A Chance for Democracy Amid a Rising Tide of Chaos

This week, the Clinton administration has an opportunity to reverse the downward spiral in its relations with Russia. Monday, Russian Prime Minister Yevgeny M. Primakov arrives in Washington for talks with U.S. and International Monetary Fund officials. With Russia’s democracy--indeed, survival--threatened, these officials should grasp the nettle and relieve Moscow of some of its crushing foreign debt. This year, the Kremlin is due to make debt payments roughly equal to the revenue the government is currently expected to receive, barring any loans. The sum, roughly $16 billion, cannot be repaid.

The visit will be difficult for Primakov. Some commentators have labeled him a sinister “former spy master.” But he was given that unenviable job by Mikhail S. Gorbachev after an aborted hard-line coup in August 1991; Primakov was one of only two members of the Soviet Security Council who opposed the junta. At the time, the intelligence agencies were being dismembered, and Russian democrats were at the peak of their influence. Had they doubted his liberal credentials, they could have blocked his appointment.

However, this is secondary to one critically important fact: Primakov is the first Russian leader since 1993 who enjoys broad-based legitimacy. Eighty-five percent of the Duma voted him in, with only the Kremlin and the ultranationalists of Vladimir V. Zhirinovsky opposed. Given the unpopularity of his predecessors, his appointment was a major step toward representative democracy. His approval ratings have consistently surpassed those of all other Russian politicians. Though his government’s economic performance has not as yet justified this level of trust, his moral capital, if skillfully invested, will greatly benefit a country where despair and mistrust are pervasive in the political system.

How can the West help Primakov succeed? German Chancellor Gerhard Schroeder perceptively remarked, “Stabilizing Russia now means stabilizing Primakov’s government.” However, Russia’s democracy may not be strong enough to keep Primakov in power, despite his constitutional legitimacy. A key problem are the “oligarchs,” the crony capitalists of the financial, media and raw-materials sectors who shaped many of Russia’s economic “reforms” in the mid-1990s, so they could, with impunity, milk billions of dollars from the state. They reaped their latest windfall during the collapse of the ruble and treasuries markets last August, when the July IMF loan was partly used to cover losses on their speculations.

Since his appointment, Primakov has blocked the oligarchs’ easy access to state coffers. In revenge, they are fiercely attacking him, through their media empires and associated politicians. They keep predicting that Primakov’s Washington trip to renegotiate Russia’s debt will fail. Then, they insist, President Boris N. Yeltsin will restore them to their privileged positions. Even though most Russians hate the oligarchs, they claim the IMF and the U.S. government favor them. To promote this scenario, some have traveled to Washington and lobbied against their own government. Thus, if Primakov’s visit goes badly, the oligarchs and other corrupt elements will be boosted in their efforts to unseat the first government to combat their plundering. Russia’s democracy and economic performance would continue “muddling down,” and anti-Western sentiment among ordinary Russians would keep rising.

But if Primakov’s visit produces positive results, it opens a window of opportunity. Russia will have a chance to begin its long-awaited transition from the supermonopolistic, robber-baron capitalism unleashed by Yeltsin’s “reforms” to a more efficient and just system. Then Primakov might finally agree to run for president in the 2000 elections, for which his chances of victory look good. Most Russians view him as a statesman who does not put his personal interests above the nation’s. He also represents that small, enlightened sector of the elite who abstained from participating in the orgy of capital accumulation, thus preserving their independence from the crony capitalists.

It’s unlikely that the U.S. government and the IMF, having sunk much political capital into promoting reforms and reformers that could not succeed in Russia, will now make a U-turn and embrace Primakov and his government. In any case, he doesn’t need the kind of uncritical support given his predecessors.

In addition, there are not many things Washington can do in the short term to improve the situation in Russia, given its mistrust of the West. This is the result of a series of Western actions, from the expansion of the North Atlantic Treaty Organization to what many Russians perceive as deliberate attempts to exclude them from Western markets. These perceptions help fuel the Kremlin’s support of countries like Serbia, Iran and Iraq.

There is, however, one major contribution that the West can--and should--make on moral as well as pragmatic grounds. Russia’s foreign debt cannot be paid without triggering a societal collapse. A significant portion of the debt involves loans procured by Yeltsin and other politicians to buy support and remain in power. The 1996 presidential elections were a case in point. Writing off at least some of these loans would help ward off chaos. It would also be morally right. For six years, the IMF sanctioned dubious Kremlin schemes such as floating treasuries at sky-high interest rates, which siphoned funds from productive industries, enriched speculators and depleted the budget. The IMF and the U.S. Treasury approved each loan because they determined that the Kremlin was following IMF recipes for recovery and that the Russian economy was “doing well.”

These calculations and recipes led straight to the financial collapse of last August. They were egregiously wrong and caused Russia enormous harm. Why, then, should Russians alone foot the bill for bad advice? Even if the loans are eventually forgiven, as they should be, Russia will need several decades to repair the damage.

Some critics of the IMF’s discredited advice cite Russia’s 30,000 nuclear warheads as a key reason for more sensitive policies. This is a sound argument, but less important morally than the long-term plight of 147 million Russians, whose faith in democracy, capitalism and the West’s good intentions is virtually shattered. Without debt relief, they will be paying off the loans in taxes for the rest of their lives.

The issue of debt relief for poor countries is gaining wider acceptance. The Catholic Church and such world leaders as British Prime Minister Tony Blair and now President Bill Clinton have been calling for urgent, wide-scale action. In Russia, the debt mountain compounds the already ominous threats of political breakdown and nuclear proliferation. Taken together, they endanger the entire world, not just one region.

Debt relief would provide Russians with some compensation for the dashed expectations of 1991-92 that their country would soon be a full-blooded participant in world markets and institutions. It would restore some hope to the Russian people and help atone for Western policies that stimulated anti-Americanism. Over time, it would serve U.S. interests better than the futile and damaging efforts of the past decade to remold Russia in the American image.