The dead man grasps the living. The corpse of the old world is
decomposing among us, poisoning everything alive. That corpse stinks!
--V.I. Lenin

It may be autumn, but metaphorically it seems to be springtime in
Russia once again. Boris Yeltsin is back, in fighting form, after an
eight month absence due to heart surgery and subsequent pneumonia. He
has given a free hand to Anatoly Chubais and Boris Nemtsov, who were
installed in March as first deputy prime ministers with a mandate to
revive market reform. These two men are the sort of politicians
Western observers like to see at the helm in Moscow--young,
forty-something technocrats who are healthy, telegenic, and fluent
both in English and in the language of IMF stabilization programs. It
is 1992 all over again: what some Russian commentators are calling
"the second liberal revolution." International markets are
enthusiastic, and money is pouring into Russian shares and bonds at
the rate of $1.5 billion a month. The Moscow stock exchange has risen
150 percent since the beginning of the year.

It may, however, be a little premature to sink one's life savings
into Novgorod municipal bonds. Western attitudes toward Russia over
the past decade have oscillated between brief interludes of elation
and dire predictions of chaos and doom. The heady optimism of 1992
was followed by the anxiety of 1993 (the shelling of the parliament)
and the fears of 1994 (the war over Chechnya). The market transition
in Russia has also been accompanied by increased poverty, rising
death rates, and an explosion of violent crime. Contract killings in
Moscow alone are running at three hundred a year. Anyone lulled into
a state of euphoria by reading an IMF or World Bank report on
Russia's imminent economic boom would be well advised to see the
recent movie, The Saint, in which Val Kilmer is chased across Moscow
by a menagerie of gangsters who have bought off the city's police and
army units and whose boss is running for president. Which is the real
Russia--the Russia of sleek bankers, oil millionaires, and
Weimar-style cabarets; or the Russia of starving babushkas, reeling
drunks, and suicidal soldiers? For once, Hollywood may have stumbled
upon a more accurate rendition of Russia's highly contradictory
social reality than that reflected in the bullish projections of
financial markets.

Hollywood aside, there are some trends in contemporary Russia that
should be applauded. There is no sign that the average Russian--even
one suffering from wage or pension arrears--thinks that a return to
the authoritarian Soviet past is either feasible or desirable. A
basic acceptance of the institutions of democracy and a market
economy has taken root both among the ruling elite and the population
at large. For all its problems, Russia does not currently feel like a
society on the brink of social catastrophe. Market democracy is weak,
but the forces that would topple it are weaker still. Radical
communists find it hard to mobilize more than a few thousand people
on the streets, and for all the talk of "Weimar Russia", the
neo-fascist movements only have a few hundred serious followers. The
historical record suggests that the major threat to developing
democracies is a military coup, but Russian generals seem more
interested in building dachas (and subsequently keeping themselves
out of jail) than repeating the sorry experiences of August 1991 and
October 1993--when the army was dragged into politics by ambitious or
fearful civilian leaders. As one commentator put it, "The army is as
defenseless in the face of democracy as it was in the face of the
totalitarian state. When the hard times came the people with weapons
accepted their poverty more meekly than the teachers with their chalk
or the miners with their picks."

Both positive and negative trends in Russia are much obscured by the
West's fixation on the personality and power of Boris Yeltsin. Too
much of Western energy, resources, and political capital has been
sunk into schemes whose primary goal is propping up Yeltsin's regime,
while far too little attention has been devoted to listening to what
Russians themselves want and need. Trends in Russia since 1991 have
been highly contradictory. In some respects the country has changed
faster than one would have expected, in other respects more slowly.
Unfortunately, journalists dislike ambiguity, and in the public mind
the fate of Russia seems to have been irrevocably tied to the rise
and fall of Yeltsin's fortunes.

This means, in turn, that some important trends of the past six
years, such as the ebbing of power away from Moscow to the provinces,
are seen as negative rather than positive developments, since they
undermine Yeltsin's power and authority. But the federalization of
Russia is arguably a healthy political development, since it lessens
the likelihood of unpredictable and potentially disruptive policy
switches at the national level. Moscow now has to look over its
shoulder at how the leaders of Russia's eighty-nine regions will
react. The autonomy of regional governors was strengthened by the
round of elections that took place last fall (before which most of
them had been appointed directly by President Yeltsin). The enhanced
power of regional leaders compensates to some degree for the
pusillanimity of the legislative and judicial branches of government
at the national level. For many Western commentators, however, these
regional governors are seen as obstacles to the reformist drive that
has been launched by Yeltsin's rejuvenated government.

The optimism of Russia-watchers about the reformist zeal of the
Chubais-Nemtsov team is all the more surprising given that just a
year earlier, in the spring of 1996, the West was staring bleakly at
the prospect of a Red Restoration. The Communist Party was the
biggest winner in the December 1995 State Duma elections, and
Yeltsin's personal popularity rating was "lower than grass", as
Chubais put it. The Russian state was mired in a bloody, senseless
war in Chechnya, while its workers and pensioners went unpaid. (It is
often forgotten that Chubais was fired from his post as first deputy
prime minister in January 1996 in part because of his inability to
pay off wage and pension arrears.) And now? The war in Chechnya is
over, Russia has brokered its problems with NATO expansion, and the
sinister "party of war" (Yeltsin's clique of hardline advisers) has
been pushed out of office. Economic reform is back on track, and the
Dynamic Duo of Chubais and Nemtsov are preparing to do battle with
the dinosaurs of the old Soviet economy--the energy monopolies--and
to bring the bracing winds of reform to housing and social welfare.

So the story goes. The reality, however, does not fit this glossy
image of reformist Russia, which has been artfully buffed by Western
financiers keen to sell bonds to emerging market investors. The new
government is unlikely to do anything that will reverse Russia's
steady decline into a minor regional power with Third World living
standards (and 20,000 nuclear weapons). The Deng Xiaoping model of a
passive, near-dead leader presiding over a delicate balance of
political forces may have worked well in China, but it is not working
in Russia, whose socialist economy was more developed than China's,
and so requires more radical surgery to repair. Six years into the
transition, that economy remains woefully anemic. The formulas that
have succeeded in most of Eastern Europe have fallen on stony ground
in the former Soviet Union--the Baltic countries excepted. Elsewhere,
economic growth kicked in six months after inflation was brought
below 5 percent per month. It has now been two years since this was
accomplished in Russia, yet the economy continues to decline for its
seventh consecutive year.

Russia's economic problems lie not so much in the economic formulas
as in the political failure to implement them. And implementation has
faltered not because of strong social opposition, but because of a
failure of political leadership. That failure is encapsulated in the
person of Yeltsin and his on-off approach to economic reform, in
which policy is subordinated to the President's moods and his
oscillating calculations of political expediency. Yeltsin is not the
solution, he is the problem. And he is the problem because he is the
state.

Ends and Means

The Russian state that emerged after 1991 was built around the figure
of Boris Yeltsin, an ex-Communist apparatchik who understood the old
system well enough to keep power out of the hands of the Communist
Party. He played an important balancing role, promoting democracy and
cautious economic reform in a country where the social bases for such
politics were slim to nonexistent. Yeltsin did this by surrounding
himself with officials of differing views and backgrounds, who were
united only by their dependence on him. This balancing of rival
forces in the interest of preserving power is the essence of
Yeltsin's political style. Former U.S. Ambassador Jack Matlock has
described how Yeltsin drew him a diagram of a circle with spokes
radiating from its center and said, "That way I can use them when I
wish, but they don't control me or speak for me."