Russia's New Hope?
DANIELS, ROBERT V.
FILLING THE VACUUM Russia's New Hope? By Robert V. Daniels With Parliament's ratification of Yevgeny M. Primakov as Russia's new Prime Minister on September 11, the tortured history of...
...Russians openly liken him to General Secretary Leonid I. Brezhnev in his last decrepit years...
...Talk about tighter state controls on the economy was underscored in July by the surprise appointment of former Soviet State Planning chief Yuri D. Maslyukov as Minister of Industry and Trade...
...Kiriyenko said upon his appointment last March that he did not intend to be a political "kamikaze...
...He is all things to all men," said a former Yeltsin adviser...
...Trained as an Arabist, he spent many years as an intelligence operative in the Middle East, with the cover job of Pravda correspondent...
...Robert V. Daniels, a frequent New Leader contributor, is professor emeritus of history at the University of Vermont...
...On Sunday August 23, Yeltsin dropped the axe and called Chernomyrdin back as Acting Prime Minister pending his confirmation by the Duma...
...Indeed, the 68-year-old Primakov may well manage to bring together the disparate forces—Yeltsinites, oligarchs, Communists—who must be persuaded to cooperate if Russia's current troubles are to be addressed...
...These were the circumstances of the July 13 International Monetary Fund (IMF) rescue package...
...After Yeltsin stiffly read his endorsement on television, Primakov was confirmed by a vote of 315 to 63 (i.e...
...With each passing crisis we seem to know less and less how much Yeltsin is still in command of his faculties, and how much his staff and his daughter prop him up and steer him until he suddenly wakes up and lashes out at someone...
...Precisely how this decision was made remains murky...
...Unfortunately, that was exactly the role he was destined to play...
...There was a chorus of calls in the Duma for the Prime Minister's resignation...
...We are already in power," he asserted ominously...
...to the presidential entourage he was the front man who staved off the necessity of getting a new Prime Minister approved while reformers like Deputy Prime Ministers Anatoly B. Chubais and Boris Y Nemtsov pushed privatization and the free-market ideal...
...When Yeltsin and his staff went into seclusion at one of the President's country houses to weigh their options, support for Primakov crystallized, starting with perennial liberal oppositionist Grigory A. Yavlinsky...
...On the economic side, rather than a genuine free market, Russia has fallen prey to a handful of tycoons and the populace is impoverished...
...Less than a month after Kiriyenko was confirmed in office, as the global economy grew increasingly jittery, miners blocked the railroads to protest nonpayment of their wages, and triggered a onethird drop in the Russian stock market...
...Who, exactly, are these "oligarchs" who have loomed so large over Russia's political and economic landscape...
...In the end Yeltsin seemed largely marginalized...
...The mistake was to challenge the financial oligarchy in rhetorically ripping terms...
...nominated by Clinton...
...But no amount of such assistance could get the Russian government's revenues in order, or stanch the run on the ruble as foreign investors bailed out of Russian securities and tried to convert their money into hard currency...
...Russia was on the verge of a presidential dictatorship...
...With short-term interest rates surging as high as 15 0 per cent, Moscow was paying out more in debt service alone than its entire tax take, and the Central Bank was rapidly using up its new IMF funds to defend the ruble...
...the bad luck was the Asian economic flu...
...Chernomyrdin perforce began acting like a chief executive and presidential aspirant...
...The move, to be sure, is no automatic solution to the country's daunting problems...
...Nevertheless, the stock market continued to shudder and rumors ran wild in Moscow of ruble devaluation, even of a possible coup...
...Chernomyrdin, meanwhile, has bequeathed Primakov a set of contradictory emergency ideas, among them foreign exchange controls, currency emission, and the renationalization of tax-dodging firms...
...He was one of several men, including Moscow's Mayor and would-be Caesar, Yuri Luzhkov, whom the Duma leaders declared acceptable nominees for the Prime Minister's post...
...It was a relief to the country, hailed by everyone from Gorbachev to the gruff General Aleksandr Lebed, and from the Communists to the oligarchs...
...And by breaking through the free-market reform impasse that brought down Kiriyenko in August and stymied Chernomyrdin's comeback, the shakeup gives despairing Russians some basis for hope in a better future...
...by practically everybody except the Yegor T. Gaidar's small free-market party and the nationalists under Zhirinovsky, who called Primakov "a pro-American candidate...
...Ruling by decree when the mechanics of parliamentary government displeased him, Yeltsin substantiated the Russian adage that "legitimacy" is not the same thing as "legality...
...Moreover, his relations with the oligarchy remain to be worked out...
...The down side is that it vindicated the decision of Communist chief Zyuganov to go for broke, strengthened his hand against the moderate wing of his party, and made him a key player in Russia's future...
...Despite the oligarchs re-entering the political scene, by early August financial crisis gripped Russia again...
...He is not an economist and has never been in business...
...Russian politics at the presidential level are as secretive as they were in the Soviet days, and we can only hypothesize about what really went on...
...At least for now, Primakov's direction portends both faster inflation and a dearth of foreign credit, not to mention a donnybrook with the bankers...
...Under Gorbachev he directed the USSR's leading foreign policy think tank and then chaired the upper house of the old Supreme Soviet, achieving the rank of candidate member of the Politburo (the same level Yeltsin attained before he was temporarily disgraced in 1987...
...It all seems utterly Byzantine...
...Russians call them tire semibankirsh china or "gang of seven bankers," after the semiboyarshchina or "gang of seven boyars," the cabal of barons in charge of the country for a while during its original Time of Troubles in the early 17th century...
...Whatever, they obviously prevailed upon the sick and depressed President to be done with the matter...
...With one more vote separating the country from parliamentary dissolution and political chaos, the Yeltsin camp blinked and bought the Primakov compromise...
...He carries no Marxist or free-market baggage, is beholden to no one, and for the moment is no threat to the potential contenders jockeying for position in the year 2000 presidential election...
...Izvestia, speculating about Yeltsin's thinking at the secret sessions, had him deciding: "Prime Minister Luzhkov means capitulation...
...The outcome was a dramatic victor)' for the Duma and for the constitutional process...
...He may be Russia's new hope, but his survival is another question...
...Prime Minister Primakov means an organized retreat...
...Evidently the oligarchy, spearheaded by the brassy Boris N. Berezovsky, had been conspiring with Chernomyrdin for some time, and pressed his revived candidacy upon the Yeltsin staff at a critical moment...
...They moved in with plans to take over policy-making—"a virtual second government" of the "oligarchs' club," one Russian newspaper charged...
...Efforts by Seleznyov and Yeltsin's staff to work out a "political truce" that included Chernomyrdin's expressed willingness to temporarily introduce an "economic dictatorship," were twice repudiated by Communist leader Gennadi A. Zyuganov...
...With no political base other than Yeltsin's favor, he made one big mistake and suffered very bad luck...
...The oligarchs were not averse to a stronger government hand so long as they could control the government, and they were working hard to do that...
...In the view of Andrei Grachev, an adviser to ex-President Mikhail S. Gorbachev, the Foreign Minister's elevation was "the last chance to stop a chain reaction of disintegration...
...Not until the Duma, Parliament's dominant lower house, was rejecting Chernomyrdin on the second of a maximum of three ballots did Primakov's name surface...
...But that political edifice rested on a foundation of economic sand...
...The premise is flawed...
...Yeltsin suddenly came to, dismissed him, and precipitously tapped Kiriyenko, the unknown sidekick of his chief reformer Nemtsov...
...Kiriyenko's appointment as Prime Minister, however good it looked from the standpoint of economic reform and curbs on the banking oligarchy, was a low point in executive-legislative balance of power...
...Yeltsin appeared in public to denounce the notion and resumed his long vacation...
...On the political side, Primakov's compromise selection, acknowledging the role of the Duma, represents a long overdue correction of the imbalance between the executive branch and the legislature...
...Following President Boris N. Yeltsin's unsuccessful reprise nomination of ex-Prime Minister Viktor S. Chernomyrdin, the former Foreign Minister's promotion to the role of de facto chief executive under an increasingly inactive President may prove to be the most decisive political development in Russia since the liquidation of the Soviet Union almost seven years ago...
...Primakov has inherited the legacy of six years of ill-considered reform and crony capitalism, aggravated by the financial turmoil that mounted under Kiriyenko...
...But in the Duma Chernomyrdin met with adamant opposition from most of the Communists and from Yavlinsky's liberals, who were ready to risk a dissolution to prevent his return...
...In the fall of 1991, as the Soviet Union was falling apart, Gorbachev made Primakov head of foreign intelligence, and Yeltsin kept him in the corresponding position for the successor Russian Republic...
...By Robert V. Daniels With Parliament's ratification of Yevgeny M. Primakov as Russia's new Prime Minister on September 11, the tortured history of political crisis in Moscow took a surprising turn...
...To the Duma Chernomyrdin was the lesser evil...
...So Kiriyenko, defying Yeltsin, bowed to the inevitable on August 17 and "floated" the ruble (better to say, let it sink...
...Ever since Yeltsin bombarded the old Parliament into oblivion in 1993, Russia has operated under a Constitution giving it something akin to the French system, with an even stronger President, a weak Parliament, and a messenger-boy Prime Minister confirmed by the Duma but beholden to the President...
...He leveraged the acceptance of Kiriyenko out of Communist Duma Speaker Gennadi Seleznyov and the Communist Party's moderate wing by letting it be known that if he were forced to dissolve the Duma, he might decree new election rules that would wipe out the Communists' advantage under the existing semiproportional voting system...
...Designated to succeed the softie Foreign Minister Andrei Kozyrev in January 1996, he soon showed he could play a tough game from a weak hand, particularly in his negotiations to gain a voice for Russia in the councils of NATO...
...Possibly his entourage took fright at the Duma's threats of impeachment proceedings, possibly they even feared civil war...
...The equilibrium was upset in the early months of this year, during one of Yeltsin's worsening periods of withdrawal...
...Each of them typically controls an oil company for its earnings, a big bank for speculating and stashing money abroad, and a major media outlet to advance his interests and harass his enemies...
...It is anybody's guess how the Primakov decision was brought off, considering Yeltsin's state of mind...
...In short, he is a political survivor, a Russian Talleyrand who has served as many regimes as his prototype...
...Chernomyrdin survived for five years as Prime Minister by bowing to Yeltsin's will whenever the Tsar-President, already prone to cycles of excitement and withdrawal, was in the mood to assert himself...
...In terms of his background, he could best be described as an intellectual police agent...
...But practically all the IMF aid granted in July had gone into the pockets of currency speculators and fleeing investors...
...That was the signal for the oligarchy to close in on the hapless Kiriyenko and his "kids' government," as Chernomyrdin called it...
...In addition, he restricted currency trading and debt service payments to foreigners—in other words, announced a partial default...
...In any event, Yeltsin seemed unaware in August that he was counter manding his own decision the previous March, and he initially defended Chernomyrdin as stubbornly as he had acted to get rid of him...
...By June the new Prime Minister had to reverse himself on the oligarchs he had been demonizing, and appeal to them to save him...
...He was an unlikely choice for today's Russia...
...Yeltsin rammed Kiriyenko through the Duma by threatening to dissolve it, a prospect that under Russia's bizarre rules would have meant the instant loss of salary, car and apartment by every deputy...
...But the Primakov appointment— acclaimed virtually across the political spectrum, except for Vladimir V Zhirinovsky's ultranationalists—appears to fill the power vacuum created last March when Yeltsin sacked Chernomyrdin because of his ill-concealed presidential ambitions and replaced him with the neophyte Sergei V Kiriyenko...
...These steps the new Prime Minister has endorsed, judging from his appointment of Maslyukov as Deputy Prime Minister for the economy, his reinstatement of the former loose-money director of the Central Bank, Viktor Gerashchenko, and the resignation of economic reformer Boris G. Fyodorov...
...His policy model, he says, is Franklin D. Roosevelt's New Deal, but the circumstances in Russia are far worse than they were in the United States during the Depression...
...Izvestia went so far as to predict he would "gradually withdraw from power...
...In the light of his past intelligence work and present Communist support, some worry that Primakov's ascendancy threatens the progress of freemarket democracy...
...A pure pragmatist, he also knows how Russia must deal with the outside world to defend its national interests...
...The stock market nosedived, banking transactions were virtually paralyzed, and the international financier George Soros added his voice to those urging ruble devaluation...
...He has character,' said Duma Speaker Seleznyov of the President, "but he is able to demonstrate it only two or three times a day and then only for two or three minutes at a time...
...Thursday morning, September 10, after a huddle with Yeltsin and Primakov, Chernomyrdin announced that he was withdrawing his candidacy because it might split the nation, and the Foreign Minister sailed in...
...A moderate Communist who voted for Kiriyenko on the third ballot in April, Maslyukov called for the state to play "an active role in regulating and managing the transition" to the post-Communist economy...
...Although the acceptance of Primakov resolves Russia's political crisis for the time being, the economic difficulties he faces are staggering...
...As in March, Yeltsin's daughter, Tatyana B. Dyachenko, appears to have been the key go-between...
...Actually, they are the fortunate few financial manipulators who rose to the top in Russia's first years of "wild West capitalism" and positioned themselves to pluck the juiciest fruits of privatization...
Vol. 81 • September 1998 • No. 10
