12 years on, share schemes that promised high yields have come to nothing, writes Dan McLaughlin in Moscow
They called it the sale of the century, and president Boris Yeltsin wanted the world's largest country to buy, buy, buy.
But a decade on from the end of the first, chaotic phase in the biggest mass privatisation in history, few Russians have any idea what happened to the shares they bought in some of Russia's biggest firms, and even less idea how a handful of politically connected billionaire "oligarchs" ended up owning vast swathes of the nation's economy.
Mr Yeltsin's plan - as laid out in 1992 by a coterie of trail-blazing Russian capitalists - was simple: give the people vouchers to buy stakes in the nation's companies, and their grave suspicion of privatisation will be driven out by a desire for a piece of the action.
Some 144 million Russians duly received their vouchers, with a face value equivalent to about $25, and had to use them before July 1st, 1994. Before then, Russians could use their voucher to buy a stake in their own employer; bid for shares in firms that were sold at public auction; or invest in mutual funds that suddenly sprang up in the rambunctious early days of post-Soviet capitalism.
It heralded the biggest transfer of ownership rights in Russia since the Bolshevik Revolution of 1917, and rekindled an entrepreneurial instinct that had been suppressed, but not eradicated, by more than seven decades of communist rule.
As inflation sent prices soaring, millions of Russians flogged their vouchers for quick cash at myriad street-corner kiosks, and huge tranches changed hands on fledgling exchanges across the country; before long, Yeltsin's vouchers were the world's most heavily traded financial security.
Lyuda, a pensioner who declined to give her surname, said she sold shares and vouchers from a folding table on the pavement in the city centre.
"Everyone wanted shares, of all types, and they all expected dividends and so on. But I never saw a prospectus or company representative. We just bought and sold, made a little profit, and gave money to people - the mafia - to look out for us."
The champions of privatisation called it an unprecedented success. By July 1st, 1994, they said, 40 million Russians had become shareholders in the new market, 80 per cent of the country's small shops and other businesses had been privatised, along with most of its 28,000 large- and medium-sized state enterprises.
"When you consider that during the entire decade of the 1980s, there were only 8,000 state companies privatised in the whole world, and here they've done 20,000 in a year and a half - I'd say they've achieved beyond anyone's wildest expectations," Mr Roger Gale enthused a decade ago, when he was director of the International Finance Corporation. Most Russians however, feel they were badly bitten by the free-market beast.
"I collected all our family's vouchers, and went to one of these halls where lots of companies were up for sale," said Andrei Maslov, a postal worker in Moscow. "There was never much information about them, but I invested all our vouchers in a Moscow construction firm. That was the last I ever heard of them."
Moscow pensioner Mr Mikhail Chernyshev said the scheme quickly dispelled dreams of capitalist bounty: "Friends of mine invested their vouchers and the company just disappeared," he recalled. "So I just swapped mine for cash and forgot about it. It was all a fix anyway."
In a country where the average wage is less than $200 a month - and whose capital is home to more billionaires than any other city in the world - a sense of injustice is still rife.
The mastermind of privatisation, a ginger-haired St Petersburg economist called Anatoly Chubais, is widely loathed for his perceived arrogance and disregard for the welfare of ordinary Russians. He is nicknamed "Red Devil" here, where an untold number of well-fed ginger cats now go by the name of "Chubais" or "Voucher".
Mr Chubais and his team of financial tyros decided that Moscow's Bolshevik biscuit factory should be the first state enterprise offered to Russia's voucher-wielding public.
"The first stakeholders had little idea what was going on, and moved blindly," said Bolshevik president Mr Yakov Ioffe, of a sale that, like most others at the time, offered a large stake to the firm's managers as an incentive to support privatisation.
"Those first two years were heroic, you could say, because each shareholders' meeting was like a Hitchcock movie - people were told they were capitalists so they thought they had to have a Rolls Royce and a big cigar." French firm Danone now owns a controlling stake in Bolshevik, and there are less of the sharp practices from shareholders and the state that prevailed in the 1990s.
"I once had to pay a fine out of my own pocket because the grass outside the factory was deemed too high," said Mr Ioffe. "And it took me five years to win an appeal against a $2 million penalty from the tax authorities.
At a time when contract killings were rife, fines were the least of many Russian businessmen's worries. But ordinary people - having been ripped off in share and pyramid-scheme scams, and seen savings wiped out overnight in banking crises - showed them little sympathy.
Voucher privatisation was only the start of a series of flawed and deeply corrupt schemes that handed control of Russia's finest industrial assets to a select few.
After a decade of injustice, most Russians are now glad to see oil baron Mikhail Khodorkovsky - the nation's richest man - languishing in jail accused of tax evasion and privatisation fraud.
"Privatisation still does not look legitimate to the people or the men in power," said Carnegie Centre analyst Ms Lilia Shevtsova, "and many still want something done about its results." "The 'crown jewels' were privatised for 1 or 2 per cent of their real value. Russians will never forgive that."