Boris Fyodorov: Politician and businessman who fought against corruption in Russia
Wednesday 25 February 2009
With his tall frame and thick-rimmed glasses, Boris Fyodorov looked every part the Russian bureaucrat. He twice served as finance minister, went on to found an investment bank, and was one of the greatest reformers to guide his troubled country through the death of the Soviet Union. A fierce individualist, Mr Fyodorov held a strong belief in the power of the market economy.
He was also something of an outsider, failing to develop the political skills or alliances needed to forge a government career in modern day Russia. After a career focused on transforming the Soviet economy into a market machine, Fyodorov died quietly in London, having retreated from public life to devote himself to private equity, growing plants at his summer home outside Moscow, and writing books on everything from finance to Russian aristocrats.
Born into a modest background in Moscow in 1958, Fyodorov did not attend the élite schools that would later turn out the bulk of Russia's reformers. It was a keen intellect and rare knowledge of Western economic practice that allowed him to travel from the unknown Moscow Financial Institute to the halls of power.
Fyodorov launched his career at Gosbank, the Soviet Union's Central Bank, where he advised the Politburo on the economic reforms that would help bring about the fall of the crumbling Soviet system. He liked to tell friends that it was at this point, reading the Financial Times every day, that he gained the knowledge of English and Western practice that would guide him throughout his career. "He understood how markets and the world economy functioned before anybody else in Russia did," said Anders Aslund, the Swedish economist and Fyodorov's long-time friend.
In 1990, Mikhail Gorbachev appointed Fyodorov to head the finance ministry. There, he helped to develop the 500-day plan that sought to turn the Soviet economic system upside down, phasing out price controls and introducing the privatisation of industry in a move that would have sacrificed the empire's economic system for the sake of its political survival. First the plan's timetable and then its core fell apart as the Soviet Union disintegrated.
After the collapse, Fyodorov moved through the international institutions that aimed to guide Russia into the market system. He represented Russia at the World Bank in Washington D.C., and worked for the European Bank for Reconstruction and Development (EBRD) in Russia. Boris Yeltsin, as Russia's first president, brought him in as a deputy prime minister and also back to the finance ministry in 1993, but he resigned less than a year later after a cabinet reshuffle. He made one last go of it in 1998, returning to Yeltsin's cabinet as chief economic policy-maker and tax minister.
Yet, by then, Fyodorov already had another project well underway. In 1994, he joined Charles Ryan, an American and a fellow alumnus of the EBRD, in founding United Financial Group, one of Russia's first investment banks. The duo developed UFG into one of the country's most respected banks, and in 2003, at the start of Russia's oil-driven boom, they sold its brokerage and investment banking divisions to Deutsche Bank in a deal widely hailed as illustrating a return of Western confidence in Russia following the country's 1998 financial collapse. They sold the remainder of the bank to Deutsche two years later.
The deal enriched Fyodorov, but it was not just the money that drove him. A strong Russian patriot, Fyodorov believed in undertaking projects that would nurture Russia's attempts at developing a market economy.
He was distraught at the corruption that ravaged Russian society and a fierce critic of the privatisation auctions and loans-for-shares schemes of the early 1990s, which created the country's infamous oligarchs. In 2000, he joined the board of the state-run gas giant Gazprom, representing the minority shareholders, particularly foreign ones, who were left aghast at the firm's murkiness and lack of corporate governance. He waged a campaign against Gazprom's two-tier share scheme, in which different classes of shares were issued for domestic investors and for foreign ones, pushing down the firm's market value.
He also fought against corruption inside the company, an undertaking often seen as one of Russia's most dangerous. In early 2001 someone threw poisoned meat over the wall of his home outside Moscow, killing his beloved dog who had eaten it.
Towards the end of his life, Fyodorov understood that not only was politics not his strong suit, but there was no place for him in Vladimir Putin's Russia. "Boris was a practical man who wanted to improve society through his own acts," Aslund said. "He saw nothing could be done [in politics], so why bother?"
Away from active politics, Fyodorov published two volumes on Pyotr Stolypin, a prime minister under Russia's last tsar, Nicholas II. Another book, A Chronicle of Destruction of Old Moscow 1990-2005, detailed 650 historical buildings that have disappeared from the nation's capital since the end of the Soviet Union. A Russian-English finance dictionary he wrote remains a standard tome.
He spent a lot of time in London nd it was there that he collapsed from a stroke, lying in a coma for several weeks before his death. He is survived by his long-time wife, Olga, and by their two children. He was buried in Moscow.
Boris Fyodorov, politician, businessman: born Moscow 13 February 1958; Russian Finance Minister: 1990, 1993-94; deputy Prime Minister 1992-94; chairman, United Financial Group 1994-98; married (two children); died London 20 November 2008.
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