Russia Begins Mass Voucher Privatization: 148 Million Citizens Given Certificates Worth 'Two Volga Cars' That Become Worthless

Russia launched the world’s largest privatization program, distributing vouchers worth 10,000 rubles each to approximately 148 million citizens, enabling the privatization of over 15,000 medium and large enterprises. The program was designed and implemented by Anatoly Chubais, chairman of the State Committee for State Property Management, who later admitted in a 2010 TV interview that ‘privatization in Russia up to 1997 was never an economic process… It pursued the main goal, which was to stop Communism.’ Citizens could purchase these vouchers for just 25 rubles (a paltry sum) and were promised by government officials that each voucher would eventually be worth the equivalent of two Volga cars. In reality, most Russians desperate to survive the economic collapse sold their vouchers for a pair of jeans, some vodka, or small amounts of cash to speculators and insiders with political connections. The young economists surrounding Chubais deliberately prioritized speed over quality, believing rapid privatization would create irreversible political support for capitalism regardless of how poorly it was implemented. Contrary to the government’s expectations of broad-based ownership, insiders and future oligarchs acquired control over most assets through rigged auctions and insider dealing. The voucher privatization facilitated the transfer of Russia’s national wealth—built over 70 years of Soviet industrialization—to a small group of well-connected businessmen who would become known as the ‘oligarchs.’ Some citizens managed to exchange vouchers for Gazprom shares, but the vast majority lost what was supposed to be their stake in the new Russian economy. By mid-decade, privatized enterprises accounted for about 70% of Russia’s industrial output, but ownership was concentrated in the hands of a few dozen oligarchs while ordinary Russians faced unemployment, collapsing living standards, and the loss of Soviet-era social services.