Publication: Monitor Volume: 4 Issue: 69

Luzhkov’s success in Moscow may not translate into a successful bid for the presidency, for three reasons.

First, ask the question of how Luzhkov was able to create this powerful empire. Above all, Coulloudon argued, Luzhkov’s success has been due to support from President Boris Yeltsin, who offered Moscow "unprecedented privileges in return for its wholesale support." In the light of the chaos of 1991, Yeltsin could not afford to have disorder in the streets of the nation’s capital. Luzhkov has no other friends in the governing elite. If Yeltsin leaves office, he may find his privileges removed, as they are resented both by reformers and by regional leaders.

Second, the Luzhkov model can only work in Moscow, seat of the federal government, headquarters for most corporations and gateway for foreign investors. It is all too clear that a great deal of Moscow’s wealth is siphoned from the profits of energy and metals enterprises whose production activity takes place hundreds of miles away. Regional leaders who try to emulate Luzhkov’s model will never have the political and economic privileges Moscow enjoys. If Luzhkov is to win support outside the Moscow beltway, therefore, he will have appeal to something beyond his paternalistic economic model — such as nationalism over Crimea.

Third, there are signs that Moscow’s bubble economy may soon burst. Too much construction with too few secured occupants has left many expensive new buildings now empty. Luzhkov’s efforts to take over industrial enterprises, such as the Zil auto plant, have both failed and drained the city’s coffers. Finally, foreign and domestic businessmen seem to be tiring of Luzhkov’s payoffs, and indicate interest in starting businesses in other Russian cities. Of the Russian bankers, only Menatep is still backing Luzhkov.

Still, Luzhkov has proved himself a skillful and dynamic politician. It would be premature to rule him out of the national political scene. He may yet have some tricks up his sleeve that could paper over the cracks of Moscow’s "economic miracle" until the year 2000.

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