CHECHEN TALKS HEAD TOWARD DEADLOCK WITH POSSIBLE EXPLOSIONS AHEAD

Chechen talks head toward deadlock with possible explosions ahead

Three developments dominated the week just past: the Chechentalks which seem headed toward deadlock or irrelevancy, the hospitalizationof Yeltsin and the official start of the election campaign, anda blizzard of depressing news about the Russian economy and societywhich will be the backdrop for future political struggles in theRussian capital.

CHECHNYA

During the week, the peace talks in Grozny narrowed the numberof issues in dispute to the central one of the future status ofChechnya itself, but on that issue there were indications thateven if the two negotiating teams came to closure, the Chechenpeople would not agree to anything less than a chance for independence.Consequently, even if an agreement is announced, and because ofRussian pressure one might be, it is unlikely to stick. Chechenpresident Dzhokhar Dudayev no longer has effective control overmany Chechen units and some of the radicals–including ShamilBasayev, the leader of the Budennovsk raid–would more likelyfight than agree. In that event, the peace conference in Groznywould represent little more than a breathing space for both sides,as Russian generals have charged. Moreover, continued abuse ofChechens in Russia itself could finally lead both Chechens andother North Caucasians there to ally themselves with the Dudayevforces rather than to stay on Moscow’s side.

YELTSIN

Yeltsin’s hospitalization for heart trouble both reminded everyoneof his mortality, and led both Russians and Westerners to lookfurther into the future. This trend was compounded by Yeltsin’sannouncement that parliamentary elections would take place December17, a decree which should increase political activity in Russiaeven as the Duma heads for a vacation recess a week from now.Western attention to Yeltsin’s illness sparked a number of articlesabout Chernomyrdin as successor, something unlikely to do theRussian premier any good in the eyes of the current Russian president.And the Russian government’s handling of press reports about Yeltsin’sillness only reinforced the view of many journalists that Yeltsin’sgovernment is increasingly playing by a Soviet-style script.

SOCIAL CONDITIONS

But probably the most important development of the week was notat the political level at all. Rather it involves media coverageof the disastrous state of Russian social life. Life expectancyfor Russian males has now fallen to 57 years, the lowest sincebefore World War II; rising unemployment and the failure of firmsto pay wages are increasing poverty as well as raising socialtensions; epidemics of cholera and diphtheria are spreading throughoutthe former Soviet space, and there were even reports of plaguesof snakes and locusts in Central Asia. On top of this, the Russianauthorities lowered their projections of this year’s grain cropto 10 million tons below last year’s already disastrous level.And non-payments to electric producers are leading them to turnoff the lights to military units and to some civilian manufacturers,and to be unable to pay the coal miners who seem ready to go outon strike. Yeltsin’s standing in the polls continued to fall,but no one, neither a politician nor a general, has yet been ableto tap into this social discontent and use it either for electoralpurposes or in the halls of power within the Kremlin itself.

ALSO..

Other developments last week likely to cast a shadow over thefuture include:

–The Latvian banking crisis showed no sign of abating and evengave indications that it had spread both into the Latvian politicalsystem, which will have elections only two months from now, andinto neighboring Lithuania, Belarus, and Ukraine– and more distantlyinto Kazakhstan and Kyrgyzstan. Some Russian officials have claimedcredit for breaking the Baltija Bank; they probably now see financialinstruments as a useful tool for bringing other former Sovietrepublics to heel in a way unlikely to draw any Western criticism.But because the Russian political elite does not completely controlthe actions of Russian banks, the Kremlin may find that any attemptto use this method may backfire against itself.

–Moscow began for the first time since 1992 to send Russiandraftees to reinforce its units in Moldova’s Transdniester region,an indication that Moscow wants both to have tighter control overthese units than it did when local ethnic Russians were recruitedinto the now defunct 14th Army’s ranks, and to be able to negotiatefrom a position of confidence with both Chisinau and Kiev aboutregional security issues.

–Yeltsin’s hospitalization provides an excuse, but not an explanation,for why he has not named a new head of the Federal Security Serviceto replace ousted Sergei Stepashin. At week’s end, Russian mediasuggested that the country’s counterintelligence director mightget the post and Yeltsin’s own security aide Gen. Barsukhov appearsto have been paid off with a promotion. In any case, until a newFSS director is appointed, the future of the country’s domesticintelligence operations will remain cloudy.

–The Duma finally passed laws on the continental shelf and onthe exploitation of oil and gas deposits which should clear theway for Western investment in Russia’s petroleum industry, buta decision by the energy ministry to create a cartel to regulateexports and access to pipelines could put some of these Westernprojects in jeopardy, unless the contradictions between this decisionand the two laws are worked out.

–Moscow’s effort to maintain a soft peg of the ruble againstthe dollar is unlikely to succeed, most independent Russian expertsin Moscow now say. And efforts to maintain it in the face of risinginflation and the need to purchase grain to make up for the harvestshortfall, will drain the country’s reserves. At week’s end, eventhe central bank seemed resigned to this fate, with CBR actingdirector Natalya Paramonova seeking to provide herself an alibifor future failures by pointing out that the government wouldhave to take a number of fiscal steps to make the peg work.