Valentin Pavlov
Encyclopedia
Valentin Sergeyevich Pavlov was a Soviet
official who became a Russia
n banker following the dissolution of the Soviet Union
. Born in the city of Moscow
, then part of the Russian Soviet Federative Socialist Republic
, Pavlov began his political career in the Ministry of Finance in 1959. Later, during the Brezhnev Era
, he became head of the Financial Department of the State Planning Committee
. Pavlov was appointed to the post of Chairman of the State Committee on Prices during the Gorbachev Era, and later became Minister of Finance in Nikolai Ryzhkov
's Second Government. He went on to succeed Ryzhkov as head of government in the newly established post of Prime Minister of the Soviet Union
, and became de facto
Chairman of the Cabinet of Ministers.
As Prime Minister from 14 January 1991 to 22 August 1991 Pavlov initiated the 1991 Soviet monetary reform, commonly referred to as the Pavlov reform, in early 1991. Early on he told the media that the reform was initiated to halt the flow of Soviet roubles transported to the Soviet Union
from abroad. Although ridiculed at the time, the statement was later proven to be true. In June the same year, Pavlov failed in an attempted coup
against Gorbachev through a constitutional amendment. In August, he participated in the 1991 Soviet coup d'état attempt, which tried to prevent the disintegration of the Soviet Union. Pavlov was arrested for his involvement in the coup and went on to work in the banking sector in post-Soviet Russia. He was succeeded as premier by Ivan Silayev
.
(bureaucratic) career as a government economist; he started working for as a official of the Ministry of Finance in 1959, and became a member of the Communist Party of the Soviet Union
in 1962. Early in his career he also worked for the Ministry of Finance
of the Russian Soviet Federative Socialist Republic
(RSFSR). Pavlov started working for the State Planning Commmittee
in 1979, and became a member of the State Planning Committee's board in 1981. He held the office as head of the State Planning Committee's Finance Department, the department which oversaw all aspects of the country's planned economy. He served as First Deputy Minister of Finance in Boris Gostev
's ministry from January to August 1986.
Pavlov was appointed Chairman of the State Committee on Prices on 15 August 1986, and retained that post until 7 June 1989. Throughout the period, and later as Minister of Finance, Pavlov supported the centralised price reform proposal posited by Nikolai Ryzhkov
, Chairman of the Council of Ministers. He succeeded Gostev to become Minister of Finance in Ryzhkov's government in 1989 and his time in the post was considered uncontroversial, even though Lira Rozenova, Deputy Chairman of the State Committee for Prices, was not elected to the post of Chairman of the State Committee for her advocacy of Pavlov-backed plans for centrally administered price reform. He was the only minister in Ryzhkov's Government who was also a member of the Presidium of the Council of Ministers.
Along with Eduard Shevardnadze
– Soviet Foreign Minister – Pavlov was the only nominee from Ryzhkov's Second Government to be overwhelmingly elected by the Supreme Soviet of the Soviet Union. As Minister of Finance, Pavlov was supportive of the marketisation of the Soviet economy, having overseen a rapid increase in the Soviet money supply and the increase in inflation it caused. Pavlov also set the exchange rate for the rouble against the American dollar on the Soviet black market. In 1993 he proudly admitted that during his tenure as Minister of Finance, and later Prime Minister, he had deceived several Western banks and creditors by lying about the Soviet Union's gold reserve
s. In 1989, Pavlov gathered together enough information on the errors and omissions of Ivan Silayev
, the future Soviet Premier and Russian SFSR Premier, to weaken his position as Deputy Premier. Silayev never forgave Pavlov and relations between the two grew even more icy when Pavlov became Soviet Premier.
and his second government, Pavlov was elected to the new position of Prime Minister as a compromise candidate, and became the de facto Chairman of the Cabinet of Ministers. He and his two First Deputy Prime Ministers, Vladimir Velichko
and Vitaly Doguzhiev, were approved by the Supreme Soviet of the Soviet Union on 14 January, while approval for the majority of his ministers followed within a few weeks. Pavlov was considered a conservative upon his election as Prime Minister, and the Soviet press described him as a "bold and complex man" who was against full marketisation but who believed that the Soviet Union was even more oppressive towards workers than even the most advanced capitalist societies. One of his first actions as Prime Minister was to move the headquarters of the Soviet Government – the Cabinet of Ministers – from the Moscow Kremlin
to the former headquarters of the State Committee for Construction to strengthen his position.
between the Supreme Soviet of the Soviet Union and the Supreme Soviet of the Russian Soviet Federative Socialist Republic
(RSFSR), which, he argued, could be resolved by introducing a state of emergency
across the entire Soviet Union, or at least in certain economic sectors.
According to Pavlov, the union's problems remained insoluble as long as Gorbachev retained so much power and had limited time to address important issues. To break the impasse, Pavlov called for a transfer of power from the President of the Soviet Union to the Prime Minister and the Cabinet of Ministers, even creating a five-point resolution to that end for the legislature to consider. Pavlov received support for the idea from the Soyuz
parliamentary faction leader Viktor Alksnis
, who called for an immediate vote on the issue. However, several members of Soyuz also demanded a statement by the KGB
and the Ministry of Defence to comment on the proposal. In retrospect, Alksnis notes that this resolution could have become a coup d'état had Pavlov consulted with them earlier. According to historian Jerry F. Hough
, Pavlov's program "was not directed as much at Gorbachev as at [Boris] Yeltsin
".
By the afternoon, the majority of Soyuz members favoured an immediate vote. The Chairman of the Supreme Soviet of the Soviet Union, Anatoly Lukyanov
, had already departed for Novo Ogarevo to take part in constitutional negotiations and he promised to tell Gorbachev about the vote. In his place stood Ivan Laptev, a pro-Gorbachev reformer, who did not trust Lukyanov and tried to stall the vote by demanding a statement from the KGB, Ministry of the Interior and the Ministry of Defence. According to Laptev, the mood was such that if a vote had been taken Pavlov would have won. At the time, both the Soviet secret police and the military establishment in general wanted to strengthen the authority of the Soviet Government and so they too supported Pavlov's program. Soyuz, through a vote, was able to increase the powers of the Cabinet of Ministers, and gave the institution the right of legislative initiative
.
Shortly afterwards, Jack Matlock, United States ambassador to the Soviet Union, told Gorbachev of the possibility of a coup attempt against him, and the Soviet leader became worried when Anatoli Chernayev informed him of mysterious troop movements outside Moscow
. On 21 June, four days after Pavlov's speech, Gorbachev addressed the Supreme Soviet and told delegates that there were no differences in opinion between him and Pavlov. Even when he had been able to secure his position, Gorbachev's power within the system was already faltering, although he succeeded in getting the enhanced powers previously given to the Cabinet of Ministers reversed. The power struggle between Gorbachev and Pavlov was not over, with Gorbachev promising Yeltsin and Nursultan Nazarbayev
that Pavlov, along with Dmitry Yazov
, Minister of Defence, and Vladimir Kryuchkov
, the Chairman of the KGB, would be removed from their posts following the signing and ratification of the New Union Treaty
.
prior to the dissolution of the Soviet Union
. Initiated on 22 January 1991, it was intended to withdraw money from circulation for reallocation to the production of consumer goods, which were in short supply. In a speech, Pavlov stated that the reason for the withdrawal was the government's belief that money was being sent to the Soviet Union from abroad, fuelling inflation. Although ridiculed by the Soviet press at the time, three years later the truth of Pavlov's statement was verified. Mikhail Gorbachev
then signed a presidential decree ordering the Soviet financial system to stop accepting and exchanging banknotes issued in 1961. The directive also included 50-rouble and 100-rouble banknotes issued in 1991. On 23 January 1991, the government began restricting monthly bank deposit withdrawals to 500 rubles with the official explanation that this was to freeze the income of corrupt officials, capitalists and criminals.
Under the orders of Pavlov, the Government freed forty percent of prices on 1 January 1991, and introduced a five percent sales tax
. Prices of consumer goods
, in particular, were now considered free in the sense that negotiation became possible between producers and the distributor. According to Philip Hanson in his book, The Rise and Fall of the Soviet economy: An Economic History of the USSR from 1945, Pavlov's reform was undermined by the Union Republics
who failed to follow Pavlov's orders, along with the widespread existence of local monopolies, which tended to have their own definition of luxury goods and as a result imposed higher prices on such items.
Soviet citizens had only three days from 23–25 January to exchange their old 50 rouble and 100 rouble banknotes for the new currency. Exchange could be postponed, but only through specialised government commissions. Due to this short exchange window, long queues formed in front of Soviet savings banks, even though it was also possible to exchange money at workplaces and post offices. This reform also dealt a crippling blow to Soviet citizens who had saved their money and could not move fast enough to get it exchanged; some lost as much as 15,000–30,000 rubles overnight.
In the end the reform proved unsuccessful. The government only managed to withdraw 14 billion rubles from circulation of the country's money supply against an intended target of 81.5 billion rubles. As a result, the Pavlov reform did not put an end to inflation. Prices for items including food and transport rose by 100–300 percent, while the Soviet standard of living decreased sharply and the state budget deficit increased by an estimated 20–30 percent of GNP
. In the aftermath of the reform, inflation exceeded the 50 percent mark every month.
being prepared called for further decentralisation of power to the republics
, which weakened the government's already tenuous hold on the economy. Pavlov received a draft of the New Union Treaty on 12 August at a Security Council
meeting and managed to get it published in the Moscow News
on 14 August.
Opposing the decentralisation stance taken in the treaty, Pavlov was one of the key players in the establishment of the State Committee for the State of Emergency
in August 1991. Pavlov's inclusion in the committee has been used to demonstrate its unwillingness to revert to pre-Gorbachev policies. The Committee's main goal was to ensure that the Soviet Union continued as a highly centralised union state. The Emergency Committee was led by Gennady Yanayev
, Vice President of the Soviet Union, Interior Minister Boris Pugo, Defence Minister Dmitry Yazov
and other hardliners who were determined to take action to oust Gorbachev.
Vladimir Kryuchkov
, the KGB Chairman, had told Pavlov of the coup on 18 August, one day before it began. He was asked by Kryuchkov to meet his co-plotters at the Moscow Kremlin
, where on 19 August, he and his co-conspirators appeared on live television and told the Soviet people
that Gorbachev was indisposed. As the day wore on it soon became apparent that Pavlov had been drinking since he issued several contradictory orders and repeated himself. In retrospect he admitted that he had been drinking with his son the day before. On the same day, his fellow plotters decided to depose Pavlov, sending him to his dacha
where his wife took care of him. As with all the others, Pavlov was arrested following the collapse of the coup. Shortly after Pavlov was hospitalised with hypertension whilst remaining in custody. He was released on bail in January 1993 and granted amnesty by the Russian State Duma
in 1994.
and the International Academy of Management, and later headed a department of the International Union of Economists. Pavlov died on 30 March 2003, and was buried on 2 April at Pyatnickoe cemetery.
Soviet people
Soviet people or Soviet nation was an umbrella demonym for the population of the Soviet Union. Initially used as a nonspecific reference to the Soviet population, it was eventually declared to be a "new historical, social and international unity of people".-Nationality politics in early Soviet...
official who became a Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
n banker following the dissolution of the Soviet Union
Dissolution of the Soviet Union
The dissolution of the Soviet Union was the disintegration of the federal political structures and central government of the Union of Soviet Socialist Republics , resulting in the independence of all fifteen republics of the Soviet Union between March 11, 1990 and December 25, 1991...
. Born in the city of Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
, then part of the Russian Soviet Federative Socialist Republic
Russian Soviet Federative Socialist Republic
The Russian Soviet Federative Socialist Republic , commonly referred to as Soviet Russia, Bolshevik Russia, or simply Russia, was the largest, most populous and economically developed republic in the former Soviet Union....
, Pavlov began his political career in the Ministry of Finance in 1959. Later, during the Brezhnev Era
History of the Soviet Union (1964–1982)
The history of the Soviet Union from 1964 to 1982, referred to as the Brezhnev Era, covers the period of Leonid Brezhnev's rule of the Union of Soviet Socialist Republics . This period began with high economic growth and soaring prosperity, but ended with a much weaker Soviet Union facing social,...
, he became head of the Financial Department of the State Planning Committee
Gosplan
Gosplan or State Planning Committee was the committee responsible for economic planning in the Soviet Union. The word "Gosplan" is an abbreviation for Gosudarstvenniy Komitet po Planirovaniyu...
. Pavlov was appointed to the post of Chairman of the State Committee on Prices during the Gorbachev Era, and later became Minister of Finance in Nikolai Ryzhkov
Nikolai Ryzhkov
Nikolai Ivanovich Ryzhkov was a Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as the last Chairman of the Council of Ministers or Premier of the Soviet Union from 1985 to 1991...
's Second Government. He went on to succeed Ryzhkov as head of government in the newly established post of Prime Minister of the Soviet Union
Premier of the Soviet Union
The office of Premier of the Soviet Union was synonymous with head of government of the Union of Soviet Socialist Republics . Twelve individuals have been premier...
, and became de facto
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
Chairman of the Cabinet of Ministers.
As Prime Minister from 14 January 1991 to 22 August 1991 Pavlov initiated the 1991 Soviet monetary reform, commonly referred to as the Pavlov reform, in early 1991. Early on he told the media that the reform was initiated to halt the flow of Soviet roubles transported to the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
from abroad. Although ridiculed at the time, the statement was later proven to be true. In June the same year, Pavlov failed in an attempted coup
Coup d'état
A coup d'état state, literally: strike/blow of state)—also known as a coup, putsch, and overthrow—is the sudden, extrajudicial deposition of a government, usually by a small group of the existing state establishment—typically the military—to replace the deposed government with another body; either...
against Gorbachev through a constitutional amendment. In August, he participated in the 1991 Soviet coup d'état attempt, which tried to prevent the disintegration of the Soviet Union. Pavlov was arrested for his involvement in the coup and went on to work in the banking sector in post-Soviet Russia. He was succeeded as premier by Ivan Silayev
Ivan Silayev
Ivan Stepanovich Silayev is a former Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as Premier of the Soviet Union through the offices of Chairman of the Interstate Economic Committee and Chairman of the Committee on the Operational...
.
Early life and career
Born in Moscow on 27 September 1937, Pavlov graduated from the Moscow Finance Institute in 1958. He started his nomenklaturaNomenklatura
The nomenklatura were a category of people within the Soviet Union and other Eastern Bloc countries who held various key administrative positions in all spheres of those countries' activity: government, industry, agriculture, education, etc., whose positions were granted only with approval by the...
(bureaucratic) career as a government economist; he started working for as a official of the Ministry of Finance in 1959, and became a member of the Communist Party of the Soviet Union
Communist Party of the Soviet Union
The Communist Party of the Soviet Union was the only legal, ruling political party in the Soviet Union and one of the largest communist organizations in the world...
in 1962. Early in his career he also worked for the Ministry of Finance
Ministry of Finance (RSFSR)
Ministry of Finance of the Russian Soviet Federative Socialist Republic , known prior to 1946 as the People's Commissariat for Finance , or shorten to Narkomfin was part of the government of the Russian Soviet Federative Socialist Republic from 1918 to the collapse of the USSR in 1991...
of the Russian Soviet Federative Socialist Republic
Russian Soviet Federative Socialist Republic
The Russian Soviet Federative Socialist Republic , commonly referred to as Soviet Russia, Bolshevik Russia, or simply Russia, was the largest, most populous and economically developed republic in the former Soviet Union....
(RSFSR). Pavlov started working for the State Planning Commmittee
Gosplan
Gosplan or State Planning Committee was the committee responsible for economic planning in the Soviet Union. The word "Gosplan" is an abbreviation for Gosudarstvenniy Komitet po Planirovaniyu...
in 1979, and became a member of the State Planning Committee's board in 1981. He held the office as head of the State Planning Committee's Finance Department, the department which oversaw all aspects of the country's planned economy. He served as First Deputy Minister of Finance in Boris Gostev
Boris Gostev
Boris Ivanovich Gostev was a Soviet Minister of Finance from 1985 to 1989.-References:*Encyclopedic Reference of Tver Oblast....
's ministry from January to August 1986.
Pavlov was appointed Chairman of the State Committee on Prices on 15 August 1986, and retained that post until 7 June 1989. Throughout the period, and later as Minister of Finance, Pavlov supported the centralised price reform proposal posited by Nikolai Ryzhkov
Nikolai Ryzhkov
Nikolai Ivanovich Ryzhkov was a Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as the last Chairman of the Council of Ministers or Premier of the Soviet Union from 1985 to 1991...
, Chairman of the Council of Ministers. He succeeded Gostev to become Minister of Finance in Ryzhkov's government in 1989 and his time in the post was considered uncontroversial, even though Lira Rozenova, Deputy Chairman of the State Committee for Prices, was not elected to the post of Chairman of the State Committee for her advocacy of Pavlov-backed plans for centrally administered price reform. He was the only minister in Ryzhkov's Government who was also a member of the Presidium of the Council of Ministers.
Along with Eduard Shevardnadze
Eduard Shevardnadze
Eduard Shevardnadze is a former Soviet, and later, Georgian statesman from the height to the end of the Cold War. He served as President of Georgia from 1995 to 2003, and as First Secretary of the Georgian Communist Party , from 1972 to 1985. Shevardnadze was responsible for many top decisions on...
– Soviet Foreign Minister – Pavlov was the only nominee from Ryzhkov's Second Government to be overwhelmingly elected by the Supreme Soviet of the Soviet Union. As Minister of Finance, Pavlov was supportive of the marketisation of the Soviet economy, having overseen a rapid increase in the Soviet money supply and the increase in inflation it caused. Pavlov also set the exchange rate for the rouble against the American dollar on the Soviet black market. In 1993 he proudly admitted that during his tenure as Minister of Finance, and later Prime Minister, he had deceived several Western banks and creditors by lying about the Soviet Union's gold reserve
Gold Reserve
Gold Reserve Inc. is a gold mining company with operations and mining property in Bolivar State, Venezuela.Founded in 1956, Gold Reserve Inc. is now headquartered in Spokane, Washington. The company has about ten employees at its Washington office and about 55 in Venezuela. Of these 55,...
s. In 1989, Pavlov gathered together enough information on the errors and omissions of Ivan Silayev
Ivan Silayev
Ivan Stepanovich Silayev is a former Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as Premier of the Soviet Union through the offices of Chairman of the Interstate Economic Committee and Chairman of the Committee on the Operational...
, the future Soviet Premier and Russian SFSR Premier, to weaken his position as Deputy Premier. Silayev never forgave Pavlov and relations between the two grew even more icy when Pavlov became Soviet Premier.
Prime Minister
Following the resignation of Nikolai RyzhkovNikolai Ryzhkov
Nikolai Ivanovich Ryzhkov was a Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as the last Chairman of the Council of Ministers or Premier of the Soviet Union from 1985 to 1991...
and his second government, Pavlov was elected to the new position of Prime Minister as a compromise candidate, and became the de facto Chairman of the Cabinet of Ministers. He and his two First Deputy Prime Ministers, Vladimir Velichko
Vladimir Velichko
Vladimir Makarovich Velichko was a Soviet official and entrepreneur appointed as the First Deputy Prime Minister of the Cabinet of Ministers in 1991.-Life and career:...
and Vitaly Doguzhiev, were approved by the Supreme Soviet of the Soviet Union on 14 January, while approval for the majority of his ministers followed within a few weeks. Pavlov was considered a conservative upon his election as Prime Minister, and the Soviet press described him as a "bold and complex man" who was against full marketisation but who believed that the Soviet Union was even more oppressive towards workers than even the most advanced capitalist societies. One of his first actions as Prime Minister was to move the headquarters of the Soviet Government – the Cabinet of Ministers – from the Moscow Kremlin
Moscow Kremlin
The Moscow Kremlin , sometimes referred to as simply The Kremlin, is a historic fortified complex at the heart of Moscow, overlooking the Moskva River , Saint Basil's Cathedral and Red Square and the Alexander Garden...
to the former headquarters of the State Committee for Construction to strengthen his position.
Coup attempt
In June 1991, Pavlov discovered that Gorbachev planned to replace him as Prime Minister. In response, he arrived at the Supreme Soviet of the Soviet Union "visibly nervous", and in his report to the Supreme Soviet, he was forced to tell delegates of the faltering state of the Soviet economy. However, Pavlov blamed this on the ongoing War of LawsWar of Laws
The War of Laws was the series of conflicts between the Federal Government of the Soviet Union, and the governments of the Russian Federation and other constituent republics during the last years of the USSR, which eventually led to the dissolution of the union...
between the Supreme Soviet of the Soviet Union and the Supreme Soviet of the Russian Soviet Federative Socialist Republic
Russian Soviet Federative Socialist Republic
The Russian Soviet Federative Socialist Republic , commonly referred to as Soviet Russia, Bolshevik Russia, or simply Russia, was the largest, most populous and economically developed republic in the former Soviet Union....
(RSFSR), which, he argued, could be resolved by introducing a state of emergency
State of emergency
A state of emergency is a governmental declaration that may suspend some normal functions of the executive, legislative and judicial powers, alert citizens to change their normal behaviours, or order government agencies to implement emergency preparedness plans. It can also be used as a rationale...
across the entire Soviet Union, or at least in certain economic sectors.
According to Pavlov, the union's problems remained insoluble as long as Gorbachev retained so much power and had limited time to address important issues. To break the impasse, Pavlov called for a transfer of power from the President of the Soviet Union to the Prime Minister and the Cabinet of Ministers, even creating a five-point resolution to that end for the legislature to consider. Pavlov received support for the idea from the Soyuz
Soyuz (faction)
Soyuz was a faction in the Congress of People's Deputies of the USSR. The faction was critical of Perestroika and liberal reforms; it was opposed to de-centralization of the Soviet Union...
parliamentary faction leader Viktor Alksnis
Viktor Alksnis
Viktor Alksnis is an ethnic Latvian Russian politician and former Soviet Air Force colonel. He is the chairman of Russian Center of Free Technologies, an organization intended to promote Free Software and open standards in Russia...
, who called for an immediate vote on the issue. However, several members of Soyuz also demanded a statement by the KGB
KGB
The KGB was the commonly used acronym for the . It was the national security agency of the Soviet Union from 1954 until 1991, and was the premier internal security, intelligence, and secret police organization during that time.The State Security Agency of the Republic of Belarus currently uses the...
and the Ministry of Defence to comment on the proposal. In retrospect, Alksnis notes that this resolution could have become a coup d'état had Pavlov consulted with them earlier. According to historian Jerry F. Hough
Jerry F. Hough
Jerry F. Hough is the James B. Duke Professor of Political Science at Duke University. Hough has taught at Duke since 1973; he previously taught at the University of Toronto and at the University of Illinois at Urbana-Champaign, and he has served as a senior fellow at The Brookings Institution....
, Pavlov's program "was not directed as much at Gorbachev as at [Boris] Yeltsin
Boris Yeltsin
Boris Nikolayevich Yeltsin was the first President of the Russian Federation, serving from 1991 to 1999.Originally a supporter of Mikhail Gorbachev, Yeltsin emerged under the perestroika reforms as one of Gorbachev's most powerful political opponents. On 29 May 1990 he was elected the chairman of...
".
By the afternoon, the majority of Soyuz members favoured an immediate vote. The Chairman of the Supreme Soviet of the Soviet Union, Anatoly Lukyanov
Anatoly Lukyanov
Anatoly Ivanovich Lukyanov is a Russian Communist politician who was the Chairman of the Supreme Soviet of the USSR between 15 March 1990 and 22 August 1991. One of the founders of the Communist Party of the Russian Federation in 1993, he is described by its leader Gennady Zyuganov as the "Deng...
, had already departed for Novo Ogarevo to take part in constitutional negotiations and he promised to tell Gorbachev about the vote. In his place stood Ivan Laptev, a pro-Gorbachev reformer, who did not trust Lukyanov and tried to stall the vote by demanding a statement from the KGB, Ministry of the Interior and the Ministry of Defence. According to Laptev, the mood was such that if a vote had been taken Pavlov would have won. At the time, both the Soviet secret police and the military establishment in general wanted to strengthen the authority of the Soviet Government and so they too supported Pavlov's program. Soyuz, through a vote, was able to increase the powers of the Cabinet of Ministers, and gave the institution the right of legislative initiative
Legislative initiative
The right of initiative is the constitutionally defined power to propose a new law .The right of initiative is usually attributed to parliaments, which in most countries have the right to make law proposals, alone or sharing this right with the government.In parliamentary systems it is common that...
.
Shortly afterwards, Jack Matlock, United States ambassador to the Soviet Union, told Gorbachev of the possibility of a coup attempt against him, and the Soviet leader became worried when Anatoli Chernayev informed him of mysterious troop movements outside Moscow
Moscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
. On 21 June, four days after Pavlov's speech, Gorbachev addressed the Supreme Soviet and told delegates that there were no differences in opinion between him and Pavlov. Even when he had been able to secure his position, Gorbachev's power within the system was already faltering, although he succeeded in getting the enhanced powers previously given to the Cabinet of Ministers reversed. The power struggle between Gorbachev and Pavlov was not over, with Gorbachev promising Yeltsin and Nursultan Nazarbayev
Nursultan Nazarbayev
Nursultan Abishuly Nazarbayev has served as the President of Kazakhstan since the nation received its independence in 1991, after the fall of the Soviet Union...
that Pavlov, along with Dmitry Yazov
Dmitry Yazov
Dmitry Timofeyevich Yazov was the last Marshal of the Soviet Union to be appointed before the collapse of the Soviet Union . He was the only Marshal of the Soviet Union to be born in Siberia....
, Minister of Defence, and Vladimir Kryuchkov
Vladimir Kryuchkov
Vladimir Alexandrovich Kryuchkov was a former Soviet politician and Communist Party member, having been in the organization from 1944 until he was dismissed in 1991...
, the Chairman of the KGB, would be removed from their posts following the signing and ratification of the New Union Treaty
New Union Treaty
Union of Sovereign States was the proposed name of a reorganization of the Union of Soviet Socialist Republics into a new confederation body. Proposed by Mikhail Gorbachev, the proposal was an attempt to avert the collapse of the Soviet Union. The proposal was never implemented in the wake of the...
.
"Pavlov" reform
The Soviet monetary reform of 1991, commonly referred to as the Pavlov reform, was the last monetary reformMonetary reform
Monetary reform describes any movement or theory that proposes a different system of supplying money and financing the economy from the current system.Monetary reformers may advocate any of the following, among other proposals:...
prior to the dissolution of the Soviet Union
Dissolution of the Soviet Union
The dissolution of the Soviet Union was the disintegration of the federal political structures and central government of the Union of Soviet Socialist Republics , resulting in the independence of all fifteen republics of the Soviet Union between March 11, 1990 and December 25, 1991...
. Initiated on 22 January 1991, it was intended to withdraw money from circulation for reallocation to the production of consumer goods, which were in short supply. In a speech, Pavlov stated that the reason for the withdrawal was the government's belief that money was being sent to the Soviet Union from abroad, fuelling inflation. Although ridiculed by the Soviet press at the time, three years later the truth of Pavlov's statement was verified. Mikhail Gorbachev
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev is a former Soviet statesman, having served as General Secretary of the Communist Party of the Soviet Union from 1985 until 1991, and as the last head of state of the USSR, having served from 1988 until its dissolution in 1991...
then signed a presidential decree ordering the Soviet financial system to stop accepting and exchanging banknotes issued in 1961. The directive also included 50-rouble and 100-rouble banknotes issued in 1991. On 23 January 1991, the government began restricting monthly bank deposit withdrawals to 500 rubles with the official explanation that this was to freeze the income of corrupt officials, capitalists and criminals.
Under the orders of Pavlov, the Government freed forty percent of prices on 1 January 1991, and introduced a five percent sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
. Prices of consumer goods
Consumer goods in the Soviet Union
The industry of the Soviet Union was usually divided into two major categories. Group A was "heavy industry," which included all goods that serve as an input required for the production of some other, final good...
, in particular, were now considered free in the sense that negotiation became possible between producers and the distributor. According to Philip Hanson in his book, The Rise and Fall of the Soviet economy: An Economic History of the USSR from 1945, Pavlov's reform was undermined by the Union Republics
Republics of the Soviet Union
The Republics of the Soviet Union or the Union Republics of the Soviet Union were ethnically-based administrative units that were subordinated directly to the Government of the Soviet Union...
who failed to follow Pavlov's orders, along with the widespread existence of local monopolies, which tended to have their own definition of luxury goods and as a result imposed higher prices on such items.
Soviet citizens had only three days from 23–25 January to exchange their old 50 rouble and 100 rouble banknotes for the new currency. Exchange could be postponed, but only through specialised government commissions. Due to this short exchange window, long queues formed in front of Soviet savings banks, even though it was also possible to exchange money at workplaces and post offices. This reform also dealt a crippling blow to Soviet citizens who had saved their money and could not move fast enough to get it exchanged; some lost as much as 15,000–30,000 rubles overnight.
In the end the reform proved unsuccessful. The government only managed to withdraw 14 billion rubles from circulation of the country's money supply against an intended target of 81.5 billion rubles. As a result, the Pavlov reform did not put an end to inflation. Prices for items including food and transport rose by 100–300 percent, while the Soviet standard of living decreased sharply and the state budget deficit increased by an estimated 20–30 percent of GNP
GNP
Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...
. In the aftermath of the reform, inflation exceeded the 50 percent mark every month.
August Coup
The 1991 Soviet coup d'état attempt, commonly referred to as the August Coup, was prompted by the slowly disintegration of the Soviet Union that resulted from Gorbachev's reform policy and Yeltsin's drive towards an independent Russia. The New Union TreatyNew Union Treaty
Union of Sovereign States was the proposed name of a reorganization of the Union of Soviet Socialist Republics into a new confederation body. Proposed by Mikhail Gorbachev, the proposal was an attempt to avert the collapse of the Soviet Union. The proposal was never implemented in the wake of the...
being prepared called for further decentralisation of power to the republics
Republics of the Soviet Union
The Republics of the Soviet Union or the Union Republics of the Soviet Union were ethnically-based administrative units that were subordinated directly to the Government of the Soviet Union...
, which weakened the government's already tenuous hold on the economy. Pavlov received a draft of the New Union Treaty on 12 August at a Security Council
Security Council of the Soviet Union
The Security Council of the Union of Soviet Socialist Republics was formed in 1990. The head of this organ was the President of the Soviet Union, he had the power to elect all members of the council...
meeting and managed to get it published in the Moscow News
Moscow News
The Moscow News, which began publication in 1930, is Russia’s oldest English-language publication newspaper. Many of its feature articles used to be translated from the now defunct Russian Moskovskiye Novosti.-History:...
on 14 August.
Opposing the decentralisation stance taken in the treaty, Pavlov was one of the key players in the establishment of the State Committee for the State of Emergency
Gang of Eight (Soviet Union)
The State Committee on the State of Emergency was a group of eight high-level officials within the Soviet government, the Communist party and the KGB who attempted a coup against Mikhail Gorbachev on 18 August 1991...
in August 1991. Pavlov's inclusion in the committee has been used to demonstrate its unwillingness to revert to pre-Gorbachev policies. The Committee's main goal was to ensure that the Soviet Union continued as a highly centralised union state. The Emergency Committee was led by Gennady Yanayev
Gennady Yanayev
Gennady Ivanovich Yanayev was a Soviet Russian politician and statesman whose career spanned the rules of Khrushchev, Brezhnev, Andropov and Chernenko, and culminated during the Gorbachev years. Yanayev was born in Perevoz, Gorky Oblast...
, Vice President of the Soviet Union, Interior Minister Boris Pugo, Defence Minister Dmitry Yazov
Dmitry Yazov
Dmitry Timofeyevich Yazov was the last Marshal of the Soviet Union to be appointed before the collapse of the Soviet Union . He was the only Marshal of the Soviet Union to be born in Siberia....
and other hardliners who were determined to take action to oust Gorbachev.
Vladimir Kryuchkov
Vladimir Kryuchkov
Vladimir Alexandrovich Kryuchkov was a former Soviet politician and Communist Party member, having been in the organization from 1944 until he was dismissed in 1991...
, the KGB Chairman, had told Pavlov of the coup on 18 August, one day before it began. He was asked by Kryuchkov to meet his co-plotters at the Moscow Kremlin
Moscow Kremlin
The Moscow Kremlin , sometimes referred to as simply The Kremlin, is a historic fortified complex at the heart of Moscow, overlooking the Moskva River , Saint Basil's Cathedral and Red Square and the Alexander Garden...
, where on 19 August, he and his co-conspirators appeared on live television and told the Soviet people
Soviet people
Soviet people or Soviet nation was an umbrella demonym for the population of the Soviet Union. Initially used as a nonspecific reference to the Soviet population, it was eventually declared to be a "new historical, social and international unity of people".-Nationality politics in early Soviet...
that Gorbachev was indisposed. As the day wore on it soon became apparent that Pavlov had been drinking since he issued several contradictory orders and repeated himself. In retrospect he admitted that he had been drinking with his son the day before. On the same day, his fellow plotters decided to depose Pavlov, sending him to his dacha
Dacha
Dacha is a Russian word for seasonal or year-round second homes often located in the exurbs of Soviet and post-Soviet cities. Cottages or shacks serving as family's main or only home are not considered dachas, although many purpose-built dachas are recently being converted for year-round residence...
where his wife took care of him. As with all the others, Pavlov was arrested following the collapse of the coup. Shortly after Pavlov was hospitalised with hypertension whilst remaining in custody. He was released on bail in January 1993 and granted amnesty by the Russian State Duma
State Duma
The State Duma , common abbreviation: Госду́ма ) in the Russian Federation is the lower house of the Federal Assembly of Russia , the upper house being the Federation Council of Russia. The Duma headquarters is located in central Moscow, a few steps from Manege Square. Its members are referred to...
in 1994.
Later life and death
After his release from custody, Pavlov became a director of the commercial bank Chasprombank between 1994 and 1995. He resigned at the request of the bank's Board of Directors who informed him that they had decided "to provide him an indefinite leave of absence." In February 1996, shortly after his resignation, the bank's license was revoked for violating the banking laws set up by the Central Bank of Russia. Pavlov then worked as an advisor to Promstroibank between 1996 and 1997, and in 1998 also became a Vice President of the American firm Vusiness Management Systems. He worked both as Vice President of both the Free Economic SocietyFree Economic Society
Free Economic Society for the Encouragement of Agriculture and Husbandry was Russia's first learned society which formally did not depend on the government and as such came to be regarded as a bulwark of Russian liberalism.-18th century:...
and the International Academy of Management, and later headed a department of the International Union of Economists. Pavlov died on 30 March 2003, and was buried on 2 April at Pyatnickoe cemetery.