cesil\cesil\0898\itcapu08

Livio Caputo

1988-1998,- the decade that has changed the face of Europe.
Ten years ago, on the eve of the Berlin wall coming down, the USSR was still the second world superpower.
All that remains in its place is a heap of ruins: the

Warsaw Pact is by now a distant memory; the Soviet Union is fragmented into no less than fifteen states and its central nucleus, Russia, has shrunk within the borders of three centuries ago; it is caught up in the spiral of endless economic crises and only survives thanks to the periodic donations of the West.
It would be less than generous to say that Yeltsin and his young entrepreneurial cohorts have not sought - compatibly with the home political situation - to confront the problem at its roots. However, the results are there for all to see: general chaos.
Today, the country is in practically intolerable straits. A few thousand businessmen have successfully gotten involved in the privatization mechanisms, accumulating fortunes of scandalous proportions and of dubious origins for themselves.
Thus has arisen the so-called “Russian mafia” that now makes its presence felt in half the world. Tens of millions of other citizens, especially pensioners and public employees, have fallen into a despair so intense that the “Economist” was commenting on them even before this last monetary crisis: “It is a mystery how they are able to survive”.
Many workers, including teachers, miners and the military, have not received their paypackets for months on end and are constrained to getting by with bartering and moonlighting. The city streets are full of beggars, drunks and petty crooks on the

lookout for anyone having more than they. The banking crisis has burnt the savings of small investors. And following the collapse of the civil and health services, the average life span has steadily fallen to 58 years,- a level that is even less than that of many Third World countries.
The State itself, previously all-powerful and all-knowing, seems to be defeated. This has paradoxical consequences in a nation which, from the Czars to Brezhnev, had always and only known authoritative regimes.
The Treasury is not capable of collecting taxes, the police no longer enforce the Law, the Kremlin does not bother to impose its will on the provinces, and the Army finds itself nothing less than impotent in suppressing the Checnyan rebellion.
Instead of freedom, the Russians have endured anarchy and many have begun to hanker after the old order when the principle prevailed that “the citizens pretend to work and the State pretends to pay them” but everyone was guaranteed at least a chunk of bread.
This scenario of desolation, perceptible also in Moscow and St. Petersburg, where it's true that it is partly toned down by the conspicuous presence of the new nomenclature, is seen to be more acute the more one distances oneself from the great cities.
The result: an unemployment rate that, having been zero (at least on paper) for three generations, has now sprung to ten per cent and will continue to steadily rise as the government applies the austerity measures demanded by the International Monetary Fund in exchange for July's maxi-loan.
No-one expected that the conversion of a giant country like Russia to a market economy would ever be painless.
What makes the task more difficult compared to other Eastern European nations, who now feel confident enough to knock on the door of the European Union, is that a series of not insignificant negative factors have concurred.
First of all, the communist regime reigned for 70 years in Moscow, as against 35-40 years for Warsaw and Budapest, with the related losses of any entrepreneurial traditions and self-reliant working. Secondly, the Russian communist bureaucracy, accustomed to being in charge of all the ex-USSR, have been able to resist the reforms much more tenaciously than the Poles or Czechs, who preferred to jump on the winners' bandwagon. And finally, due to the very dimensions of the country, the dysfunctioning of its peripheral administrations, and the “imperial means” that the USSR enjoyed, the amount of inefficiencies and parasitism nourished in its economy were much greater (and much more difficult to eliminate) than those of the former satellite States.
The West decided right from the beginning to back Boris Yeltsin, the man who, in 1991, got rid of Gorbachov and was able to resist - with undoubted courage - two restoration coup attempts.
However, even though he had “seen the light” before the others (Gorbachov removed him from office as Moscow party secretary ten years ago for what he judged was an excess of reforming zeal), the “white raven” is still seen as an ex-communist provincial boss who knows little or nothing about economics, still less about democracy and who has always had the vice of raising the elbow too often.
If Yeltsin is full of defects, his main collaborators are not much more efficient.
Viktor Chernomyrdin, the man who bore the destiny of the government from 1993 to 1998, was dismissed from his post last Spring and has now been recalled to the Kremlin as the only possible “savior of the homeland”, is an astute navigator who comes from the ranks of the old nomenclature and has always been more interested in his own survival than in the reform process.

In fact, more steps backward rather than forward are expected from his return to power, in the best soviet tradition. Sergei Kiriyenko, the thirty five year-old technocrat who had briefly held the post, was without doubt less “marked” by the previous regime and started off full of good intentions. However, he soon paid the price for his inexperience and lack of political weight and was sent back home before being able to steer a new course.
Perhaps this might have come from the most brilliant of the “new men”, the resolute and unbiased Anatoli Ciubais called the “great privatizer”, creator of the more audacious restructuring plans and the preferred interlocutor of the IMF.
However, on the occasion of one of the many compromises that had to be agreed with the nationalist-communist majority in the Duma (Zhuganov and Zhirinovski), Yeltsin was constrained

to oust him from the Ministry of Finance and, after Chernomyrdin's return, to also take away his key assignment as “ambassador” to the IMF. Officially, Ciubias fell from grace for the so-called “90 thousand dollar scandal”, i.e. the presumed kickback disguised as a prepayment for a book, that he would have received from one of the seven Industrial Financial Groups that share the power. In reality his main blame, according to the finance magnates who brought this affair to light, lies in having tried to shift the country from the no-rules, aggressive capitalism phase to a civilized capitalism, so to speak, with the same rules for everyone, fixed and imposed by the State.
One of the more unsettling characteristics of the power aspect that seems to come out of this latest crisis is the bearing that these Groups have, these true giants in perrenial struggle amongst themselves, that compete for the best bites of the privatization pie, continually interfere in Government business and, through control of the most important media, are able to strongly influence public opinion. Two years ago, they temporarily agreed in helping Yeltsin's re-election to the Presidency, in the certainty that he would have better guaranteed their status than the communist Zhuganov or the populist General Lebed. Immediately afterwards, however, in the face of a new privatization phase, the alliance was shattered and this gave rise to the so-called “war of the banks” which also profoundly influenced successive political events.
The interlacement of interests among these groups, and the large foreign companies they have alliances with from time to time, is as mysterious as it is impressive. It ranges from the exploiting of mineral resources to the construction of giant oil pipelines, from telecommunications to the rehabilitation of what remains of the large industries. At least until August's economic and financial crisis, it had superimposed itself upon, if not exactly replaced, the real political struggle. Now the Duma, theoretically controlled by the Opposition but reduced to being on the defensive by the presidential nature of the Constitution, the corruptibility of many parliamentarians and the objective differences of interest among the various parliamentary groups hostile to the government, will seek to get its revenge.
Fortunately, foreign policy problems have so far remained substantially unaffected by this turmoil.
Ratification of the grand disarmament treaties does not appear to be impaired and the government - at least in appearance - has been able to maintain control of the nuclear arsenal inherited from the USSR.
In effect, it's only in foreign policy that Russia is able to avoid the eclipse that its home conditions would cause to surmise. With the aid of that old fox of Soviet diplomacy who is the Minister of Foreign Affairs Primakov, Yeltsin has even achieved some important successes that in some ways justifies the decision of the great Western powers - which seems a little strange in the light of this latest crisis - to include the new Russia in the G-8 club. Taking stock of the 1997-98 period, there are at least three successful transactions.
The first is the definitive settlement of the differences with China, regarding both border demarcations and economic co-operation in Central and Eastern Asia. The second is the return of Russia to the Middle-eastern scene, in the robes of mediator between Clinton and Saddam, even if only partly with America's consent. The third deal, though thwarted by this latest crisis, is the attempt to establish a sort of direct line with Bonn and Paris, outside of Washington's control.
As long as the Kremlin is totally dependent on Western economic aid for its very survival, this “return” does not hold any particularly threatening features. But if by any chance a different type of power should take over from Yeltsin and his new government, either subversively or by democratic means, then these forces could weigh very heavily on the future for Europe.
It is also to head off this arbitrary drift that, two months ago, Clinton and his allies acted beyond any prudent economic considerations and decided to throw another large bag of dollars into the Russian cauldron.
Unfortunately, this was not enough to stabilize the situation and, with the crisis this August, Russia has taken another step towards the abyss, or at least meltdown, whose international effects could be likewise dangerous.

Leadership Medica^®

This pages are maintened by
GTM Grafica
Service & Network

gtmgraph@coloseum.com