Valentin Sergeyevich Pavlov (russian: Валéнтин Серге́евич Па́влов; 27 September 1937 – 30 March 2003) was a
Soviet
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
official who became a
Russia
Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-eight ...
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
Leonid Ilyich Brezhnev; uk, links= no, Леонід Ілліч Брежнєв, . (19 December 1906– 10 November 1982) was a Soviet politician who served as General Secretary of the Communist Party of the Soviet Union between 1964 and 198 ...
, he became head of the Financial Department of the
State Planning Committee
The State Planning Committee, commonly known as Gosplan ( rus, Госплан, , ɡosˈpɫan),
was the agency responsible for central economic planning in the Soviet Union. Established in 1921 and remaining in existence until the dissolution of ...
. Pavlov was appointed to the post of Chairman of the
State Committee on Prices
Goskomtsen (russian: Госкомцен) was the State Committee on Prices in the former Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eura ...
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
The Premier of the Soviet Union (russian: Глава Правительства СССР) was the head of government of the Union of Soviet Socialist Republics (USSR). The office had four different names throughout its existence: Chairman of the ...
.
As Prime Minister 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 called for a transfer of power from the President of the Soviet Union to the Prime Minister and the Cabinet of Ministers. When that failed, he joined a plot to oust Gorbachev. In August, he participated in the
1991 Soviet coup d'état attempt
The 1991 Soviet coup d'état attempt, also known as the August Coup,, "August Putsch". was a failed attempt by hardliners of the Soviet Union's Communist Party to forcibly seize control of the country from Mikhail Gorbachev, who was Soviet ...
, 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 is seen by some as the last legitimate Soviet head of government since his successor,
Ivan Silayev, was appointed by the
Russian Soviet Federative Socialist Republic in breach of what his opponents consider to be Soviet constitutional principles.
Early life and career
Born in Moscow on 27 September 1937, Pavlov graduated from the
Moscow Finance Institute in 1958. He started his ''
nomenklatura'' (bureaucratic) career as a government economist; he started working for as an official of the Ministry of Finance in 1959, and became a member of the
Communist Party of the Soviet Union
"Hymn of the Bolshevik Party"
, headquarters = 4 Staraya Square, Moscow
, general_secretary = Vladimir Lenin (first)Mikhail Gorbachev (last)
, founded =
, banned =
, founder = Vladimir Lenin
, newspaper ...
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 Committee
The State Planning Committee, commonly known as Gosplan ( rus, Госплан, , ɡosˈpɫan),
was the agency responsible for central economic planning in the Soviet Union. Established in 1921 and remaining in existence until the dissolution of ...
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
Goskomtsen (russian: Госкомцен) was the State Committee on Prices in the former Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eura ...
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
The Supreme Soviet of the Union of Soviet Socialist Republics ( rus, Верховный Совет Союза Советских Социалистических Республик, r=Verkhovnyy Sovet Soyuza Sovetskikh Sotsialisticheskikh Respubl ...
. As Minister of Finance, Pavlov was supportive of the
marketisation of the
Soviet economy
The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy wa ...
, 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
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
on the
Soviet black market
The second economy in the Soviet Union was black market or the informal sector in the economy of the Soviet Union. The term was suggested by Gregory Grossman in his seminal article, "The Second Economy of the USSR" (1977). . 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
A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store of v ...
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
A deputy prime minister or vice prime minister is, in some countries, a government minister who can take the position of acting prime minister when the prime minister is temporarily absent. The position is often likened to that of a vice president, ...
. 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 Ryzhkov following a heart attack in December 1990, Pavlov was elected to the new position of Prime Minister as a compromise candidate, and became chairman of the Cabinet of Ministers. He and his two
First Deputy Prime Ministers,
Vladimir Velichko and
Vitaly Doguzhiev, were approved and elected by the
Supreme Soviet of the Soviet Union
The Supreme Soviet of the Union of Soviet Socialist Republics ( rus, Верховный Совет Союза Советских Социалистических Республик, r=Verkhovnyy Sovet Soyuza Sovetskikh Sotsialisticheskikh Respubl ...
on 14 January, with 279 votes in favour, 75 against, and 66 abstained, while approval for the majority of his ministers followed within a few weeks. Pavlov was considered a
conservative
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization ...
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.
1991 monetary reform
The
Soviet monetary reform of 1991, commonly referred to as the ''Pavlov reform'', was the last
monetary reform prior to the
dissolution of the Soviet Union, despite having made a speech 2 weeks before, saying there would be no such reforms. 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
sales tax
A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a govern ...
of 5%. Prices of
consumer goods
A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, but ...
, 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 to 25 January to exchange their old 50
rouble
The ruble (American English) or rouble (Commonwealth English) (; rus, рубль, p=rublʲ) is the currency unit of Belarus and Russia. Historically, it was the currency of the Russian Empire and of the Soviet Union.
, currencies named ''rub ...
and 100 rouble
banknote
A banknote—also called a bill ( North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issue ...
s for the new
currency. Exchange could be postponed, but only through specialized 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
The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
. In the aftermath of the reform, inflation exceeded the 50 percent mark every month.
Coup attempt
In June 1991, Pavlov, who felt that the office of Prime Minister had limited power, 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 Laws
War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regular o ...
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
A state of emergency is a situation in which a government is empowered to be able to put through policies that it would normally not be permitted to do, for the safety and protection of its citizens. A government can declare such a state du ...
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, (specifically, he wanted the Cabinet to have the right to issue decrees on economic affairs without the approval of the president), even creating a five-point resolution to that end for the legislature to consider. Pavlov received support for the idea from the
Soyuz Soyuz is a transliteration of the Cyrillic text Союз ( Russian and Ukrainian, 'Union'). It can refer to any union, such as a trade union (''profsoyuz'') or the Union of Soviet Socialist Republics (Сою́з Сове́тских Социали� ...
parliamentary faction leader
Viktor Alksnis
Viktor Imantovich Alksnis (russian: italic=yes, Виктор Имантович Алкснис, lv, Viktors Alksnis; born 21 June 1950) is a Russian politician and former Soviet Air Force colonel of Latvian descent. He is the chairman of Russi ...
, who called for an immediate vote on the issue. However, several members of Soyuz also demanded a statement by the
KGB
The KGB (russian: links=no, lit=Committee for State Security, Комитет государственной безопасности (КГБ), a=ru-KGB.ogg, p=kəmʲɪˈtʲet ɡəsʊˈdarstvʲɪn(ː)əj bʲɪzɐˈpasnəsʲtʲɪ, Komitet gosud ...
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 Fincher Hough (April 26, 1935 – May 24, 2020) was an American political scientist. Hough was the James B. Duke Professor of Political Science at Duke University and his research focused on domestic American politics, the Soviet Union, the ...
, Pavlov's program "was not directed as much at Gorbachev as at
Yeltsin">orisYeltsin".
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 Ivanovich Lukyanov (russian: Анатолий Иванович Лукьянов, 7 May 1930 – 9 January 2019) was a Russian Communist politician who was the Chairman of the Supreme Soviet of the USSR between 15 March 1990 and 4 Se ...
, 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
Anatoly Chernyaev
Anatoly Sergeevich Chernyaev (May 26, 1921 – March 12, 2017) was a Russian historian and writer who was a principal foreign-policy advisor to General Secretary Mikhail Gorbachev during the final days of the Soviet Union.
After fighting in World ...
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, on July 29, 1991, promising Yeltsin and
Nursultan Nazarbayev
Nursultan Abishuly Nazarbayev ( kk, Нұрсұлтан Әбішұлы Назарбаев, Nūrsūltan Äbişūlı Nazarbaev, ; born 6 July 1940) is a Kazakh politician and military officer who served as the first President of Kazakhstan, in off ...
that Pavlov, along with
Dmitry Yazov, Minister of Defence, and
Vladimir Kryuchkov
Vladimir Alexandrovich Kryuchkov (russian: Влади́мир Алекса́ндрович Крючко́в, link=no; 29 February 1924 – 23 November 2007) was a Soviet lawyer, diplomat, and head of the KGB, member of the Politburo of the ...
, the
Chairman of the KGB, would be removed from their posts following the signing and ratification of the
New Union Treaty
The New Union Treaty (russian: link=no, Новый союзный договор, Novyy soyuznyy dogovor) was a draft treaty that would have replaced the 1922 Treaty on the Creation of the USSR to salvage and reform the Soviet Union. A ceremony ...
, with Nazarbayev to be appointed in Pavlov's place as Prime Minister.
August Coup
The
1991 Soviet coup d'état attempt
The 1991 Soviet coup d'état attempt, also known as the August Coup,, "August Putsch". was a failed attempt by hardliners of the Soviet Union's Communist Party to forcibly seize control of the country from Mikhail Gorbachev, who was Soviet ...
, commonly referred to as the ''August Coup'', was prompted by the slow disintegration of the Soviet Union that resulted from Gorbachev's reform policy and Yeltsin's drive towards an independent Russia. The
New Union Treaty
The New Union Treaty (russian: link=no, Новый союзный договор, Novyy soyuznyy dogovor) was a draft treaty that would have replaced the 1922 Treaty on the Creation of the USSR to salvage and reform the Soviet Union. A ceremony ...
being prepared called for further decentralisation of power to the
republics
A republic () is a "state in which power rests with the people or their representatives; specifically a state without a monarchy" and also a "government, or system of government, of such a state." Previously, especially in the 17th and 18th c ...
, 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
Gennady Ivanovich Yanayev (russian: Генна́дий Ива́нович Яна́ев, link=no; 26 August 193724 September 2010) was a Soviet politician who served as the first and only vice president of the Soviet Union. Yanayev's politica ...
,
Vice President of the Soviet Union
The Constitution of the Soviet Union recognised the Presidium of the Supreme Soviet and the earlier Central Executive Committee (CEC) of the Congress of Soviets as the highest organs of state authority in the Union of Soviet Socialist Republics ( ...
,
Interior Minister Boris Pugo
Boris Karlovich Pugo, OAN ( lv, Boriss Pugo, russian: Борис Карлович Пуго; 19 February 1937 – 22 August 1991) was a Soviet Communist politician of Latvian origin.
Biography Early life and education
Pugo was born in Kalinin, ...
,
Defence Minister Dmitry Yazov and other hardliners who were determined to take action to oust Gorbachev.
Vladimir Kryuchkov
Vladimir Alexandrovich Kryuchkov (russian: Влади́мир Алекса́ндрович Крючко́в, link=no; 29 February 1924 – 23 November 2007) was a Soviet lawyer, diplomat, and head of the KGB, member of the Politburo of the ...
, 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 recognizance not to leave in January 1993 and granted amnesty by the Russian
State Duma
The State Duma (russian: Госуда́рственная ду́ма, r=Gosudárstvennaja dúma), commonly abbreviated in Russian as Gosduma ( rus, Госду́ма), is the lower house of the Federal Assembly of Russia, while the upper house ...
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
The Central Bank of the Russian Federation (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...
. Pavlov then worked as an advisor to
Promstroibank between 1996 and 1997, and in 1998 also became a vice president of the American firm Business Management Systems. He worked both as vice president of both the
Free Economic Society and the International Academy of Management and later headed a department of the
International Union of Economists.
Pavlov died in Moscow on 30 March 2003, and was buried on 2 April at
Pyatnitskoye Cemetery.
Decorations
*
Order of the Red Banner of Labour
The Order of the Red Banner of Labour (russian: Орден Трудового Красного Знамени, translit=Orden Trudovogo Krasnogo Znameni) was an order of the Soviet Union established to honour great deeds and services to th ...
*
Order of the Badge of Honour
The Order of the Badge of Honour (russian: орден «Знак Почёта», orden "Znak Pochyota") was a civilian award of the Soviet Union.
It was established on 25 November 1935, and was conferred on citizens of the USSR for outstanding ...
Personal life
In 2000 with support from
Viktor Gerashchenko, Valentin Pavlov's son Sergey Pavlov (russian: Сергей Павлов) was a banker at East West United Bank, Luxembourg.
Notes
Bibliography
*
*
*
*
*
*
External links
Obituary in ''The Washington Post'' archives (requires log-in)
{{DEFAULTSORT:Pavlov, Valentin
1937 births
2003 deaths
Politicians from Moscow
Russian communists
Anti-revisionists
Soviet Ministers of Finance
Heads of government of the Soviet Union
People's commissars and ministers of the Soviet Union
Expelled members of the Communist Party of the Soviet Union
State Committee on the State of Emergency members
Burials at Pyatnitskoye Cemetery
Recipients of the Order of Lenin
Financial University under the Government of the Russian Federation alumni
Businesspeople from Moscow