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Books by Grigory Yavlinsky
Economics and Politics in Russia
The Center for Economic and Political Research (EPIcenter)
Nizhni Novgorod-Moscow, 1992

1.1. Concise Analysis of the Situation.

The Political Environment in the Russian Federation. Central Authorities.

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The behaviour of the central authorities seems to lack initiative (if "initiative" does not mean decisiveness "in general" or "in part", but solution of the problems in their

most important aspects). This refers both to the executive and to the legislative authorities. In many respects Russia's present power has created problems whose solution is still unclear. In this sense the authorities are not only the hostage of their own misunderstanding of what is going on, but also the hostage of truly insoluble problems.

Good individual decisions are being made (as, for example, the legislative initiative of Russia's President on establishing a five-year-term transition period for territorial rehabilitation of repressed peoples and the Law "On Establishing a Transitional Period in Territorial and State Division in the Russian Federation" adopted by the Supreme Soviet on July 3, 1992. This law envisages a three- year transitional period for Russia in general), but on the whole a concept for creating a new federal state is still missing.

Lack of initiative by the central authorities even in such issues as setting up a true state border (the most transparent example was the declaration that Russia does not need a border-line with Azerbaijan, considering that the former border of the USSR which went through the territory of Azerbaijan does not exist any more; there are also issues of borders with Estonia, Georgia, etc.) leads to the situation when in some of the Russian regions this issue is solved locally (in August 1992 the deputy of the "ataman" (the head) of the Cossacks' troops of the South of Russia, in view of "indecision and non-acceptance of the measures on demarcation of the Russia's state border", ordered the closure of the provisional border between Russia and Georgia with the forces of the Kuban Cossacks' Rada, the Kuban Cossacks' Army, a division of the household troops of the Don Army). However, the border issue (especially between Azerbaijan and Russia, and between Georgia and Ossetia) is a special topic. Here we are facing the problem of the division of peoples. Do the Ossetians in Georgia or the Lesgins in Azerbaijan desire this? The facts tell us that they don't. But if the Ossetian crisis is already at its zenith, the Lesgian one is only beginning. Yet a state in - 19 - the present world must have a guarded border, and in the aforesaid cases for the time being this is impossible. We have only to bear the consequences of this and be satisfied with palliatives like intensification of customs' control over a limited number of goods. (This is a typical example of how shortsightedness in politics creates dead ends.)

The problem of political disintegration and the problems of migration of entire ethnic groups, economic destabilization, and collapse of the security system have not truly been realized. In this respect no lessons were learned from the disintegration of the USSR.

The policy of "shift of the reform centre to the regions" announced by the Government at the conference of the heads of administrations in Moscow on August 24, 1992 so far exists only as a slogan, without any concrete declarations of what this "shift" will actually be. Though even the most specific statements of the kind already would mark a certain progress by the government (or at least, some of its members) in their understanding of the real situation. Yet so far the matter is restricted to the pretense of activity, and in this respect "the policy of the shift of the reform centre" to the regions could turn out to be another myth, another page in the "Anthology of Modern Russian Mythology". (We used these notions in our work "Diagnosis", in the chapter "Authorities - Imitation". The policy of myths was characterized there as follows: "It seems as if the problems are 'closed', but there are no positive results." In this respect, the summer of 1992 did not bring about anything new in comparison with the spring.) The results of the conference of the heads of administrations, chairmen of oblast and krai Soviets, and Presidents of the republics within the Russian Federation, held in Cheboksary on September 11-12, 1992, also bring us to the latter conclusion. The President of Russia, Chairman of the Presidium of the Russian Supreme Soviet and the acting Prime-minister of Russia participated in this conference; nevertheless they did not adopt any concrete decisions. Moreover, an old desire "to hold" the territories, not giving them enough freedom, is seen (in this connection the President made a declaration on the extension of the moratorium on elections of local administrations and governors of Russian territories. But why should Russia's oblasts and krais be second to the republics within the Russian Federation or those that already left the Russian Federation and have nationally-elected Presidents?)

But still we can state that in terms of economics the Centre still retains levers over the regions. The question is for what influence they can be activated. They are insufficient for conducting their own policies, but are sufficient to be somehow switched into the situation.

By this, we mean the following instruments:

- federal budget financing of enterprises, institutions and agencies located in the regions, and investments from the republican budget; - 20 -

- subsidies of the federal budget to oblast and republican budgets and the budgets of autonomous districts;

- subsidies from federal extrabudgetary funds (pension, roads, and employment funds primarily) to the respective funds of the territories;

- deliveries of production, centrally distributed from state resources (including the imports);

- Central Bank credits;

- cash money emission;

- issuing of export licences.

The problem, however, consists in the fact that in effect, due to development of negative trends in the economy, the effectiveness of these instruments is decreasing, financing of many enterprises is stopped because taxes stop flowing into the federal budget, subsidies and subventions are not paid, and state resources are being formed only poorly.

The inertia of the thinking of the regional authorities is also very important, as traditionally Russia has been a highly centralized country.

At present on the whole, the Centre has the controls for influencing the situation. Public opinion demonstrates another view of this problem. According to a sociological survey held by the Russian Public Opinion Centre in mid- August (1,695 people surveyed), when asked "Do you think the Russian leadership controls the situation in the republic or has it gone completely out of control?", 56% of the respondents answered that "the situation has gone out of control" and only 24% answered that the leadership "controls the situation". This is true for all the territories to a certain extent. However the field of control is being narrowed quite rapidly. But still, at least at present, the government practically does not have to worry about the oblasts and krais, as there are no influential political forces in favour of separation from Russia. (Though a tendency, which is hardly possible to characterise other than "separatist" - as the isolation of some of the Russian territories has become one of its activities - has recently emerged in the actions of Russia's executive authority. More precisely, a closed conference of the heads of administration of the Russian oblasts organized by the Russian government was held in Tula at the end of August, 1992, but not all the heads of administrations were invited (to say nothing about the Presidents of the republics). There can nothing worse than these policies, because the next step of these territories could be banding with those republics that have already had problems with the central

authorities. In any case, activity of some of these republics in the above-mentioned directions is already noticeable. It would not be an exaggeration to say that such policies (if continued) will spell suicide for the federal power.

We can also say that in a certain sense the oblasts and krais do not represent a single whole. Here we mean the contradictions between the heads of administrations and the oblast Soviets (in particular, the heads of administrations are dissatisfied with the Law "On Oblast (Krai) Administration", which gave greater rights to the local legislative bodies of power). Not only the elite of those bodies, but also the regional elite is far from being united - there are contradictions between the authority and directors of industrial or agricultural enterprises, and chairmen of collective farms.

In terms of the republics, already in winter - spring 1993 there may arise problems with Tuva. (As according to the demands of the people's front "Hostug Tyva" ("Free Tuva") in Autumn 1992 the Supreme Soviet of this republic will discuss the issue of holding a referendum on the independence of Tuva. This is dangerous, as in the long run - if the referendum yields a response in the positive - this may cause Tuva to refuse to sign the Federation Treaty. The latter will mark the beginning of open disintegration of a hastily created "Federation", which is particularly sad against the background of a possible bloc between Tatarstan, Bashkortostan, Yakutia, and associations of the indicated republics with some of Russia's oblasts).

With skilled policies such highly centralized structures as the army and state security system (KGB) at the present stage can be a stabilizing factor. At the same time the existence of such structures can aid decision-making by the adherents of centralization of Russia on the old basis (and there are such adherents in the legislative, executive and presidential power structures) to stop the process of going sovereign by force.

Until the problem of disintegration of Russia, and separation of part of its territories is fully comprehended, it will be difficult to speak about the preventative measures.

And if the problem is understood, than by no means should we try to gather the Russian regions into one indivisible whole by force. Reliance on the old institutions in the present conditions would be illusory.

A few words also have to be said about the influence of the political disintegration process in Russia on the situation in the CIS countries. If on December 8, 1991 Russian President Boris Yeltsin could sign the renowned Belovezh agreements on behalf of Russia, the further the situation develops, the fewer the reasons there will be left for him to do so. Russia's political disintegration could deprive the CIS' realistically-minded forces, which try to pursuethe policies of integration, of the hope of making the Commonwealth efficient, to say nothing about further disintegration of the CIS states. Moreover, these "realistically-minded" forces themselves, starting from a certain moment, will begin to pattern their behaviour not on the federal authority but on the republican and oblast levels. Already today we can see such action.

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