September 2, 1998
In a joint press conference with Russian President Boris Yeltsin, President Clinton encouraged Russians to continue their move to a democratic, market-orientated society. But will the latest political and financial crisis undermine those reforms? A panel of Russia experts evaluate the current situation. Then join in an Online Forum to discuss the nation's future.
A RealAudio version of this segment is available.
Will Russia survive its economic and political crisis.
August 31, 1998:
A look at how Russians view the crisis.
August 31, 1998:
Presidents Clinton and Yeltsin meet in Moscow .
August 31, 1998:
The Dow falls 512 points.
August 27, 1998:
The Dow falls 357 points.
August 26, 1998:
Russia's economic situation drives down markets around the world.
August 24, 1998:
Boris Yeltsin sacks his government.
July 13, 1998
International lenders agree to loan Russia over $22 billion.
May 28, 1998
Russia's government tries to maintain the value of the ruble.
April 24, 1998
After two tries, Sergei Kiriyenko is confirmed as Russia's Prime Minister.
March 23, 1998
President Yeltsin sacks his cabinet.
The Russian Government Information Network.
International Monetary Fund.
ELIZABETH FARNSWORTH: And here with me to analyze events in Russia is Michael McFaul of Stanford University, author of a forthcoming book on Russian democracy. Also joining us are Stephen Cohen of New York University, author of Rethinking the Soviet Experience, Melor Sturua, of the University of Minnesota, a longtime columnist for the Russian newspaper Izvestia. He was a speech writer for Soviet leaders Kruschev; and Leon Aron of the American Enterprise Institute, who's writing a biography of Boris Yeltsin. Thank you all for being with us. Michael McFaul, did this summit help Russia in this time of crisis?
MICHAEL McFAUL, Stanford University: Well, it didn't do anything positive, that's for sure. I don't think it did anything negative either. President Yeltsin and President Clinton had agreed to have the summit well before the crisis, and Clinton had to go as a result of that. But he didn't provide anything to help them out. It's going to be a long road down before they do better.
ELIZABETH FARNSWORTH: Melor Sturua, do you agree with that, that nothing positive came out of this?
MELOR STURUA, University of Minnesota: Well, something positive came, of course, but it's not substantial enough to say that it helps Russia.
ELIZABETH FARNSWORTH: What positive do you think came of it?
Giving long-term advice when emergency aid is needed.
MELOR STURUA: Well, the point is that Mr. Clinton came to Moscow, shook hands with President Yeltsin. They exchange some pleasantries, and this is fine. But I don't think that this is decisive. Let me abandon some sophisticated vocabulary and give you an example. Somebody's dying from massive coronary heart attack. And the doctor tells him, I will treat you, but you have to abandon smoking, drinking, meeting with Monica Lewinsky; you must jog, you must run, et cetera. That's fine, but the man is dying. You must treat him now. You must apply some intensive cardiovascular therapy. Afterwards, yes, it's okay. But all the conditions are iffy conditions. Health is very iffy. And if it's late, it doesn't matter for Russia.
ELIZABETH FARNSWORTH: So, Mr. Sturua, you're saying that the advice that the President gave is long-term advice—
MELOR STURUA: Yes, yes.
ELIZABETH FARNSWORTH: And what Russia really needs is immediate aid?
MELOR STURUA: Of course. In the long run it's good advice and we have to follow it. We know ourselves about it. But now, of course, it's too late to speak about this—conditions. You know, we need your helping hand. And you are giving just a finger. And finger is good for nose picking, and that's it.
ELIZABETH FARNSWORTH: Stephen Cohen, what do you think about the advice that the President gave to Yeltsin?
STEPHEN COHEN, New York University: I think it was not only bad, but it's impossible. He essentially said to Russia stay the course. And Russia cannot stay the course. And it can't stay the course, and by the course, I mean, these monitored economic policies that we have politically and economically underwritten in Russia for seven years. It can't stay the course because in the last seven years an unprecedented peacetime economic devastation has occurred in Russia. The economy today is barely 20 percent what it was seven years ago. 75 percent of the population lives below or at the subsistence level. Children don't have vitamins. They suffer from malnutrition. Men live less than 60 years. Yeltsinism as a set of policies has no legitimacy. It's completely discredited. Russia is changing course as we talk. What Mr. Clinton said simply associated the United States with Russia's pain. I think it feeds the anti-Americanism in the country. And I think it hurts our friends in Russia, particularly the way during his press conference—and I've never seen an American President do this before--he actually lobbied on behalf of specific Yeltsin appointees and laws. I've never seen another American president do that in another country.
ELIZABETH FARNSWORTH: Leon Aron, do you agree that this is—that President Clinton's advice is actually counterproductive?
A test for Russian democracy
LEON ARON, American Enterprise Institute: Well, I think that obviously the summit—summits in general are largely symbolic affairs, and this particular summit happened to be a sort of a visit on the Titanic, where one person, unfortunately for him, will be able to lift off. But I'm afraid I'll have to disagree with my friend, Stephen Cohen. I think what the President stressed—at least this was my understanding—is trying to find a way out of this economic collapse, part of which is due to severe structural problems, part of it due to human blunders and corruption, to find it—a way out of it within the democratic framework--I think this is extremely important. I think we will see in a few days, maybe in a week and a half at the Duma, I think, does not confirm Chernomyrdin. We will see a deadlock with both powers, executive and legislature, claiming legitimacy, and both of which, you know, obviously, were elected. Then it will be a real test of Russian democracy, of how to get out of it. Finally, you know, for all the faults that this regime had and for all the blunders that were made, this is by far the freest, most open, most tolerant regime that Russia had in a thousand years. It's a regime under which opposition could organize, publish newspapers, when nobody was arrested for their political convictions, when the freedom of press was complete, when everybody could publish and travel everywhere they wanted. So to that extent, prodding this same regime to do something in the economy and come to an understanding with the Duma, within the economic—within the framework of democracy I think is at least sort of a useful reminder.
ELIZABETH FARNSWORTH: Mike McFaul, you just heard Leon Aron mention the Titanic and Alexander Lebed, the general, who's also a political leader, now said that the current crisis is more dangerous than before the Bolshevik Resolution in 1917. How serious do you think this crisis is?
MICHAEL McFAUL: Well, the crisis is very serious. I don't believe it's like 1917 for the simple fact that there is not a Bolshevik Party out there waiting to take advantage of riots on the streets. Having said that, this is akin to the greatest crisis that Russia's had since becoming an independent state. It's a total economic meltdown, and here I agree with Steve Cohen, we rarely agree, but I agree here that the course that they'd been on is over and done, and to speak of staying the course, you know, we're beyond that. History has moved beyond that. And the real threat now is the political crisis, does this bleed over to cause authoritarian regimes, civil war? So far they've played by the democratic rules of the game, and I'm encouraged by that. But I'm also very worried that people would be tempted to say this crisis is too serious, we need to dissolve the Duma, and not bring back the elections. And if Yeltsin attempts to do that, and there are rumors that they are thinking about doing that, rule by decree, martial law, I think that's very serious, because he's not strong enough to pull it off. I agree—I disagree with it in principle, but even in practice, it's not going to work, and that could lead to real bloodshed in Russia.
A temporary suspension of the markets and democracy?
ELIZABETH FARNSWORTH: Melor Sturua, you've seen a lot of hard times in your lifetime in Russia. How does this one compare?
MELOR STURUA: Well, of course, I don't think that there is a real danger of civil war, because the Communist Party can't come to power at the ballot box. The situation is very dangerous. Our financial system is falling apart. Banks are falling apart. Goods are disappearing. The ruble is disappearing. Dollar is disappearing. What's next? Hope disappears, and then patience. And when the patience of the people disappears, this is the most dangerous thing in Russia. But it seem to me that despite everything, despite everything, I agree with my colleagues that today's Communists are not Bolsheviks in 1917, and Mr. Zyuganov is not Lenin, fortunately enough. But Lenin said that Russia always suffered—not from capitalism but from the under-developed capitalism. And today we have this underdeveloped capitalism in Russia. May I show you two credit cards? One is an ordinary Mastercard; another is Mostcard issued by the Most Bank, which is the fifth largest bank in Russia. So when you insert in money machine Mastercard, you get dollars; when you insert Mostcard, you get just a flash on the screen, all the transactions temporarily suspended. So now based in Russia we have temporarily suspended free market, and temporarily suspended democracy. I hope temporarily but suspended.
ELIZABETH FARNSWORTH: Stephen Cohen, we saw President Yeltsin in the press conference just now. How capable is he of dealing with this crisis?
STEPHEN COHEN: You mean physically, Elizabeth?
ELIZABETH FARNSWORTH: I mean physically.
STEPHEN COHEN: It's hard to speculate about a man's health, but visibly—and that's the beauty of television—we get a close look—and this is the first time he was subjected live to television, to live television in a while--he did not look good. But I would draw your attention to a more fundamental matter. I believe that Yeltsin and Yeltsinism—by that, I mean the general policies he's pursued in economic and social policy for the last seven years--have lost all support in the country, both in the political elite and among the ordinary people. And that means that Yeltsin personally no longer has any legitimacy. The legitimacy that he was given by becoming an elected president he has squandered, and therein lies the danger. We've seen what the people are prepared to do. In May, June, and July we saw in the far North, in the maritime provinces, the capacity of not only the working class but middle class people, who have not been paid in months and months, who cannot feed their children, who in a few weeks won't have electricity to generate heat, to protect him against the cold. We've seen them close down the railway lines. They can cut down Moscow, cut Moscow off from the rest of the country. And I believe that if the political elite and Moscow doesn't get its act together, in the next say ten days, two weeks, that will happen. There is one thing driving these politicians in Moscow that might make him compromise and agree on a coalition government, and that is that all of them, from Yeltsin to the Communists, are afraid of the Russian people. And I think they have good reason to be.
What should the U.S. be doing to help Russia?
ELIZABETH FARNSWORTH: Leon Aron, given all of this, what should the United States do next?
LEON ARON: It's very difficult for the United States to do anything at this point. This is a country in the midst of either post-revolutionary or pre-revolutionary crisis, depending on whether we'll see movement forward or retrenchments and perhaps reaction. Outsiders in these situations are extremely limited in their options. I think the West has done its last bit when it provided Moscow with over $22 billion in loans and because of the domestic political situations, because the parliament would not approve the emergency measures because the government did not do the right things at the right time. That was at least the first trench of it. That was essentially evaporated. So I think after that we could only, as Dickens would say, "behold with throbbing bosoms" is what is happening there.
MELOR STURUA: May I interject?
ELIZABETH FARNSWORTH: Yes.
MELOR STURUA: May I interject. Well, you say that the West has already given $22 billion to Russia and let's see if we can do anything more. We are talking about sea changes not in Russia but in the whole world, especially we live in the state of globalization. And you are talking about $22 billion. The United States in a couple of weeks lost in the market more than $2 trillion, and you could save this money if you were more generous toward Russia. Do you remember in '94 how you bailed out of Mexican peso? You gave them 50 or 54 billion dollars. And Mexico has no nuclear weapons, no missiles. Mexico doesn't support Saddam Hussein, Mexico doesn't supply Iran with nuclear know-how. I don't think that $22 billion settles everything.
ELIZABETH FARNSWORTH: What do you think about that?
MICHAEL McFAUL: No. There's a big difference between Mexico and Russia, and—
MELOR STURUA: Yes, there is a big difference. I agree with you.
MICHAEL McFAUL: And the big difference is not just in their economies but that Mexico had a plan to bail them out, to get them out of a crisis, and it worked. Russia today has no such plan. Throwing money at Russia today is just throwing money down the tubes.
ELIZABETH FARNSWORTH: So what should be done?
MICHAEL McFAUL: Well, I agree with Leon. At this point there's very little that can be done in the short-term. I think the one thing we want to make clear is we do not want to see authoritarian rule of Russia because it's going to fail, and No. 2, I think over time we need to resurrect the idea of the market. The failures of the reforms of the last seven years are not because they tried market reform and it failed but because they tried Soviet-style muddling through, partial reform, oligarchic capitalism. That's the real enemy in Russia today, and we can help to undermine that.
ELIZABETH FARNSWORTH: Okay Steve Cohen. Yes. We have a very short amount of time, but what do you think?
STEPHEN COHEN: I think we're in danger of losing our soul in Russia. I think we have to drop this dogma about the notion that there's only one way to reform the country. Russia's changing course. They are going to be new policies. They are not going back to the Soviet system, that the state is coming back to try to save the nation. I think we ought to open our minds, our hearts, restructure their debt, and help them change course. If not—if not, Russia will become the cemetery of America's moral reputation.
ELIZABETH FARNSWORTH: Well, thank you all very much for being with us.
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