The Debits in Yeltsin’s Ledger

Kirsanov: “You destroy everything. . . . Notwithstanding, it is also necessary to rebuild.”

Bazarov: “That does not concern us. It is necessary in the first place to clear off the ground.”

--Ivan Turgenev, “Fathers and Sons,” 1862

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Svetlana Teleshova is a believer in Boris Yeltsin’s revolution. She also is the first to admit that it has brought little but despair to her town’s rusting factories and unpainted wooden homes.

A school principal who has taught Russian literature for a third of a century, she quotes Turgenev’s passage on nihilism as a metaphor for the president’s half-decade as the country’s first democratic leader.

“To my deepest regret,” she adds with blunt authority, “people who come to power in Russia are always clearing off the ground.”

If Yeltsin has a chance to win a second term in Sunday’s presidential election or in a subsequent runoff, it is because many voters fear, along with Teleshova, that a triumph by his Communist rival would do little but “clear off the ground” yet again.

But across their land, in cities and in smaller settlements like this one, millions of Russians have seen too much destroyed and not enough rebuilt to feel they have a stake in the democratic and free-market reforms that broke the Soviet Union in 1991.

In interviews, many voters assert that the reform process has confused, disappointed or failed them outright. Not only has it shriveled incomes and savings, they say; it has offered little in return--too few of the human and property rights that define a law-based society, no unifying ideal to replace the Soviet welfare state.

“The original idea, as I understood it, was to overhaul the Soviet system, turn to Western civilization and use a millennium of Western experience to accomplish our goals,” says Teleshova, who has introduced a reformed curriculum at her school that includes the study of other societies. “But the overhaul was carried out with an ax, rough and dirty. Before long, people came to equate this new democracy with anarchy.”

How did Yeltsin, who stood on a tank to demolish a Soviet coup five summers ago, so badly discredit the words “democracy” and “reform”? What turned so many voters against him that his reelection--and Russia’s post-Soviet path--are still uncertain?

And what has he learned that might make a second term, if he gets one, any different? What will he build on the ground he has cleared?

Taking over a Russia already tasting democratic freedoms, Yeltsin assumed the historic task of liberating its vast natural wealth from the state and building a market economy.

Yevgeny Yevtushenko, the Siberian-born poet, cautioned in verse at the time that “saving our fatherland halfway would fail.”

The warning was borne out by Yeltsin’s costliest missteps:

* A former Communist Party boss with little grasp of economics, he cast his lot with young Westernized reformers--whose “shock therapy” impoverished and disoriented millions--then wavered in the face of resistance and watered down their work before it could pay off.

* Having come to power on a pledge to end the privileges of the Communist elite, he presided over an equally corrupt bureaucracy and allowed some of his cronies to profit from their ties to him.

* While enshrining civil liberties in a new constitution, he exalted the power of the state to bloody his opponents in parliament and the breakaway republic of Chechnya.

More than anything else, the half-dose of “shock therapy” inflicted lasting damage on Yeltsin’s credibility and popular support.

He went along with a sweeping abolition of centrally planned prices in January 1992, hoping, he said, to see living standards “improve before my eyes” by year’s end. Russians never forgot his promise--the first of many he broke--to throw himself on the railroad tracks, Anna Karenina-style, if this did not happen.

While the reform filled once-empty shops, it triggered price increases that wiped out the ruble equivalent of $6 billion in savings, nearly the entire nest egg of Russia’s emerging middle class.

“Not even Stalin’s monetary reform was so brutal,” says Nikolai Shmelev, a senior economist who supported the reformers until then.

Yeltsin’s Diagnosis

Yeltsin now says his first presidential mistake was failing to disband the Soviet-holdover parliament right after the abortive 1991 coup, when voters might have chosen a new legislature more supportive of radical reform.

Instead, conservative lawmakers forced him to compromise year after year. The reformers’ next shock remedy--to cut off subsidies to thousands of failing factories so healthy ones might sprout--slowed to a crawl, prolonging the painful restructuring and making inflation chronic until 1995.

The president never fathomed the contradiction between huge subsidies for backward collective farms and the reformist goal of shrinking the state.

“I gave you a tight fiscal policy,” he once huffed at his finance minister, “so let me give the farmers an agrarian policy!”

Impoverished by inflation and ignorant of their options, millions of Russians forfeited a once-in-a-lifetime stake in the new private economy.

Each citizen received a free government voucher to trade for shares in the 14,000 state companies sold off from late 1992 to mid-1994. Workers became nominal owners of their factories, but many sold out for quick cash, often for the cost of a bottle of vodka and usually to their longtime bosses, who continued to run the plants Soviet-style.

“The reforms created a thin layer of oligarchs who control everything,” says Larisa Piyasheva, an advisor on privatization to the current parliament. “There was nothing democratic about it.”

Few workers at Tobolka Textiles can tell you what it means to be a shareholder in the mammoth red-brick plant, which makes bedsheets for the army while sinking slowly into a marsh cleared 115 years ago.

The 2,150 workers got shares for free, without a word of explanation from the old boss about the shares’ market value or the workers’ newfound power to influence decisions at the plant.

“Nobody bothered to ask us if we even wanted these rights,” says Sergei Potapov, 50, a maintainer of looms.

Sacks of Rubles

A few months later, in August 1994, two men hauled sacks of rubles into the factory and set up a table. Most workers were too poor to buy school supplies for their children that fall, so they sold their shares for $2.28 apiece, 1% of their estimated market value, no questions asked.

The new majority shareholder, a Moscow businessman named Yevgeny Otto, made use of the factory as collateral for a loan in England but failed to deliver promised investment to revive its slumping output. All but 350 workers have been sent home on reduced wages, and lately Otto has been paying them with canned fish trucked in from one of his other ventures.

“We’re lost,” says Potapov, who peddles his fish in the market and hopes for a Communist comeback. “We used to have secure jobs, savings. It was never clear what these reforms were about.”

Workers at half the town’s 10 factories idle away in the twilight zone of Yeltsin’s stalled reforms; their employers are crippled by a slow withdrawal of state subsidies but limp along because the government is too fearful of mass unemployment to force them into bankruptcy.

The employers survive by piling up debt, adding to a national web of unpaid taxes, wages and bills that keeps workers waiting months for their paychecks--yet another outrage that people here blame, spitting out the words, on “democratic reform.”

Police Chief Nikolai Dobrov feels guilty for deploying cops, who haven’t been paid in two months, to fight a crime wave that he blames on “a growing animosity between rich and poor.” The town of 65,000, midway between Moscow and St. Petersburg, registered 50 car thefts and 28 homicides last year--higher rates than in either big city.

It is the insecurity, disorder and moral confusion, more than the poverty, that echo through complaints here and explain why so many seem willing to vote for Yeltsin’s Communist rival, Gennady A. Zyuganov.

Sitting at his manager’s desk in the textile factory, Viktor Pikin ponders the question of whether the plant, his life for 31 of his 49 years, is destined in Yeltsin’s new order to survive or drop dead. He spends a lot of time phoning the bureaucrats in Moscow but gets no answers.

“Communist ideology is utopian, everything for the material well-being of man, and Christian ideology is love thy neighbor as thyself,” he says. “So what is the common, all-embracing idea shared by the people of Russia? What is the ideology we’re all aspiring to? I just don’t see where Russia is heading.”

Ideology of Graft

If today’s Russia has an unofficial ideology, it is “grab what you can.” It is a practice that corrupts the bureaucracy from the top and tarnishes the leader who sits there.

None of his critics will suggest that Yeltsin is a crook. But he signs a lot of decrees he doesn’t understand, former aides say, and in the scramble for Russia’s wealth, some decrees have enriched his close friends at the country’s expense.

One decree permitted his tennis coach to set up a tax-exempt National Sports Fund, ostensibly to aid athletics. In 1995, the fund handled 80% of Russia’s tobacco and liquor imports, at a cost to the treasury of $1.2 billion in lost tax revenue.

In another scandal, a few Kremlin-favored banks were allowed last fall to acquire some of the biggest state-owned oil and mineral conglomerates for a fraction of their market value in auctions organized by the banks themselves.

“To become a millionaire in our country . . . it is often enough to have active support in the government,” Pyotr Aven, a banker who used to be Yeltsin’s foreign trade minister, told the Moscow News. “One fine day . . . quotas for the export of oil, timber or gas are allotted to your company, which is in no way connected with production. In other words, you are appointed a millionaire.”

The same functionaries who traffic in such privileges have been known to use taxes and extortion to stifle small enterprise. Since their boom in the final year of Soviet rule, the number of small business cooperatives has shrunk from 300,000 to 1,000 while the state bureaucracy has blossomed.

Meanwhile, much of Russian commerce has atomized into 20 million “shuttle traders,” many of them laid-off factory workers, who make quick trips abroad, buy cheap goods and retail them on the street.

While they have a huge stake in the post-Soviet freedoms to travel and trade, there are those who say they would gladly give up the new struggle for the old securities, just to dodge the racketeers and tax police who seem to collaborate in preying on them.

“Our generation was brought up thinking that one must earn a living honestly,” says Rita, 41, who became a shuttle trader in the Urals city of Yekaterinburg after losing her job in a military electronics plant. “We were forced to humiliate ourselves doing this. But I don’t think it will last. Pretty soon, we will be run out of business by big companies with their own shops. Then what do I do?”

Crises and Enemies

Yeltsin further discredited reform with two decisions that showed his penchant for making enemies, provoking crises and resolving them by force.

To end a deadlock with the powerful Soviet-era parliament, he stormed it with tanks in October 1993. To keep Chechnya a part of Russia, he started a war that has killed an estimated 30,000 people since December 1994.

On the ruins of parliament, he achieved a new constitution that is an awkward balance between Western-style individual rights and barely checked presidential power to rule by decree. Chechnya tipped the balance toward autocracy, prompting leading reformers to abandon him.

“Instead of strengthening the rule of law, you have revived the blunt and inhuman might of a state machine that stands above the individual,” Sergei A. Kovalev, head of the president’s human rights commission, wrote in January in his letter of resignation.

It wasn’t until he began running for a new term and looking at the polls that Yeltsin realized the depth of opposition to the war. There had been no mass rallies, little organized civic activity against it.

This in itself is a telling legacy of the Yeltsin presidency: Bled by the economic shock of 1992, Russia’s budding middle class had dropped out of grass-roots interest groups, co-ops and political parties--the building blocks of a democratic “civil society.” By the start of the war, those citizens were too busy struggling for survival.

Today the president’s democratic constituency is so weak, his reforms so unpopular, that he is seeking reelection not as the pioneer of Russia’s transformation but as the guarantor of its stability. His aides say this is the real Yeltsin: a survival artist capable of wavering among Communist, nationalist and democratic positions to stay on top.

“Power is his ideology, his friend, his concubine, if you want, his lover--and his passion,” says Vyacheslav Kostikov, his former press secretary. “Everything that is beyond the fight for power concerns him much less.”

For that reason, it is hard to predict how Yeltsin would use his power in a second term. Reformers and conservatives in the Kremlin are already waging a new struggle for his mind.

A few months ago, Yeltsin was listening to advice to step in time with the Communists who had won a parliamentary election in December. He purged reformers from the government, halted their privatization program and stepped up the war in Chechnya. Oleg N. Soskovets, a conservative and hawkish deputy prime minister, took charge of Yeltsin’s reelection.

But when polls showed Yeltsin still lagging far behind Zyuganov, other advisors reacted and had Soskovets replaced in the campaign by Anatoly B. Chubais, a reformer who had just been ousted from the Cabinet. Yeltsin moved quickly to halt the war and launched a vigorous campaign of face-to-face meetings with voters. Zyuganov’s lead vanished.

Yeltsin the campaigner evidently has learned some lessons. He comes across as a wiser ruler, intent on completing his reforms with greater justice and more attention to cushioning their impact on the poor.

His ability to achieve this, however, is far from certain. He cannot pursue reform without more reformers in the government. His campaign pledges are too lavish to fulfill without ruinous inflation. If he wins by a hair, his election may be contested with violence.

Bedridden for nearly four months by heart trouble last year, he could become an ailing lame duck, touching off a power struggle. His record after previous battles is not encouraging; instead of working to consolidate his triumph over the coup plotters of 1991, he took a long vacation.

“After this election, he will probably relax again,” said Otto Latsis, a former member of Yeltsin’s advisory council. “Such periods usually enhance the power of his intimate friends, who can hardly be called democrats or reformers.”

Voices of Optimism

The more optimistic voices of this election season believe that Russia, if it rejects a return to communism, will eventually reform itself--more in spite of Yeltsin than because of him.

Despite the chaos of his five years, Russia has not collapsed. The new private economy, however unfairly concentrated, is starting to pull the country out of recession. Reform is taking hold in schools, courts and nascent stock markets. The new rich, having grabbed enough, are starting to demand laws to protect private property.

“It doesn’t matter who runs the country for the next couple of generations,” says Dmitri Veselov, 23, a laid-off spare-parts superintendent at an aircraft factory in the Siberian city of Omsk. “There won’t be any stability until all people with the old ideas, biases and inferiority complexes are gone.”

Teleshova, the principal here in Vyshny Volochek, gives her 608 students at School No. 2 a similar lecture. “To reach the standard of living in Europe in a short period of time is impossible,” she cautions. “Only your children will live in such conditions.”

Then she adds a hopeful note that prosperity may come sooner: “Remember the proverbial character of the Russian people: ‘They take a long time to harness, but they ride fast.’ ”