Yeltsin

by Timothy J. Colton

  Yeltsin claimed on several occasions that the emergency had passed, even as he spoke more frankly with his subordinates. On August 13 the Financial Times of London printed a letter from U.S. financier George Soros about Russia being at “the terminal phase” of a “meltdown” of its financial markets. He recommended a prompt devaluation of 15 to 25 percent and turning over management of the ruble to an expert currency board. At the request of Kiriyenko, his economic team, and Valentin Yumashev, Yeltsin made one last demurral. On August 14, in Novgorod, he stated “firmly and concisely” that there would be no devaluation. Kiriyenko, Yumashev, Chubais, and Dubinin (accompanied by Yegor Gaidar) went to Zavidovo two days later to tell him the game was up. Yeltsin concurred and, as was typical of his style, asked them to spare him the fine print. “The head of government started describing the details, but I stopped him. Even without them, it was clear that the government, and all of us along with it, had become hostages to fate. . . . ‘Go ahead,’ I said. ‘Do take emergency measures.’”28

  On August 17 Russia let the exchange rate float, defaulted on its treasury bills and bonds, and imposed a ninety-day moratorium on payments to foreign creditors. In two frantic weeks, the ruble lost half of its exchange value, going from 6.3 to the U.S. dollar to 9.3; it was to plummet to 21 to the dollar by September 21. GKOs were reduced to all but worthless scraps of paper. The three-month moratorium favored Russians over foreigners without keeping hundreds of the banks from going under in a triage process that stretched into 1999. Citizens queued at tellers’ windows to withdraw their deposits. Prognoses of economic and social breakdown swamped the domestic and world media.29

  Political change came inexorably in the wake of the financial bulletins. The alternatives facing Yeltsin, as one writer put it in September, were “the bad, the atrocious, and the bloodcurdling.”30 The leftist and nationalist majority in the Duma, and especially the far-left communists, were out for nothing less than the president’s head. On August 21 the house met and passed a nonbinding resolution calling on him to step down, with 248 votes for and just thirty-two against. Opinion makers had been scoping out an abdication in earnest since early summer, some pitching ideas for institutional innovations that might grease the skids. In an essay in Nezavisimaya gazeta on July 10, the sagacious Vitalii Tret’yakov pointed the finger at Yeltsin and his loyalists for following an “ostrich policy.” Without a change of course, Russia was in for popular insurrection, a coup d’état, or civil war; if the last were to break out, the country would come under foreign military occupation, since the world could not abide the breakup of a former superpower with a nuclear arsenal and ten atomic power stations. To stave off a cataclysm, Russia, he said, needed to hold special legislative and presidential elections within three months. The Federal Assembly should establish a Provisional State Council consisting of main ministers, parliamentary leaders, party heads, and representatives of Russia’s macroregions and trade unions. Yeltsin was to be barred from chairing the council and to be a member only if he consented in writing not to stand for another term in the extraordinary election for president. To head the council, Tret’yakov suggested Foreign Minister Yevgenii Primakov; he also recommended that Viktor Chernomyrdin be returned as the caretaker prime minister for the interregnum.31

  Tret’yakov was right in the presentiment that there would be a shakeup and that Chernomyrdin and Primakov would be players in it. The Provisional State Council, though, was too contorted an idea to fly.32 And Tret’yakov miscalculated about the president. Yeltsin did not consider renouncing power in 1998, to a Supreme Council or anybody else, despite repeated testimony in the press that he was on the verge of doing so.33

  Yeltsin notified Kiriyenko on August 22 that his premiership was done, after four months. The choice to replace him was the amazing one foreseen by Tret’yakov in July—Chernomyrdin, the same veteran of the red directors’ club whom Yeltsin had deposed in March. As he made the offer to Chernomyrdin in his Kremlin office on August 23, Yeltsin made a fulsome apology for the past spring and offered to repeat it on the airwaves. Chernomyrdin said the confidential amends were sufficient. It was made clear in this meeting and others that Yeltsin expected Chernomyrdin to sit until 2000 and to run for president then with his support. Yeltsin was more acceptant of Chernomyrdin’s return than excited by it.34 He divulged his decision in a televised speech the next day. “Today we need the people who are usually called ‘heavyweights.’ In my view, the experience and weight of Chernomyrdin are needed.” Yeltsin drew a link to the succession question, saying the reinstatement would help assure “continuity in power in 2000” and that human qualities such as Chernomyrdin’s “will be the decisive argument in the presidential elections.”

  The Duma would have none of it. In the first round of the voting, on August 31, only ninety-four deputies voted for the former and acting prime minister, worse than Kiriyenko had fared in April. Meeting on September 2 with Bill Clinton, in Moscow to show the flag, Yeltsin was truculent. He was not afraid to provoke a system-wide crisis if the Duma would not confirm his nominee: “Yeltsin seemed ready for that, even to welcome it. He could use his presidential powers, he said, to ‘wreck the Communist Party once and for all.’ The communists ‘have committed plenty of sins in the past. I could make a list of those sins and take it to the Ministry of Justice and prosecute them.’ Clasping his hands and gritting his teeth, he added, ‘I could really put the squeeze on them.’”35 But Yeltsin also shared with the Americans that he was debating alternatives, and Chernomyrdin knew it full well.36 Doubts only grew when, upon resubmission, Chernomyrdin could garner no more than 138 votes. While this was more than Kiriyenko received in the second round in April, the climate of opinion was different: Gennadii Seleznëv would not arrange a secret ballot; the communist caucus stuck to its guns; the Federation Council was not on board; Yeltsin and Chernomyrdin were damaged goods. There was also a constitutional complication. The communists were preparing to introduce a bill to impeach Yeltsin. Under Article 109, the president was not empowered to dissolve the Duma and force a new parliamentary election if an article of impeachment had passed the lower house. Had Yeltsin persisted, militant KPRF deputies had a chance to tie his hands by railroading through an impeachment bill before the nomination of Chernomyrdin came to a vote.

  Yeltsin now executed another U-turn: As in December 1992 with Chernomyrdin, he agreed to a compromise candidate. Yevgenii Primakov, two years older than Yeltsin (and thirty-three years older than Kiriyenko), had been Russia’s spymaster and latterly its minister of foreign affairs. Before that he was a journalist, academic, and nonvoting member of the Gorbachev Politburo, always working hand in glove with the security services. Primakov was portly, avuncular in comportment, and center-left in his politics. He wanted a broad-based government, heightened state regulation of the market, and a more muscular foreign policy, all of which fit better with what parliament and the populace wanted than Chernomyrdin or Kiriyenko had. Primakov needed to be talked into taking the position of prime minister. After three meetings with Yeltsin and many more with staffers, he acquiesced on September 10. The nomination sailed through the Duma on September 11, with 317 votes in favor to sixty-three against.

  Yeltsin’s back-to-back reversals, in a setting of economic distress, led some to the surmise that his star had set irretrievably. “The Yeltsin factor, with his . . . utter unpredictability in the struggle for personal power, has departed for all time from Russian politics,” Tret’yakov submitted in Nezavisimaya gazeta the morning after the Primakov confirmation. “In the larger scheme of things, politician Yeltsin no longer exists”; all that was left now was “citizen Yeltsin,” yesterday’s man. He had failed to “appoint” an heir, Tret’yakov continued, and would be unable to appoint one in future.37

  But Yeltsin was not yet ready to fade from the scene, and he was not bereft of political resources, as would be evident in 1999. What Tret’yakov’s diagnosis also overlooked was that the Primakov solution was in some ways a blessing
in disguise for Yeltsin. Defeat in a third Duma ballot, if that was the alternative, held more dangers for him than it did for the communist-led opposition, which most likely would have come back from an election strengthened. Yurii Luzhkov of Moscow was a much-bruited option for prime minister in September. Put off by his ambition and forwardness, Yeltsin was passionately against the candidacy and sacked several close aides for pushing it.38 Had a Chernomyrdin restoration come about, it would have been a standing reproach to Yeltsin for his poor judgment in ousting him earlier. Unlike Primakov, Chernomyrdin had open presidential aspirations that Yeltsin would need to manage. Chernomyrdin had reason to feel aggrieved at Yeltsin’s treatment of him and to reckon that he could feed off it politically.39 And parliamentary approval for Chernomyrdin would have come at the price of a huge power-sharing concession, to be in effect until 2000. During the negotiations Yeltsin had offered to waive his right to dissolve the legislature (it would waive its right to vote no-confidence) and to give it a veto over the appointment of deputy premiers, the minister of finance, and the heads of the force agencies. Gennadii Zyuganov renounced the pact on August 30, thinking there were more concessions to wring out of Yeltsin.40 Yeltsin took it off the table when he submitted Primakov’s name, leaving him able in future to put his new prime minister through the same meat grinder he subjected Chernomyrdin and Kiriyenko to in 1998.

  Primakov, most importantly, was in a position to pursue the needed course correction with far more credibility than Chernomyrdin. Talk of a constitutional revision to dilute Yeltsin’s presidential powers withered on the vine in October. Yeltsin was prepared to give Primakov as much autonomy to select collaborators as the young liberals Gaidar and Kiriyenko had in their time. Primakov filled many positions in his White House apparat with reserve intelligence officers. In staffing the cabinet, he would say in a memoir, “The president and his entourage . . . desisted from imposing . . . particular people on me.”41 As his first deputy premier for economic affairs, he lined up the communist and dirigiste Yurii Maslyukov.42 At Primakov’s urging, Viktor Gerashchenko, evicted from the position by Yeltsin in 1994, came back on September 12 to chair the central bank.

  Primakov on the whole was a moderate and pragmatic prime minister. He ran for Yeltsin what was essentially a coalition government. Fourteen of thirty-one cabinet members, among them reformists like Finance Minister Zadornov, were carried over from Kiriyenko, and he blended in leftists, centrists, and clients of Luzhkov and other politicos. Primakov and his ministers employed administrative levers to put failed banks into receivership, slow capital flight, and force the payment of some back wages to civil servants and the disgruntled miners.43 The budget they submitted had a deficit of only 3 percent of GDP. Primakov and Gerashchenko financed the deficit that remained through the printing press, thereby ramping up inflation to 84 percent in 1998 (from 11 percent in 1997) while short-circuiting the ruinous lending cycle. The feeble economic growth of 1997 yielded to still another slump in output, by 4.9 percent in 1998, but the bottom did not drop out of the system, as had been feared. Primakov, in Yeltsin’s assessment, “chose the perfect intonation” to reassure the nation. “With his confident unhurriedness, Yevgenii Maksimovich managed . . . to convince almost everybody that things would calm down.”44

  Counter to the doomsday talk, the Russian economy after those first jumpy weeks commenced a dramatic upturn that has continued to this day. There were signs as early as October and November of 1998. The annual figures for 1999 were music to Yeltsin’s ears—5.4 percent growth and inflation under 40 percent. The seemingly disastrous decision to mark down the currency ended up being a revitalizing tonic. The devalued ruble made petroleum and other exports more affordable to external buyers and formed a nontariff barrier against imports, which sparked a recovery in the domestic supply of food, apparel, and consumer durables. Shut out of international capital markets, Russia was at last pressed to harden its state budget and restructure the sovereign debt. Crisis let these revisions, undoable in normal times, be imposed and locked in against regression. In the worldwide economic environment, trends turned in Russia’s favor for the first time since the 1980s. Most critically, oil prices more than doubled between 1998 and 2000. That surge, compounded by an increase in production and exports, tripled revenues from the oil and gas trade, which in turn restored liquidity to cash-starved commerce and put an end to the demonetization and nonpayment syndromes.45

  In his survey of the financial collapse in Presidential Marathon, Yeltsin revisited the therapeutic imagery he had applied to shock therapy six or seven years beforehand. “A political crisis,” he wrote, “is a temporary phenomenon and is even useful in a way. I know from my life that the organism uses a crisis to overcome an illness, renew itself, and return to its customary, healthy state.”46 The passing of the great panic of 1998, however, was not followed by a revival of Boris Yeltsin’s fortunes. Instead, he was increasingly beleaguered and preoccupied by finding a way out of the jam he was in.

  One reason this was so was that the economic turnaround seemed fragile and did not improve the well-being of the average Russian family for some time to come. Per-capita income and consumption reached pre-crash levels only in 2001, by which time Yeltsin was in retirement.

  A more immediate problem was with the president’s personal health and ability, actual and perceived, to do his job. Yeltsin maintained mental equilibrium after the blur of events in August–September, largely out of relief that things were not worse and that Primakov had taken the bit between his teeth. It was his physical condition that worsened noticeably. One month after Primakov’s installation, Yeltsin’s occasional appearances at the Kremlin were being played up by the Russian media as “breaking news.” On a visit to Kazakhstan and Uzbekistan in the second week of October, he had coughing spells, several times lost his footing, and returned to Moscow early.47 He checked into the Barvikha sanatorium at the end of October, went on a threeweek layoff attributed by his staff to exhaustion, and was admitted to the TsKB on November 23 with double pneumonia, staying there for better than two weeks. On January 17, 1999, he was hospitalized with a bleeding stomach ulcer. He emerged from the sanatorium in early February to fly to the funeral of King Hussein of Jordan, where Primakov had been announced as Russia’s representative. His doctors were unconditionally against the expedition. “No one understands me,” Yeltsin declared to his staff, ordering a six A.M. departure for the presidential plane.48 He was on the ground in Amman for only six hours.

  The ulcer flared up again in late February. Yeltsin was readmitted for three weeks in hospital and sanatorium. The Izvestiya columnist Maksim Sokolov floridly summed up the contrast with Yeltsin in his prime: “The material out of which nature made Yeltsin is the wood from which kings are carved. Yeltsin’s and all Russia’s misfortune is that nine years of transitional burdens have managed to chew this wood into dust.”49 Attendees at the G-8 meeting in Cologne in June 1999, where Yeltsin dropped in on the final day, found that he “looked like a battered statue that might topple over at any moment.”50 After an even-keeled summer, he was in hospital for several days in October 1999 for influenza and laryngitis and, following a short visit to Istanbul—his last as president—went through it all over again in November and early December, for pneumonia.

  The decline in Yeltsin’s health provoked repeated pleas in parliament and the media for him to resign. Some went so far as to appeal to Naina Yeltsina and the family to intercede to put a stop to the “public spectacle” of him “dying away” in office—unsolicited advice that the Yeltsins found deeply wounding.51

  There were multitudinous markers of poorer political health after August 1998—poorer than Yeltsin had ever been in as national leader. Public-relations and policy-planning endeavors begun in 1996–97 were inaudibly abandoned. The Friday brainstorming group did not convene after the 1998 crisis. The Saturday radio chats were canceled rather than having to make amends each time for “the disaster of the week.”52 In the monthly ratings of
influence in Nezavisimaya gazeta for October, the superpresident, Yeltsin, was put in third place, below Prime Minister Primakov and Mayor Luzhkov; he remained there until the February 1999 poll, when he was back in second place, with Primakov still in first.53 A corruption scandal broke out early in 1999 around the Swiss construction company Mabetex. Prosecutors in Switzerland alleged that it had paid kickbacks to Pavel Borodin and other high-level officials to secure the main contract for the reconstruction of Building No. 1, in Yeltsin’s first term. The procurator general, Yurii Skuratov, who had long been estranged from Yeltsin’s administration, launched an internal investigation. It eventually was claimed that the owner of Mabetex, Kosovar-Albanian businessman Behgjet Pacolli, had transferred a million dollars to a Hungarian bank account for President Yeltsin, supplied him and his two daughters with credit cards, and paid for expensive purchases through them. Guilt or innocence is impossible to ascertain with certainty, owing to the secrecy surrounding all these transactions, but the finger pointing at the Yeltsin family lacks credence and none of the charges was ever proved. Still, the affair was of sufficient magnitude for Yeltsin to mention it on the telephone with President Clinton in September 1999.54

  Proof of an embattled presidency could not be missed in various areas. In center-periphery relations, provincial governors were among those who summoned Yeltsin to cede power during and after the 1998 crisis, and there was a spike in regional noncompliance with central laws and policy at this same time. Chechnya, brutalized by the war of 1994 to 1996, remained an open sore. Leader Aslan Maskhadov proved incapable of reining in gangsters, terrorists, and Islamic fundamentalists; dealings with Moscow became tenser by the month.55 Foreign policy had its own frustrations, as Yeltsin could not stop NATO from retaliating against Serbia for its repression of rebel forces and civilians in Kosovo. An air war against the Serbs began on March 24, 1999, leading Russia to freeze relations with the alliance.