ABSTRACT
The Russian government approved a policy involving the rapid transition to a free market economy while the Soviet Union was still in existence. The economic policy of the Russian government was outlined by President Yeltsin on 28 October 1991 in a speech to the Russian parliament, which then passed a series of bills on 15 November creating the legal framework for the transition to a market economy. More specific detail was published in document called the ‘Memorandum on the Economic Policy of the Russian Federation’ (Memorandum 1992), which was approved by the Russian government on 27 February 1992 and which formed the basis of Russia’s letter of intent to the IMF. The policies outlined in the memorandum (and other policy documents) incorporated the basic pillars for the rapid transition to a market economy (price liberalisation, removal of bureaucratic constraints on economic activity, privatisation of state industry and macroeconomic stabilisation, together with an appeal for western economic assistance) developed by Jeffrey Sachs, Professor of International Trade at Harvard University, who has been a principal adviser to both the Polish and the Russian governments (Sachs 1991). The proposals, which had the broad support of the IMF, were largely modelled on the policies adopted by the Polish government in January 1990, which has been popularly referred to as a ‘shocktherapy’ programme. Yegor Gaidar, the first deputy prime minister, was given responsibility for implementing the reform programme.
