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Boris Yeltsin, Comeback Kid
Russia's June 16 presidential election is causing jitters in Western political and business circles. Fears of a Communist victory, which would upset an already tumultuous transition, are everywhere, and many doubt Boris Yeltsin can win. But his skillful election strategy has begun to bring results, and he commands a favorable showing in recent polls, including one conducted by CNN and the Moscow Times.
According to Russian election laws, a candidate must capture 50% of the votes to win on June 16. If not a second round is expected July 7.
Several developments in recent months have edged Mr. Yeltsin ahead of Gennady Zyuganov, the Communist candidate. For starters, Mr. Yeltsin is running a campaign that acknowledges the suffering of the vast majority of Russians: emphasizes humane government responses to social and economic dislocation (i.e. policies designed to help the unemployed and pensioners, restore devalued savings and improve living standards); replaces corrupt or unpopular government officials, especially those accused of misusing federal budget funds; and garnishes support from the international community.
He has secured approval from the International Monetary Fund for a $10 billion loan, and for Russia's expected entry into the Paris Club - an international financing group - this summer. Voter turnout also is expected to be high, a fact that bodes well for Mr. Yeltsin.
Then there is the "reality check." Russians have begun to contemplate the true meaning of a Communist comeback and the consequences of undoing the sacrifices made since 1991 to dismantle the old regime. Many prominent Russians have publicly rallied to Mr. Yeltsin's side, including former Deputy Prime Minister Anatoli Chubais. He said he was endorsing Mr. Yeltsin "to avoid the bloodshed that would result from a Zyuganov victory." The general director of a large plant was just as adamant. "We all dread a change in the economic situation, which is increasingly stable...I am not a politician, but if Boris Yeltsin is not re-elected, I fear new authorities will take ill-considered economic actions that would ruin everything that has been achieved with such difficulty," he said.
Based on leading indictors, there is no denying that the Russian economy has taken a turn for the better (although growth has yet to resume), and that Mr. Yeltsin deserves recognition as chief architect of the recovery. Industrial production, while disappointing, is expected to rebound on the excellent performance of several sectors, including foreign trade and the chemical/petrochemical and metallurgy sectors.
Inflation is under control, hovering around 3% a month in 1996 from a monthly high of 17% in early 1995. Measurable progress has been made in the building of new infrastructure, as well as in tax, legal and governmental reform. Foreign investment has steadily increased, estimated by the economics ministry to be about $3 billion last year. The United States, Switzerland and Germany are among the biggest investors.
The biggest thorn in Mr. Yeltsin's side is the war in Chechnya; it worries Russians even more than crime and the economy. Despite a well-publicized unilateral Russian cease-fire proclaimed April 1, which called for the gradual withdrawal of Russian troops, appointment of a negotiating commission and an agreement to negotiate with rebel leader Dzhokhar Dudayev, these attempts failed, and the fighting has worsened. The mid-April rebel ambush of a Russian convoy, which killed or wounded almost 200 soldiers, humiliated Defense Minister Pavel Grachev and his military. In retaliation, the assassination of Mr. Dudayev followed. His successor, Zelimkhan Yandarbiyev, is a writer, radical and also an uncompromising opponent of Moscow.
Mr. Dudayev's death could produce two possible results. On the one hand, a vengeful and retaliatory Chechnya could launch a terrorist campaign against Russian targets, which could hurt Mr. Yeltsin's campaign. The other possibility is that intra-Chechen factionalism could weaken resistance and push the new leaders to the negotiating table, bring an end to the war and helping Mr. Yeltsin. Such a scenario would most likely clinch the campaign for him. No other candidates have suggested any "miracle solutions" of the Chechen quagmire, and there are no easy or convenient answers.
Overall, the prospects for a Yeltsin win appear strong. Despite momentary ups and downs, economic stabilization has taken root and will continue as a long-term developmental trend. Russia's fledging democracy is advancing toward a better future, notwithstanding the pain of the gut-wrenching transformation. Returning to a retrograde Communist economic and political system, which failed to produce a modern and competitive nation and ultimately caused its demise, is not an option for most people, nor is it an economic panacea.
Western pessimists should give Russia the benefit of the doubt and trust that it can successfully craft its own destiny, even it falls short of our expectations and desires. We should also recognize that Mr. Yeltsin is a statesman capable of holding his own and successfully managing his country.
Deborah Anne Palmieri
The Journal of Commerce
Monday May 13, 1996
Copyright 1999 The Russian-American Chamber of Commerce®
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