While observing the developments in the political situation in Russia, it gradually becomes clear that we are dealing with rough draft as the political elite looks for a way out of a situation which has not yet taken shape.
The main events will happen this fall. Even the most sage Russian politicians and entrepreneurs are aware of the fact that they cannot foresee absolutely everything and are piling up pillows where they could fall. However, they also understand that they could fall somewhere without pillows. Thus, the optimal task for the Russian political and business elite is to provide as much as possible cushioning for slippery and hard places.
Economic and financial crisis is unavoidable in any case. It will happen even if the International Monetary Fund gives Russia all the money it needs - the $10-15 billion that Anatoliy Chubais spoke about shortly after being appointed special envoy of the Russian President for talks with international financial organizations. This crisis has been caused not simply by the negative developments on the world financial markets and decrease of oil prices but rather by the whole logic of the development of the Russian economy which both during Gaidar's reforms and afterward has remained corporate and too bound up if not with the state then, at least, with the party of power, the Kremlin. After the Indonesian crisis only the lazy failed to compare the Russian and Indonesian economies, each time finding more and more striking similarities. Heads of international financial organizations were also among those people who made such comparisons. Michel Camdessus, IMF Managing Director, during one of his visits to Moscow paid a special attention to the fact that he came to the Russian capital to remind Yeltsin and his staff about Jakarta's sad experience. Obviously, the Russian economy is functioning as an extremely vulnerable organism which is too dependent on every external and internal fluctuation of the situation, and business is unable to rescue the state and the state is unable to rescue business either – they exist in an inseparable unity like Siamese twins. There is no hope that in case one of them gets ill, the other would not catch it.
However, in such a case we can expect a temporary unification or reconciliation of hostile groups in the face of a threatening hazard. And such a reconciliation has indeed taken place.
The main evidence of this reconciliation was Chubais' appointment as special presidential envoy to the international financial organizations with the rank of Deputy Premier. However, the issue here is not only and not so much about Chubais – although his return to power in itself is a topic to be analyzed – as the fact that the oligarchs who until the very recently had been fighting hard to exclude him from the government accepted Chubais' new appointment, and CIS Executive Secretary Boris Berezovsky turned out to be one of the main advocates of the move. The story with Berezovsky's dismissal from the post of Deputy Secretary of the Russian Federation Security Council became a legend in the corridors of power long ago: Chubais and Boris Nemtsov made no secret of the fact that it was they who had initiated his dismissal. Thus, it is quite clear that Berezovsky as well as other entrepreneurs and financiers have understood that should the Yeltsin administration crash this fall their own fortunes could do likewise. In its turn, the Kremlin has also made a few steps toward respected oligarchs: President Yeltsin and Premier Sergei Kirienko have met them, and a Council on Economic Cooperation, which will enable a limited number of entrepreneurs to keep track and coordinate governmental steps, has been established. The meeting with Yeltsin has been talked about as the first one conducted in an atmosphere of a relative equality and that the President is searching for real partners among big business representatives. But, if you think about it, Yeltsin has no other choice.
After the meeting with oligarchs, Yeltsin made an important political statement: while visiting Kostroma he said he would not be a candidate in the 2000 Presidential election. Of course, Yeltsin has also made such statements before, but now we can see quite a clear coincidence: it was right after the President and Premier had met with the business elite that Berezovsky in an interview with Vladimir Gusinsky's Ekho Moskvy radio station called upon Yeltsin to give up any idea of running for reelection to give the power party a chance to consolidate its efforts and find a joint candidate. We can state that in this case Berezovsky represented not so much his own point of view as a collective one, and that most of the Russian political and business elite is seriously concerned about Yeltsin: it thinks him inadequate to the situation and that he is beginning to subordinate state interests to those of preserving his own power under any and all circumstances. But that is nothing new! As one can imagine that the oligarchs were seriously irritated both with the way Chernomyrdin and his government were dismissed, and by Kirienko's appointment as the government head. Perhaps Yeltsin was unaware of that while lobbying for Kirienko – he needed only a "technical" and inexpressive premier who, unlike Chernomyrdin, would never even dream of the presidency. However, when the situation in the Russian economy demanded strong measures, it became clear that the young Premier could count on neither the oligarchs' sympathy not the West's trust, that his activity became exclusively representative, and that Chubais was needed once more. Thus, it is no wonder that in this situation Yeltsin found himself in true political isolation and sought the oligarchs' support, no wonder that in order to calm down the elite he declared again his unwillingness to be a candidate in 2000.
The other thing is that there is and will be a fear even of such a Yeltsin. Hence, it is not worth expecting a consensus regarding Yeltsin's successor to be reached soon. Thus, there is no wonder that only a few days after Yeltsin's Kostroma statement, Chernomyrdin, who immediately after his dismissal said he was ready to take part in the Presidential election, omitted the issue of such participation at his press conference. However, Chernomyrdin stated his confidence that had his government remained in power such a situation would not have occurred. One can hardly agree, but it is obvious that if Chernomyrdin's government were still in power there would be only one government in Russia.
By now, a diarchy has de facto formed. When explaining to journalists Chubais' functions, Kirienko said he would coordinate measures to overcome the crisis by all the branches of state, his words were not just words. Of course, there in fact were two governments in Russia when Oleg Soskovets was Chernomyrdin's First Deputy, and when Chubais and Nemtsov were appointed First Deputy Premiers. But a dual government then existed within the framework of the same structure, and reflected rather the struggle of various groups within the same government. Today's situation is different. There is the government, and an oligarchic council, which places all its hopes on Chubais and is irritated of the very fact of Kirienko's existence. And if today the formal and informal governments still manage not to hinder each other, by fall they will start to battle for real power and, of course, for the mechanism of allocation of the money procured by Chubais.
This could become an important reason why relations between Parliament and ministers might become strained. Obviously, the executive would like to share responsibility for the decrease in social guarantees with the legislative branch. It is no less obvious that the State Duma does not appreciate this a year before the election. The Duma's Communists are in even more trouble. On the one hand, it is already clear that cohabitation with the authorities will not benefit the Communist Party in terms of votes, and what it needs – which has now become reality – is to return to the slogans of uncompromising opposition. Otherwise, Gennady Ziuganov would loose not only votes but also power in his own party, and he certainly does not need that. On the other hand, the current Communist Party elite, which is closely integrated with the regime, does not at all need a big crisis to happen because it could bring forth a third force, militant populists who would know how to treat the Communist Party, and, the most important thing: would society need a Communist Party when the regime itself is uttering popular Lumpenproletariat slogans? Thus, the Parliament must speak against and vote for. However, the likelihood of this scheme depends on the general development of the economic and political situation. It would hardly be desirable if a new Caucasus war were added to the economic crisis.
During last few months, observers have become concerned over possible developments in the North Caucasus, especially in Dagestan, whose leaders are dramatically loosing control of the situation, ceding influence to authoritative groups of interwoven criminals and businessmen. Taking into account the fact that Dagestan is a multinational republic in comparison to which Bosnia seems to be a country with a tiny number of nations, one can imagine how big the shooting could get should those groups decide to carve out spheres of influence in Dagestan – under national banners, of course. Especially, when quite real nationality problems there remain unsolved for decades. There is shooting in Dagestan now – no two consecutive days pass without a bomb explosion, some official getting killed or someone taken hostage. Meanwhile, the Kremlin, like in Chechen case, prefers to support the archaic and weak regime of Magomet ali Magometov reelected last week as the Head of the State Council of Dagestan. Against a background of instability in Chechnia where an unanimity among its leadership is unlikely, and the tension between Ossetians and Ingushes is growing, it becomes clear why the military presence is being increased, and a Caucasian war seems to be unavoidable.
The Kremlin is unlikely to be able to change the situation in the economy, politics, or the Caucasus. The only thing that it can hope for is that all the dangerous events do not come at once. Then, at least, there would still be some maneuvering space.
Moscow
AP Photo:
Recently a Moscow storm rendered the Kremlin damage that was easily cleaned up. Will Moscow be able to deal as easily with the financial tornado?







