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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Real Man who wrote (35)3/26/1998 1:47:00 AM
From: Real Man  Read Replies (1) of 1301
 
On the recent political events (from clari.world.europe.russia)

The stunning news of Boris Yeltsin's Cabinet firing this week was
no surprise to those who know the character of the aging Russian
president. It was the logical reaction of a man who doesn't like his
power challenged - even if only by someone's intentions to run for the
presidency in 2000.
Victor Chernomyrdin survived as Prime Minister for so long because
he was always loyal to the president and never flaunted political
ambition beyond his position as the second-ranking Russian statesman.
Mr. Yeltsin appreciated this loyalty and seriously regarded Mr.
Chernomyrdin as his most probable successor. However, for Yeltsin the
problem of his successor is purely academic, relegated to some distant
future - sometime in 2000, and possibly later because the president
keeps toying with the notion of a third term through constitutional
loopholes.
But for many influential Russians, the succession problem isn't
academic. For them it is a matter of life and death.
The incestuous relationship of power and money in this country is
well known. Last week the business magazine, Expert, published two
rows of photographs of Russia's 10 most influential politicians and 10
most influential businessmen. The lists were almost identical.
Our robber barons owe their enormous fortunes not to their
entrepreneurial skills but exclusively to their connections in the
corridors of power - and consequently to their ability to channel the
state budget financial flows to their private companies. So they can't
help being preoccupied with the problem of succession. It's critical
to them that the presidential post falls to someone who will guarantee
their fortunes, their positions of power, their freedom, and their
personal security.
A group of these oligarchs proclaimed publically last month that
their handpicked successor to Boris Yeltsin was Chernomyrdin. These
Russian tycoons - in cahoots with many people from the Yeltsin
administration, and even some members of Yeltsin's family - were
involved in the ''understanding'' about succession.
This business group, often spoken for by Boris Berezovsky, the oil
and media tycoon and former national security adviser to Yeltsin, was
so confident of its influence within Yeltsin's inner circle that it
decided Yeltsin himself could be manipulated.
Mr. Berezovsky, for example, boldly bragged to the Financial Times
in 1996 that he and his colleagues had essentially bought Yeltsin's
re-election with more than $1 billion spent on his campaign. And
Berezovsky, through his television and newspaper outlets, had publicly
recommended Yeltsin not interfere with the already-accomplished
process of selecting his successor.
''The country needs a much cheaper president,'' editiorialized the
Berezovsky-owned Nezavisimaya Gazeta daily on Feb. 6.
It just was too much for the old man, who hasn't lost his famous
instinct for power. Yeltsin was already planning Chernomyrdin's
firing.
Chernomyrdin's fatal mistake was not to protest publicly against
the oligarchs' growing claims on his political future.

BEREZOVSKY got wind of Yeltsin's plan, and just hours before
Yeltsin announced the dismissal, Berezovksy disavowed his support for
Chernomyrdin and said the uncharismatic prime minister is unelectable.
Chernomyrdin was seduced and abandoned.
So much for the power elite. What about the country?
Let's give Yeltsin once again the benefit of the doubt. While
preserving his own place as master of the country, he inadvertently
saves Russia from at least this latest attempt by the oligarchs to
appoint the next president behind the backs of the people. On the
other hand, the political crisis opens a new period of uncertainty.
But the uncertainty also brings hope. Perhaps Yeltsin's new
appointments will bring our nation's best and brightest to the
Kremlin.

Andrei Piontkowsky is director of the Strategic Studies Center in
Moscow.
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