it was fitting for the job we were doing. a very warm welcome back its home owner mosque a this is all team president dmitri medvedev it says the publication of the results of sunday's elections could be postponed or investigation takes place meanwhile russia's prime minister called for donald with the opposition but warned foreign powers against meddling in the country's political if it's. may so it was in taking russia's concerns of the european missile defense into account and isn't ready to seriously let's get it on the shield strong words are from a party that is going to get after all follow

a nato meeting in brussels. and year a d. day need is a race against time to save this in the current seen by gathering states of the brussels on the ground law a big reason lose the power to govern themselves germany and for all the pushing the new treaties to bind the nations and to close knit fiscal union which is a taxes on peltz states. two decades after the u.s.s.r. was signed into history books of the final moments of the soviet era spotlight is next. i'm and today my guest is. exactly twenty years ago today laps of the soviets to push the world into.

groups a crash was inevitable as the country faced. a crisis. but others think the situation was not that bad and. even mastermind. victim of an economic downturn could say. that the one behind all that. money. not. political will so here's the former chairman of the so you can still. think that. by the beginning of the eighty's the soviet economy had been suffering a long lasting stagnation it was greatly stressed by the arms race and oil prices

which caused a sharp fall in. perestroika was designed to sound things rise by commercializing and liberalizing the economy but these reforms didn't help. against the reformers known as the who eventually led to the collapse of the soffit union. welcome to the show. the collapse. the soviet union you were the head of the state bank when the soviet union disintegrated. was it as much of a surprise as it was for ninety percent of the russian people. when they. came to the state bank in one thousand nine hundred eighty nine prior to that so i worked my entire life. bank foreign trade bank were often interacted with western

businesses so i realized that we were moving towards a dead end. since my college years i've been friends with valentin pub love who was the head of the pricing committee and later finance minister and later got involved to the ninety ninety one coup. so a big tub a lot of information from my conversations with him. in fact there were serious reforms in the works in this government they included three key aspects. the first the pricing reform because pricing and been wrong ever since industrialisation. i see. well then there was only government property and collective property. you know there were a few workshops in collective property producing consumer goods like clothes for

example and some apartment blocks were collected property too and third we had no taxes the only tax we had was the income tax there was also the tax and childlessness. people were frowned on then as they are now other than that companies simply handed over all the revenues to the governments and the governments then distributed this money among recipients by the way quite often up to four different versions of the budget were prepared because nobody knew which industry will be given priority next year anyway all that was supposed to be reformed but since political events were forming a different scenario i mean the conflicts between those two people. charged yes because of that everything went haywire. well let's take a look at how the saar disintegrated twenty years ago spotlights you in the d. me of the has the story. deliberate lies ational society me how you gorbachev

initiated in the you with this song in the late one nine hundred eighty s. led to grow when ethnic self-awareness in the country's republics and the rise of nationalist movements calling for independence the feeling grew stronger as the world watched communist regimes overthrown one by one all across eastern europe in one thousand nine hundred nine the revolution school i mixed in the fall of the berlin wall in one thousand ninety which was a powerful premonition of changes awaiting the largest socialist state in march one thousand nine to one i refer and then was held in the u.s.s.r. which showed a majority of soviet citizens who wanted to retain the union however the voting was boycotted by the baltic republics which were first to declare independence their example inspired other republics to break away fear in the disintegration of the u.s.s.r.

authoritarian forces within the country try to oust the gorbachev their attempt at a coup was stopped by boris yeltsin who however did not stop the dissolution of the country on the twenty second of december one thousand nine hundred one yeltsin and the presidents of the then soviet republics of ukraine and belarus met secretly and agreed to dissolve the soviet union. the way this aggression go you've mentioned the two people we just saw yeltsin and gorbachev many think that it was the power struggle between those two major political figures that caused the collapse of the soviet union however people claiming to have a deeper understanding of the process say that the root cause was different. course some also say that the collapse was orchestrated by the ninety's stay. it's with a key reason some people believe it was money so they see the country daid economy wise. it can they do agree with that. you know i can't agree with that

let me give you a simple example from our time america's foreign debt in dollars and mainly in treasury bonds of course because they don't print actual bills like big seeds its g.d.p. . they are only surviving on credit. the u.s.s.r. had a budget deficit since around one thousand sixty six but then deficit was not properly reported to the supreme council so no measures were taken. at the same time lots of money was going towards armaments and we armaments. so the deficit was not allowed to exceed the growth of people's savings deposits in burbank. from one hundred twenty to the time of the new canonic policy the same bank in the ministry of finance kept tally of people savings in the banks even with a little salary as they knew for how long an average person had to save up to be

able to buy a new coat for his wife we all without a color let alone a car or an apartment people spend their entire lives saving money people knew how to count money resigned the people who were involved in economics had been taught before the war by old school professors they understood inflation and other economic factors these things were easy to coordinate back then with strict regulation of a prices for everyday goods and pensions that was the reason our economic model was somewhat artificial. he said the soviet union lived on credit indeed this was the case especially in the 1980's when the country subsisted on loans alone the us as a huge foreign debt today so why are the common is telling us that it's wrong they're saying the soviet system was right and what we have today is wrong. it seems like the system is the same. initially and most of our loans were only for six months that's when i graduated and started working but by the mid sixty's we

were taking out medium turn credits to buy pipes and other equipment we needed to build all in gas pipelines my point is saying what you will about a planned economy we knew how to plan our spending like these things were very strictly monitored. part. of your friend who went on to become finance minister and his government administered if you unpopular reforms in one thousand anyone people's savings suddenly went bust the bills were taken out of circulation it said it was all very serious to think these measures helps was there any points to these reforms. the point was partly to prepare people for changes they had to realign so they couldn't just do nothing and expect manna from heaven. realized that a price reform would in turn bring reforms of wages and pensions that's why he

thought that we might need a monetary reform as well. where it's why he decided to replace fifty and one hundred rouble bills in one thousand nine hundred one. mind you that was not a monetary reform the purpose was to battle counterfeit money. there were a lot of counterfeit bills in circulation. because the gunman's allowed people to bring copy machines into the country without proper control. the idea was to allow a short period of time when people had to exchange all the fifteen hundred rouble bills they had and those who had too much money would have to explain where they got it. time despite some problems the soviet economy was producing a huge amount of goods after gorbachev came to power the shelves suddenly turned empty i remember walking into

a store in seeing nothing but empty shelves what happened where you got the goods go. do you know about the telegraph that's finance minister a law firm and myself as the bank chairman cents on the nineteenth of august we did it because pavel have told us to do it it was asking republics agencies not to delay their payments to the union governments because russia was holding on to its money russia set up and soon central bank even though it's unthinkable to have two central banks working in the same country with the same currency so russia was delaying its payments she was still working in the state bank and was in the state bank of the soviet union as it was called that was when we send a telegram saying that all money should be transferred to the union government as soon as possible in fact that's where they find me afterwards because they said i supported the coup and the reason russia was holding on to its money was because of

yachts and standoff with gorbachev yes and he was trying to evade the green ones that we had concerning the budgets of russia and that of the soviet union from one thousand nine hundred one the government often didn't have the money even to buy currency instead we had to borrow money abroad. this was a real problem. but i don't agree that everything disappeared from the stores and then magically came back. things don't happen this way. we have to keep in mind that the west was not very eager to lend to russia a ninety ninety one and nice united too. so where did we have to take money from. says says the victim give a shill co the former head of the soviet central bank and one of the most renowned bankers and economist in rushing to the spotlight moved back shortly after a break so stay with us don't go back in the afternoon.

i am. welcome back to spotlight i'm al gore and often just to remind you that my guest on the show today is vic that again i should call the former head of the soviet central bank one of the most renowned economist and bankers in russia today. i would like to ask you the following question once again even with the standoff between the all to end gorbachev even with the growing economic hardships that the

u.s.s.r. was facing and they contributed much to its breakup can we still say that it was to a large extent if not fully due to the efforts of the west that the process of disintegration gain momentum in the soviet union that the west old pride. and that all they could to encourage these developments in the u.s.s.r. well first of all we should say that the soviet union's economy was quite worn down even its defense industry we say the defense industry is big in the west but we also had it in the use of sar one of my relatives my younger sister's husband works in the foreign ministry and participated in the very early disarmament talks and he used to say we just can't give the americans and the sensible explanation as to why the heck we have produced so many assists twenty missiles there were enough of them to blow up three plants like the earth why should we want three times the amount that means that our defense industry kept ordering more and more and more the requests to downgrade to new developments and this was destroying the economy on

the other hand the defense industry itself required upgrading new weapons and so on another thing to say is that in those times as far as i know there was not a single western made piece of equipment in the is to start somewhere snick weapon was purchased for the plans of the ministry of machine building which produced equipment for the defense industry that's how it was much like with china now i recall that the west wasn't particularly eager to sell us any equipment i remember a story when the soviet union was trying to buy some double purpose piece of equipment which led to scandal and we were accused of trying to steal the military secrets rights riots there were so many things the nuclear projects that it should be admitted partially we ourselves contributed to the destructive processes by getting involved in the arms race although ironically the signing of the nuclear nonproliferation treaty was expedited by the hundreds in bomb test. of former head of the cabinet said in two thousand and ten that the shortage of retail products during gorbachev's rule was actually encouraged and facilitated by simply

co-leaders in russia among other things he alleged that yeltsin approved a major reconstruction project to start similar to the it's twenty four tobacco factory in order to create. the surety of tobacco products in the country and use it in said going public with sentiment of the authorities since the people were sensitive to shortage in cigarettes. as possible although i should say it wasn't aware of all the details of the economic situation but i can say for sure that the budget was severely hit by the government's decision to increase the price on the boats going and restrict the number of items one customer was allowed to purchase. but. he is the government introduced steve monopoly over vodka sales today would they do any good to russia's economy. i don't know why you think between you could please try and reintroduce the order that existed in russia before the nine hundred seventeen revolution in those times was a nickname for interpreters something called the kisses i recall that name and it

came from the tradition for such businessmen to swear an oath to the czar and seal it with the keys on the cross their oath being that the promise to pay me the value added tax to the states in good faith that's what we can do it doesn't matter which plan produces vodka it's also known that in the old times farmers didn't drink every day they only had what's good for holidays and then winner in the winter time and when the farming season is over they would also make their own spirits too because they could not afford the board because sold of the store. going back to the fall of the soviet union you mentioned who joined the emergency committee which staged a coup in august one thousand nine hundred one many prominent in respected people in the soviet union joined their. story which is so i said that the cool was an attempt to preserve the soviet union to counteract the when you go she started by gorbachev would you agree with that. they wanted to introduce

a state of emergency which could save the soviet union what is interesting is that head of because a stun there's a buyer never reached. he was invited but he must have decided not to go there just in case. any politician is supposed to be sly when television cover the one thousand nine hundred one events they interviewed a man by the name of craft it was the chairman of the committee on television and radio crushing there was dismissed shortly after ninety nine to one of the draft decree to introduce a new economic state of emergency had been showing to gorbachev when it was being written in april ninety ninety one. the document comments on it so it's not true that governor of new nothing about these plans he knew about them it might not have aligned with but you could see that the country was heading towards economic problems because of his conflicts with yeltsin and his team. it seems they gorbachev is still holding on to the dia that he could have renewed the

u.s.s.r. somehow given it a new lease of life if he had been given the opportunity do you believe in that. would be generally i have always thought of him as somewhat kicks or tick so often told us that the one party system was hampering the soviet union and we had seventeen million communists only a fraction of whom were truly committed to the cause so we had to do something about it. all the things he's sands and the things i listen to because i was invited to these meetings by protocol i still think governor of like decisiveness his idea was to create a second part is similar to the labor party or on the basis of labor unions or some other organisation to encourage competition in the parliaments but he never got around to making any actual steps towards this i think the conflict started when he dismissed and appointed yeltsin nor the yeltsin was hardly fit for the position

since you get in board is very different from moscow. let's be frank put in any good you are also unhappy about the single party system they try to change it but no matter what they do they end up with a model communist party. in their hands it is true you know it might be in our genes first we are the root kids then ivan the terrible reforms and atrocities disrupted the system. then there came along yes the remount of dynasty they're not even the best candidates they just have the pantry arc as an uncle so this standard rule in the country i think every region degrades over time need to be replaced but it should be done constitutionally people are right today when they say we should have not a majority in parliament that can turn down any outside initiative. republics including the second largest of them ukraine started clearing sovereignty one after another i remember that very distinct feeling there was in the air in

both sides we were seeing let them go we were only feeding them anyway they thought they would become immensely rich after they secede for some reason this is not happening. with the politicians educating secession in the states lying to their people. the problem is that some politicians in the party did not have a clear idea of the economy is which was actually the reason why not survive and kareem of did better than the rest of them by a friend of steel mill then went on to become a minister than the prime minister karim of work to finance ministry they had a better understanding of their own economies and their problems now let us take a look at the soviet union's budgets when we were discussing the possibility of uniting with valerie's people told us why would we want to three in belarus i told them take a look at the last few budgets of the soviet union and you will see that the only two republics were self-sufficient economically russian belarus even ukraine got

subsidies from the union budgets as the military and defense industry was too large it was huge in fact i thought ukraine would do best after the union collapsed. it was my opinion but i was wrong you queen cut down his defense budget but would not say their life has become better if we stopped funding them in our life did not get better why is there even buying food from bell ropes we all thought we would end up with a better economic situation but it didn't happen why is that miracles don't happen you know we long to believe in fairy tales we have plenty of them. something of that sort happened in the baltic states they never left the union you know the asked for permission to conduct an economic experiment to conduct their own economic policy. to sas supreme council was against it. came in and convinced them to let the baltic states have a try. when the soviet union collapsed you change your position from head of the

u.s.s.r. central bank to head of russia's central bank no my first band some time working for stony slush a time in the foundation but when they could not balance the central banks budget for ninety nine to one and the deputies go down in particular were a little angry with the previous hand they dismissed him and hired us although he was by no means a stupid man they needed someone who could do math and i would only come with the allowed me to bring my sim along when i spoke to mr grade or more people from his team they would always claim that russia only had in a food to last for two days when they came to power they claim they sealed russia from fam in is it true that i was not the minister of food but i think it is a lie so it is not true that the country was on the brink of starvation. and would spend a hundred million euros dollars worth of foreign consumer commodities there would be distributed between major cities. we did not buy enough and that was why people

would look for underwear from germany or shoes from czechoslovakia we simply did not only get enough money for it. russia went through a phase of so-called barbaric capitalism after the soviet union fell apart there ever an alternative to that could the transition have been made smoother. do you remember of former polish presidents less well and of course they had of the solidarity trade union he had a good economic advisor. and although he went down the liberal party to poland but poland was very different from the soviet union as an undivided country with a single religion. which was a guest in one of our shows most of all and so one sands never thought the transition from a pro socialist system wishbone town of the time even with the free agriculture in trade that this transition to the market economy would be such

a painful process he said it was the same as trying to make a good fish soup with fish from your fish tank i could not put it better myself. thank you very much for being with us and just there reminded that my guest today was think that good i should go in the form of the soviet send back and the third. spotlight will be back with more until then they are to. take.

that's.