The Road Not Taken

The results of the elections show that the success of the parties in opposition was predetermined by the economic and political decisions of the president that were made during the first month after the 1993 elections. The victory of the ultranationalist Liberal Democratic Party of Russia put in question the economic and political direction of the country. At that time there were two courses of actions to take. Yegor Gaidar insisted on speeding up and strengthening the process of economic reform. He based his program on the post-communist experience of the East European countries which were entering a phase of macroeconomic stability and a 2 percent to 2.5 percent increase in living standards per year at the time of the presidential elections in Russia. The new constitution of the Russian Federation and the makeup of the legislative body in general allowed him to pursue such a path.


The other option was to compromise with various political forces, slow down economic reforms in the hope of easing social dissatisfaction and attempt to form an alliance with the left-nationalist powers in the State Duma. Incidentally, high-ranking officials from the United States administration at that time, including Vice President Al Gore and Deputy Secretary of State Strobe Talbott, recommended taking precisely such steps.


Gaidar's position was taken up neither by the president nor by the prime minister, which prompted him to submit his resignation. And in 1994, the executive authorities wound up in a series of economic defeats, including an almost 20 percent monthly inflation, the exhaustion of hard-currency reserves and a sharp fall in living standards until the beginning of 1995. Only then did the government begin to lead a more or less consistent stabilizing course. But the time before the elections was too short. And at the end of 1995 the country, having reached a stable phase of economic reform, was consequently facing an extremely difficult social situation. It is not surprising then that the aggressively anti-government forces succeeded.


The election results show that a clear majority of voters chose parties that were in direct opposition to the government. Moreover, the similarity of the economic platforms of Communist Party leader Gennady Zyuganov and Yabloko leader Grigory Yavlinsky, which are based on inflationary policies and left populism, cannot help but be noticed. It was not without reason that the Communist leader said during a press conference after the elections that his party had a rich experience of productive cooperation with the Yabloko bloc.


The success of the Communists reflects not only its high level of organization and potential to mobilize its electorate, but also certain characteristics of the mentality of the country's voters. Above all, it is distinguished by its conservatism, which favors those who seem most familiar and comprehensible and at the same time who avoid openly extremist slogans about a return to the past.


Finally it seems only fair to note the clear success of Russia's Democratic Choice. Who could have expected that a party which stressed anti-populist, consistently liberal and Westernizing -- that is "anti-patriotic" -- ideas and which took responsibility for the most unpopular measures at the start of the reforms and was made a scapegoat for all the mistakes of the executive authorities, would finish fifth out of the 43 blocs in the race?


Russia once again faces a choice. But it is not a choice between "capitalism and communism." We have already for some time passed the stage where the return to socialism of the 1970s is possible. The country must now choose the kind of market economy it wants. However, the political struggle in Russia has not yet reached the point which characterizes modern market democracies of opposing liberal capitalism against social democracy. Unlike the left in Eastern Europe, our communists are drifting not toward social democracy but toward nationalism.


The country can either continue on the course the government is now taking which is bringing economic stability and steady growth. Or it can change its course in the name of giving support to domestic industries, and in practice, to inefficient sectors which rely on "inexpensive money" from the State budget. This path will lead to high inflation, import and export limits, government paternalism and nationalist rhetoric.


The choice of alternatives depends to a large degree on whether the government continues its political and economic course. The new Duma does not automatically lead to a change in government. However, President Boris Yeltsin has already made statements about the need to rearrange the government. What will come of such a change? The president can either speed up economic reforms or drift toward a more closed economy. Both options are open. Especially since the defeat of the Agrarians frees the executive authorities from one of the most influential lobbyists threatening the stability of the course.


If the Duma were to raise the question of no-confidence in the government, this would pose some danger. The formation of a new government, however, would hardly be to the advantage of the leaders of the Duma factions as long as their attention is directed at the presidential campaign. Both Zyuganov and Yavlinsky stopped criticizing the government after the elections. The new opposition would prefer to place its members in the cabinet. Indeed, the hard-currency reserves and the state of the economy is such that they practically guarantee improvement of the economic situation in the coming six to eight months under any kind of rational economic policies. And the opposition parties -- particularly the communists -- could attribute such economic successes to their own participation in government.





Vladimir Mau, a doctor of economics, is deputy director of Yegor Gaidar's Institute for the Economy in Transition. He contributed this comment to The Moscow Times.