oris Nikolayevich Yeltsin.
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Part V. Four More Years?

Economic reforms conducted by the government of President Yeltsin and Prime Minister Chernomyrdin had serious negative consequences. Crime increased beyond all expectations, organized crime became a serious obstacle on the way of economic recovery. GDP fell rapidly, unemployment has risen several times. Living standards of most Russians plummeted, and one third of the population now lives below the poverty line set at about $60 per month. The budget-dependent sectors (education, health care, science, police, military industry) got hit the hardest by the crisis. In the meanwhile, in a sign of disparity unknown under communists, 10% of the adult population earn 28% of the money.

In 1995, President Yeltsin suffered two heart attacks. Pro-government Our Home is Russia won 10.13% of the party list vote in the December elections and formed the second largest Duma faction, behind Gennady Zyuganov's Communist Party of the Russian Federation. In the government reshuffle after the elections, the last members of the reformist Gaidar team were forced to resign.

In January, 1996, Yeltsin ordered a massive military operation in which surface-to-air missiles and artillery were used to resolve a hostage crisis. Some hostages were reportedly given weapons by Chechen terrorists and helped them to break through the lines of Russian forces trying to surround and eliminate them. Yeltsin spoke on national TV on details of the operation. He said that, according to his information, 38 snipers were supposed to keep the terrorists in their sights while a smokescreen would be created for hostages to run away through.

The parliamentary leader of Our Home Is Russia, Sergei Beliayev, announced on January 29, 1996, that the bloc, created initially to support Chernomyrdin, would now devote itself to electing Yeltsin.

Despite health problems and low ratings, Boris Yeltsin officially announced in Yekaterinburg (former Sverdlovsk) on February 15 that he will seek a second term. He said that his electoral platform is "practically ready" but needs some "smoothing" and that he will return to the city to present it, ITAR-TASS reported. The president said that he did not want to leave office when the future of reform still hangs in the balance. Yeltsin said that he hoped the Chechen war would be concluded before the presidential elections, arguing that "they are sending 18-year-old kids with no experience to fight against professionals, trained in camps in Turkey, Iran, and other countries, who are armed to the teeth. " He asserted that he could not just pull the troops out, because in the case of Afghanistan, once the troops were withdrawn, "civil war flared up with new force." In issuing a decree on the establishment of a new anti-terrorist center, he demanded the capture of Chechen leaders Dzhokhar Dudayev, Salman Raduyev, and Shamil Basayev, saying that they should be shot. (As of April 24, 1994, only Shamil Basayev is still alive, out of the three.) Boris Yeltsin also expressed dissatisfaction with the progress of military reform. Yeltsin criticized Defense Minister Pavel Grachev, saying that "reform is proceeding badly, but Grachev seems to think it is going well." Disagreement among the top brass has hampered efforts to restructure the post-Soviet Russian military. Yeltsin said a special presidential commission is considering an overall concept of military reform. Sverdlovsk Region Governor Eduard Rossel recommended that local factory managers support Yeltsin's reelection, but his call did not meet with unanimous support, Izvestia reported on February 15. At a meeting with Rossel, the managers complained that Yeltsin's current policies are damaging production and entrepreneurship. Viktor Korovin, CEO of Uralmash, said that people are looking for someone to blame and thus creating an atmosphere in which "extremist forces" could come to power.

Boris Yeltsin stressed the importance of "developing the market and bringing down the social cost of this process" in his annual state of the nation address to the parliament on February 23. Yeltsin said that economic reforms have passed through the stages of liberalization and financial stabilization, and are now entering the third step of stimulating production and investment, increasing productivity, and a complete structural overhaul of the Russian economy. He described the economic situation as "complicated" and said bringing inflation down to less than 25% a year is necessary to end the crisis. He warned that "we are near a dangerous limit beyond which exhaustion and discontent may outweigh patience and hope." In the political sphere, Yeltsin said that his reforms were "the first in Russia to be realized without repression and the destruction of political enemies." Yeltsin declared that the government had failed to carry out the social tasks spelled out in his last two addresses. Yeltsin threatened that if the government did not carry out these tasks, he would replace it. He ordered Prime Minister Viktor Chernomyrdin immediately to prepare a presidential decree to compensate people who lost their savings due to inflation caused by the introduction of his reforms. He also called for the establishment of a public-private foundation to help deceived investors. Yeltsin stressed increased housing construction, support for small businesses, and the establishment of an insurance system for deposits in commercial banks. To combat economic crime, Yeltsin proposed tightening up the procedure for registering commerical entities and reforming the "unwieldy and contradictory tax system." He said that the government had failed to implement reform in the agricultural sector in 1995, leading to the dismissal of Agriculture Minister Alexander Nazarchuk. He blamed interest groups and a lack of executive discipline for these failures and called on the parliament to pass a land code to allow the buying and selling of land. On Chechnya, Yeltsin said that the two commissions on resolving the conflict had sent him recommendations and that a "peaceful resolution would be based on them." In spite of the ongoing fighting, he described his policy as a set of measures based on negotiations and strengthening the legitimacy of Chechnya's government. He rejected negotiations with "bandits" and a withdrawal of troops, saying that this would lead to war throughout the Caucasus.

Prime Minister Viktor Chernomyrdin said on March 24 his centrist political bloc would try to create a broad coalition of parties to support Yeltsin's bid for re-election. Chernomyrdin's pledge confirmed his Our Home is Russia movement would back Yeltsin in the June 16 election. "To sum up why Our Home is Russia is for Yeltsin, I can say only one thing -- because we are for reforms, for the constitution of Russia, for peace in Chechnya, for a normal life in Russia," Chernomyrdin told Itar-Tass news agency.

Yeltsin was officially registered as candidate on April 3, 1996. By then, he had signed a decree allowing land sales and purchases and proposed a so-called "peace plan" for Chechnya.

On April 15, Yeltsin signed a decree doubling compensation payments for Russia's poorest pensioners, saying the elderly needed special support. He also ordered the government to send a draft law to parliament in the next few days which would increase all pensions by 10 percent. Earlier this year, Yeltsin has ordered increases in student grants, payment of three trillion roubles to workers in the depressed mining industry and pledged big sums on the reconstruction of war-torn Chechnya. In April, Yeltsin signed a decree on restoring the value of private savings, which were wiped out in the galloping inflation of 1992 and 1993.

According to a Reuter report, Yeltsin muffed his lines and fumbled papers at the April 20 G-7 nuclear summit.

On Saturday, May 11, Boris Yeltsin rejected a challenge by Communist Party leader Gennady Zyuganov for a live face-to-face debate on television ahead of their clash in the June presidential election. "I was a communist for 30 years and I listened to so much of this demagoguery that now, with my democratic views, I can no longer stand it," Itar-Tass news agency quoted him as telling journalists in the southern Russian town of Astrakhan. Yeltsin said he was also against TV debates with other candidates.

Zyuganov, who has been leading in opinion polls ahead of the June 16 election, wrote to Yeltsin saying a face-to-face meeting between them would help the Russian people to make their choice. The commmunist leader, a text of whose letter was circulated to news agencies, proposed that he and the 65-year-old Kremlin chief should meet on television "in open discussion and without aides or consultants." In this way, he said, they could give their views on "the main problems facing the country, the ways in which it will develop, and the means whereby Russia is to be extricated from its current highly dangerous state."

Boris Yeltsin sailed down the Volga river on May 11 to the southern city of Astrakhan where a warm welcome was marred by heckling over Chechnya and over delays in paying pensions and salaries. Yeltsin had hardly set foot on dry land when he was confronted by a banner reading "Stop the genocide in Chechnya. " It soon became clear that this final stop on a meet-the-people tour of Russia would not be easy. Many locals appeared to support the Kremlin leader's rivals in the June 16 election.

Yeltsin just wagged his finger at a heckler who called on him to end the war in Chechnya. But his wife Naina stopped to remonstrate with the protester as security guards quickly jumped between them. "I have got the right to demonstrate," said Sergei Shcherbakov, who said he supported Yavlinsky's candidacy. Naina told him to calm down. "We know everything," she said.

Yeltsin said that he had met Yavlinsky "and we are uniting." But Yavlinsky, who is also running as a candidate in the June 16 poll, told commercial NTV television: "The words of the president that we have united do not correspond to reality."

The liberal economist, while not ruling out that he might finally throw his support behind Yeltsin, dwelt more on his policy differences with the Kremlin chief. "I once more repeat that all discussions with the president touch on concrete essential problems -- Chechnya, change in economic policy, social problems, army reform and very broad, significant personnel changes," Yavlinsky said. "We did not talk about duties. We did not talk about me withdrawing my candidature. We did not talk about him withdrawing his candidature." Yavlinsky said that Yeltsin had promised to think over his proposals. But the liberal reformer added that up to now Yeltsin had failed to fulfil any of the promises he had made him.

The president was also given a rough ride during a walkabout in an Astrakhan local park where people complained loudly and harrassed him over pension and salary arrears. "Where are our pensions ?" asked one woman close to tears. "We have to increase pensions and we are doing so," Yeltsin replied, getting visibly hot under the collar. He even asked one of his aides for some money which he handed to one pensioner.

Yeltsin, 65, made similar gestures on previous campaign stops further up the river in the towns of Volgograd, Akhtubinsk and Kapustin Yar where he said he had signed a decree earlier this week on support for the military-industrial complex. State debts to the sector would be paid off completely by the end of this month and significant tax relief and other benefits would also be made available, he added.

Yeltsin said he would sign a decree compensating those whose savings depreciated after reforms were introduced. He even made a pitch for votes from church-goers. "The state is supporting religion and religion should support the state and ensure believers make the right choice in the June 16 election."

In the end of May, 1996, Economics Minister Yevgeny Yasin called President Boris Yeltsin's campaign promises "absolutely unrealistic" and said they could bankrupt the country after the presidential elections. Excerpts of a letter from Yasin to Prime Minister Viktor Chernomyrdin were published in the Kommersant daily. These excerpts outlined Yasin's concerns that covering the budget deficit may cause "serious crises in the securities, credit and hard-currency markets". The Central Bank of Russia recently flooded the securities market with the so-called state credit obligations, which means raising money at the cost of rapid growth of the country's internal debt. Liberal economist and presidential candidate of the democratic opposition Grigory Yavlinsky recently called Yasin "about the only decent person" in Yeltsin's government. Yasin and Yavlinsky once worked together on the ill-fate "500 days" economic program rejected by Gorbachev in the end of 1990 in favor of the empty Ryzhkov plan, which was never implemented either. At his May campaign trip in Arkhangelsk region, President Yeltsin readily acknowledged he'd come to buy votes: "I came with full pockets. Today, a little money will be coming to Arkhangelsk region." Yeltsin personifies populism in Russia the way Huey P. Long once did in the United States.

Yeltsin finished first in the June 16 first round of the elections with about 35% of the vote. He was scheduled to compete with Zyuganov in the runoff (July 3).

Sergei Lisovsky and Arkady Yevstafyev were arrested on the evening of June 19 while leaving the White House of Russia. They were allegedly carrying a case containing $500,000, and were detained and questioned for 11 hours by Presidential Security Service, then released. Lisovsky is a wealthy advertising and showbusiness magnate with wide business interests who organized pop and rock concerts for Yeltsin and an advertising campaign under the slogan "Vote or Lose." Yevstafyev is a close aide to former first deputy prime minister Anatoly Chubais and a former top television news excutive and businessman. Chubais, now the top organizer of Yeltsin's campaign, called the episode an attempt to get the runoff cancelled. As a first Vice Premier, Chubais once supervised Russia's privatization program when many state-run enterprises were allegedly transferred in the hands of well-connected people for fraction of the cost.

On June 20, President Boris Yeltsin fired First Deputy Prime Minister Oleg Soskovets, Federal Security Service (FSB) head Mikhail Barsukov, and Presidential Security Service (SBP) head Alexander Korzhakov. Korzhakov has been Yeltsin's loyal bodyguard since 1987. In August 1991, he stood next to his boss on top of a tank during Yeltsin's historic speech. Barsukov, who was appointed to head the FSB in 1995, has a reputation of a tough administrator long feared by his colleagues. Soskovets has ties to Korzhakov and has advocated a privatization slowdown.

Yeltsin's new security czar, Alexander Lebed, who had campaigned for president on an anti-crime and anti-corruption platform before accepting his position in the government, told the journalists he was not interested in "the murky case".

Lisovsky asserted that the money was planted by the SBP agents who detained him. Chernomyrdin told ITAR-TASS the morning of June 20 that the two aides actually had permission to remove the hard currency from the White House.

Prominent bankers Berezovsky and Gusinsky reportedly interfered to help Lisovsky and Yevstafyev out the night of June 19 by getting NTV and ORT to dispatch TV news crews and interview Lebed about the events. The NTV president, Igor Malashenko, is himself a member of Yeltsin's campaign team. Berezovsky and Gusinsky hold significant interests in NTV and ORT, respectively. A third of the NTV stock is owned by Gazprom, a monopoly formerly headed by Chernomyrdin and controlling about 8% of Russia's economy. ITAR-TASS reported that Korzhakov and Barsukov wanted to get Prime Minister Chernomyrdin replaced by Soskovets.

Duma Speaker Gennady Seleznev said that Korzhakov and Barsukov were fired because they "encroached on the "sacred cow" -- the secret financing of the Yeltsin campaign."

Obshchaya Gazeta on June 27 published a detailed account of the events of June 19-20. The paper reports that early on June 19 Boris Lavrov, the deputy head of the National Reserve Bank, was told by Deputy Finance Minister German Kuznetsov to pick up $538,850 from the office of V. Dmitriev, head of the Department of Foreign Credits at the Finance Ministry. The money was to be used to pay Yeltsin campaign expenses. The paper states that Lavrov took the money to the White House and was with Sergei Lisovsky and Arkady Yestafyev, carrying the cash, when they were detained leaving the building that evening. They were released early the next morning on orders from Prime Minister Viktor Chernomyrdin's office. On June 20 Anatoly Chubais denied that the men were carrying any money.

Duma Security Committee Chairman Viktor Ilyukhin charged that the law enforcement agencies have considerable evidence that high government officials are engaged in corruption, bribe-taking, and squandering money allocated by the Central Electoral Commission. However, when former Federal Security Service head Mikhail Barsukov and former head of the presidential security service Alexander Korzhakov tried to stop Yeltsin's aides from taking $500,000 from the White House, they were fired, calling into question Yeltsin's commitment to fighting crime, Ilyukhin charged. He explained the recent firings in the Kremlin as the result of the ongoing battle between three groups: the former heads of the power ministries, representatives of the energy complex, and representatives from financial circles, Russian Public TV reported on June 27.

President Boris Yeltsin failed to attend a scheduled meeting with agricultural workers in the Kremlin on June 28. Prime Minister Viktor Chernomyrdin said that Yeltsin had strained his voice during the campaign. Earlier Western reports had described the president as appearing tired. His Communist rival, Gennady Zyuganov, had dinner with a group of young supporters at the "Woodstock" rock club in Moscow on June 27. He was shown on television dancing to folk music.

Boris Yeltsin appeared briefly on national television on July 1, the final day of campaigning before the runoff. In a stiff, awkward and emotionless two-minute speech, Yeltsin asked voters to participate in the election and appealed for their support. In a slightly hoarse voice, he said "I know exactly what to do, I have the strength, will and decisiveness for that. What is needed now is your support." Yeltsin has canceled meetings and public appearances since June 28. Originally aides said he had lost his voice, but now say he has a cold. Zyuganov called for an offical medical investigation into Yeltsin's health.

On July 3, Yeltsin voted at a location near Barvikha sanitarium, instead of the Moscow polling station he was supposed to use.

Sources:

1. Boris Yeltsin, Confession on the Assigned Topic, Moscow, 1990.
2. Vladimir Solovyov and Yelena Klepikova, Boris Yeltsin, London, 1992.
3. Boris Yeltsin, Notes of the President, Moscow, 1994.
4. Open Media Research Institute.

Links to More Information on Boris Yeltsin

• Russia Today - Yeltsin
• "How Much Would a Yeltsin Win Cost?" (Business Week, June 10, 1996).
• "Church Leans Toward Yeltsin in Russian Vote" (New York Times, May 30, 1996).
• "Yeltsin vs. The Vietnam Syndrome" (Chicago Tribune, May 29, 1996).
• "Made for TV: A Trip That Took Few Chances" (Chicago Tribune, May 29, 1996).
• "Yeltsin, In Manifesto, Pledges to Treat Voters' Pain" (New York Times, May 25, 1996).
• "Candidate Yeltsin Turns Giver - He Uses Power, and Pork, in Bid to Keep Power" (Boston Globe, May 23, 1996).
• "As Dean of Democracy, Yeltsin's a Dud" (Chicago Tribune, May 12, 1996).
• "Yeltsin Raises a Big Red Scare to Counter Communist Comeback" (Chicago Tribune, Apr. 28, 1996).
• "Moscow Democrats Back Yeltsin for Russia Poll" (Reuter, Apr. 27, 1996).
• "Yeltsin Hits Campaign Trail, Telling Voters to Forget Past" (New York Times, Apr. 5, 1996).
• "Russian PM's Party Backs Yeltsin for Second Term" (Reuter, Mar. 24, 1996).
• "Yeltsin Says He, and not Communists, Will Defend Reforms" (Philadelphia Inquirer, Feb. 24, 1996).
• "Grim Yeltsin Blames Own Government for Nations's Ills" (New York Times, Feb. 24, 1996).
• "Yeltsin on the Defensive" (Chicago Tribune, Feb. 24, 1996).
• "Yeltsin's Health Is Worrisome, US Analysts Say" (Boston Globe, Feb. 23, 1996).
• "Yeltsin Hits Campaign Trail in Urals" (Reuter, Feb. 16, 1996).
• "Second-Hand Boris Campaigns Again" (Chicago Tribune, Feb. 16, 1996).
• "Yeltsin Begins Uphill Run for Re-Election" (Chicago Tribune, Feb. 16, 1996).
• "President Presents Himself as the Best Hope to Preserve Democracy and Reform" (New York Times, Feb. 16, 1996).
• "Yeltsin's Years in Power: The Main Events" (Reuter, Feb. 16, 1996).
• "Yeltsin to Voters: Reform? Never Heard of It" (Business Week, Feb. 12, 1996).
• "Dr. Yeltsin's Rx for Russia: Amnesia" (Chicago Tribune, Feb. 2, 1996).
• "Yeltsin Faces Uphill Struggle for Re-Election" (Reuter, Jan. 29, 1996).
• "Is Yeltsin Kissing Reform Good-Bye?" (Business Week, Jan. 29, 1996).
• "Is Yeltsin The Chechens' Biggest Hostage?" (Chicago Tribune, Jan. 25, 1996).
• "Yeltsin Likely to Seek Re-Election Despite Low Popularity" (New York Times, Jan. 24, 1996).
• "The Comeback Kid of Russia?" (Business Week, Jan. 8, 1996).
• Boris Yeltsin Administration Home Page.
• Boris Yeltsin: Halifax-95.