Don’t Breathe Easier Yet: Scariest Part Of Russia’s Roller-Coaster Yet To Come

Far from being over, the crisis in Moscow will likely escalate in the days and weeks ahead as opposing hostile forces get ready for yet another ‘war of laws.’ In short, the power struggle underway in Russia will intensify after a tumultuous weekend — not improve — as prospects for near-term democratic and market reform worsen.

Fallacy of Upbeat Conventional Wisdom

A central theme of most analysts reviewing the high-stakes bidding in Moscow is that President Boris Yeltsin has now emerged as a stronger, ascendent figure, having thwarted the Congress of People’s Deputies’ latest attempt to impeach him. Further bolstering this perspective is the conviction that hardliners have been effectively divided, with the weekend rebellion against Parliamentary Speaker Ruslan Khasbulatov throwing the anti-Yeltsin forces into disarray. This view has it that President Yeltsin’s standing will only be further strengthened by an expected successful Vancouver Summit and a likely favorable outcome of the 25 April referendum, held along the lines configured by Yeltsin.

Unfortunately, wish as the West might for such a positive outcome, at present it seems unlikely to come to pass. Worse yet, U.S. policy-makers and their G-7 counterparts risk undermining important Western security and economic interests by misreading the underlying fundamentals at work.

The Center believes that, in fact, the hardliners in Moscow are now enraged and likely to resist further efforts by those at the top (e.g., Yeltsin, Khasbulatov, Zorkin) to fashion what they perceive as compromising "sweetheart deals." The crisis in government leadership is becoming more systemic in nature and substantially less susceptible to accommodation. Evidence of this can be seen, for example, in the following:

• Yeltsin himself seriously upset his own supporters by reaching an 11th-hour compromise with Khasbulatov on Saturday night in which he blithely abandoned his push for an April plebiscite in favor of presidential and parliamentary elections in November. Although that understanding was squashed by the Parliament on Sunday, Yeltsin’s concession is a signal warning: a positive referendum outcome — possibly even the referendum itself — is far from assured.

 

For one thing, there is ample time for reversals between now and April 25, particularly given that even supposedly hard-and-fast positions are evidently subject to change without notice. What is more, the Parliament is engaged in predictable manuevers to dilute the effect of the referendum by adding questions to the ballot — thereby deliberately confusing the outcome and by requiring that at least 50 percent of registered voters must participate in order for it to be judged valid.

 

• For his part, Khasbulatov managed to alienate a large block of his hardline supporters by favoring early elections for deputies — most of whom took office in 1990 under the ancien regime. The deputies revolt centered on the sweetener added to the package — continued perks and privileges until 1995 for those who lost their seats. Many deputies evidently took offense at the implication that they could be so easily induced to accept their removal from power.

 

Although back-room deals like that conjured up by Messers. Yeltsin, Zorkin and Khasbulatov have worked in the past, this one only served to make most parliamentarians more intractable in their determination to preserve a largely centrally-controlled system and their privileged positions.

 

Predictions:

Political Directions

• The ‘war of edicts’ will resume at a fevered pitch — with decrees issued by each side only to be ignored by the other. (Yeltsin, for example, was stripped yesterday of his regional representatives by the Parliament; the Parliament has taken nominal control of state-owned TV and radio.)

 

• Yeltsin will continue to adulterate his reform program by adopting key elements of the so-called "social-oriented reform program" of the hardliners.
  • Already, Yeltsin has significantly backtracked on market-oriented reforms — particularly the all-important effort to reverse hyperinflationary policies — by issuing three decrees on 28 March which: doubled the minimum wage; ordered savings banks to compensate for losses on the value of depositors’ accounts due to inflation; and authorized regional governments to impose price controls on basic goods.

     

   

  • At the same time, the United States and other G-7 nations are leaning heavily on the International Monetary Fund — indeed compromising its institutional integrity — in order to "ease" (read, dispense with) many of the Fund’s prudent demands for discipline, transparency and conditionality on the part of a sovereign borrower. The Finance Ministries of the G-7 should not be surprised when the line of other sovereign borrowers begins to form at their doors, not to mention the IMF itself, all insisting on "equal treatment" with Russia.

     

 

• Boris Fyodorov, the recently appointed Minister of Finance and one of the Yeltsin cabinet’s last Western-oriented reformers, is likely to be made the object of the Parliament’s next effort to emasculate the campaign to transform Russia politically and economically. This gambit will mark a return to the Old Guard’s successful strategy of December 1992, namely of "defoliating" Yeltsin’s reformist entourage now that its members failed to fell the tree in the center.

Foreign Policy

• Other Soviet successor states will be increasingly intimidated and bullied by Russia. This will be done in the name of Russia’s efforts to maintain peace and stability in the former Soviet Union through a kind of distorted "Monroe Doctrine"; this doctrine will be invoked whenever Russian equities are deemed to be disadvantaged (e.g., by the prospect of genuine independence for Ukraine and the Baltic states).

 

Yeltsin has already urged the West repeatedly to bestow on Moscow the right to intervene in the affairs of its neighboring states when it alone determines the need is warranted. This troubling development is made worse by Vice President Alexander Rutskoi’s recent condemnation of "democratic romanticism" and promise to resist the emerging "jungle of sovereign, independent territories" in the wake of the USSR’s collapse.

 

• The Serbs are reaping a political windfall at arguably the decisive moment of the Bosnian crisis: One of the latest arguments against enforcement of the no-fly zone is the warning that Russia will then feel compelled to arm the Serbs.

 

• Other issues of interest to the Russian Old Guard may well benefit equally from the United States’ distraction with the Russian roller-coaster and/or Washington’s willingness in light of the crisis in Moscow to defer to the hardliners.
  • For example, the U.S. has been looking the other way at Iran’s decision to provide life-support to the Kremlin’s long-time client, Saddam Hussein, by purchasing Iraqi oil in violation of the U.N. sanctions.

     

   

  • Similarly, North Korea will get a substantially freer ride for its nuclear blackmail than would otherwise be the case as the March 31 inspection deadline comes and goes with de facto new deadline extensions.

     

 

• For the first time, there will likely be verified reports of select troop movements and the beginning of more serious divisions in the military as the Russian leadership proves increasingly incapable of resolving the crisis.

Bottom Line

At this juncture, the danger of civil war in Russia is on the upswing, not declining. Rigidities are taking hold in the political process, making an acceptable compromise that holds out any hope for advancing reform and democratization ever more problematic. Crowds in the street that have been relatively well-behaved to date will become considerably more surly — and perhaps even violent — as the polarization of democrats and communist/nationalists intensifies. In these perilous circumstances — when despots around the globe seem to be receiving a signal to "go-for-broke" — it is hardly the time for the sort of "don’t-bother-me-with-the-facts" approach to new aid and credit flows favored by the Clinton Administration and allied governments.

It is high time that the United States and its G-7 partners wake up to a fundamental and irreconcilable contradiction that exists in contemporary Western policy toward Russia: One cannot both exhort American and other taxpayers to part with billions of dollars more in aid and credit flows to Russia lest a more threatening regime take power in Moscow — an outcome said to be inevitable if the aid is not at least attempted — and credibly assure those same populaces that massive defense cuts can be safely made, notwithstanding the Russian drama.

The Center for Security Policy believes that the Clinton Administration and its counterparts simply cannot have it both ways. Now is the time to adopt a more disciplined, transparent and conditioned approach to Russian aid and a more prudent, responsible and risk-averse policy toward eviscerating U.S. national security capabilities.