Nemtsov, Boris Ivanovich

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NEMTSOV, BORIS IVANOVICH

(b. 1959), prominent liberal politician and leader of the Union of Right Forces.

Born in Sochi, Boris Ivanovich Nemtsov received a doctorate in physics in 1990. From 1990 to 1993 he was a member of the Congress of People's Deputies, serving on the Council for Legislative Affairs. In 1991 President Boris Yeltsin made him the governor of Nizhny Novgorod.

Nemtsov quickly moved to transform the province into a cutting-edge experiment in free-market economics. Obtaining a license to open a business in post-communist Russia plunged would-be entrepreneurs into a nightmare of bureaucratic corruption. Nemtsov made it possible to register new businesses by mail, and allowed the project to go forward if the petitioner received no answer within a reasonable amount of time. Equally innovative in agricultural affairs, Nemtsov enabled members of collective farms to acquire individual plots, and he introduced tax breaks for struggling businesses. To deal with the inefficient Soviet practice whereby industrial enterprises had to provide housing and other social services for employees, the new governor encouraged companies to raise wages instead so that their workers could afford to pay for rent and utilities. These policies and Nemtsov himself proved immensely popular, and he was elected governor outright in 1995, receiving 60 percent of the vote. Nemtsov was so popular, in fact, that the Yeltsin camp of reformers briefly considered running him for president in 1996 against the communist Gennady Zyuganov. Nothing came of this, but in 1997, after Yeltsin's reelection, Nemtsov reluctantly accepted the office of first deputy prime minister.

In Moscow Nemtsov and his colleagues launched a program of economic "shock therapy." The new deputy minister was charged with making bidding for government contracts more open and competitive, forcing railroads and electricity suppliers to cut their prices, reducing household utility rates by 30 percent, and overhauling the Pension and Securities Insurance Fund. Little wonder Nemtsov called his job "politically suicidal" (Aron, 2000, p. 367).

Nemtsov began by making all government contracts valued at more than 900 million rubles, including military contracts, subject to competitive bidding. He then plunged into the state's sale of 25 percent of Svyazinvest, the national telecommunications enterprise. Nemtsov publicly declared that the sale would be a national test of the government's ability to take on the notorious "oligarchs" who had looted many of Russia's assets in the years after communism.

The losers in the bidding for Svyazinvest used their media outlets to open a blistering campaign against the government, but more serious was a sharp drop in global oil prices, a vital source of government income. Simultaneously a financial crisis that had begun in Asia spread to Russia, causing investors to flee from emerging market economies. By the spring of 1998 Russia was on the verge of economic collapse, and in March Yeltsin dismissed his entire cabinet, including Nemtsov. The following year Nemtsov was elected to the Duma of the Russian Federation.

See also: bureaucracy, economic; kiriyenko, sergeivladilenovich; privatization; shock therapy; yeltsin, boris nikolayevich