Russian Politics - Instructions attached - Essay Example

248686 Russian Politics Write an essay, describing the deep economic, financial, social, political, demographic, and even moral crisis into which the Russian Federation plunged during the post-Soviet years of Boris Yeltsins presidency (1992-1999) and also explaining the reasons for it. Introduction The Russian Federation despite formally gaining its independence from the Soviet Union in December 1991 stuttered through to the end of the decade despite grave economic, political, and social problems, which President Yeltsin seemed incapable of dealing with. The Soviet Union had an economic system that proved to be highly ineffective, with the black market frequently providing essentials as well as luxury items. Hand in hand with the black markets went corruption and bribery. Black marketers frequently resorted to bribing communist party officials, the police and the KGB or they in turn extorted money off the black marketers. The Soviet leadership started to have concerns about economic stagnation, organised crime and to a lesser extent corruption in the early 1980s without understanding the extent of the economic malaise. Brezhnev had done nothing to halt economic decline and in fact worsened it by accelerating the arms race with the United States. It has been estimated that as much as 50% of the Soviet Union’s annual budgets was spent on weapons.1 By the 1980s the idea of abandoning the communist command economy in favour of capitalism and liberal democracy gained support in the USSR.2 For the reformers could look at the neo-liberal experience of the Thatcher and Reagan governments, the devastating economic effects in Argentina and Chile would have been more relevant.3 There was one group of pro-capitalist economists that hoped to bring in a market system to Russia, the ‘young reformers’.4 The political demise of the Soviet Union went hand in hand with its economic disintegration and declining levels of law and order in its successor states. The end of the USSR was hastened by the failure of the communist coup of August 1991.5 The Yeltsin Years – The transition towards capitalism and democracy The Yeltsin government was hampered in its efforts to control and administer the regions let alone fight the rise in crime because the remaining regional governors were by and large communist party bosses unwilling to do as Moscow wanted. These bureaucrats forged links with industrialists in their regions providing a basis for ongoing corruption. The bitter power struggles between President and Parliament during the 1992-1993 period distracted them and allowed the regions greater autonomy and organised crime gangs free rein across much of Russia.6 The number of killings related to gang warfare escalated dramatically. Moscow and the newly renamed St Petersburg were the focus points of most of that gang warfare. In Russia traffic police were involved in robbing motorists working with local gangs to force motorists to hand over their cars, or pay fines for non-existent offences or face their cars being confiscated.7 Nobody in the public or the media believed that Yeltsin would succeed in rooting out organised crime and corruption. His only previous crack down on corruption and organised crime in Moscow had been stopped it its tracks by Gorbachev when he was sacked as the Moscow party boss. The official crime figures for 1992 give a strong indication of the deteriorating law and order situation. The number of murders had increased by 40% whilst there was an even larger increase in robbery up by 60%. The over all number of registered crimes, bearing in mind that many crimes remained unreported went up to 2.76 million.8 Just how much money corrupt communist party members made may not be known, the evidence was destroyed just before the final failed coup of August 1991. Those party members that did not get into trouble following the coup could find themselves in a good position to make money in the post -Soviet world. Petty crime was rumored to be rife amongst civil servants and state employees, for instance in 1993 the Russian Interior Ministry recorded 13,000 such crimes, that was thought to be the tip of the iceberg. It was estimated that virtually all shops paid protection and perhaps four fifths of businesses and financial institutes did the same. 9 In Russia neither the transition to democracy nor the switch to a capitalist economy has developed as the Russians hoped or expected. Through a combination of the collapse of the archaic economic system, assets stripping by the Russians that brought utilities at cheap prices, government failings and last but no means least corruption. Russia was in a worse economic position than the Soviet Union had been. Inward foreign investment during the 1990s did not make up for the vast sums that left Russia of between $100 billion and $150 billion made by the oligarchs that asset stripped Russia’s industries and infra-structure excluding any of the profits made by crime gangs. Foreign investors, the more sensible ones at least were put off the possibility of investing in Russia by the high risk of their investment been ruined by having to pay bribes to officials or crime gangs. It seems that the only people prospering in post-Soviet Russia are those that became nouveau riche by their investments. Poverty and unemployment that did not officially exist during the Soviet era increased alarmingly during the 1990s. Even if the poverty line is measured below a monthly income of less than $30 a month up to 40 million Russians appeared to live in poverty.10 The adoption of free market capitalism brought an end to queuing in empty shops and replaced it with full shops where most people could not afford to actually buy anything. Uneconomic factories were shut making millions unemployed. The Soviet system had given privileges to countless petty state workers and junior party members. They were known as apparatchiks, whilst high ranking officials and senior party members with better perks were known as nomenklatura. With the end of the Soviet system some of these apparatchiks and nomenklatura exchanged their privileges for money, those still in state employment that had remained honest now exchanged favors for bribes.11 Weapons were often obtained from members of the armed forces. Military and naval personnel were increasingly eager to sell weapons to supplement their wages, assuming they had been paid on time. The Russian commanders are said to have done worse during the first Chechen war of 1994 -1996. They sold Grozny back to the rebels in August 1996 leading to the deaths conscripts.12 Corruption within the Russian military seemed to be endemic, which given its role in maintaining central government authority and internal security in some of the remoter regions of the Russian Federation certainly permitted organised crime to rise, for instance in Chechnya. During the second Chechen war that began in 1999 the local police observed the illicit trade between Russian soldiers and local black marketers. These soldiers would exchange boxes of ammunition for locally distilled vodka or locally grown cannabis. The black marketers then sell the ammunition to the Chechen fighters. Local police could intervene and arrest everybody but they have either been told not to or bribed not to. The army was supposed to keep all the roads into Chechnya secure to prevent the rebels escaping or gaining supplies and money. However, the reporter Anna Politkovskaya was told “one person on foot must pay 100 roubles”. Politkovskaya did not readily accept those claims until she successfully bribed troops herself.13 Gangsters did not always buy weapons; they could often steal weapons from poorly guarded or neglected military bases. Due to the Soviet Union having national service most of the organised crime gang members could already use weapons. Troops leaving the army could also consider employment as either bodyguards for the newly rich and the justifiably concerned business owners or joining the organised crime gangs themselves as thugs and assassins.14 Some murders have shown that the crime gangs and contract killers are able to gain hold of sophisticated weapons such as rocket launchers to kill bodyguards as well as their bosses in St Petersburg.15 The dramatic rise in the murder rate witnessed the deaths of politicians (3 members of the Duma were shot dead), businessmen and journalists. Business executives and more lowly bank employees could be and were at risk of being killed due to the rise in corruption and organised crime. In the period between 1992 and 1995, the number of killed bank workers ranging from clerks to senior executives was 46. The most publicized killing was that of Ivan Kivelidi who had been the president of Rosbiznesbank. He was poisoned in August 1995 for not complying with the demands of organised criminals.16 There are still a high number of deaths as a result of fighting between rival gangs still demonstrating that there are enough guns and money up for grabs to make the high risks of being killed seem worthwhile. Over 2,000 gang members were gunned down every year in gang wars in the Moscow region alone.17 The sudden adoption of ‘shock therapy’ in 1992 occurred before any new corporate or financial regulations could be introduced to ensure that competition between businesses would be free and fair or those financial transactions could be above board and leave an audit trail. Hyper inflation and unemployment meant many of them got power, after all pensions, pay or benefit payments could not keep pace with 245% inflation (January 1992 monthly total and equated to an annual rate well over 2,000%). 18 The switch to capitalism gave former party members and officials chances to grab their share of the crumbling Soviet infrastructures.19 Whilst people such as Boris Berezovsky and Roman Abramovich were on their way to making billions the Russian government was running out of money. So short of money in fact that it had to receive a $10.2 billion loan from the IMF in 1996. 20 The problem for Yeltsin was that “the spine of the Soviet State had been the communist party”. The power and influence of the Russian central government gradually withered away during Yeltsin’s two terms as President. Poorly equipped and lowly paid Russian conscripts sold their weapons to Chechen rebels, in the city of Tver armed gangs extracted tolls from motorists; regional governors and companies, kept taxes that should have gone to the Kremlin.21 Not only was Yeltsin unable to halt the rise of organised crime and corruption in post-Soviet Russia he actually contributed to the problem. Yeltsin contributed to the problem in various ways some accidental others less so. He was unable to halt the decline in the power of the central government, having spent most of his first term as President competing for control with the Russian Supreme Soviet and then the Duma. His second term was beset by his worsening health that partly explained his decision to retire early. Instability and uncertainly continued to plague central government meaning it was unable to control the country properly thus hampering any efforts to fight crime. When Yeltsin did find capable Prime Minister’s he would fire them if he thought they were getting too powerful and ambitious, Yevgeny Primakov and Viktor Chernomyrdin. Of all his Prime Ministers the only one he trusted was the one man who would succeed him as President, Vladimir Putin. Finally there was the links with the so-called oligarchs that Boris Yeltsin and his family had. With the departure of the young reformers went the chance of any serious action against corruption and organised crime until the emergence of the Putin presidency.22 Just how much Boris Yeltsin’s family and friends were closely liked to organised crime and corruption became more apparent during August 1999. Two scandals showed that Boris Yeltsin either knew about or did not stop the rising level of corruption linked to the Kremlin. The first one could have proved very problematic; Boris Yeltsin was so concerned he almost ended his fishing holiday early. The Mabetex affair had actually started to emerge at the start of 1999. There had been money laundering and corruption on such a vast scale that even the cynical Russians were surprised. The other scandal actually brought to public attention in the United States. Articles in the New York Times claimed that Russian organised crime gangs in conjunction with Russian government officials were using American banks to launder vast sums of their illegal earnings.23 Corruption and organised crime increased after the end of the Soviet era because it could be highly lucrative with little chance of being caught breaking the law. The oligarchs such as Boris Berezovsky or Roman Abramovich may or may not have made their fortunes legally but they provided Boris Yeltsin with support and favours for his family. In return Boris Yeltsin sold them state oil and mining enterprises on the cheap. They would have preferred to call it influence rather than corruption. They had also helped the central government out of its worst financial position by loaning it money in return for free or heavily subsidized shares in soon to be privatised state enterprises. Yeltsin would have preferred to take loans off the oligarchs rather than the IM F because they would not insist on social and economic reforms or restrict payments due to fears over human rights abuses in Chechnya.24 Illegal drugs and the trafficking of them were supposed to only happen in the capitalist decadence of Western Europe and North America. Since the collapse of communism the Russia and other former Soviet states have had as much trouble in countering the rise in the drugs trade. Ironically the production of opium and heroin originating from Afghanistan and Pakistan increased greatly after the Soviet Union’s invasion of Afghanistan in 1979.25 The chaotic and sudden collapse of the Soviet Union made it easier to smuggle, supply and sell drugs and then launder the proceeds in the former Soviet republics. St Petersburg was the main city to be affected by drug addiction, with around 70,000 users by 1990. The harsh economic factors and the dullness of life in the 1990s led to an increase in alcohol and hard drug abuse as people tried to forget how awful their lives were. The high profits and low risks of getting caught attracted rival gangs to the former Soviet Union. Aside from corruption and organised crime the hard drugs explosion has left Russia with another increasing problem the spread of HIV.26 When the Soviet Union finished it’s legacy financial and banking systems were backward and open to vast amounts of fraud and money laundering. Organised crime gangs were well positioned to take advantage of what remained of the old system before new systems were put into operation, where they encountered people who got in their way they found violence, threats and bribery effective means to get what they wanted. Through extortion, investment and takeovers they controlled much of the income from the new private enterprises. Economic decline and the threat to people’s livelihoods made a contribution to the rise crime and corruption in the post-Soviet economy of Russia. When faced with hyperinflation, under employment and unemployment ordinary people resorted to second and third jobs, mass tax evasion or setting themselves up as market traders. Those that worked as minor officials or in the police could always make other people pay fines to increase the level of corruption. Russia seemed to be convulsed by an extreme form of economic Darwinism. In Yeltsin’s Russia only the most ruthless, the meanest and the most immoral survived, the rest would go under. In the new Russia rich and poor seemed to forget all of their morals in the search for money. Yeltsin headed governments that introduced economic reforms that provided ideal opportunities for organised crime whilst reducing the power of their respective states. Bibliography Dukes, P. A History of Russia c. 882-1996 3rd edition (1998) Macmillan, Basingstoke Dunbabin, J.P.D the Cold War – The Great powers and their allies (1994) Longman Group, London Freeland, C. Sale of the Century – The Inside Story of the Second Russian Revolution (2000) Little, Brown and Company, London Harvey, R. the Rise and Fall of World Communism (2003) John Murray, London Henderson, K. and Robinson, N. Post-Communist Politics – an Introduction (1997) Prentice Hall, London Hobsbawm, E. Age of Extremes – the Short Twentieth Century (1994) Michael Joseph, London Holmes, L. Post-Communism an Introduction (1997) Polity Press, Cambridge Jack, J. Inside Putin’s Russia (2000) Granta Books, London Kampfner, J. Inside Yeltsin’s Russia (1994) Cassell, London Meir, A. Black Earth – Russia after the fall (2004) Harper Perennial, London Milner, M. Former Soviet states fail to reform - The Guardian Monday November 25, 2002 Politkovskaya, A. A Dirty War – A Russian Reporter in Chechnya (2001) The Harvil Press, London Service, R. A History of Modern Russia from Nicholas II to Putin-new edition (2003) Penguin, London Solotov, V & Klepikova E. Boris Yeltsin – A Political Biography (1992) Weidenfeld and Noicholson, London Templeton Thorpe Business Intelligence Report, Volume 2 Number 39, 5 February 2003. The Economist Very like a Bear – December 23rd 1999 White, S. Rose, R and McAllister, I. How Russia Votes (1997) Chatham House Publishers, New Jersey Read More