Yeltsin’s hands at the controls grew ever shakier, apart from when it came to decisions about sacking his associates. He was resorting extravagantly to the comforts of the vodka bottle, and in Berlin in 1994 he drunkenly snatched a conductor’s baton and led an orchestra through a rendition of the folksong ‘Kalinka’. His drinking aggravated a chronic heart ailment. Suffering a collapse on a flight across the Atlantic in the same year, he was too ill to meet the Irish Taoiseach at Dublin airport.3 For the duration of the 1996 presidential electoral campaign he had to be pumped full of palliative medicines. Afterwards a quintuple cardiac bypass operation proved necessary.
Neither Yeltsin nor his governments retained much support in the country. Prime Minister Chernomyrdin formed a party, the archly named Our Home’s Russia, to contest the Duma elections of December 1995. He had a huge advantage over the opposition since the new party had unrivalled financial resources and powers of patronage and secured unobstructed access to TV news programmes. Yet Chernomyrdin took only 65 seats out of 450. The lacklustre Gennadi Zyuganov and his Communist Party of the Russian Federation obtained 157, and the allies of the communists – the Agrarian Party and Women of Russia – added a further 23. This made Zyuganov the leader of the largest block in the Duma. Yeltsin, however, refused to compromise with him and insisted on keeping Chernomyrdin as Prime Minister. Zyuganov, filled with new confidence, denounced both Yeltsin and Chernomyrdin. The Duma elections, he declared, supplied a popular mandate for a reversal of the whole reform agenda. The USSR should never have been abolished. Economic privatization had reduced millions of households to poverty. The country’s assets and interests had tumbled into the grasp of Russian plutocrats and the IMF, and Yeltsin and Chernomyrdin were the agents of this dénouement. Zyuganov made the case for a government of communists to restore well-being in state and society.
The Communist Party of the Russian Federation had been widely thought to be at death’s door since it drew its support mainly from pensioners and from workers in the decaying sectors of industry. Yet there was a tenacity about Zyuganov, and his increasingly Russian nationalist statements continued to attract popular approval. His party comrades in the Duma, moreover, were well-organized and one of them, Gennadi Seleznëv, became its Speaker. Despite having equipped himself with abundant powers under the 1993 Constitution, President Yeltsin had to let his governments come to terms with Zyuganov whenever the communists stirred up controversy in the Duma about his behaviour, health or policies. Yeltsin and Chernomyrdin continued to trim back the project of reforms. The headlong rush into capitalism was slowed. The inclination to perceive Russia’s national interests in international relations as identical to those of the leading Western powers faded. The chaotic relationship between the centre and the republics and provinces in the Russian Federation began to be regularized. Yeltsin more and more rarely devoted his speeches to the theme of the communist totalitarian nightmare between 1917 and 1991.4
Although these adjustments came easily to the opportunistic President, he did not want to concede more than was absolutely necessary. He and his coterie were determined to hold on to power. In spring 1996, when Zyuganov was beating him in the national opinion surveys, he contemplated a plan to suspend the presidential election. His aide and chief bodyguard Alexander Korzhakov encouraged him, arguing that a communist restoration had to be prevented at all costs. A ‘red scare’ atmosphere was fostered in newspapers and on television. A decree of suspension was drafted. Not until the last moment was Yeltsin persuaded that he would do more damage than good by trampling on democratic procedures.5 Not that he stopped being devious. He agreed a secret deal with Boris Berezovski and a handful of other exceptionally wealthy businessmen who were commonly known as ‘the oligarchs’ whereby they would receive a lucrative stake in state-owned mining enterprises in return for bailing out the state budget and financing Yeltsin’s electoral campaign.6 He also came to an agreement with rival presidential candidate Alexander Lebed. With his booming voice and confident comportment, Lebed had a substantial following in the country. As reward for urging his supporters to vote in the second round for Yeltsin, Lebed was to become Secretary of the Security Council and principal negotiator for the Russian side in the conflict with Chechnya.
Zyuganov had started the electoral campaign with advantages. Even though he fought it with obsolete techniques, he was confronting an incumbent whose health problems were acute. Nevertheless the second round of the voting in July 1996, after the other candidates had been knocked out, gave a thumping victory to Yeltsin. Money, patronage and a brilliant media campaign had done the trick for him.
Despite his good performance in the presidential polls, though, Yeltsin lacked a stable, loyal majority for his policies in the State Duma.7 He did not attend its proceedings or negotiate with its leaders, leaving it to his prime ministers to manage some kind of accommodation. Chernomyrdin worked behind the scenes offering attractive deals to groups of deputies. Party politics lost much importance as various leading figures were bought off. Vladimir Zhirinovski and the Liberal-Democratic Party noisily criticized the government but did not always vote against it. Duma debates commanded little public respect or attention. Press and TV were concentrated upon the President and ministers except when something scandalous was happening in the chamber. Zhirinovski increased his notoriety in 1996 by physically assaulting a female Duma deputy; but his party’s fortunes did not benefit in subsequent elections. The situation was staider in the Council of the Federation but hardly more helpful in easing the passage of Chernomyrdin’s legislation unless he gave in to their demands for special concessions to region after region. This was pork-barrel politics par excellence.8
Of all the republics in the Russian Federation it was Chechnya which caused the greatest trouble for Moscow. Having declared unilateral independence in 1991, its leader Dzhokar Dudaev had continually cocked a snook at Yeltsin. He had presided over the thorough criminalization of economic activity in Chechnya and given haven to Chechen protection racketeers operating in Russia’s cities. He permitted the application of Sharia law. He declined to pre-empt Islamist terrorist raids from inside Chechnya upon nearby Russian areas. While Dudaev was right that Chechnya had remained with Russia solely because of the superior military power of tsars and commissars, he was not the simon-pure democrat and liberator depicted in his propaganda.9
In December 1994 Yeltsin’s Minister of Defence Pavel Grachëv had persuaded him that the Russian Army would quickly crush the Chechen rebellion. The motives for the invasion were murky. Grachëv wished to divert attention from his corrupt management of the armed forces’ finance and equipment. Powerful members of Moscow’s business elite also aimed to secure tighter control over their oil assets in the Chechen capital Grozny. Yet Grachëv had misled everybody about the readiness of his troops to take on the Chechens. After Grozny fell to artillery assault by land and air, Dudaev and his commanders organized resistance in the mountains. Terrorist actions were intensified in Russian cities. Moscow TV stations and newspapers had reporters in Chechnya who told of the Russian army’s incompetence and of the atrocities carried out by its troops. Such was the confidence of the Chechen fighters that even after Dudaev was killed, having been traced through his satellite-connected mobile phone, the armed struggle continued. But the cost in human lives mounted, and a truce was arranged for the duration of the presidential campaign; and Lebed soon succeeded in producing a peace agreement which left both sides with their honour intact. Military hostilities would cease; the Chechens would in practice govern Chechnya without interference and the independence question would simply be deferred.
No one felt truly convinced that this was the ground work for a solution. Already the implications were dire for Russia’s self-liberation from the authoritarian past. Leading liberals Grigori Yavlinski and Yegor Gaidar were among the few politicians to censure the invasion. Yeltsin recognized his blunder over Chechnya too late and was a shadow of his former self. Practically the entire politic
al establishment had casually accepted the use of massive and at times indiscriminate violence in pursuit of the state’s ends. There was scant appreciation of the damage done to the prospects for a healthy civil society to emerge.
The usually critical leaders of the Western powers did little more than go through the motions of upbraiding the Russian government. The perception was that Yeltsin, warts and all, was the best President available and that his economic and diplomatic achievements earned him the right to prolonged support. It was noted too that Chernomyrdin, while abandoning the laissez-faire zeal of Gaidar, continued to strengthen the roots of capitalism in Russia. Even Gaidar had avoided genuine ‘shock therapy’ for the ailing economy for fear that a drop in people’s living conditions might provoke civil disturbances. Chernomyrdin maintained the policy of enormous state subsidies for fuel, lighting, telephones and transport, and he ensured that tenants should receive the deeds to their apartments without charge. He also devoted resources to keep the prices of farm produce low. Moreover, fiscal regulations gave incentives to firms to eschew sacking employees; the incidence of unemployment stayed low.10 At the same time Chernomyrdin and his successors pressed ahead with economic measures which brought little benefit to anyone outside the tiny circles of the wealthy. By 1995 sixty-five per cent of industrial enterprises had been privatized. The market economy had been installed.
Markets in Russia, however, were of a very distorted kind. Competition was cramped by the dominance of a few ‘oligarchs’ over the banks and the media as well as the energy and rare metals sectors. Criminal gangs and corrupt administrative clientèles compounded the difficulty. The rule of law was seldom enforced. The economic environment was so unpredictable and indeed downright dangerous that the most successful entrepreneurs stashed away their profits in Swiss bank accounts. Fraud was rampant. About half the funds loaned to Russia by the IMF were illegally expropriated by powerful individuals and diverted abroad.
Not all the economic data were gloomy. Although gross domestic output continued to diminish after 1993, the rate of diminution was slowing. In comparison with most states of the CIS, indeed, Russia had an economy that seemed very vibrant. Tajikestan and Georgia were in desperate straits and even Ukraine could not afford to pay its debts to Russia for gas and petrol. The Ministry of Economics in Moscow in 1995 predicted that the Russian economy would at last start to expand again in the following year. The prognosis was proved wrong. Among the problems was the justified reluctance of foreign enterprises to set up branches in Russia while contracts were hardly worth the paper they were printed on. The government’s financial management also left much to be desired. In 1997 it issued state bonds to balance the budget. The terms were hopelessly disadvantageous to the government if ever the ruble fell under severe pressure. Global financial markets were febrile at the time and the dreaded run on the ruble duly occurred in August 1998. Russia unilaterally defaulted on its international loan repayments and Sergei Kirienko, despite not having been Prime Minister when the state bonds had been issued, stepped down.11
Yeltsin’s reputation was in tatters, but the Russian financial collapse quickly turned out to be a blessing in disguise. The devaluation of the ruble increased the costs of imported goods and inadvertently provided a stimulus to domestic manufacturing and agriculture. Shops and kiosks bought up and sold Russia’s own products. By 1999 the beginnings of economic recovery were unmistakable and gross domestic output was rising; and these small steps forward were rightly treated as success.
Nevertheless the economic crisis was not simply an accidental result of the vagaries of financial markets at home and abroad; for the government’s incompetent policies had made a bad situation a lot worse. Such strength as the Russian Federation retained in the world economy anyway rested on the export of its natural resources. Oil and gas were in the lead. Not far behind came gold, diamonds and nickel. Wood pulp too was sold abroad – the result was a shortage in the supply of paper for Russian newspapers! The only finished industrial goods to be sold in any amount across Russian borders were armaments, and even in this sector there was the difficulty that the government was constrained by the Western powers to stop selling weaponry to traditional customers such as Iraq and Iran. Such an economic strategy had been followed by governments from Gaidar’s onwards. Indeed the structure of Soviet foreign trade had similarly been built on the export of natural resources. What was new after the collapse of the USSR, as Zyuganov pointed out, was the process of de-industrialization. Russian factories no longer produced as much output as in 1990 (which was a poor year for the Soviet economy). The Communist Party of the Russian Federation urged the need for tariff walls for the restoration of industrial production.
Communists were brisker in supplying criticism than practical policies. Indeed they appeared reconciled to permanent opposition, and their willingness to abandon tenets of Marxism-Leninism was remarkable. Zyuganov declared himself a Christian believer; his prolific pamphleteering was inspired more by anti-communists like Nikolai Berdyaev, Arnold Toynbee and Oswald Spengler than by Lenin.12 One prominent communist even owned a casino.
In the Duma, communist deputies could still make telling criticisms aimed at the government’s foreign policy. Yeltsin had planned with Foreign Minister Andrei Kozyrev to sustain Russia as a power in alliance with Western countries: both believed in the need for a warm partnership with the USA and Yeltsin spoke confidently about his ‘friend Bill’ when reporting on his summit meetings with President Clinton. Yet the partnership was never remotely near to being an equal one. Russian economic distress disabled the government from competing with American technological advance, military power and global diplomacy. The only residue of old glory lay in Russia’s possession of ageing atomic weapons: this was the sole reason why Clinton bothered to hold summit meetings. In December 1994 Yeltsin signed the Budapest memorandum confirming recognition of Ukrainian sovereignty and territorial integrity in return for Ukraine giving up its legacy of nuclear weapons. Russia obviously remained the most powerful of the successor states. Nevertheless its dependence on the USA’s sanction for the IMF to go on lending to Moscow made it difficult for Yeltsin to refuse America’s diplomatic demands, and Kozyrev’s ‘Atlanticist’ orientation came under assault in the Duma and the oppositionist press.
Yeltsin reacted sharply by publicly rebuking Kozyrev as if he himself had not had a hand in setting the orientation. Both of them began to warn that the government would not stay indifferent whenever other states of the former USSR discriminated against their ethnic Russians. The stringent linguistic and cultural qualifications for Estonian citizenship became a bone of contention. Within the CIS, moreover, Russia increasingly used its supply of oil and gas to neighbouring countries as an instrument to keep them within the Russian zone of political influence.
Hardening the line of foreign policy, Yeltsin sacked Kozyrev in December 1995. Yet he could do little about the series of encroachments by Western powers. Finland had joined the European Union earlier in the year and schemes were made for the eventual accession of many countries in Eastern Europe in the twenty-first century. This was embarrassing enough. Worse for the Russian government was the NATO’s refusal to disband itself after the Cold War’s end and the Warsaw Pact’s dissolution. Quite the contrary: NATO set about territorial expansion. Poland, the Czech Republic and Hungary became members in 1999. NATO forces were sent into action in Bosnia in 1993–5 and Kosovo in 1999 as inter-ethnic violence intensified. In both cases the Russian government protested that insufficient effort had been invested in diplomacy. Yeltsin sent Chernomyrdin as his personal envoy to Belgrade to plead with Serbia’s President Slobodan Milosević to come to terms with the Americans and avoid the bombing of his capital. But to no avail. Having lost its position as a global power, Russia was ceasing to carry much weight even in Eastern Europe.
The Russian Foreign Ministry and various Moscow think-tanks recognized that policy should be formulated on the basis of a realistic appreciation of R
ussia’s reduced capabilities. They recommended that Russia should seek other partners in world diplomacy without alienating the USA. The benefits of ‘multipolarity’ in global politics and economics were touted. The European Union, China and India were courted by Russian diplomats with a revitalized enthusiasm.
Nothing about this steady endeavour was going to capture the imagination of a public unaccustomed to seeing its government treated casually by the USA. It was Yeltsin’s good fortune that few public bodies took him to task. The Russian Orthodox Church supported his invasion of Chechnya and his diplomatic stand on the Kosovo question. Its hierarchy had little interest in the routine of politics. At times of national emergency, especially in late 1993, Patriarch Alexi II offered himself as an intermediary between Yeltsin and his enemies; but generally the Church, needing the government’s assistance in defending itself against the resurgence of other Christian denominations, was quiescent. So too was the Russian Army. Yeltsin never had to face the overt criticism by serving officers that Gorbachëv endured. Military critics no longer held seats in representative public institutions. The platform of criticism had been sawn from under them. The armed forces performed poorly in Chechnya. Although their finances had been savagely reduced, there was no excuse for their incompetence and brutality in the taking of Grozny. Even the media were easy on Yeltsin’s regime. They exposed corruption in his family; the NTV puppet show Kukly (‘Dolls’) satirized him as a bumbling idiot. But his policies rarely suffered assaults of a fundamental nature.
The Penguin History of Modern Russia Page 62