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Kakha Bendukidze. Photo: unknown

Suggested readings

In an extensive interview (also available in English) with Kommersant-Dengi from 1996, Bendukidze reflects on his professional transition from biologist to businessman and investor. He describes the early years of his companies, Bioprocess and investment fund NIPEK, as well as the story of the privatization of Uralmash, which would become the core of his future engineering holding OMZ.

One of the best books on the birth of Russian capitalism is David E. Hoffman's The Oligarchs – Wealth and Power in the new Russia. It focuses on the careers of six of the men who rose to the pinnacle of Russian capitalism in the 1990s. Although the book does not discuss Bendukidze, many of the people and issues it raises directly touch upon his own rise to wealth and influence. Hoffman also captures the spirit of the early 1990s:

"…if they had Western models, these Russians were also unique. They inherited a country with a political and economic culture rooted in centuries of Russian obedience to authority, arbitrarily defined, from tsars to commissars. They inherited a society in which the simplest human instincts of individual initiative and entrepreneurship had been suppressed for seven decades … Russia was also unique because of a critical choice made immediately after the Soviet Union collapsed. Yeltsin deployed a band of radical young reformers, including Chubais, who, believing they had little time, set out to wreck the old system at any cost." (p. 6)

Hoffmann describes in detail the thinking that lead Yegor Gaidar and other reformers who implemented the shock therapy in Russia in the early 1990s. The chief engineers of Yeltsin's economic revolution:

"set out to accomplish nothing less than wreck the old system – smash the entire complex of planning, thinking and behavior inherited from Lenin, Stalin and their successors … Another legacy of their past was their shared disdain for politics. In the 1980s, Gorbachev had unleashed freedom but lagged behind on economic change. They were determined to avoid Gorbachev's quagmire of politics – endless plans that went nowhere … instead they thought of themselves as technocrats, pure economists, who would find the right thing to do and smash through the old barriers to getting it done." (p. 182)

The Gaidar team "often described themselves as kamikaze pilots, because they would certainly destroy themselves in trying to tear down so many entrenched interests." And they were real revolutionaries in spirit:

"Gaidar and Chubais believed that gradualism was akin to death; it would strengthen the vested interests and doom any real chance at reform. Chubais said it was only an illusion that change could be done 'gently, slowly and painlessly, so that everybody should be happy.'" (p. 183)

The belief in technocracy, smashing through resistance, disdain for gradualism: all of these ideas, which shaped the mindset of Russia's reformers of the 1990s, were to reappear in Bendukidze's policies in Georgia.

April 2010

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