Commentary

13th September 1998

Boris Yeltsin's Russia in turmoil

By Mervyn de Silva

Parliament Vs. President, a direct confron tation. Or so it seemed from the headlines in the foreign news page. Some were quite strong and bold enough to predict the shape of things to come:

Intrigue grips Kremlin as aides write off Yeltsin: Yeltsin confronts critics, goes on TV and vows not to quit.

Europeans warn Russia, push reforms to get help.

Russia goes to barricades over burial of last Czar.

It was the last headline to an agency item that was most thought- provoking. Nostalgia for the Czarist past? No more faith in the commissars?

Of course the mood in Moscow today, and certainly other cities and major towns is decidedly grim. Why? The shortest answer is inflation. Its impact has been so widespread that the Duma, the Russian Parliament damanded President Yeltsin's immediate resignation. But how could the spokesmen of a rapdily swelling opposition deliver his message? Alas, the popularly elected President had "Gone underground!". And this was the brave leader who seven years ago had sparked a mass uprising by climbing atop an armoured car and convinced his people the time had come to close the chapter that V. I. Lenin had contributed to Russian history. As the New York Times correspondent wrote he had not been seen too often in public since Russia's financial markets and its currecny fell off a cliff.

The Russian economy had caught the Asian flue, said a Moscow columnist, who had been a staunch supporter of Gorbachev, glasnost and perestroika and had cheered the victorious Yeltsin at the presidential polls.

"Is Boris Yeltsin the ruler of Russia? Or is it his double! The question has been raised by Alexander Saly, a Communist party deputy in the Duma, the lower house of parliament who has asked for a formal inquiry to establish the answer! Of course it's a joke but a joke can be a serious thing, say some of Saly's comrades who have also noticed that President Yeltsin is no longer the self assured, aggressive leader he had been. Foreign dignitaries who see him in the White House return quite surprised by the "new Boris Yeltsin", a tired, troubled man.

One is not sure how the Speaker will respond to the communist M.P.'s inquiry. A newspaper that is linked to the Nationalists has already produced "evidence" that the man living in the White House is a look-like, not the real Boris Yeltsin.

IMF World Bank

The American pundit on Russian affairs, Dimitri K. Simes, President of the Nixon Centre in Washington sees some light at the end of the tunnel - prime Minister Victor Chernomyrdom. The central issue is economic, meaning the rouble, now grossly over-valued. Devaluation is the answer, meaning a leader like Chernomyrdin who could make tough decisions and impose his will on the Central Bank.

In trying to avoid the inevitable devalution of the rouble, the Russian central bank wasted about 3.5 billion of the first 4.8 billion dollars, off the IMF's 22.6 billion July rescue package in only one month. Russia needs more reform but for reform to work, it must be undertaken in a systematic manner and address the key requriments for building a genuine market economy, including gurantees of property rights and anit-monopoly legislation, tax reform and tough measures against corruption.

In short, the economy of Russia, the first communist state, shares with the newly independent Third World states which gained independence from Britain, and retained many of the social welfarist programs that characterised England under the Labour party. The IMF World Bank Bretton Woods twins issue a prescription quite familiar to the former colonies. What makes the Russian challenge more difficult and disturbing is that the armed forces of Russia have a nuclear arsenal.

Stock markets

In a post-Cold War world, the stock exchange is more important than a nuclear stockpile. Russia's Defence Establishment, more or less the Soviet Union's, has access to weaponry which would allow the decision makers in the Kremlin to confront the United States or NATO, in any European theatre. Disorder in a permanently unstable Russia threatens order, stability and prosperirty in Europe starting with central and eastern Europe, including those fomer Communist allies of Moscow as members of the Warsaw Pact.

Economic Factor

The conflicts may no longer be ideolgical shall we say 'isms'... but identity (race and religion) territory or resources. Communist Yugoslavia in central Europe, could well be the pattern in what American propaganda described as "Soviet Sattelites", in the long war of the superpowers, capitalsm vs. socialism. Capitalism, that is "market economics", won but... Capitalism, market economics, or private enterprise have not brought order and stability.

"European stock markets were sent reeling again by the worsening crisis in Russia. Share prices fell across all sectors, spreading out from the banking stocks that sank after figures began to emerge of losses on Russsian positions".

Leading European shares fell 92.29 points or 3.6% Financial stocks were again among the main casualties. To cite just one example from the banking sector, Credit Suisse First Boston, the Swiss-owned investment bank has suffered losses in dollars because of the Rusian impact, wrote Vincent Boland, a British reporter based in Germany. Any American analyst would call it "peanuts".

The Washington-based Institutue of International Finance.... a research institute funded by the leading banks says that "the outside world's debt and equity exposure to Russia tops 200 billion dollars. The dutch-owned Ing Baring and investment bank places the wealth destroyed in Russia since the start of this year at 118 billion dollars.

But the authorities in Moscow claim that debtors owe Russia 148 billion dollars. At the top of the list are Cuba, Vietnam, India, Iraq and states in the Commonwealth of Independent states, mainly Russia's former Warsaw pact allies.

Dmitri K. Sime's favourite candidate is Vicktor Chernomyridin, the new prime minister. But President Yeltsin's problem was aggravated by communists and nationalists.

And they are by no means pro-IMF/IBRD. Neither will endorse policies which would send the prices of essential items (the average housewife's main interest) Soaring.

Democracy rests on the popular will, and the prices of basic consumer items will determine the average housewife's mood, not the IMF.

Firday's newspapers announced that Yevgeni Primakov the distinguisted journalist had been appointed Prime Minister. Primakov, the Cairo based PRAVDA correspondent, covered the NAM summit in Colombo.

He had the privilege of an exclusive interview with Prime Minister Sirima Bandaranaike. And this columnist who had met him in Cairo had a lunch in his honour, on behalf of Mrs. Bandaranaike's NAM organising committee.

Hulftsdorp Hill

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