#5 - JRL 7135
April 8, 2003
SADDAM AND BUSH SPOIL ELECTIONS IN RUSSIA
By putting up a fight, Iraq disappoints US generals and Russian economists
Author: Andrei Savitsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ANOTHER ELECTION CYCLE BEGINS IN RUSSIA THIS SEPTEMBER, AND THIS ONE WILL DEPEND ON OIL REVENUES. NONE OF RUSSIA'S MAJOR POLITICAL FORCES EXPECT ANYTHING TO SPARK CONFLICTS WITHIN THE POLITICAL ESTABLISHMENT OR AMONG DIFFERENT LAYERS OF SOCIETY. BUT THIS SCENARIO WILL FALL APART AS SOON AS BUDGET REVENUES ARE AFFECTED.
Cheap Iraqi oil will appear on the market much earlier than expected. Needless to say, this is only an unpleasant prospect for oil exporters. For some countries among them, oil is the only source of national revenue. A global price crash will be a disaster for these countries - and unfortunately, Russia falls into that category.
Another election cycle begins in Russia this September, and this one will depend on oil revenues more than on anything else. All major political forces are relying on the "inertia scenario", which entails a tranquil social background: budget revenues will keep flowing in, pensions will be raised as promised, money to repair water supplies will be found, the wages of state-sector workers will be paid on time and even raised in October... In other words, none of Russia's major political forces expect anything to spark conflicts within the political establishment or among different layers of society. But this scenario will fall apart as soon as budget revenues are affected.
The regime is claiming stability in Russia as its own major achievement. Vladimir Putin owes his unprecedented popularity rating to that. But when the public realizes that Putin's stability rests on the same foundation as Leonid Brezhnev's (high oil prices rather than skillful economic management), that will be bad news for the powers- that-be.
Needless to say, the regime is trying to postpone this unpleasant moment of truth until after the election. We all remember 1995 and 1996, so we know how that is done. Back then, in order to boost morale, the regime begged, borrowed, and stole: International Monetary Fund loans, loan securities, short-term state bond pyramids... There can be no doubt that new creditors will be found this time, particularly since everyone already knows that such election investments inevitably end in defaults.
There are other ways of rescuing this hopeless situation. Negative activity among the masses may be channeled against a suddenly-discovered enemy. This may be America, or Georgia, or whoever. Under the circumstances, however, an internal enemy is necessary (ar least that won't lead to a backlash from abroad). In fact, one such enemy has already been found: Mikhail Kasianov's government. Steady criticism of the Cabinet and criminal charges against some Cabinet ministers will probably suffice for the election, given a relatively stable situation. But if the economy crashes, the public will demand more than that. The Kremlin would probably have to declare a full-scale war on corrupt officials and embezzlers. Some heads would have to roll: first, prominent former ministers like Nikolai Aksenenko - then some newer ones as well. Actually, everyone knows who is meant by that... Still, we can still hope that America - if we ask - will not drop oil prices as soon as Baghdad is taken, and give Russia a chance to hold the election. Otherwise, Russian democracy will be in greater jeopardy than it was back in 1996.