What Stability?
Russia is preparing for parliamentary elections in December 1995, and a presidential election in Jun
The "party of power" is making the necessary preparations to remain in power, and continue the massive theft which characterises the capitalist "development of Russia". The stakes are so high that there is a real risk of authoritarian measures if the population votes the "wrong" way.
by Poul Funder Larsen
Moscow
AFTER YEARS OF POLITICAL TURMOIL and economic decline, the political elites in Russia have found themselves a new mantra: that of "national accord" and "stability" The Chernomyrdin government proclaims the success of its policies of "financial stabilisation" as prescribed by the International Monetary Fund (IMF), while privatisation is now said to be irreversible. The political superstructure of this government "success" is Chernomyrdin's "Our Russian House" organisation - the quasi-official "bosses' party". In the parliamentary elections of December 1995 this party will defend the colours of the current pro-capitalist government, with the ultimate perspective of keeping the Yeltsin-Chernomyrdin tandem in power until and after the Presidential elections of June 1996. The absence of a strong, credible opposition gives the "bosses' party" a chance of success. But this is far from certain. No amount of government propaganda can cover up the consequences of five years of botched pro-capitalist "reform": production had dropped 50%, unemployment has risen from zero to 13%, whole industries have been destroyed, and violent and white-collar crime is rampant. Not to mention a few wars here and there on the periphery of the "empire". STABILISATION WITHOUT STABILITY? Since the freeing of prices in January 1992 unleashed hyperinflation, the government has made "financial stabilisation" its top priority. IMF style. The coming of stabilisation has been announced regularly, at least twice a year. But it has never materialised. The latest attempt, to drive inflation below 2% a month through budget austerity, has, not surprisingly, failed. Official sources now admit that inflation in December 1995 will be 7-8%, no lower than in the summer of 1992, three years and half-a-dozen "stabilisation" plans ago. 18 International Viewpoint n° 270 - October 1995
And yet, in this latest "stabilisation" plan, government spending on education, health care, culture and science has been tightly controlled, with disastrous results. But at the same time the huge commercial monopolies, formed in the process of privatisation of nationalised property, and operating in what is largely a fictitious market, have utilised their privileged position to hoard super-profits. One prominent example is Gazprom, the world's largest producer of natural gas, and in asset terms probably the largest company in the world. This giant has not only avoided paying taxes, but has hiked its rates to consumers far quicker than the general development of costs and prices would call for. Incidentally, Gazprom is the personal fiefdom of Chernomyrdin, the man at the head of the "stabilisation" government. Far from facilitating decentralisation and generalising prosperity, as the liberals promised to do in the 1989-1992 period, privatisation has in fact paved the way for a new hypercentralisation. A few individuals now control quite enormous fortunes. The political corollary of this process has been the forging of new alliances among the groups in the state apparatus which reflect the interests of the various monopolies. And the criminal corollary is the flood of economic crime and contract killings which has engulfed all spheres of Russian economic life. CHERNOMYRDIN'S "NEW DEAL" The Chernomyrdin government has become the symbol of a "New Deal" carried out to the detriment of the overwhelming part of the population. After the most odious monetarists (Ygor Gaudier and Boris Fyodorov) were forced out of the government, following the liberal defeat in the December 1993 elections to the Duma (parliament), Chernomyrdin forged an alliance between leading managers in those parts
* RUSSIA of Russian industry most dependent on western investments and markets (oil and gas extraction, the metal-working industries) and representatives of "nationally oriented" Russian capital (the banking sector, parts of the defence and agro-industries). The Chernomyrdin government thus became the central bargaining institution for the lobbies and apparatuses competing for power and influence. In this process, President Yeltsin has unavoidably lost out, and the dominant position in Russia is now that of the Prime Minister, Chernomyrdin. The material basis for the convergence of interests is the privatisation process. "Red" directors (those in whom the hardline opposition of the early 1990s had so much trust) have been transformed into managers in a commercialised, if not fully capitalist, environment. The commercial expression of this is the increasingly dominant position of the new Russian banks (that is commercial banks organised in the 1988-1991 period). To illustrate: earlier this year a consortium of banks "offered" to bail out the cash-strapped government in exchange for major stakes in the remaining large state enterprises, due to be auctioned off in 1995-6. This concrete proposal eventually came to nothing. But it does show the growing self-confidence of the up-and-coming Russian bourgeoisie. Of course, the future of this new class depends on the political struggle in society as a whole, and in particular on the struggle for control over the state apparatus. The fortunes of these "new Russians" have been created solely by pilfering state property and assets. Their future is linked to that of the state apparatus on which they have been acting as parasites. Economic reform à la Chernomyrdin has been a boon to these layers, while destroying large parts of Russian industry producing for the home market. Much of Russian light industry has come to a standstill. And even after five years of constant decline, output in this sector will drop a further 35% The Chernomyrdin government has succeeded in keeping its fragile alliance together, despite the social costs of reform and the fierce competition between the sectional lobbies. Chernomyrdin's success is based on his identification of the lowest common denominators': the things that are sure to keep his coalition together. They are three: continued privatisation, subsidies for the strongest lobbies, and a free hand for the monopolies. From the hard-line liberal Chubais to the "Red Collective Farmer" Zaveryukha, the government is united. The success of this approach (and the "principles" of the opposition) can be illustrated by the ease with which the government avoided a threatened no-confidence vote by parliament in June of this year. The government simply allocated a slice of new credits to the agro-industrial complex. And then the majority of the Agrarian Party faction in the Duma switched their support from the opposition to the government. THE VIOLENT FACE OF RUSSIAN CAPITALISM The pro-capitalist drive has created an unprecedented wave of criminality. Russian society has been shaken several times over the last few years. This is an important factor in the abysmal popularity ratings of Yeltsin and his government. In 1994 alone there were more than 500 contract killings of businessmen and public figures. Among the victims were
Russia's top investigative journalist Vlad Listyev, three Members of Parliament, and countless bank managers and company directors. These numbers indicate the extent to which the privatisation programme, in the absence of a market infrastructure and legal framework that would secure some, even rudimentary form of economic competition, has led to outright barbarism. In a monopolised environment dominated by Mafia clans with deep roots in the state administration, the only means of "competition" is the physical liquidation of competitors. Seven reshuffles of the secret services in less than four years, and a massive reallocation of resources to the Ministry of the Interior has not had any positive effect, because these organs are themselves infected by criminal structures and corruption. Any systematic struggle with organised crime in Russia would have to take the form of a struggle with the present state apparatus, which is responsible for atrocious crimes. The war in Chechnya is a case in point: tens of thousands of Russian citizens have been killed by the Russian army, and a whole region destroyed in a military adventure that will have serious repercussions for years to come. This undeclared war was initiated and executed by Yeltsin and the "power ministries" (Defence, Interior, and the secret services) without the slightest democratic decision-making or possibility of parliamentary veto. The "division" between "hawks" like Defence Minister Grachov and "doves" like Prime Minister Chernomyrdin boils down to a discussion about whether, after systematically destroying Chechnya, one should try to "divide and rule" in the framework of a negotiated settlement, or simply continue to wage war for years to come. The Budyonovsk disaster exposed the utter incompetence of the police and military, coupled with the economic constraints, had enabled the second option to gain the upper hand, as a means of political damage control. A lasting political solution is still to be found. Russia is likely either to demand the de facto capitulation of the Chechens, or to insist on the partition of the republic, incorporating northern Chechnya into Russia proper. This would reduce southern Chechnya to little more than a Bantustan. The ethnic cleansing of Chechens from the Stavropol region of Russia proper, which borders on Chechnya, is a worrying development, suggesting a development towards the partition option. TWO ELECTIONS All this sets a sombre background for the elections to the State Duma (lower house of parliament) in December of this year, and the presidential elections of June 1996. The sheer number of parties and the possible permutations of alliances makes the results difficult to predict. Chernomydin's "Our Russian House" party is virtually synonymous with the state administration. It can count on unlimited material resources and media access, which should secure the "Party of Power" a decent result in the December 1995 elections to the Duma. But since Yeltsin's constitution, baptised in the gunfire of October 1993, relegates the Duma and the Federal Council (upper house of parliament) to the role of a discussion club with a high-profile membership, the most important election is the presidential one. The Duma elections should be seen as a testing ground for the Spring 1996 presidential election campaign.
International Viewpoint n° 270 — October 1995 19
The chances are that Yeltsin will seek re-election. His current popularity rating is 7-8%, and so his chances of success are unclear. Chernomydin would seem to be a better candidate for the elite. A large number of equally unpopular candidates will face each other in the first round. Only the two best placed go forward to the decisive, second round. Only a small percentage of total votes could result in Yeltsin facing the extreme right leader Vladimir Zhirinovsky in the second round. In which case Yeltsin could still win. In any case, Yeltsin's strongest card is not any of his (very limited) political successes, but the weakness of all wings of the opposition. OPPOSITION IN SEARCH OF IDENTITY The liberal current is in crisis. In December 1993 they could muster 25% of the vote, but they are now scattered among a series of unimpressive parties, and will fare much worse in the next elections. The old liberal establishment has been side-lined by the marked shift in the economy away from the dominance of comprador elements towards the emergence of "national capital", and the consequent shift in Russian politics towards a consensus on the need for a strong active state. It should also be noted that a part of the old liberal establishment has been genuinely repulsed by Yeltsin's atrocities in Chechnya. A change ot generation has taken place in the remaining. "hard" opposition: the communist, "patriotic" and chauvinist forces. Pre-December 1994 leaders like Rutskoi have been pushed aside. The party and leaders likely to do well in December 1995 and June 1996 are more soft-spoken. They are closer to the pro-capitalist, "centrist" consensus that has emerged in Russian politics since October 1993. Besides the maverick Zhirinovsky, the main force on the nationalist wing will probably be a bloc of moderate "patriots" in favour of pro-capitalist reforms, led by General Alexander Lebed. The exact outlines of such a bloc are still 20 International Viewpoint n° 270 — October 1995
RUSSIA * undecided, with the allegiance of many fractions as yet undeclared. But one thing is sure: the future of Russian democracy is threatened by the popularity of a man like
Lebed, who had identified the former Chilean dictator Pinochet as one of his political idols.
The Communist Party might become the strongest single party in the new Duma, although CP leader Gennady Zyuganov has no chance of winning the presidential elections.
The big question concerning the Communists and their cousins in the Agrarian Party is what programme they will present. Zyuganov has always been strong on nationalist rhetoric, but is rather evasive when asked about concrete policies to reverse five years of Yeltsinism. Any victory for the CP would mean little change in the government's economic policies, and increase the probability of a "Russia first"
foreign policy.
In these circumstances, the choice for leftists is not an easy one.
Some militants try to work with the trade unions, but it now seems that no clear-cut prolabour bloc is likely to emerge in time for the elections. Other militants are trying to build up an internationalist and socialist opposition within the Communist Party, or at least to secure the presence of independent socialist candidates on the Communist Party candidate list.
THE AUTHORITARIAN OPTION
The political situation remains one of "uneasy calm". Many media observers predict a rise in economic and social tensions during the autumn, creating an unpredictable climate for the election campaign. It is true that there is no real stabilisation in sight, and that real incomes are still falling
Having said this, the workers remain largely passive, and those struggles which do take place are not generating a clear opposition dynamic. But if the December elections do result in an outcome which goes against the interests of the
"Party of Power", Yeltsin can always play the "Nazarbayev option": call off the presidential election, or hold a referendum proposing to avoid any such event, in the tradition set by Presidents Nazarbayev of Kazakhstan and Karimov of
Uzbekistan.
It will not be difficult to regroup supporters of this last option among pro-Yeltsin politicians and the new business elites. But this would not guarantee stability in the short or medium term. Any such move would trigger a political crisis as important as the events of September-October 1993
Transcaucasus