Yeltsin: the problem, not the solution.

• Author: Rutland, Peter
• Position: Boris Yeltsin, current Pres of Russia

The dead man grasps the living. The corpse of the old world is decomposing among us, poisoning everything alive. That corpse stinks!

- V.I. Lenin

It may be autumn, but metaphorically it seems to be springtime in Russia once again. Boris Yeltsin is back, in fighting form, after an eight month absence due to heart surgery and subsequent pneumonia. He has given a free hand to Anatoly Chubais and Boris Nemtsov, who were installed in March as first deputy prime ministers with a mandate to revive market reform. These two men are the sort of politicians Western observers like to see at the helm in Moscow - young, forty-something technocrats who are healthy, telegenic, and fluent both in English and in the language of IMF stabilization programs. It is 1992 all over again: what some Russian commentators are calling "the second liberal revolution."(1) International markets are enthusiastic, and money is pouring into Russian shares and bonds at the rate of $1.5 billion a month. The Moscow stock exchange has risen 150 percent since the beginning of the year.

It may, however, be a little premature to sink one's life savings into Novgorod municipal bonds. Western attitudes toward Russia over the past decade have oscillated between brief interludes of elation and dire predictions of chaos and doom. The heady optimism of 1992 was followed by the anxiety of 1993 (the shelling of the parliament) and the fears of 1994 (the war over Chechnya). The market transition in Russia has also been accompanied by increased poverty, rising death rates, and an explosion of violent crime. Contract killings in Moscow alone are running at three hundred a year. Anyone lulled into a state of euphoria by reading an IMF or World Bank report on Russia's imminent economic boom would be well advised to see the recent movie, The Saint, in which Val Kilmer is chased across Moscow by a menagerie of gangsters who have bought off the city's police and army units and whose boss is running for president. Which is the real Russia - the Russia of sleek bankers, oil millionaires, and Weimar-style cabarets; or the Russia of starving babushkas, reeling drunks, and suicidal soldiers? For once, Hollywood may have stumbled upon a more accurate rendition of Russia's highly contradictory social reality than that reflected in the bullish projections of financial markets.

Hollywood aside, there are some trends in contemporary Russia that should be applauded. There is no sign that the average Russian - even one suffering from wage or pension arrears - thinks that a return to the authoritarian Soviet past is either feasible or desirable. A basic acceptance of the institutions of democracy and a market economy has taken root both among the ruling elite and the population at large.(2) For all its problems, Russia does not currently feel like a society on the brink of social catastrophe. Market democracy is weak, but the forces that would topple it are weaker still. Radical communists find it hard to mobilize more than a few thousand people on the streets, and for all the talk of "Weimar Russia", the neo-fascist movements only have a few hundred serious followers. The historical record suggests that the major threat to developing democracies is a military coup, but Russian generals seem more interested in building dachas (and subsequently keeping themselves out of jail) than repeating the sorry experiences of August 1991 and October 1993 - when the army was dragged into politics by ambitious or fearful civilian leaders. As one commentator put it, "The army is as defenseless in the face of democracy as it was in the face of the totalitarian state. When the hard times came the people with weapons accepted their poverty more meekly than the teachers with their chalk or the miners with their picks."(3)

Both positive and negative trends in Russia are much obscured by the West's fixation on the personality and power of Boris Yeltsin. Too much of Western energy, resources, and political capital has been sunk into schemes whose primary goal is propping up Yeltsin's regime, while far too little attention has been devoted to listening to what Russians themselves want and need. Trends in Russia since 1991 have been highly contradictory. In some respects the country has changed faster than one would have expected, in other respects more slowly. Unfortunately, journalists dislike ambiguity, and in the public mind the fate of Russia seems to have been irrevocably tied to the rise and fall of Yeltsin's fortunes.

This means, in turn, that some important trends of the past six years, such as the ebbing of power away from Moscow to the provinces, are seen as negative rather than positive developments, since they undermine Yeltsin's power and authority. But the federalization of Russia is arguably a healthy political development, since it lessens the likelihood of unpredictable and potentially disruptive policy switches at the national level. Moscow now has to look over its shoulder at how the leaders of Russia's eighty-nine regions will react. The autonomy of regional governors was strengthened by the round of elections that took place last fall (before which most of them had been appointed directly by President Yeltsin). The enhanced power of regional leaders compensates to some degree for the pusillanimity of the legislative and judicial branches of government at the national level. For many Western commentators, however, these regional governors are seen as obstacles to the reformist drive that has been launched by Yeltsin's rejuvenated government.

The optimism of Russia-watchers about the reformist zeal of the Chubais-Nemtsov team is all the more surprising given that just a year earlier, in the spring of 1996, the West was staring bleakly at the prospect of a Red Restoration. The Communist Party was the biggest winner in the December 1995 State Duma elections, and Yeltsin's personal popularity rating was "lower than grass", as Chubais put it. The Russian state was mired in a bloody, senseless war in Chechnya, while its workers and pensioners went unpaid. (It is often forgotten that Chubais was fired from his post as first deputy prime minister in January 1996 in part because of his inability to pay off wage and pension arrears.) And now? The war in Chechnya is over, Russia has brokered its problems with NATO expansion, and the sinister "party of war" (Yeltsin's clique of hardline advisers) has been pushed out of office. Economic reform is back on track, and the Dynamic Duo of Chubais and Nemtsov are preparing to do battle with the dinosaurs of the old Soviet economy - the energy monopolies - and to bring the bracing winds of reform to housing and social welfare.

So the story goes. The reality, however, does not fit this glossy image of reformist Russia, which has been artfully buffed by Western financiers keen to sell bonds to emerging market investors. The new government is unlikely to do anything that will reverse Russia's steady decline into a minor regional power with Third World living standards (and 20,000 nuclear weapons). The Deng Xiaoping model of a passive, near-dead leader presiding over a delicate balance of political forces may have worked well in China, but it is not working in Russia, whose socialist economy was more developed than China's, and so requires more radical surgery to repair. Six years into the transition, that economy remains woefully anemic. The formulas that have succeeded in most of Eastern Europe have fallen on stony ground in the former Soviet Union - the Baltic countries excepted. Elsewhere, economic growth kicked in six months after inflation was brought below 5 percent per month. It has now been two years since this was accomplished in Russia, yet the economy continues to decline for its seventh consecutive year.

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