Russia

It was Washington that most feared a revival of Communism; Washington that had encouraged Yeltsin to take that disastrous short cut; Washington that wanted no debate on economic policy in Russia. As Stiglitz put it, Washington was ‘afraid of democracy’. And, when the ruble crisis of 1998 came, it was the Clinton administration that pressured the World Bank into lending Russia money, even though many of the bank’s own officials were against it. As a result a ‘rescue’ was launched. Within days, billions of dollars appeared in Cypriot and Swiss bank accounts. In addition to the Russian oligarchs themselves, the beneficiaries were ‘the Wall Street and other Western investment banks who had been … pressing hardest for a rescue package’. Their investments in Russia had seemed lost, but when the IMF rescue came through they seized the opportunity of getting as much of their money as possible out. In destroying the last vestiges of the Communists’ planned economy, America had gained a major victory for private enterprise and open markets. The poor Russians (of whom almost half had to live on less than $4 a day) were left to bear the heavy costs of the operation. ²³

A Russian anti-Communist intellectual wrote what might have been Yeltsin’s obituary. He thought Yeltsin to be ‘the perfect incarnation of the most repellent traits of the Russian psyche, of the most shameful features of the Russian national character: irresponsibility … ignorance, boorish-ness … servility towards the strong … [and with an] inferiority complex to the West’. ²⁴ Already in decline when he took office, most of the economy’s remaining strength had been dissipated during Yeltsin’s tenure of the presidency. And the population had fallen by 6 million in ten years. Now, belatedly, there were some signs of an improvement. GNP began to rise, inflation to fall, and the balance of trade to improve. True, Russia was heavily in debt to the West (it was soon to reach eight times the size of the national budget), but it was owed money by India, Cuba, North Korea, Mongolia, Poland and various other former members of the Soviet Bloc. The new premier, Primakov, steered a judicious course but decided, at last, to crack down on the corrupt. The prosecutor-general, who rejoiced in the name of Ivan the Terrible’s notorious hatchet man, Skuratov, was instructed to prepare for the prosecutions of Berezovskii and of Pavel Borodin, Yeltsin’s Chief of Staff. However, Yeltsin quickly intervened to dismiss both Skuratov and then Primakov. ²⁵ Democracy is no guarantee of good government. The election had given Yeltsin a mandate. Now he exploited it using his authority, which was in effect unlimited.

Yeltsin’s economic policies were by now being characterized as ‘a crime against national security’ by anti-Communist newspapers which had once supported him; according to an opinion poll, the President was now distrusted by nine Russians out of ten. ²⁶ He tried desperately to deflect his regime’s unpopularity by dismissing one prime minister after another. Stepashin, who replaced Primakov in May 1999, was himself replaced by Vladimir Putin in August. Meanwhile the President played the patriot and defender of Orthodoxy on the international stage. He gave moral support to the Orthodox Serbs in the former Yugoslavia, and ordered a small Russian force, stationed in Bosnia as part of the international peace-keeping operation there, to seize Sarajevo airport, enraging NATO’s American commander. The gesture did not affect the outcome in Bosnia, however. ²⁷Yeltsin also gave support to Serbia in its repression of the Kosovo Albanians, following nationalist (KKL) threats to the Serb minority in Kosovo, but Washington saw the Serbs rather than the Albanian nationalists as guilty and bombed Serbia into submission. He showed concern, too, for Russians suffering discrimination in the Baltic states, but thinly veiled threats from Western agencies that discrimination against minorities might effect these states’ applications to join NATO and the EU were more effective. Yeltsin’s bluster could not disguise his lack of clout on the international stage.