DON’T DIE BEFORE YOU’RE DEAD…
is a piece of good advice from poet Yevgeny Yevtushenko. It is advice taken to heart by the architects of Russia’s foreign policy. The state is feeble, the army decrepit, the treasury broken and the prime minister on the bubble, but Russian diplomacy just keeps on trucking. (This weekly said not long ago that Russian diplomacy was out of gas. It seems to be running well on fumes.)
In the past week, President Boris Yeltsin’s special Balkan envoy, former Prime Minister Viktor Chernomyrdin, received the American deputy secretary of state, the Greek foreign minister, the German defense minister, the Canadian foreign minister and the secretary general of the United Nations. He met in Rome with the Italian prime minister and in Belgrade with Slobodan Milosevic.
The activity seems busy but random, just diplomatic Brownian motion. If Russia has a plan, it has not been revealed. Still, in public at least, no Western or Yugoslav official will criticize the Russian initiative. Official but anonymous American sources tell the press that Russia is looking for a way to let Milosevic back down without losing face. Unofficial Western observers tend to see the opposite–a Russian mediation which provides political cover for NATO to adjust its objectives downward (toward partition?) until it can claim success in a failed campaign.
Either outcome could suit Russian purposes. Either outcome would give Russia a political role in the Balkans, in Europe, and in NATO, to which it is no longer entitled by reason of military power or economic weight. Either outcome would enhance Russian prestige and conceivably help stabilize and strengthen Boris Yeltsin’s government.
The NATO countries seem perfectly willing, even eager, for the Russians to proceed to wherever they are headed. NATO will not stop Russian ships supplying oil to Yugoslavia. NATO apparently will bring discussions on the introduction of ground forces into Kosovo into the United Nations Security Council, where Russia has a veto.
Public statements by Russia’s leaders are strongly anti-NATO but much less strongly pro-Serb. But Russia’s unwillingness to endorse Serb policies or tactics has not dampened Serb enthusiasm for a Russian role. An international force might be acceptable in Kosovo, say Serb leaders, but only if it has a large Russian contingent.
Russia for the moment has the Clintonian advantage of triangulation. To keep that advantage, the Russian diplomatic game now is all tactics, with no apparent strategy. The chance that such a game will lead to peace is slim, but it is greater than zero. Besides, the Russian game right now is the only game in town.
No connection, all the way down the line…. Most Russian politicians are staying away from Washington while NATO bombs fall on Yugoslavia. But Yuri Maslyukov, the communist deputy prime minister and former central planner, had four-and-a-half billion good reasons to visit. There is no connection whatever, he insisted, between events in the Balkans and the negotiations with the International Monetary Fund (IMF).
Maslyukov and Michel Camdessus, IMF managing director, put the penultimate touches on a new stand-by loan agreement, with only a few technical details still to be worked out. But the real deal is a long way from done. Before funds are transferred to the Russian Central Bank, or deducted from Russia’s debts to the IMF, Russia must complete a few intervening steps: raise taxes on gasoline and vodka; rescind the cut in the value-added tax; lift Central Bank restrictions on the sale of hard currency; tighten banking laws, regulations and enforcement; and provide a full accounting of IMF loans disbursed over the last few years.
When these measures have been taken, said Camdessus, IMF management will recommend approval of the loan to the Fund’s executive board. If approved, the loan would be disbursed in three tranches of $1.5 billion each, with the first two tranches to come within the first twelve months.
Former Finance Minister Boris Fedorov says conforming to the terms of the IMF agreement will require passage of some ten new bills through the Duma, and many more amendments to existing law. The measures–the tax hikes of course, but also the closing of insolvent banks–will be highly unpopular. The Fund money, if it is ever released, will all go to pay foreign creditors, including the Fund itself. The ordinary Russian who pays more for vodka or gas will not see a kopeck of it.
No major economic legislation has moved unscathed through the Duma since late 1994. The Balkan war has greatly increased the political risk of association with Western institutions. With elections in December, there are many reasons for Duma deputies not to take dictation from the IMF. Prime Minister Yevgeny Primakov has a large store of political capital built up in the Duma. He will have to spend it in large amounts to get the IMF program done.
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