[Home] [English Articles]
Yavlinsky’s turn at bat
Peter D. Ekman, Moscow Times, March 16, 1999
In russian

First Deputy Prima Minister Yury Maslyukov is about to be thrown out of the Cabinet. He’s staked his career on getting a loan for Russia from the IMF, and it’s clear that he won’t be able to get it. As the default time bomb ticked down last week, Maslyukov was sent to Indonesia. The reason is clear. He has a better chance of securing a multi-billion dollar loan from financially struggling Indonesia than from the IMF.

The desperation of the government for the IMF loan has been shown be its incessant predictions of a forthcoming agreement, and be hasty changes in Russian negotiators. Last weekend former Prime Minister Viktor Chernomyrdin – the second worst possible loan negotiator – returned from talks with the IMF in Washington and said the Cabinet needed greater economic expertise. In other words, Maslyukov will be pitched and a Western-oriented “liberal economist” will have to be installed in hos place, if only for show.

Don’t think for a second that this means that former Deputy Prime Minister Anatoly Chubais or former prime ministers Yegor Gaidar or Serghei Kiriyenko will re-enter  the Cabinet. They have even less credibility now in the West than they do in Russia. There are a few other old warhorses that don’t quite fit the bill: former Cabinet ministers Yevgeny Yasin, Alexander Livshits, and Alexander Shokin. Former Finance Minister Boris Fyodorov would probably satisfy the IMF, but it is unacceptable to the government.

Moscow Mayor Yury Luzhkov was very direct in naming the leader of the Yabloko party, Grigory Yavlinsky, as the leading contender for the job. Yavlinsky’s appointment is by no means a done deal. He may even have already turned down the appointment because he is unsure whether he’ll have enough power to effectively govern the country. He would reject the first deputy prime minister’s chair if he’s appointed just as a showpiece to satisfy the IMF. Nevertheless, faced with the alternative of a complete default, Prime Minister Yevgeny Primakov and President Boris Yeltsin will probably promise Yavlinsky just enough power to get him to accept the position. 

Yavlinsky’s power will not br based solely on the promises of Primakov and Yeltsin. Yabloko has the support of between 10 percent and 15 percent of the Russian population, with few people intensely disliking its positions. Yabloko’s support will greatly increase once the party attains a position of power. Luzhkov, Yavlinsky’s apparent ally, has the support of an additional 10 percent to 15 percent. Between them, they could control the only active political factions other than the Communist party and the supportes of the do-nothing Primakov.

Yavlinsky would be a wonderful choice to run the economy. He’s a professional economist who designed the famous – but never implemented – “500-day plan” for economic reform under Soviet leader Mikhail Gorbaciov. Since that time, he’s led Russia’s only truly democratic and reform-oriented party. He’s turned down several chances to join the government while other so-called democrats and reformers were using their posts to plunder the Russian economy. Indeed, Yavlinsky has made a point of exposing corruption in the government.

The only complaints about Yavlinsky have been that he’s too idealistic and too reluctant to compromise to have a positive effect on government. I consider these points, however, to have been his greatest strengths. Compromise with the pirates who’ve been running the Russian economy would have been the kiss of political death, as Kiriyenko founded out. Too idealistic to serve in the Russian government? – that phrase would have covered anybody who had even a single scruple – but all things must eventually change.

Yavlinsky represents everything that the current and former does not: idealism, democracy, a sensible economic policy, and the fight against corruption.

Several obstacles beyond the simple enormity of Russia’s economic problems will face Yavlinsky if he attempts to govern. The Communist party will likely stop just short of armed insurrection to protest Maslyukov’s removal. They will be able to block any legislation that Yavlinsky submits to the State Duma. As a democrat, Yavlinsky’s principles and political skills will be sorely tested by his relations  with the Duma. His political skills are somewhat suspect since he’s never held a national political office. Compromise will now be a requirement, not a sign of weakness.

The upcoming Duma and presidential elections will greatly complicate matters. Corruption allegations will be seen by many as purely political maneuvers. Primakov and Luzhkov may jockey for position as potential political allies, or they may turn on Yavlinsky for political gain. Nevertheless, of Yavlinsky survives his first three months in office, he will almost surely emerge as the front-runner in the presidential race.

Leader of Gazprom, oil firms, and bankrupt industrialists and bankers will fiercely oppose Yavlinsky, because any sensible programs on the economy will limit their abuse of power.

But perhaps the most dangerous opposition will come from Yeltsin. In the near term Yeltsin will likely support personnel changes that will help Yavlinsky, in order to balance opposing political forces. In the long term, however, moves to balance power will result in halfway measures on the economy. Halfway measures simply will not work now.

Yavlinsky will, I believe, be appointed to and accept the position of first deputy prime minister in charge of the economy. He’ll have a tough row to hoe. Designing an economic policy will be the simplest task that he’ll need to accomplish. If he manages to get the enthusiastic support of the Russian people, he will successfully change the face of Russian politics and economics. But, without the people’s support to counter opposition from his political enemies, complete economic and political failure are possible

In russian

Peter D. Ekman
Professor of finance at the American Istitute of Business and Economics in Moscow
Moscow Times, March 16, 1999
  [Home] [English Articles]