Open Letter to Boris Yeltsin

Abstract: This page contains an open letter to Boris Yeltsin. Editing by Quintessence has been largely cosmetic - the text remains a reflection of the original letter written by Michael Darby, which was accompanied by the following note:

My friends,

I have sent this letter to two English-language newspapers in Russia. Please feel free to use all or part of this letter as you wish. If you agree with the letter, please send to everyone you know, anywhere in the world, who might be interested, especially in the media. If you have any contacts in Russia, please send to them in the hope that they might translate the document into Russian and pass to media and politicians. Let us not delay, because there is a real danger that Russia might turn in the direction of dirigism, which could set back the cause of liberty by a decade.

Kind regards

Michael Darby

Freemarketeers of Australia
PO Box 6105, Woodridge East, Queensland, Australia
Phone: +61 414 666 226. Fax: +61 2 9922 5848

28 August 1998

President Boris Yeltsin
President of the Russian Federation

Dear Mr. President,

From all around the world you will be receiving advice. Most of that advice will attempt to persuade you to impose some or other control or restriction upon the Russian people. All such advice is wrong, dangerous to Russia, and potentially fatal to your Presidency.

Based on the lessons of history, particularly the economic boom which followed the postwar decontrol of the economy of (Western) Germany, I urge you to remain in office and to trust the market place.

I respectfully tender the following six-point plan to end the crisis and consolidate your presidency.

With all good wishes for the future of your nation,

Michael Darby
Freemarketeers of Australia


1.   Finance

  • Accept and announce that the recent decline in the exchange value of the ruble does have advantages for the Russian Federation, especially in the export of minerals, the improvement in domestic competitiveness of local manufacturers, and in appeal to tourists.
  • Announce that currency exchanges will re-open on Monday 31 August, and that currency and stock exchanges will never again be closed by the Government. This measure will remove the element of fear. Announce that you will be in person at the door of the currency Exchange when it opens to exchange all your personal stock of dollars for rubles at the market rate. Your loyal Ministers will insist on following your example.
  • Announce that printing of rubles has ceased, and that future printing of currency will be limited to replacement of old and destroyed notes. This measure will immediately halt the decline in the value of the ruble, stimulate capital inflow, and prompt a steady recovery of the exchange rate.
2.   Privatization
  • Announce a date of auction to the highest bidder of all Russia's space research assets.
  • Announce that all other State-owned commercial assets will be swiftly denationalised, by distribution of shares in each asset among the citizens of the Russian Federation. Where an asset is wholly contained within a State, distribution of shares could be equally distributed among each citizen within that State. This measure will restore the confidence of the people in the future of Russia, and in your Presidency. Moreover, this measure will take off the pressure for massive increases in social welfare. Commercial assets for denationalisation include but are not limited to: telephone and cellular phones systems, factories; schools; universities; mines; dams; broadcasting stations; nuclear reactors and other power stations; electricity reticulation; all buildings not directly related to the functions of government; airlines and airports; railways, tramways, buses and trolley-buses; dams; oil and gas wells, refineries, storage and pipelines; water and sewerage; sporting facilities; ports and docks; banks; merchant shipping; forests; agricultural assets not already in private hands. Shares in these various assets will become defacto subsidiary currencies, which will supplement but not threaten the rouble. Distribution of share capital in State-owned industries is subject to the principle that employees to whom unpaid wages are owed have a prior claim upon the share capital of their employer corporation.
3.   Customs, Border control
  • Replace all visa requirements for all visitors with a straight visa fee of US$100 per month, payable on arrival, and extendable. This measure will bring an immediate spectacular increase in the availability of foreign currency; from tourists, from investors, and from commercial buyers of Russian Federation products. Present visa requirements are a terrible impediment to the economy. With the abolition of visa requirements, embassies and consulates around the world may be closed or downgraded. In many countries the interests of the Russian Federation may be well-served by honorary chargés-d'affaires. The reduction in the foreign profile of the Russian Federation will permit the sale of many buildings and the saving of very large amounts of foreign currency.
  • Abolish all import duties. The devaluation of the ruble removes any need for protection of Russian industry. Persistence with import duties increases the cost of many inputs of industry, and impairs the purchasing power of Russians.
4.   Foreign Affairs
  • Accept a large fee from Japan for withdrawing from the Kuril Islands.
  • Accept a large fee from the USA for demilitarising Kaliningrad.
  • Accept a large fee from Finland and its allies for demilitarising Karelia.
5.   Taxation
  • Abolish permanently all taxation on income derived from savings.
6.   General
  • Relax, and trust the ingenuity of the Russian people and the subtlety of the market place to overcome all problems and build the economic strength of the Russian Federation.
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