As Andrei Zorin, a historian of state ideologies, wrote at the time in an essay, ‘Are We Having Fun Yet?’, history was being replaced by mythology.82 A quotation from an old Stalinist song ‘Moscow – you are my favourite’ decorated banners stretched across the city’s main streets. Television channels churned out Soviet retro films and songs about the good old days. A statue to Peter the Great, who moved the Russian capital to St Petersburg, was placed in the centre of Moscow – a tribute to Luzhkov ‘as a great reformer’, according to its maker Zurab Tsereteli. Historic conflicts were not reconciled but obliterated. The unifying idea was consumerism, legitimated by the history of the Russian Empire and by the Russian Orthodox Church.
One of the most elegant squares in the city – between the Kremlin and the old Moscow University – the site of mass political rallies in the late 1980s and early 1990s – was turned into an underground shopping centre and an overground amusement park. Its globed glass roofs rose up from the ground like bubbles from the earth. A few hundred metres away, the Cathedral of Christ the Saviour, reconstructed with lavish donations from the oligarchs, gleamed with its gilded cupolas. The purpose of this remake was not to atone for the past sins of the regime, but, on the contrary, ‘to create an illusion that the demotion never happened. We have to believe that all these buildings were always present, that nothing bad was ever done to them.’83
The idea of a collective repentance vanished. A serious examination of the Soviet past would have raised the question nobody wished to be asked, let alone answer: who was responsible for the Soviet experiment and the suffering it brought? The only honest answer would be ‘everyone’. Several Russian artists who wrestled with that question inevitably arrived at the grim conclusion that Stalinism was an act of self-destruction rather than an external force.
But Moscow was having too much fun for such dark matters. The Russian stock market was booming, money was flowing into the country, attracted by crazily high interest rates; Moscow restaurants were full. The fact that much of the country was still suffering from chronic wage arrears, that poverty was reaching its post-Soviet peak and that the majority of the population was barely getting by, hardly registered in Moscow.
Meltdown
While Moscow was revelling and the oligarchs savouring their victory over the government of young reformers, thousands of miles to the east in Asia a major financial crisis on the scale of the Great Depression was unfolding and investors began to withdraw money from emerging markets. The Russian government, however, was too demoralized by the bankers’ war and the oligarchs too euphoric to think about the financial tsunami heading Russia’s way. Gusinsky was preparing to float his company for $1.2 billion on the New York Stock Exchange to pay for the new satellite he was planning to launch.
Meanwhile, Russia’s economy was in a sorry state. The country was running a large budget deficit; the oligarchs used every loophole to avoid paying taxes. To finance itself, the government had been issuing short-term high-yielding bonds. By the spring of 1998 the interest rate on those bonds was exceeding 50 per cent. To repay bondholders the government was issuing more bonds with even higher yields. The oligarchs and foreign speculators were all piling in. Effectively, it was a debt pyramid of vast proportions and, as with all pyramids, it was only a matter of time before it started crashing.
Politics was hardly more stable. In early 1998 Yeltsin sacked Chernomyrdin, who had faithfully served him as prime minister since 1993. The most popular explanation was that Yeltsin had grown suspicious of Chernomyrdin’s presidential ambitions. The opposite explanation, supported by the oligarchs and Yeltsin himself, was that Chernomyrdin had exhausted his potential, was unelectable as Yeltsin’s successor and therefore had to be disposed of. The oligarchs, along with Yeltsin’s daughter Tatyana Dyachenko and her husband Valentin Yumashev, held counsel about who should replace Chernomyrdin.
At one such meeting, Berezovsky suggested Malashenko. Everyone seemed to like the idea, apart from Malashenko himself. Furiously, he turned to Berezovsky: ‘And do you know what my first decision will be? I will kick you out of the country the very next day.’ ‘Why is that?’ Berezovsky asked, taking it as a joke. ‘Because outside this building, virtually, stands the whole country demanding for you to be kicked out.’ Berezovsky was taken aback. ‘I was not joking,’ Malashenko said years later. ‘If I were to act as a politician I would have had to maximize power, which is what Putin did a few years later. But this is precisely why I did not want to do it – I just did not like the idea of a country like that.’84
After the ‘bankers’ war’, Yeltsin, too, realized that the oligarchs were getting too powerful and he was looking for a man who would be efficient, economically literate but also distant from the oligarchs – a new face altogether, untainted by previous scandals. Yeltsin’s choice for Chernomyrdin’s replacement was Sergei Kiriyenko, a baby-faced, smiling, thirty-five-year-old former banker from Nizhniy Novgorod – a protégé of Nemtsov’s, quickly dubbed ‘Kinder Surprise’. But while Kiriyenko may have been a good technocrat to serve as a government minister in calm times, he was appointed when, in the words of Gaidar, ‘a mine had not only been planted, but its fuse had also been lit’.85 The idea of Kiriyenko being able to stand up to the oligarchs was wishful thinking as the oligarchs were keen to prove.
In May 1998, the miners from the Kuzbas region – unpaid for months – went on strike. Some blocked railways. A few hundred came to Moscow, banging their helmets on the ground in front of the White House and refusing to leave. Miners’ strikes had happened before, but this one was clearly stoked and egged on by television, which showed it with great sympathy as the main event in the country, thus sustaining it over weeks and mobilizing other miners to join in. As Yeltsin wrote in his memoirs, the strike became an excuse for attacking Kiriyenko’s government. When Yeltsin asked television executives to stop this information attack, they pretended to be indignant. ‘Not to notice that half of the country is cut off by the miners’ strikes, to pretend that it is not happening and accuse the media – that is something we’ve seen before,’ said Dobrodeev.86 This was the height of cynicism.
Meanwhile Channel One was entertaining its audience with a game show that captured the crazy spirit of those pre-crisis days. It was called Zolotaia likhoradka (Gold Rush). The audience was ushered into the studio, resembling a dimly lit vault, by a dwarf in a golden cloak. The host, pretending to be Satan, and demonically laughing, asked the audience general knowledge questions and selected a finalist – usually some middle-aged, balding man with bags under his eyes. If the finalist answered the questions correctly, he was offered a slab of gold and showered with banknotes. If not, a suitcase of gold melted away in front of his eyes. ‘What a remarkably nasty thing to do: tempting people with money they have not earned. How tactless, in a country which officially has no money, to play for gold and to throw banknotes into the air on the screen,’ Petrovskaya, the TV critic, wrote.87 Within weeks, the entire country was to observe its savings, along with Russia’s gold reserves, melt away.