RUSSIA: Communists Step Back From Showdown With Yeltsin’s Government

By IPS Correspondents Reprint | | Print |

Sergei Blagov

MOSCOW, Oct 15 1997 (IPS) - Communists and nationalists dominating the Russian lower house of parliament backed down on a no-confidence vote in the country’s government Wednesday, despite earlier threats to vote against the cabinet and its tough draft budget for 1988.

Russian deputies had been called in for the threatened no- confidence motion as a protest against the severe belt-tightening budget, but backed down when confronted by president Boris Yeltsin’s apparent willingness, if necessary, to dissolve the lower house (State Duma) in defence of his premier’s reformist cabinet.

Nominally the legislature has postponed the vote until Oct. 22, but observers agreed that both sides now understood there was little chance the Duma can now bring prime minister Viktor Chernomyrdin’s cabinet down.

Under the constitution, if the parliament votes no confidence in the government twice within three months, the president must either dissolve the Duma or replace his cabinet. But Yeltsin repeatedly said that he will not choose the second option.

And Chernomyrdin said earlier this week that instead of waiting for the Duma’s no-confidence vote, he would demand such a vote himself — forcing his own confrontation with the legislature.

“The government will not work in an unclear situation. We will resolve everything within the limits of the constitution, and not in three months, as some want, but much sooner,” he warned.

Kremlin sources said the government had no intention of allowing its actions to be paralysed for three months and was mulling the possibility of urging Yeltsin to dissolve the legislature. The Duma was elected in 1995 and is not due for re-election until 1999.

Yeltsin has warned several times that he will target the Duma, which is also attacking tax code reforms and plans to ease private land ownership as well as his premier’s austerity plan for 1998.

But just hours before the scheduled vote Yeltsin spoke by phone with Gennady Seleznev, the communist speaker of the Duma and offered to improve cooperation between the Kremlin and the legislature if his supporters stepped back from the brink.

Seleznev’s proposed motion had already been moderated, targeting Chernomyrdin’s first deputies, the market reformers Anatoly Chubais and Boris Nemtsov, rather than the premier himself. At one point the chances of the no-confidence measure passing were improved when teh pro-reform Yabloko alliance, led by liberal economist Grigory Yavlinsky, said it would be backing the no- confidence motion.

“Yabloko is against the government’s policies, where the free market has been replaced by a system of corporate monopoly with criminal links,” the party said in a statement.

It urged the government to change its economic policies, withdraw a controversial new tax code currently under debate in parliament, and to include aid to small businesses in the 1998 budget.

The debate began with Communist Party leader Gennady Zyuganov opening the session, apparently in command of the necessary votes. A simple majority in the 450-seat chamber was needed to oust the government — the communists hold 140 seats, and their allies form the Agrarian Party, 33, the People’s Power bloc 39, and Yabloko 55.

Zyuganov had already described as “completely senseless” earlier efforts by a conciliation committee to reach a compromise on the draft budget. He accused the government of violating the agreement on how the committee would work.

But despite their apparent majority, the government’s opponents, failed to cross the line and postponed their no-confidence vote, after a heated adjournment that ironically saw the communists pushing for a stay and the reformist Yabloko urging a stand. The postponement was achieved with just two votes to spare.

Instead the conciliation committee will resume work on the budget bill, which was rejected by the Duma on its first reading last week.

Government officials signaled a willingness to make concessions at the first meeting of the committee, which includes delegates from the Duma, the upper house of parliament (Federation Council) and Chernomyrdin’s cabinet.

Chubais said after the meeting of the conciliation commission that the cabinet was ready to raise its estimates of Russia’s likely 1998 gross domestic product, thereby allowing increased spending in some areas.

“The government is ready to reconsider GDP figures,” Chubais said after the meeting. But he made it clear the government would not compromise on other key benchmark indicators, such as inflation targets, deemed crucial for ensuring modest economic growth in 1998 after years of decline.

“We see no ground for revising our inflation forecast,” Chubais said. The government hopes to hold inflation to 5.7 percent in the year to December 1998.

The draft 1998 budget envisages a deficit running at 4.8 percent of gross domestic product. In the original draft budget for 1997 the deficit was put at 3.5 percent of GDP, but that target proved over-optimistic. The government had to slash 1997 spending by 21 percent due to failure to meet tax collection targets, though the cut was not approved by the Duma.

Russia’s GDP inched up by just 0.2 percent in the first nine months of 1997 on 1996, a meagre figure but still the first sign of growth in the country since the break up of the Soviet Union in 1991.

The budget is key to a currency confidence building plan that will see the introduction of ‘new roubles’, one new rouble equivalent to 1,000 of today’s roubles, on Jan. 1.

To help cover the expected 1998 deficit the government plans to borrow 9.6 billion dollars from abroad, including 3.5 billion dollars raised on eurobond issues, a slight increase from this year’s borrowing on international debt markets.

The government hopes that low borrowing will allow interest rates to fall, and push the economy to its first growth since the beginning of economic reforms.

Past Russian eurobond issues have proven secure and the stock market and currency is relatively stable. Some 33 billion dollars worth of foreign debt has been successfully restructured. But the massive social costs of the economic restructuring and the perennial cash flow problems that afflict employers are leaving a bitter taste in the mouths of ordinary Russians.

Parliament has only once before voted for a motion of no- confidence in the government, in 1995, a vote that was overturned by a ‘confidence’ vote a few days later. A move toward a no- confidence vote last spring evaporated before reaching the Duma floor.

Chernomyrdin, a loyal Yeltsin ally, has submitted his resignation on several previous occasions, most recently in March, but has been imposed on to withdraw it each time. However while Yeltsin retained Chernomyrdin as premier, he used the last occasion to bring more reformers into top-level Kremlin posts.

The threat of a no-confidence vote is primarily designed to improve the Communists’ bargaining position over the budget rather than to oust the government. But it is a card that cannot be played too readily.

“Despite the anti-Yeltsin pronouncements, the Communists were afraid of a collision with the Kremlin and tried to avoid the no- confidence vote,” independent parliamentarian Nikolai Gonchar told Russian NTV TV.

“Next week the Communists once again will not be brave enough to oust the government,” he added.