When stability and predictability mean war

It was July 25, 1998, and I happened to be in the anteroom of Alexei Kudrin’s office. He was the first deputy Russian finance minister, and I was discussing Russia’s looming financial crisis with him, his assistants, and a few visitors when somebody entered behind my back.

I didn’t see a person, but everybody turned their heads to the incomer. It became clear this wasn’t a regular visitor. When he approached, I saw he was a shorter man in a very strange light green suit; unusual for a serious person in Moscow’s corridors of power.

The man turned out to be Vladimir Putin, whom Russian president Boris Yeltsin had that morning appointed director of the FSB, Russia’s internal intelligence service.

My presence was a sheer coincidence. It seemed Putin had come straight to talk with Kudrin, apparently his closest friend in Moscow then. Kudrin asked me to repeat for Putin what I had talked about for months—the inevitability of the ruble’s devaluation. So, briefly, I did.

Putin didn’t respond or react at all. Neither agreement nor disagreement. Just silence. He listened, though it was unclear if he understood. After my brief monologue, I left.

I was head of a research think tank, the Institute of Economic Analysis, that I founded four years earlier. We focused on the Russian economy during a period of turmoil and reform after the Soviet Union’s collapse, and on policies to sustainably grow Russia out of its nine-year Great Depression.

At that troubled time, there was a huge shortage of economists who had some understanding of the market economy. I was among a few young economists who had professionally studied market economics and monetary policy invited into the newly formed Russian government.

I became deputy director of the government’s analytical center under former prime minister Yegor Gaidar, and then, after his departure, was invited to be chief economic adviser to his successor, Viktor Chernomyrdin.

While in Moscow I heard positive news about some KGB lieutenant colonel who happened to be in the team of then St. Petersburg mayor Anatoly Sobchak.

My circle of people there were mainly economists; some were anti-communists and anti-KGB Soviet dissidents. It was quite unusual to hear flattering comments about a former KGB officer from them. I was shocked, but my friends were relaxed.

He, I was told, was a different type of KGB member—a real reformer who switched camps to our side.

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This file comes from the website of the President of the Russian Federation and is licensed under the Creative Commons Attribution 4.0 License.