12-20-2017

(Photo: October 1995, presidents Yeltsin and Clinton at the White House)

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Tales of the New Cold War: 25 years of American aggression. Stephen F. Cohen @NYU @Princeton. PART 1 of 2

Following the dissolution of the Soviet Union, Yeltsin promoted privatization as a way of spreading ownership of shares in former state enterprises as widely as possible to create political support for his economic reforms. In the West, privatization was viewed as the key to the transition from Communism in Eastern Europe, ensuring a quick dismantling of the Soviet-era command economy to make way for 'free market reforms.' In the early 1990s, Anatoly Chubais, Yeltsin's deputy for economic policy, emerged as a leading advocate of privatization in Russia.

In late 1992, Yeltsin launched a program of free vouchers as a way to give mass privatization a jump-start. Under the program, all Russian citizens were issued vouchers, each with a nominal value of around 10,000 rubles, for purchase of shares of select state enterprises. Although each citizen initially received a voucher of equal face value, within months most of them converged in the hands of intermediaries who were ready to buy them for cash right away.[40]

In 1995, as Yeltsin struggled to finance Russia's growing foreign debt and gain support from the Russian business elite for his bid in the early-1996 presidential elections, the Russian president prepared for a new wave of privatization offering stock shares in some of Russia's most valuable state enterprises in exchange for bank loans. The program was promoted as a way of simultaneously speeding up privatization and ensuring the government a cash infusion to cover its operating needs.'[31]

However, the deals were effectively giveaways of valuable state assets to a small group of tycoons in finance, industry, energy, telecommunications, and the media who came to be known as "oligarchs" in the mid-1990s. This was due to the fact that ordinary people sold their vouchers for cash. The vouchers were bought out by a small group of investors. By mid-1996, substantial ownership shares over major firms were acquired at very low prices by a handful of people. Boris Berezovsky, who controlled major stakes in several banks and the national media, emerged as one of Yeltsin's most prominent backers. Along with Berezovsky, Mikhail Khodorkovsky, Vladimir Potanin, Vladimir Bogdanov, Rem Viakhirev, Vagit Alekperov, Alexander Smolensky, Victor Vekselberg, Mikhail Fridman and a few years later Roman Abramovich, were habitually mentioned in the media as Russia's oligarchs.[41]

https://en.wikipedia.org/wiki/Boris_Yeltsin