“You see, Sasha, this is how it goes,” a tired Mikhail Gorbachev said to his closest aide when he lay down to rest after transferring power to his successor, Boris Yeltsin, in 1991. Gorbachev, who passed away last week, has been hailed for his role in ending the ideological conflict between communism and capitalism, and also bringing down the Iron Curtain and ending the Cold War between the North Atlantic Treaty Organization (NATO) and the Soviet Union.
Russia today
Sadly, Gorbachev lived to see history return with a vengeance. NATO is expanding eastwards; Russia is threatened: Ukraine is its battleground. On the economic front, Russia has not recovered from the shock it got from Boris Yeltsin’s “big bang” capitalisation imposed by U.S. economists. Perversely, an unintended effect of the big bang is the return of authoritarianism under Vladimir Putin. Gorbachev had favoured a slow transition to a “mixed economy” like the Indian model and had approached Rajiv Gandhi for advice. I was a member of a small team of Indian business leaders which had travelled to Moscow and Riga in 1989 to explain the “Indian model” to economists at the Academy of Sciences of the Soviet Union. However, the “Washington economics” model prevailed. Led by a triumphant United States, and economists in U.S. think tanks, the World Bank and the International Monetary Fund, the wave of opening domestic economies to international flows of trade and finance swamped Russia; it also reached India’s shores in 1991.
