Putin Takes Over:
The Return of the Czar
It was not an auspicious beginning for the new prime minister. Having been the head of the FSB (the modern day KGB), Vladimir Putin certainly was aware of the problems confronting his country, but awareness of problems is not the same thing as coping with them. And Russia had problems. In August 1999, it was still reeling from the financial bloodletting of August 17, 1998, twelve months earlier. In the wake of the government default on its debt, most of the country’s larger private commercial banks had shut their doors—some, such as Togobank, forever. Millions of Russians lost their savings, including former president Mikhail Gorbachev and the director of the Marinsky Opera of St. Petersburg, Valery Gergiev.
For the Marinsky, this was nearly catastrophic. Gergiev had set aside $2 million in his bank to pay for the ensemble’s trip to China. Now the bank was closed and its money gone. Had Phillips Electronics of the Netherlands not come to the rescue with $1 million, the famed St. Petersburg ensemble would have been forced to cancel its tour. Others without such a fairy godcorporation to turn to were not so fortunate. Businesses closed down, staffs were fired, and the whole concept of a market economy was cursed.