Gorbachev’s Resignation 30 Years Ago Marked the End of USSR

Mikhail Gorbachev, the final leader of the Soviet Union, signs the decree relinquishing control of nuclear weapons to Boris Yeltsin at the Kremlin in Moscow, Wednesday, Dec. 25, 1991. (AP)
Mikhail Gorbachev, the final leader of the Soviet Union, signs the decree relinquishing control of nuclear weapons to Boris Yeltsin at the Kremlin in Moscow, Wednesday, Dec. 25, 1991. (AP)
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Gorbachev’s Resignation 30 Years Ago Marked the End of USSR

Mikhail Gorbachev, the final leader of the Soviet Union, signs the decree relinquishing control of nuclear weapons to Boris Yeltsin at the Kremlin in Moscow, Wednesday, Dec. 25, 1991. (AP)
Mikhail Gorbachev, the final leader of the Soviet Union, signs the decree relinquishing control of nuclear weapons to Boris Yeltsin at the Kremlin in Moscow, Wednesday, Dec. 25, 1991. (AP)

People strolling across Moscow's snowy Red Square on the evening of Dec. 25, 1991 were surprised to witness one of the 20th century's most pivotal moments - the Soviet red flag over the Kremlin pulled down and replaced with the Russian Federation's tricolor.

Just minutes earlier, Soviet President Mikhail Gorbachev announced his resignation in a live televised address to the nation, concluding 74 years of Soviet history.

In his memoirs, Gorbachev, now 90, bitterly lamented his failure to prevent the USSR's demise, an event that upset the world's balance of power and sowed the seeds of an ongoing tug-of-war between Russia and neighboring Ukraine.

"I still regret that I failed to bring the ship under my command to calm waters, failed to complete reforming the country," Gorbachev wrote.

Political experts argue to this day whether he could have held onto his position and saved the USSR. Some charge that Gorbachev, who came to power in 1985, could have prevented the Soviet breakup if he had moved more resolutely to modernize the anemic state-controlled economy while keeping tighter controls on the political system.

"The collapse of the Soviet Union was one of those occasions in history that are believed to be unthinkable until they become inevitable," Dmitri Trenin, the director of the Moscow Carnegie Center, told The Associated Press. "The Soviet Union, whatever its long-term chances were, was not destined to go down when it did."

By the fall of 1991, however, deepening economic woes and secessionist bids by Soviet republics had made the collapse all but certain. A failed August 1991 coup by the Communist old guard provided a major catalyst, dramatically eroding Gorbachev's authority and encouraging more Soviet republics to seek independence.

While Gorbachev desperately tried to negotiate a new "union treaty" between the republics to preserve the USSR, he faced stiff resistance from his arch-rival, Russian Federation leader Boris Yeltsin, who was eager to take over the Kremlin and had backing from other independent-minded heads of Soviet republics.

On Dec. 8, the leaders of Russia, Ukraine and Belarus met in a hunting lodge, declaring the USSR dead and announcing the creation of the Commonwealth of Independent States. Two weeks later, eight other Soviet republics joined the newly formed alliance, handing Gorbachev a stark choice: step down or try to avert the country's breakup by force.

The Soviet leader analyzed the tough dilemma in his memoirs, noting that an attempt to order the arrest of the republics' leaders could have resulted in a bloodbath amid split loyalties in the military and law enforcement agencies.

"If I had decided to rely on some part of the armed structures, it would have inevitably triggered an acute political conflict fraught with blood and far-reaching negative consequences," Gorbachev wrote. "I couldn't do that: I would have stopped being myself."

What would have happened had Gorbachev resorted to force is hard to imagine in retrospect, the Carnegie Center's Trenin observed..

"It might have unleashed bloody events in Moscow and across Russia, maybe across the Soviet Union, or it might have consolidated some things," he said. "Had he decided to go down that route...there would have been blood on his hands. He would have had to turn into a sort of a dictator, because that would have...done away with his most important element of legacy; that is, not using force in a massive way."

When the leaders of Russia, Belarus and Ukraine declared the Soviet Union defunct, they didn't pay much attention to what would happen to the 4-million-strong Soviet military and its massive nuclear arsenals.

After the Soviet collapse, it took years of US-led diplomatic efforts to persuade Ukraine, Belarus and Kazakhstan to hand over to Russia the Soviet nuclear weapons left on their territories - a process finally completed in 1996.

"The leaders of the republics that announced the end of the Soviet Union in December 1991 did not think through all the consequences of what they were doing," Gorbachev´s aide, Pavel Palazhchenko, told the AP.

Russian President Vladimir Putin, whose two decades at the helm is longer than Gorbachev and Yeltsin's tenures combined, has famously described the Soviet collapse as "the greatest geopolitical catastrophe of the 20th century."

"The breakup of the Soviet Union was the collapse of a historic Russia," Putin said in a documentary that aired this month on Russian state television. "We lost 40% of the territory, production capacities and population. We became a different country. What had been built over a millennium was lost to a large extent."

The Kremlin moved to redraw the post-Soviet borders in 2014, responding to the ouster of Ukraine's former Moscow-friendly leader by annexing the Ukrainian Crimean Peninsula and throwing its weight behind separatist rebels in its neighbor's east.

More than seven years of fighting in Ukraine's eastern industrial heartland has killed over 14,000 people. Tensions flared up in recent weeks over a Russian troop buildup near Ukraine that fueled Western fears of an invasion.

Moscow has denied plans for an offensive and sternly urged the US and its allies to provide a binding pledge that NATO wouldn't expand to Ukraine or deploy weapons there - a demand rejected by the West.

Putin and his officials countered the Western argument that Russia doesn't have a say in the alliance's expansion by emphasizing the country's right to protect its core security interests.

"Russia has never pretended to have the right of vote to make decisions for other countries," Konstantin Kosachev, a deputy speaker of the upper house of Russian parliament, told the AP. "But we have an absolute right of vote to ensure our own interests and security, and to offer our vision of a security environment in the nearby regions."

While Putin has repeatedly denied intentions to rebuild the USSR, he has described Russians and Ukrainians as "one people" over angry protests from Kyiv and charged that Ukraine unfairly inherited historic parts of Russia in the Soviet demise.

The Russian leader further toughened his rhetoric Thursday amid spiraling tensions with the West, blaming Soviet founder Vladimir Lenin for handing Russian lands to Ukraine to "create a country that had never existed before."



To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)

Cash is the lifeblood of the Gaza Strip’s shattered economy, and like all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply.

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses and commissions on those transactions have soared to about 40%.

"The people are crying blood because of this," said Ayman al-Dahdouh, a school director living in Gaza City. "It’s suffocating us, starving us."

At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods.

The cash that is available has even lost some of its luster. Palestinians use the Israeli currency, the shekel, for most transactions. Yet with Israel no longer resupplying the territory with newly printed bank notes, merchants are increasingly reluctant to accept frayed bills.

Gaza’s punishing cash crunch has several root causes, experts say.

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war. Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory. And rising fears about Gaza’s financial system prompted foreign businesses selling goods into the territory to demand cash payments.

As Gaza’s money supply dwindled and civilians’ desperation mounted, cash brokers' commissions — around 5% at the start of the war — skyrocketed.

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills. Many brokers openly advertise their services, while others are more secretive. Some grocers and retailers have also begun exchanging cash for their customers.

"If I need $60, I need to transfer $100," said Mohammed Basheer al-Farra, who lives in southern Gaza after being displaced from Khan Younis. "This is the only way we can buy essentials, like flour and sugar. We lose nearly half of our money just to be able to spend it."

In 2024, inflation in Gaza surged by 230%, according to the World Bank. It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March.

Cash touches every aspect of life in Gaza

About 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is likely higher now. Those with jobs are mostly paid by direct deposits into their bank accounts.

But "when you want to buy vegetables, food, water, medication -- if you want to take transportation, or you need a blanket, or anything — you must use cash," al-Dahdouh said.

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another business they owned were ruined by the war.

"We had to sell everything just to get cash," said Ajjour, who sold her gold to buy flour and canned beans. The family of eight spends the equivalent of $12 every two days on flour; before the war, that cost less than $4.

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2.2 pounds), multiple people said; before the war, that cost less than $2.

Gasoline is about $25 a liter, or roughly $95 a gallon, when paying the lower, cash price.

Bills are worn and unusable

The bills in Gaza are tattered after 21 months of war.

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who lives in a tent camp in southern Gaza.

Small business owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them.

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare. Most civilians pay him with 20-shekel ($6) notes that are often in poor condition.

On a recent visit to the market, Ajjour transferred the shekel equivalent of around $100 to a cash broker and received around $50 in return. But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition.

"So the worth of your $50 is zero in the end," she said.

This problem has given rise to a new business in Gaza: money repair. It costs between 3 and 10 shekels ($1-$3) to mend old bank notes. But even cash repaired with tape or other means is sometimes rejected.

People are at the mercy of cash brokers

After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power.

"People are at their mercy," said Mahmoud Aqel, who has been displaced from his home in southern Gaza. "No one can stop them."

The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. "Nobody can physically monitor what’s happening," Alazzeh said.

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq. It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash.

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold.

Experts said it is unclear if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim.

The war has made it more difficult to determine who is behind all sorts of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank.

"It's a dark place now. You don't know who is bringing cigarettes into Gaza," he said, giving just one example. "It's like a mafia."

These same deep-pocketed traders are likely the ones running cash brokerages, and selling basic foodstuffs, he said. "They benefit by imposing these commissions," he said.

Once families run out of cash, they are forced to turn to humanitarian aid.

Al-Farra said that is what prompted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta.

"This is the only way I can feed my family," he said.