History 127CGetty2012 FallWeek 10Lecture 18December 6Announcements- Required reading: History of the Soviet Union (Kenez, ch. 10-11) Outline of Last Lecture I. Brezhnev YearsII. Brezhnev Balance SheetIII. Brezhnev the gunslingerIV. EmbarrassmentsV. End of Brezhnev, 1982VI. Yuri Andropov (1982-84)VII. Konstantin Chernenko (1894-85)VIII. Conservatives and ReformersIX. 1985: Stagnation consensusX. Mikhail Gorbachev, 1985XI. Gorbachev’s PlanXII. Gorbachev’s Foreign PolicyXIII. Perestroika, a neo-NEPXIV. Glasnost’XV. Course of Glasnost’XVI. The 1991 Crisis Outline of Today’s Lecture I. The 1991 Crisis II. Reasons for the USSR collapse III. Yeltsin chronology 1992IV. The Yeltsin EconomyV. Yeltsin ChronologyVI. Yeltsin Chronology 1994-95VII. The Yeltsin Economy IIVIII. The Yeltsin Economy: a kleptocracyIX. Yeltsin politicsX. Russia under YeltsinXI. Russia tomorrow The 1991 Crisis- Last partial year of the Soviet Union - Things moved very fast in 1991 in context of a collapsed economy, violent disagreements and protests between nationalities and the behind the scene struggles between conservatives (thought Gorbachev went too far) and reformers who thought he hadn’t gone far enough- Jan: Vilnius massacre, 15 killed. Gorbachev role?- Mar: Democracy, anti-party demonstrations; Gorbachev rejects repression- Apr: Negotiation of Union Treaty with republics beginThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- June: Yeltsin elected President of Russia; demanding the breaking up of the USSR- July: Yeltsin bans Communist Party in workplacesA. Divided Central Committee meeting- Aug: Conservative coup against GorbachevA. Yeltsin resists, mobilizes democratic politiciansB. KGB and Army split; coup fails; wanted to overthrow GorbachevC. Sent KGB team to arrest and neutralize Yeltsin - Organizes successful resistance to the coup- Nov: Yeltsin senses that Gorbachev is weakening  takes emergency powers - The coup crumbles, starts to evaporate - Dec: Minsk Agreement: USSR dissolved following the signed agreementA. Gorbachev is forced to resign Reasons for USSR Collapse- Rapid economic collapse  population lost faith in the system- No united, uniformed system prepared to save the state- In any political system, the economy is the main issue- Rapid economic collapse during Gorbachev’s reign and he took the blame for it- Party elite, KGB, Army all divided- No tradition of democracy (needed for success)- No tradition of legal capitalism (needed for success)- Deep national resentments- Gorbachev’s mistakes?A. 1) Overestimated i. Party’s ability and willingness to lead reform. Party didn’t want reportii. Party’s support amount peopleB. 2) Underestimated nationalism. Genuinely surprised that these national ethnic groups wanted to break away. The USSR was not a happy federation in actualityC. 3) Too much too fasti. Dismantled old economy before new was readyii. Political + economic reform together? ChinaD. 4) Trusted party conservativesE. 5) Indecisive ZigsHow the mighty have fallen? - Statutes removed - Gorbachev retires; out of politics; he takes all of the heat in the public mind; considered a total failureYeltsin chronology 1992- Yeltsin launches shock therapy - Prime Minister Gaidar, “shock therapy”A. Freed prices; legalized all private ownershipB. Massive privatization by “voucher”C. Market economyD. Inflation destroyed wages and savingsE. If the economy could collapse more it didF. Mafia corruption and manipulation of marketG. Hidden agenda H. Collapse of industrial productionI. Strong parliamentary opposition (Supreme Soviet) to Yeltsin’s dramatic shock therapy which had crushed the economyJ. Wouldn’t go along with Yeltsin’s plan to decentralize everything- Dec…The Yeltsin Economy- McDonalds everywhere- But there was nothing to buy or to eat in all these shops- Collapse of production- A barter economy took over- Trade/import economy- Inflation hitA. World prices for basicsB. Average wage $250/mo- Bribery instead of salary- Strong polarization of wealth - Large fortunes made on drugs; primary exports, protection; “banking”Yeltsin Chronology- Mar 1993: parliament 72 votes short to impeach Yeltsin- Apr: referendum only 53% support Yeltsin over a return of the communists - Sept: against Constitution; Yeltsin dissolves Parliament- Oct: parliament supporters seize TV station, mayor’s officeA. Yeltsin calls in Army to attack parliament 100+ killed, Russian troops stormed the parliament- Dec: Yeltsin writes new Constitution for strong President, weak parliament. In elections, pro-Yeltsin groups want a 1/3 of seatsA. The Duma doesn’t have any power except to just consultYeltsin Chronology 1994-95- 1994: A. Final collapse of the rubbleB. 1992: 400 rubies to $1C. 1994: 3000 rubbles to $1D. 1995: 5500 rubies to $1- Dec: elections; Yeltsin sends troops to Chechnyao Yeltsin gets only 10%o Communists now get the majority in parliament even though they were blamed for several thingssince 1991- 1995:A. Two economiesThe Yeltsin Economy II- Every year, US banks transfer 20 billion in US dollars to private Russian accounts- Russian debt = 80 bill. - ½ of Russian’s 2000 banks and 40,000 firms controlled by mafia (CIA)- 2 million millionaires- 90% of salaries below poverty line- GNP fell average 50% per year, 1993-96- 35% annual inflationA. Average people who relied on salaries were being wiped out and being forced under the poverty lineThe Yeltsin Economy: a kleptocracy- Prime Minister made 5 billion on his 25% of national gas company- 1994:- 6 state prosecutors fired when they investigated corruption- Every year, US banks transfer 20 billion in US dollars to private Russian accounts- ½ of Russia’s banks and 40,000 firms controlled by mafia (CIA)Yeltsin politics- July 1996 elections:A. Yeltsin enters campaign at 6% popularity- CampaignA. Promised to double all pensionsB. Promised to restore all savings from 1993C. Handed out money- 4 opposition journalist killed- Campaign spent 16 million dollars- Campaign aids caught with suitcases containing $500,000 cashA. Police and investigators who caught them fired- Four ministries blamed for economy and fired- Coalition of 7 “bankers” organized Yeltsin reelection committeeA. Two weeks later named ministersB. “Loans for shares” if you were a rich guy, you loaned the Yeltsin administration money; loans were