Bush, Mikhail Gorbachev agreed to cosponsor a resolution of the United Nations Security Council authorizing the use of force against Saddam Hussein. Gorbachev overruled his hard-line advisers and kept his word, giving Bush and an international coalition of states the opportunity to attack Saddam, drive him out of Kuwait, and place Iraq under siege.
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After the United States' victory in the Gulf War, the American stake in the region grew tremendously, creating an opportunity for Washington to push for a peace conference between Israel and its Arab neighbors. The Soviet Union supported the initiative, which took on new momentum after the failure of the Moscow coup and the appointment of Boris Pankin as Soviet foreign minister. The Soviets, who had abrogated diplomatic relations with Israel after the Six-Day War of 1967, restored them in October 1991. To Washington's surprise, they did so without consulting Syria, their main ally in the region. Events in the Middle East were going America's way. That month, President Bush commented on the new Soviet policy to a visiting Middle Eastern dignitary, the emir of Bahrain: “We don't see them
coming back to threaten our interest in the Middle East.” James Baker would begin his numerous meetings with Middle Eastern leaders, from Prime Minister Yitzhak Shamir of Israel to President Hafez al-Assad of Syria, with the same confident phrase: “The Soviets remain fully on board.”
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