In the long run, the success of this dialogue is important to
establishing a viable democratic system in Russia. More immediately,
it may be essential in avoiding a social explosion. Much is at stake
here for both Russia and the world; while new turmoil is possible but
still not probable, its consequences could be so profound that trying
to avoid--or at least not to facilitate--such upheaval should be a
priority for the United States in dealing with a Russia on the brink.

The American Stake

In this context, it was appropriate for Secretary Albright to advise
against "taking a census of reformers in the Kremlin." Still, the
secretary of state could not resist the temptation to do precisely
that by expressing doubts about the Primakov government, saying, "We
can only wonder if some members of Primakov's team understand the
basic arithmetic of the global economy." She was similarly unable to
conceal her disappointment that America's radical reformer protégés
were no longer in government.

As the secretary also said, though, Primakov is "a forceful,
straight-talking advocate of a major power's national interests." The
new Russian prime minister has a long record of dealing with the
United States as an adversary during the Soviet period as well. But
attempts by some to demonize him as an anti-Western Arabist or a KGB
agent are an oversimplification. First, even if he had worked for the
old KGB, he would have been employed in a foreign intelligence
capacity--not as a political policeman. Given that Yeltsin himself is
a former party apparatchik, it is hypocritical to become exercised
over the new prime minister's old KGB contacts.

Second, and more to the point, it is clear that while a person with
Primakov's illustrious career had to have close ties to the KGB, it
is very unlikely that he was ever a staff officer. If there were any
firm institutional rules in the post-Stalin Soviet Union, one was
that the party was above the security services and, therefore, that
party personnel could not work for the KGB. As a correspondent for
Pravda, the official party newspaper, in Cairo in the 1960s, Primakov
was a part of the Central Committee nomenklatura. Because he was
directly supervised by the International Department of the Central
Committee, it would have been highly unusual for him simultaneously
to take orders from the KGB. Lieutenant General Vadim Kirpichenko, a
retired first deputy chief of foreign intelligence for the KGB,
confirmed this in a recent book, where he wrote that Pravda
correspondents such as Primakov maintained "close professional
contacts" with KGB station chiefs but "could not be engaged for
cooperation."

Primakov's appointment, like so much else, seems to have taken the
Clinton administration off guard. In all likelihood this was not a
result of dark suspicions about Primakov personally; after all,
Secretary Albright and others in the administration know him well
and, despite obvious disagreements, feel that they can do business
with him. The real problem for the administration is that because the
Primakov government came into power as a result of a compromise
between Yeltsin and the parliament, it has enjoyed greater autonomy
than any previous Russian cabinet and has been much more
representative of opinion in the Duma and in Russia in general. As a
result, it is less interested in guidance from Washington than were
Yeltsin's protégés among the radical reformers.

For years the Clinton administration has paid lip service to the
importance of promoting democratic reform in Russia. Its policies of
promoting strict monetarism and crony privatization, however, have
actually frequently worked in the opposite direction by limiting
economic growth and the development of a legal framework for a free
but regulated market. Almost since its inception in late 1991,
radical economic reform has triggered a strong popular backlash in
Russia. Sensing public opinion, sizeable majorities in both the old
Congress of People's Deputies and the Duma have consistently opposed
radical reform.

Despite this opposition, Yeltsin was in a position to ignore the
legislature and appoint governments of his own choosing responsible
only to himself. This was particularly true after the adoption of the
December 1993 constitution, which provided him with enormous powers.
However, the Russian president was able to ignore parliament only at
the double cost of further polarizing Russian society and encouraging
obstructionist behavior by the Duma.

Nevertheless, the Clinton administration consistently urged Yeltsin
to follow U.S. Treasury and IMF recommendations no matter the social
and political consequences. This encouragement--backed by detailed
conditions established for IMF credits--often went beyond policy
advice to include not-so-subtle suggestions about which specific
individuals should occupy key positions in the Russian cabinet and
even on Yeltsin's personal staff. According to knowledgeable Russian
sources, President Clinton himself coached Yeltsin on several
occasions about the importance of retaining such administration
favorites as Chubais and former Foreign Minister Andrei Kozyrev in
the government. The administration thus put its desire to influence
the Russian president's policies above the development of democracy
in Russia. At the same time, the administration's strict adherence to
its own somewhat arbitrary vision of what constituted reform in
Russia actually undermined the economy's prospects for growth. The
continuing lack of legislation became a serious obstacle to foreign,
and even domestic, investment; few investors were willing to commit
their money in the absence of a reliable legal framework. The
deadlock between the government and the Duma was similarly an
obstacle to tax reform--another problem that must fall to solution if
Russia is ever to put its financial house in order.

The failure to attract investment and to raise tax revenues made
Yeltsin uniquely dependent upon the good will of the outside world,
particularly the United States, which was rightly seen as having a
decisive influence over IMF lending decisions. As a result, there are
now strong suspicions in Russia that Washington deliberately sought
to keep it on its knees by forcing it to accept destructive economic
policies. While there is no evidence that the Clinton administration
was either capable or desirous of so Machiavellian a policy, senior
administration officials certainly must be aware that,
notwithstanding the rhetoric of partnership advanced by both sides,
there could be no genuine equality in the relationship between a
powerful donor and a beleaguered recipient.

Primakov's Prospects

In contrast to its rhetoric, deep down the administration has also
acted as though it shared Henry Kissinger's observation that, "In
Russia, democratization and a restrained foreign policy may not
necessarily go hand in hand." In fact, President Clinton and his
advisers supported Yeltsin not only because of naive romanticism, but
also because of a perfectly pragmatic--if shortsighted--calculation
that he was prepared to subordinate Russian foreign policy interests
to Western, and especially American, preferences to a much greater
extent than the parliament or the Russian public at large. For
example, it is hard to imagine that a Russian government responsive
to popular sentiment would have sent military units to serve under
NATO command in Bosnia, as Yeltsin did, when NATO launched air
strikes solely against Orthodox Serbs despite strong Russian claims
that each of the parties in the conflict had committed excesses.
Similarly, it is unlikely that such a government would express
willingness to participate in the international monitoring effort in
Kosovo essentially on NATO terms.

The underdevelopment of democracy in Russia and the resulting broad
autonomy of the Russian president have thus helped the Clinton
administration to win Moscow's acquiescence to U.S. foreign policy
actions that it may otherwise have strongly opposed. From this
standpoint, the emergence of the Primakov government, which relies on
parliamentary support from the Communists (among others), was bound
to make the administration think twice. Administration officials were
forced to ask how the new Russian cabinet would respond if the United
States were to take the lead in organizing a NATO air campaign
against Serbia in response to Slobodan Milosevic's brutalities in
Kosovo. Use of the Russian UN Security Council veto became a real
possibility for the first time in years. It was by definition much
easier and more predictable to make arrangements with only Yeltsin
and his lieutenants.

Similarly, the Primakov government is likely to be less open to U.S. Treasury and IMF guidance on how to manage Russia's economy. Taking into account how deeply flawed that advice has been thus far, this may to some extent be a blessing. It has also already become clear that the Primakov government has had great difficulty putting together an economic program; the new prime minister has emphasized several times that he is not a magician. His is not a cabinet looking for bold new approaches - whether toward or away from the free market through large-scale re-nationalization. Muddling through is the best one can realistically expect from his cabinet - and even that will not be easy.

Russia's new government has inherited a banking system near collapse, spiraling inflation, negative economic growth (a 5-6 percent decline in Russia's GDP is projected by the Russian Central Bank for 1998), and severely undermined investor confidence. Some $17 billion in debt is due in 1999 and there is no chance that Russia will be able to raise sufficient revenue to avoid - to put it delicately - restructuring its obligations. It is clear that difficult economic times are still ahead and that conditions will become worse before they get better.