By Renfrey Clarke
MOSCOW — When US President Bill Clinton sat down with Boris Yeltsin on September 1 for the first day of their summit meeting, Russia was without a prime minister, a government or a strategy able to deal with the country's worst economic crisis since the hyperinflation of 1992.
Outside the Kremlin palace, where the two leaders were conferring, the financial scene was one of chaos and collapse — a stunning indictment of the economic policies dictated by western governments and financiers, and implemented by their zealous local followers.
On August 17, when the government gave up on a ruinous battle to prevent a currency devaluation, 6.4 roubles had been needed to buy a US dollar. By the first days of September, the price of the dollar in Moscow exchange booths had risen to more than 13 roubles.
The Central Bank had announced plans to put the country's second-largest commercial bank under state administration. The licences of two other important banks had just been revoked, and a wave of collapses was expected to sweep away many smaller banking institutions.
Tax collection in August had fallen by 70%. By selling dollars in a vain effort to uphold the rouble, the state authorities had encouraged the banks to exhaust their rouble reserves, making it impossible for firms to transfer tax payments from their bank accounts.
Acutely short of revenue, the government was faced with a choice of printing money or of failing to pay millions of "budget sector" employees.
Against this backdrop, Clinton's message to Russian leaders was that they had to stay the course of "reform", pressing ahead with the key policies of the last seven years.
"This is not an American agenda ... these are the imperatives of the global marketplace", the US president told an audience at Moscow's Institute for International Relations on September 1. "... you can't ignore the rules of the game."
Non-aggression pact
If playing by these rules had reduced Russia's economy to a size roughly that of Holland's, the Russian political system was not faring well either.
On August 23, Yeltsin had sacked Prime Minister Sergey Kiriyenko and his cabinet. The dumping of Kiriyenko was widely — and, it seems, accurately — interpreted as having been forced on Yeltsin by a small group of powerful business magnates, the so-called "oligarchs".
The oligarchs were reportedly incensed at plans by Kiriyenko to begin bankruptcy proceedings against major firms that owed huge tax debts.
To succeed Kiriyenko, Yeltsin nominated Viktor Chernomyrdin — whom he had sacked only five months previously in order to install Kiriyenko. During Chernomyrdin's five previous years as prime minister, the oligarchs had been allowed to cement their power, acquiring fabulous wealth through insider privatisation deals.
Once nominated, Chernomyrdin had still to be confirmed as prime minister by the State Duma, the lower house of parliament. The price of this endorsement was always going to be high.
Deputies of all political stripes had long since been alienated by Yeltsin's scornful treatment of the legislature. Now, the fiasco in the economy had stripped the president of his last shreds of popular credibility, making it impossible for him to bully the parliamentarians as in the past.
Hints by Chernomyrdin that he planned a broad-based "government of accord", with ministries for the Communist Party of the Russian Federation and other left and nationalist forces, merely whetted the parliamentarians' appetites.
It quickly became clear that the deputies would not confirm Chernomyrdin in office without a big increase in the slender powers allowed the Duma under Yeltsin's super-"presidential" constitution. The Russian president had imposed this constitution through a dubious referendum after illegally disbanding — and then blasting away — an earlier parliament in 1993.
Chernomyrdin, presidential chief of staff Valentin Yumashev, and parliamentary leaders duly went into a huddle. The result, on August 30, was a draft for a non-aggression pact. The parliament would refrain from voting no confidence in the government, and Yeltsin would not dissolve the Duma.
Further, the government would be allowed to work for a year and a half without major personnel changes. Instead of the president exercising almost unlimited sway over the make-up of the cabinet, the parliament would gain the power to reject nominees for most ministries.
Yeltsin, however, was by no means to become a figurehead. The right to appoint the heads of the so-called "power ministries" of defence and the interior, plus the foreign minister and the chief of the Federal Security Service, was to remain with the president.
Changed course
But when the pact was already being reported as signed and sealed, the Communist Party leadership decided unexpectedly to reject it. The agreement, Communist leader Gennady Zyuganov charged, would "cover up Yeltsin's arbitrary actions just like before".
At least three factors seem to have convinced the Communists to spurn the document. First, there was no guarantee that Yeltsin could not repudiate the deal at some point after Chernomyrdin's candidature had passed through the Duma.
The Communist leaders also seem to have reflected that for a party claiming to represent working people, restoring to office a prime minister as despised as Chernomyrdin would not be good politics.
On the evening of August 30 the television news program Itogi reported the results of a phone-in poll in which viewers were asked whether they thought Chernomyrdin, if confirmed in his post, would be able to get Russia out of crisis. Seven per cent said "yes", and 90% "no".
Finally, Zyuganov and his colleagues appear to have decided that, with Yeltsin's position weakening by the hour, the terms of the pact were much too generous to him.
On August 31 the Duma voted by 253 to 94 against confirming Chernomyrdin. Barely two hours later, Yeltsin nominated Chernomyrdin a second time.
The Duma has now scheduled a second vote for September 7. The constitution provides that if the Duma rejects the president's nominees three times in a row, the legislature is dissolved and general elections follow.
A less clear-cut vote on August 31 would presumably have sent parliamentary leaders back to the negotiating table to try to refine the terms of their deal with the president. But the crushing rejection of Chernomyrdin now means that settling for anything short of a decisive victory over Yeltsin would cost the president's opponents a severe loss of face.
Accordingly, the stakes have been raised, and the hints of a willingness to compromise have come to an end.
Duma Security Council chairperson and prominent Communist Viktor Ilyukhin stated on August 31 that the opposition in the Duma would approve Chernomyrdin's candidacy only if Yeltsin were to resign.
Zyuganov and nationalist leader Vladimir Zhirinovsky — whose sizeable fraction abstained on the first vote — have reportedly declared that they will vote against Chernomyrdin on September 7. Duma chairperson Gennady Seleznev has told reporters that Chernomyrdin has "no chance" of being accepted.
Options
For Yeltsin, the choices are to abandon Chernomyrdin before the third Duma vote and to nominate a candidate more acceptable to the opposition, or to press ahead, hoping that in the opposition ranks enough nerves will crack.
On past experience, this second option would seem to make good tactical sense. Year after year, the Communist Duma fraction has finished up voting for state budgets after first declaring them unacceptable. Last spring, the parliamentary opposition endorsed Kiriyenko as prime minister after spending weeks denouncing his candidacy.
Yeltsin's trump has always been the threat that he will force the Duma into dissolution, and that the deputies will lose their Moscow apartments and comfortable salaries. But this threat has lost virtually all its sting in the past few weeks.
The deputies' mandate is due to run out in December 1999 — no longer so far off. Barely more popular than Chernomyrdin, the opposition parliamentarians have good reason to want to go into early polls at a time when the executive power is visibly incompetent and bewildered.
Using various constitutional ploys, Yeltsin could delay Duma elections for as much as four months, in the meantime legislating by decree and blaming the situation on the parliament. This would be a sound tactic only if there were a real prospect of the economy stabilising rapidly under Chernomyrdin and of noticeable growth beginning — something that no commentator has dared to predict.
Duma elections during a hungry winter would inevitably turn into a plebiscite on Yeltsin's rule. A big opposition victory would create a parliament with a fresh mandate to demand that the president quit office or surrender most of his powers.
There is, however, another line of march that Yeltsin may be contemplating. After forcing the dissolution of the parliament, he could discover a suitable threat to democracy and the market, and forget about Duma elections altogether.
According to usually reliable sources quoted on August 29 by the newspaper Komsomolskaya Pravda, Defence Ministry chiefs have given the commanders of elite "palace" units secret orders to prepare for action in an emergency situation. The Federal Security Service, meanwhile, is reported to be working at a level of "doubled and redoubled activity".