Russia Collapse
Accelerating - The Latest
"Deal With Me, Or Deal With Zhirinovsky"
On Wednesday, August 26, as the Russian economy teetered near the edge of total collapse, newly reinstated Prime Minister Viktor Chernomyrdin unexpectedly flew to Ukraine for emergency meetings with Ukranian President Leonid Kuchma, Belorussian President Alexander Lukashenko, and International Monetary Fund Managing Director Michel Camdessus. Before he departed for the Crimean, Chernomyrdin reportedly met in Moscow with Russian Communist Party leader Gennadi Zyuganov, Russian Liberal Democratic Party leader Vladimir Zhirinovsky, and Krasnoyarsk Governor Alexander Lebed. While Chernomyrdin was scurrying between meetings, Russian President Boris Yeltsin was nowhere to be found, until it was eventually revealed that he was working from his country home, 60 miles outside of Moscow. The question: What did Chernomyrdin hope to gain from his sudden trip to Ukraine that warranted leaving crisis-ridden Moscow in the care of acting Deputy Prime Minister Oleg Sysuyev?
The latest phase in Russia's collapse began last week, when the government of then Prime Minster Sergei Kirienko announced both that it would let the ruble fall from 6.3 to 9.5 to the U.S. dollar by the end of the year, and that foreign debt payments by commercial banks would be frozen for 90 days. Last Sunday, President Boris Yeltsin fired Kirienko, replacing him with former Prime Minister Chernomyrdin, whom he had fired only five months previously, just prior to selecting Kirienko. Whatever Yeltsin's motives were in choosing Chernomyrdin, his selection did nothing to calm the situation either inside or outside of Russia. The general consensus was that the new/old Prime Minister was a non-starter. The financial situation continued to deteriorate, reaching new lows on August 26 when the Central Bank halted trading on the Moscow Interbank Currency Exchange and annulled the day's trading of the ruble.
It was in this crisis atmosphere that Chernomyrdin held separate meetings with Zyuganov, Lebed, and Zhirinovsky. Zyuganov is the head of the Communist Party, the largest party in the Duma, and a leader with a large and growing following. Lebed, who was head of the national security apparatus before being fired by Yeltsin, is a nationalist leader who draws on his record as an airborne general. He speaks for substantial numbers of non-communist nationalists. Chernomyrdin needs the Communist Party's support for his own confirmation in office and for the success of his economic plans. He needs Lebed's support to win over the fractious nationalists. However, Chernomyrdin's meeting with Zhirinovsky had multiple purposes.
Zhirinovsky's Liberal Democrats, with 51 seats, are the third largest party in the 450 seat Duma, after the Communists' 157 seats and Chernomyrdin's own "Our Home is Russia" party's 55 seats. The only other parties with more than 9 seats are reformist Grigori Yavlinsky's Yabloko party, with 45 seats, and the Russian Agrarian Party, with 20 seats. While Chernomyrdin needs Zhirinovsky's support for his confirmation as Prime Minister, Chernomyrdin's meeting with Zhirinovsky also intended a psychological effect.
Zhirinovsky, while head of the third largest party in the Duma, is more notorious for his outrageous statements and extraordinary antics. His political base grew out of a heavy metal music shop, and he delights in visiting such global pariahs as Moammar Khaddafi. By treating Zhirinovsky on the same level as Zyuganov and Lebed, Chernomyrdin may have been trying to tar the Communist and nationalist leaders with the Zhironovsky brush. By saying that his political opposition consisted of the three, he may have been trying to signal that the alternative to his government was not a stable coalition of Communists and nationalists, but an unstable, fascist regime with expansionist fantasies. In other words, he was signaling that the choice was between him and chaos.
Who was he signaling? Certainly not the Russian public, who are not likely to panic at the symbolism. Rather, the audience was Michel Camdessus, the IMF and, through them, Western financiers. By meeting with Zhirinovsky before flying off to meet with Camdessus in the Crimean, he was trying to drive home two points to the West. First, that the Yeltsin regime was tottering and might fall. Second, that the follow-on regime was likely to be much less stable and rational than Westerners might expect. In other words, if the IMF, looking at Yeltsin's impotence, thought that they might be better off dealing with a Zyuganov-Lebed regime, which at least had some real popular support, they had better think again. Along with them, the IMF and the West would get Zhirinovsky and the return of the Cold War.
The second audience was the Ukranian government. Camdessus had been dealing with the Ukranians, who were in far better shape financially than the Russians. Chernomyrdin was reminding them that events in Moscow will shape events in Kiev. In other words, if they make a deal with the IMF which takes care of their needs, without a comparable IMF deal with the Russians, they would be facing a new government in Moscow, one that would include Zhirinovsky. For good measure, Chernomyrdin brought along Alexander Lukashenko, President of Belorussia and a man with deep nostalgia for Brezhnev. Ukranian President Kuchma was invited to see the future.
Chernomyrdin is desperately shouting, "apres moi, le deluge," trying to convince the West and Ukraine that they can't afford to let him fail. In playing the Zhirinovsky card, he may have concerned his audience, but it is unlikely to panic them. Yeltsin scares them quite enough.
The IMF cannot bail out Russia, and Western banks will not bail out Russia. Ukraine is not in a position to underwrite loans to Russia. Chernomyrdin is posturing to an empty theater. What is interesting about all this is the length to which Chernomyrdin feels he must go to get attention. Also significant is the fact that he no longer has many options. Zhirinovsky is a fascist, but he is not going to be included in the government. The issue is not whether or not there will be a government of national unity including communists and nationalists, but how many ministries Yeltsin will be able to hold on to.
One threat, however, is real. The new government will radically redefine Russian foreign policy. The West will look back with nostalgia on the 1992-1998 period. Unfortunately, there is nothing the West can do to save this corrupt and failed reform attempt. Even if he was frightened by Zhirinovsky, Camdessus cannot save Chernomyrdin and Chernomyrdin cannot save Yeltsin. The deluge is not coming. It is here.