I met him in Moscow in 1993, when he was an up-and-coming
big Russian businessman. He had bought the vast machine-building company
Uralmash in Yekaterinburg cheaply in a voucher auction and would soon buy a
similar Soviet giant, Izhorsky Zavod in St Petersburg. He successfully turned
around their production, focusing on oil-drilling rigs for the reviving Russian
oil companies, notably Yukos. He lived in Moscow and built an office for
himself that looked like one of his factories in Arbat in central Moscow.
But Kakha was different from all the other big Russian
businessmen. He was calmer and wiser. He loved ideas and figured out how things
really functioned, telling well-researched stories about how absurdly the state
worked. Kakha knew everybody in the Moscow elite, and he was a fixture in the
economic policy discussion throughout the 1990s. Needless to say, he was a
convinced libertarian, but he stayed out of politics in spite of his strong
views. He stuck to his Georgian roots and took his large family with him to
Moscow, but they all lived in a large house outside the city perimeters because
they did not have Moscow residence permits. His single drawback was that he was
quite stingy. He tended to complain how salaries rose excessively, and his
collaborators were often bought over by other businessmen who paid better.
After the Rose Revolution in Georgia in 2003, Kakha linked
up with President Mikheil Saakashvili and moved to Georgia. He became the chief
architect of the very successful Georgian economic reforms, first as minister
of economy in 2004 and then as minister of economic reforms until 2008. Here,
Kakha’s Moscow discussions and can-do attitude came to fruition. In one area
after the other, he saw what was needed. With his supreme and well-deserved
self-confidence he did exactly that. One of his great achievements was to sack
all the 6,000 thoroughly corrupt traffic police at once, building up a new
corps. Nobody but Kakha would dare to do that and succeed. Thanks to Saakashvili and Kakha’s endeavors, the previously thoroughly corrupt Georgia
became the least corrupt country by far in the former Soviet Union and it is
the most successful economic reform. When moving to Georgia, he could no longer
hold on to his large Russian corporation but was forced to sell his OMZ cheaply
to Gazprom. Kakha claimed that the price was less than half of a decent market
price.
From 2009, Kakha devoted himself to a new old passion,
higher education. He founded the Knowledge Fund and the Free University of
Tbilisi and put more than $55 million of his own money into higher education,
drawing on his own background as a Ph.D. in biology from Moscow State
University and his early life as a researcher. He traveled the world to figure
out the best and most innovative form of higher education. Recently, however,
the new Georgian government had caused him so much trouble that he was about to
move from Tbilisi to Miami, Florida.
After the ouster of President Viktor Yanukovych on Feb. 22, he engaged
with the new Ukrainian government as an economic advisor. We worked quite
intensively together with him in an Economic Advisory Council with Professor
Daron Acemoglu, Oleh Havrylyshyn and Basil Kalymon. Kakha combined his trademark preference for simple, radical measures and great personal wisdom. Saakashvili has stated that Prime Minister Arseniy Yatsenyuk asked him to
join his cabinet of ministers the very day when he died.
Last May, my Peterson colleague Simeon Djankov and I
organized a conference in Budapest on the lessons from a quarter of a century
of post-communist transition. Among our paper authors were the great reformers
Leszek Balcerowicz, Vaclav Klaus, Ivan Miklos and Mart Laar, but also Kakha and
Mikheil Saakashvili, who delivered an excellent paper on what they achieved in
Georgia. One of Kakha’s memorable quotes is “We are going to sell everything
apart from our morals.” The book came out just before he died.
One of the greatest reformers in Eastern Europe has passed
away. The world has lost a wise and good man with a wonderful sense of humor.
We shall all miss him. God bless him!
Anders Aslund is senior fellow with the Peterson Institute for International
Economics in Washington, D.C.
Editor’s Note: Here is the Wikipedia entry on Kakha Bendukidze.
