by Dr. Stanley Kalpage
Just five months after sacking Prime Minister Viktor Chernomyrdin and his entire government, Russia's ailing erratic and confused president, Boris Yeltsin, gave his country and its crisis-battered financial markets another jolting surprise. Without so much as an explanation for his unpredicted move, he dismissed premier Sergei Kiriyenko, this own choice five months ago, and his government and brought back Viktor Chernomyrdin, calling the latter a "heavyweight", whose "main advantages are decency, honesty and thoroughness".

Yeltsin had replaced Chernomyrdin with Kiriyenko in March this year blaming him "for losing dynamism in this pursuit of economic reform." At that time, Yeltsin said that he needed new ideas and new energy to achieve the market reforms he had in mind. And now, Yeltsin's firing of Kiriyenko is seen as a desperate move by an enfeebled president to shore up support among Russia's politically active business magnates, known as the "oligarchy", who function sometimes as a shadow government and who could lose millions in the economic crisis that has hit Russia.

Vladimir Zhirin-ovsky, head of the ultranationalist Liberal Democratic Party, said that "the president made a mistake" by dismissing the Kiriyenko government. "Changing the cabinet will not do anything," he said. "In this country the weak are replaced by the weaker."

Kiriyenko in and out
President Yeltsin had virtually forced Sergei Kiriyenko on Russia's parliament in April. Twice rejected by Duma, Kiriyenko was confirmed only on the third and final attempt when Yeltsin threatened to dissolve parliament and call for fresh elections unless his nomination was accepted.

Following the appointment, Yeltsin praised Kiriyenko in a radio address: "This is a new figure. In government, as energy minister, he showed his professional capacities and human qualities. This is a technocrat, a man who is allied to no party or movement."

As a matter of fact, Sergei Kiriyenko (36), the provincial vanker and oil executive, proved himself to be an aggressive reformer but he was unable to prevent the devaluation of the rouble and the freeze on the government's bond market, which sorely hurt Yeltsin among average voters, the country's business elite and foreign investors.

The youthful Kiriyenko, lacking political experience or a broad-based constituency, did manage to force a hostile Duma to raise some taxes and cut some expenditure. But even with a $ 26.4 billion financial package furnished by international lenders. the country teetered on the verge of bankruptcy, and banks were fast approaching a state of default. Fearful investors were hurrying to withdraw their funds.

To avert a financial disaster, Kiriyenko then announced that the government could no longer prop up the rouble and would allow it to fall by as much as one-third its value. He also announced a 90-day moratorium on the repayment of billions of dollars of short-term debt.

The rouble's devaluation made a mockery of Yeltsin's vow a few days earlier to keep the rouble stable. A stable currency had been the Kremlin's proudest economic achievement of post-Soviet reform. With devaluation, public trust in Yeltsin plummeted and the media heaped scorn on him saying that he had "devalued himself along with the rouble". The communist-led Duma, by an overwhelming vote, urged Yeltsin to resign.

Can Chernomyrdin make a difference?
Chernomyrdin (60), long schooled in politics, is a stodgy Soviet-era bureaucrat who excels at mending political fences. Unlike Kiriyenko, he enjoys support in the Duma and is a favourite of the powerful business elite that felt ignored by Kiriyenko. Since his dismissal in March, Chernomyrdin had been busy with his campaign for the presidential election in 2000 A.D.

Although Chernom-yrdin himself is not very popular with the voters his recall as prime minister would seem to enhance his presidential election prospects. However, with Yeltsin's public approval rating, being a low 5 percent, any endorsement by Yeltsin could well be (for Chernomyrdin) the political kiss of death.

It is still not clear what Chernomyrdin could do to ameliorate Russia's parlous economic situation. It is said that prominent economic reformers like Anatoly Chubais and Boris Nemtsov are unlikely to be in the new government. But Chernomyrdin began by offering an olive branch to parliament when he asked the Duma to set aside the package of economic austerity measures demanded by international investors.

Many analysts hold the view that the root of the current chaos goes back to the years of pseudo-re form when Chernomyrdin himself was prime minister from 1992-98. While he may not be able to push through the harsh reforms ended, Chernomyrdin could help to improve relations between the Kremlin and the anti-Yeltsin parliament.

On the economic front he may not be able to do much. The financial management firm, Merrill Lynch, has said that Chernomyrdin's reappointment "is a significant defeat for market-based reform in Russia and a significant victory for crony capitalism."

Russia's economic woes
The devaluation of the rouble makes Russian exports more attractive abroad but imports more costly at home. For Russia's banks, devaluation is especially painful because their rouble assets are worth less, and they still have big debts that must be paid in dollars.

The government cannot survive by collecting less revenue than it expects and trying to balance the budget by slashing spending. If it follows that course, millions of unpaid teachers, soldiers and government employees will never get the months of back salary owned them. In addition, Moscow needs to impose honest privatisation on the subsidised industries that, for the present, make almost nothing consumers want. It must regulate the banking system into some semblance of honest bookkeeping and provide legal protection for investors and private-property owners. In other words, Russia's economy needs an almost complete overhaul.

Drastic reforms needed
Boris Yeltsin has talked reform but hasn't been able to deliver fully. He calls Russia's economy a freemarket system when it actually is a hybrid between robber-baron capitalism and state control. And now, the greatest accomplishments of the painful Yeltsin years - a stable rouble and low inflation - have been snatch away. Rampant tax evasion among Russia's companies is largely responsible for the low revenues; mis-spending has undermined confidence in the financial markets.

On one difficult afternoon as the crisis worsened, Yeltsin vowed that he would not devalue the rouble and would not even break off his vacation to return to Moscow. Three days later, he did both. Russians viewed this as a betrayal.

Future options
President Yeltsin's attempt to rule Russia by presidential decree has failed miserably. Nor has be recovered his health completely since he underwent multiple heart bypass surgery in November 1996.

According to Russian presidential spokesman Sergei Yastrzhembsky, President Boris Yeltsin has recently discussed with Duma speaker Gennady Seleznyov the future of Russia, including the proposal to create a three-party commission.

Yastrzhembsky told a briefing that "a trilateral commission will be one of the key bodies in the political life of our country in the near future. " He was of the view that the commission's meetings and consultations to be held by acting prime minister Viktor Chernom-yrdin with the principal Duma factions and regional leaders will "determine the anti-crisis programme and composition of the government."

Communist Party leader gennady Zyuganov has other ideas. He said that, the Chernomyrdin nomination notwithstanding, the Communist-led majority in parliament was still calling for Yeltsin himself to step down. The communists would thereafter agree to wide-ranging discussions on the formation of a coalition government.

There are plenty of dire predictions. Rumours floating in Moscow indicate that Yeltsin might declare a state of emergency, a move that would probably be seen as a retreat from democracy. Some are worried that Yeltsin might form a government of national unity that would take in communists and fascists and bring re-form to a halt or put it into reverse.

Presidential elections
With the latest economic and financial crisis it seems as if the days of Yeltsin's eventfully career are numbered. Any chances of his changing the Constitution to become a candidate at the presidential elections of 2000 A.D. are now remote. His anointment of Viktor Chernomyrdin as his successor may not be to Chernomyrdin's benefit. And there are others with presidential ambitions; among them, the youthful Boris Nemtsov, the feisty nationalist-minded mayor of Moscow Lury Luzhkov, and the charismatic governor of Siberia, Alexander Lebed.

However, if the current financial upheaval degenerates into political turmoil and social discontent, Russia may lapse once again to some kind of authoritarian rule. The communists still have a sizeable following in the country and dominate the present parliament. The western powers will naturally not want this to happen.

President Clinton's forthcoming visit to Russia in early September is considered to be ill-timed. There is no definite agenda and takes place at a time when both presidents have serious credibility problems in their own countries. There is little that Clinton can do except perhaps to reflect on how Russia has moved from communism, not to capitalism, but to chaos. What a different world from the day of the Cold War when the US and the USSR, both superpowers, were in angry confrontation targeting cruise missiles and nuclear weapons at each other.