Better post-1991 Russia

So the challenge is: to get better ( more developed, more democratic ) Russia with a POD of not before January 1st 1992.

Could Yeltsin's death ( too much vodka or a heart attack ) in say 1994 or 1995 help? Viktor Chernomyrdin would become acting President, could he win the elections later?
 
consistent economic reforms in 1991-93, no?

it will allow start to economic growth in 1995, makes people less angry for democracy, allows to save federalism in Russia
 
The privatization was far too rapid and allowed for a mafia to develop and take control of the economy. As you say, Yeltsin dying sooner might help, but it all depends on the policies of the person following him.
 
Bakenellan posted a link to this article by Jeffrey Sachs who acted as an economic adviser to the Russian government in the early 1990s in the Second Marshall Plan thread. It gives an interesting brief overview of what happened and what he thinks went well and what could have been done better.
 
The privatization was far too rapid and allowed for a mafia to develop and take control of the economy. As you say, Yeltsin dying sooner might help, but it all depends on the policies of the person following him.

Ultimately it was this and this had many causes beside Yeltsin including a United States eager to remake Russia in its own capitalist image. What was needed was the realization that without the institutions that back up a market economy, privatization leads to oligarchy. Keeping the state enterprises around for a number of years while building an independent and honest judiciary, truly open and fair securities and capital markets and stronger democratic institutions in government would have been a sounder course of action than what was done. It's truly one of history's great missed opportunities. The West should have been willing to pay the price for this, which would have been billions and billions in subsidy aid and investment to support Russia through the transition. Unfortunately, market triumphalism prevailed rather than a wiser recognition that a transition to a market economy would take time and a fair amount of patience. You can't transform an economy which has for over 70 years been a command economy into a market economy overnight. Moreover, even within the framework of a market economy, a European style of market oriented democratic socialism would have probably been a better option than the more laissez-faire model that was attempted.

I think the necessary POD for this falls before the 1/1/92 date the OP gives; this was a realization that probably needed to be setting in during the fall of 1989 as the Warsaw Pact states started to leave the Communist world.

ETA: the Jeff Sachs piece which Simon linked gives a good overview of the issues involved.
 
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Maybe more honest privatisation ( companies bought for their REAL value based on international value of their products, not on Russian/USSR value ) could be the most important POD. That might stop oligarchs from getting their hands on Russian economy for small money. On the other hand, that would mean that foreign companies would buy allmost all Russian companies, and I don't see Russia ready to allow that...
 
this article by Jeffrey Sachs w


Interesting article.

So, if we take that some of his recomendations are used: 1) not to rush with privatisation/honest privatisation ( giving shares to workers ), so no "loans for shares" and 2) not to privatise oil/gas/natural resources companies. Probably a good PODs.

Reducing monetary supply is impossible since it's under Central Bank ( controlled by Communists at the time ), but maybe some sort of compromise is possible with them, if the Government is not rushing into privatisation?

Larger Western aid will probably remain just a dream, as in OTL...
 
But, what do you think about this: If Yeltsin kicked the bucket ( heart attack ) say, a few months after his victory on elections in 1996, Viktor Chernomyrdin becomes Acting President. Can he win new elections? And if yes, what do you think what would be the consequences?
 
Interesting article.

So, if we take that some of his recomendations are used: 1) not to rush with privatisation/honest privatisation ( giving shares to workers ), so no "loans for shares" and 2) not to privatise oil/gas/natural resources companies. Probably a good PODs.

Reducing monetary supply is impossible since it's under Central Bank ( controlled by Communists at the time ), but maybe some sort of compromise is possible with them, if the Government is not rushing into privatisation?

Larger Western aid will probably remain just a dream, as in OTL...

The economics cannot be disentangled from the political, and in particular it was not impossible for the Communists to win a fair election. This puts a limit on what the government can do eg allowing private ownership of land.

The key issue for transforming the economy especially 1991-5 is that EVERYTHING is wrong because it was designed for a centralised economy, all the information reported centrally is wrong because of suppression of 75 years worth of inflation and misreporting by enterprises, and anything the government does will cause problems, and may cause whole cities to starve.

The Central Bank is not actually run by communist ideologues but apparatchiks who understand the consequences of their actions; eg Nizhny Tagil is a city of 350k built to produce tanks for the Soviet Army; what happens to the population if government funds are cut off?

Some economic reform is self-starting eg the retail sector moved from individuals on street corners, to tables, to all metal kiosks, to small shops within 3 years, some new things the government tried worked well eg GKO market, some were mixed eg enterprise directors finding new products and markets but there were still black holes eg tank factories and other heavy industry. Different sectors are moving at different speeds and the government has to balance reform with the threat of economic collapse.

Some thing eg shares for loans were just wrong, but at the time it was seen as getting some large enterprises out of the control of government, so making it harder for the communists to roll back reform if they beat Yeltsin in 1996. Unfortunately instead it created an unhealthy level of control by oligarchs.

Western aid - it will simply not work well; either it will be stolen and moved offshore (as happened to the rent some multilateral agencies were paying for their Moscow offices), or it will come with strings which are unacceptable to the Russians.

TL;DR It was a messy and fast- changing environment and often their were only bad choices.

You need an earlier POD than 1996, perhaps post the October 1993 coup attempt?
 
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