Yeltsin swings left to dodge electoral crash

By Boris Kagarlitsky MOSCOW — In the parliamentary elections in December, six months before the far more vital vote for the presidency, the authorities discovered to their alarm that they had almost no support among the population. As a matter of urgency, they decided on a swift change of course. President Boris Yeltsin declared publicly that a quick "manoeuvre" in social and economic policy was essential. Similar manoeuvres were made by the ocean liner Titanic on its last night. An iceberg was spotted dead ahead. If the helmsman had kept his nerve, the ship would have struck the ice with its bow — its strongest part. Though damaged, the ship would have stayed afloat. But the terror-stricken people on the bridge tried to make a sharp change of course; the ship struck the ice with its vulnerable flank and went quickly to the bottom. Not for the first time, the "Titanic effect" is being witnessed in Russian politics. Gorbachev's political manoeuvres in 1990 and 1991 were of this type. Now Yeltsin is trying to manoeuvre. But the more desperately the regime tries to shift course, the more vulnerable it becomes. The policy has included a decision by the pro-government "Our Home is Russia" fraction in the Duma to bloc with the Liberal Democratic Party of ultra-nationalist Vladimir Zhirinovsky. Other manoeuvres have included the sacking of foreign minister Andrei Kozyrev and of the government's key economic strategist, first deputy prime minister Anatoly Chubais. The main hopes, however, have been placed on initiatives in financial and social policy. Yeltsin announced that a special presidential fund would be established, and that this would guarantee the prompt payment of wages. Student stipends would be increased from April 1. The demands of coal miners, who had been fighting for the payment of wage debts from as far back as October, would be granted. The government calculates that additional infusions of money, will dampen popular discontent before the elections. The positive social effects of this spending will be felt immediately, while the inflationary impact will hit only after four or five months. If the "party of power" triumphs in the polls, the present authorities will be able to return to harsh financial policies. If the current authorities lose, then the task of coping with the results of pre-election populism will fall to today's opposition. Those are the regime's calculations. In practice everything will be quite different. The discontent has already reached its critical mass. The popular attitude to the Yeltsin regime is firmly settled, just like the population's attitude to Gorbachev in 1991. For many people this is no longer a matter of social protest, but of personal enmity. The hatred has been piling up for years now. In this situation, as in personal relationships, people's attitudes will not change whatever those they hate might do. The regime's manoeuvres are narrowing its social base, which is extremely limited in any case, while making the ideology and practice of the opposition appear in a more advantageous light. Until recently government leaders were warning that success for the opposition would lead to populist measures and to increased printing of money. Now all this is starting to occur without the opposition being involved. At the same time, the predictions of catastrophe if such measures were adopted are not being borne out. As the regime tries to steal the opposition's program, it loses the ability to criticise that program. The opposition, by contrast, can still criticise the regime — for using inadequate and ineffective half-measures. The regime, meanwhile, cannot implement the opposition's program effectively. Politicians may not believe in what they say, but they have to believe in what they do, or they face disaster. A government which is following a policy of concessions sees its actions as having been forced upon it and therefore is not particularly committed to the success of these measures. A further problem is that, while seizing on the ideas of the opposition, the authorities do not really understand these ideas. The regime's ideologues have created a caricature image of left economic policies remote from what oppositionists are really urging. Having decided to make concessions to the left, the authorities will use this caricature (ill-founded wage rises, undeserved subsidies and social benefits, cheap credits, populism and protectionism, a lack of clear criteria of efficiency) as the basis for their actions. A new course requires people who are free of the old prejudices, ties and obligations. Otherwise the politicians and officials will act inconsistently, giving way to lobbying pressures from old friends. They will constantly make exceptions or adopt "compensatory" measures, robbing their policies of any meaning. Presidential decrees and government resolutions will be sabotaged by the Central Bank and the Finance Ministry. Inter-departmental struggles will grow more acute. The regime is also failing to take account of the fact that the relationship it has created between wages, prices and the level of inflation is quite different from the one set out in the textbooks. None of these suggests such an original method of fighting inflation as failing to pay wages in broad areas of the economy. This Russian innovation alters the whole picture fundamentally. As in the case of the Titanic, the system's inertia predetermines failure. The 1996 budget is now emerging as a problem for the authorities. The budget was adopted by the old Duma under government pressure as a bulwark against the left. Now it represents a barrier for the regime. The government wants to combine its new populist measures with retention of the rouble corridor, with continued collaboration with the IMF and with assurances of its commitment to liberal reforms. There is only one good thing that can come out of this situation: if the June elections bring a change of regime in the Kremlin, the new rulers will find that much of their work has already been done by their predecessors. The "creeping statisation" of financial institutions and of privatised enterprises whose debts make them dependent on the government will open the way for the relatively painless nationalisation of these bodies. The IMF will understand that its conditions will not be fulfilled in any case, and may therefore respond to the advent of the leftists in less intractable fashion. Meanwhile, it is not yet decided that the left — that is, the Communist Party of the Russian Federation and its allies — will become the heirs of the present administration. It is possible that, as a result of some convulsion or other, power will pass into quite different hands. All that is obvious is that the present team will not hold onto office using the methods it is employing at the moment.