Who's Who and What's What in Russia

Who's Who and What's What in Russia

Who's Who and What's What in Russia

Answers to your questions about the news.
Sept. 2 1998 6:17 PM

Who's Who and What's What in Russia

So: Yeltsin canned Kiriyenko and installed Chernomyrdin at the behest of Berezovsky and Dyachenko (his daughter); Zyuganov (a Communist!), Lebed, and Luzhkov are angling for the presidency; and no one knows how Sergeyev and his nukes will react. Confused? The Slavic names don't help. In response to reader requests, here is Explainer's Tear-It-Out-And-Put-It-In-Your-Wallet Glossary of the Russian political struggle.

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Who's Who

Boris Beresovsky: Beresovsky made his fortune by buying state-owned oil, gas, automobile, and media companies during Yeltsin's reign. He and a group of immensely wealthy banking cronies--sometimes called the Magnificent Seven or Moscow oligarchs after a group of 17th century aristocrats who briefly ruled Russia--owe their success to connections with President Yeltsin. In turn, they have bankrolled his political campaigns. Some of the oligarchs have been diminished by Russia's financial meltdown, but Beresovsky's empire remains powerful. The oligarchs have traditionally been enemies of the Communists--for obvious reasons--though the two groups may be reaching a modus vivendi.

Viktor Chernomyrdin: A former Soviet bureaucrat described as "a precinct captain in an outer-borough clubhouse" (David Remnick; The New Yorker), he was Yeltsin's Prime Minister for five years until Yeltsin sacked him five months ago, then restored him last week. Chernomyrdin's restoration is probably the handiwork of Yeltsin's daughter and the oligarchs. The oligarchs like Chernomyrdin because several years ago he made their fortunes by selling them state-owned enterprises at sweetheart prices. The Russian legislature, the Duma, has refused to approve Chernomyrdin (see below).

The Duma: Russia's legislature is controlled by a Communist named Gennady Zyuganov. The Duma wants to give itself many of the powers currently exercised by the executive. The Duma's economic plan includes a return to price and exchange controls, the nationalization of important industries, and economic protectionism.

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Sergei Kiriyenko: He's 36 years old but looks like he's 26. A reform-minded banker with almost no political experience, Yeltsin named him Prime Minister five months ago and canned him last week. He was replaced by his predecessor, Chernomyrdin.

Alexander Lebed: The former general is thought to be a front runner in the 2000 elections (sooner if Yeltsin resigns). Lebed has attacked the Duma for attempting to usurp the executive branch and has allied himself with Chernomyrdin.

Boris Yeltsin: Oh, yes, the president. He came to power in 1992 and has swung between alliances with conservatives and reformers, businessmen and populists, hard-line generals and pro-democracy politicians. Though once well-loved, his approval rating in 1996 was four percent. It is rumored that Yeltsin is interested in resigning, as soon as the Duma approves his choice of Prime Minister (who will assume the presidency for 90 days upon Yeltsin's abdication, then hold general elections) and offers him immunity from prosecution. Yeltsin denied the rumors in a recent speech, though observers say he looked sick and/or drunk. Some say his daugher, Tatyana Dyachenko, has great influence over his decisions.

What's What

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Conservative: In Russia it means a former Communist or anyone who favors price controls and renationalizing factories. (In the U.S. "conservative" means someone who talks a lot about the invisible hand, the entrepreneurial spirit, and his golf handicap. In Russia, this person is called a "reformer.")

Pyramid Scheme: This is how Russia has been financing itself. Russia has an enormous budget deficit, since it has a generous social welfare system and its citizens are notorious tax cheats. To finance its shortfall the government, beginning in 1995, issued a series of high-interest, short term bonds. When each set of bonds came due, the government discharged them by issuing even more bonds. Last week the government sort-of solved the problem by announcing that in effect it would not pay a significant portion of the last round of bonds (the base of the pyramid).

Ruble: The Russian currency's exchange rate is a proxy for the country's economic health. The Russian government historically has fixed the exchange rate (by agreeing to buy rubles at a given price in foreign currency). Last week the government abandoned this pledge, probably because currency reserves were exhausted, and the exchange rate plummeted immediately. The ruble's slide indicates that both ordinary Russians and foreign investors think hyperinflation is a serious possibility. (Ordinary Russians are withdrawing their life savings--causing bank runs--and buying consumer goods in anticipation.) Hyperinflation would occur if the government discharges the rest of its ruble-denominated debts by printing rubles rather than by raising taxes.

Photograph of the Cathedral of Basil the Blessed in Red Square, Moscow, by Marc Garanger/Corbis.