YELTSIN GAINS FROM LATEST POLITICAL CRISIS IN MOSCOW, BUT NEARLY TORPEDOES CHECHEN TALKS

Yeltsin gains from latest political crisis in Moscow, but nearly torpedoes Chechen talks

Three events dominated the week just past: the resolution ofat least the first stage of the current Russian government crisisas Yeltsin fired three of his power ministers and the Duma failedto pass a no-confidence resolution against the government of PrimeMinister Chernomyrdin, the opening of a new and much more difficultround of peace talks between Moscow and the Chechens, and Moscow’sdecision to stabilize the ruble within a range against the dollar.

GOVERNMENT CRISIS

Yeltsin sacrificed three of his power ministers as part of asuccessful effort to keep the Duma from passing a second and definitiveno confidence motion against Chernomyrdin’s government. But Yeltsindid not fire defense minister Pavel Grachev, the man most parliamentariansblame for the Chechen war and for the mishandling of the Budennovskhostage taking. Indeed, Yeltsin once again appears to have turneda political crisis to his advantage by forcing the Duma to backdown, and by giving himself the opportunity to restructure andtake greater control of the Russian Federation’s increasinglydivided and fractious intelligence and security communities. According to widely reported rumors, Yeltsin will have Grachevsupervise all military and internal forces as a chairman of anew state military committee, and the president will combine theFederal Security Service with some of his own intelligence servicesin order to create an American-style intelligence community inRussia. Chernomyrdin survived, but Yeltsin may turn out to havewon this round too.

PEACE TALKS

Yeltsin was less successful in taking control of the Chechenpeace talks, which resumed this week after a break for consultations. The Russian president issued a decree mandating the permanentbasing of Russian troops in Chechnya. Russian negotiators saidthat there would be nothing to talk about unless Yeltsin rescindedthis decree, and Chechen negotiators said that this was yet anotherindication of Russian bad faith. One Russian negotiator claimedthat he had been assured Yeltsin would back down and pull thedecree, but that claim was rejected by the President’s press secretaryand by Kremlin officials who said that Yeltsin was simply restoringthe status quo ante. This disarray in Moscow brought jeers fromsome Russian commentators and politicians. At week’s end, thetalks were sputtering on with little prospect that the fundamentalpolitical question–the status of Chechnya–would be resolvedanytime soon. Moreover, the Chechen who led the Budennovsk raidgave another interview in which he threatened further terroristacts inside Russia. Moscow officials dismissed his suggestionas an effort to get attention, but Grachev put 15,000 more troopson the streets of Moscow to ward off any attack.

RUBLE STABILIZATION

Also this week, the Russian government and its Central Bank announcedplans to support the ruble within a range against the dollar untilat least this fall. Such a move would create more predictabilityfor foreign investors and some exporters, but it is fraught withdifficulties. Inflationary pressure on the ruble could cost Moscowmuch of its hard currency reserves, the new higher rate for theruble will make some Russian products less attractive to foreignbuyers, and a failure of Moscow to maintain the ruble would senda shockwave through the country, possibly triggering an economicand hence political crisis.

ALSO…

In addition to these developments, five other less noted eventsare also likely to have a continuing impact on the region:

–Kazakhstan’s President Nursultan Nazarbayev released his draftof a new constitution. Besides creating a strong presidency anda bicameral legislature, the draft makes Russian an official language,rules out dual citizenship, and renames the country the KazakhRepublic instead of the Republic of Kazakhstan. Each of thesehas important consequences. Russians will be angry that Russianwas not given a status equal to the state language Kazakh, andMoscow will be upset about the constitutional prohibition of dualcitizenship, something Russia has tried to promote in all CIScountries. But the change in the name of the country may be themost significant: it suggests that Almaty is now thinking of itselfas a Central Asian country, rather than as a bridge between CentralAsia and Russia. The country’s ethnic Russians will feel evenmore uncomfortable, and Almaty may be able to help forge a moreunified Central Asian bloc which would inevitably oppose Russianinfluence in the region.

–The Federation Council voted down two major pieces of legislationand the Duma passed one, each of which actions is likely to affectRussian politics this year and beyond. The Federation Councilrefused to pass Duma-passed bills which would have mandated thatthe Federation Council’s members be popularly elected, and whichwould have established countrywide rules for local government. The first decision means that the Federation Council is likelyto be selected according to the provisions of a Yeltsin decree,something that will save some members their jobs but may undercutthe authority of the institution. The second decision means thatthe regional elites and their representatives in the FederationCouncil will be able to continue to take advantage of the absenceof such regulations for awhile longer. Meanwhile, the Duma passeda bill that would allow the parliament a say in all privatizationdecisions. While Yeltsin is likely to veto it, this measure pointsto continuing tensions between the parliament and the president.

–In another action, the parliament completed ratification ofa treaty with China which calls for Russia to hand over a smallportion of its territory to China. Russian officials in the FarEast are totally opposed to such a step, and have even mobilizedCossack units to occupy and defend the land involved. Now thatMoscow has ratified the agreement, there is likely to be a testof wills between the center and the periphery, one that Moscowwill have to handle carefully given the emotional quality of anyissue involving Russian territorial concessions.

–Following last week’s vote in which pro-Russian candidateslost throughout the Crimea, the Crimean parliament elected a newspeaker who pledged to cooperate with Kiev and to clear any actionsbetween the Crimean provincial authorities and Moscow with theUkrainian government. The stance of the new regional governmentencouraged both local Ukrainians and local Crimean Tatars to believethat some stability might come to their region, but local Russians,and more importantly Russian officials, indicated that they wouldcontinue to demand better and special treatment for ethnic Russiansthere. Not surprisingly, their fate is almost certainly one ofthe reasons why Russian foreign minister Kozyrev said July 7 thatYeltsin’s long promised visit to Kiev had not yet been scheduled.

–Armenians went to the polls July 5 to vote on a new constitutionand to elect a new parliament. At week’s end, only very preliminaryresults were available: they suggested that the voters were ratifyingthe constitution and would provide President Levon Ter-Petrosianwith a working majority in the parliament. That outcome willnot produce stability. Ter-Petrosian and his government wereheavy-handed in their approach to the opposition, excluding oneof the biggest parties from the vote and putting obstacles inthe way to an honest count, some international observers claimed. Moreover, next week the trial of the so-called Dro activistsis set to begin; those being tried are accused by the governmentof plotting terrorist acts, The political opposition claims thatthe entire case was invented by the government in order to crackdown on opponents.