Zhores Medvedev looks at the problems facing Boris Yeltsin if he is to unite the ruling party before the crucial Duma elections in December.

President Boris Yeltsin and Prime Minister Viktor Chernomyrdin have been functioning in a political vacuum since the beginning of 1995. The 200-odd parties and organisations in Russia are in opposition to the government. New opposition parties appear almost weekly in preparation for December's elections to the State Duma and the presidential elections next summer. Communists and socialists, hoping to return to power, are also actively preparing.

The young bourgeoisie, on the other hand, and particularly the financial wing which operates Russia's 3,000 banks and exchanges, is campaigning for the elections to be postponed and for the establishment of a stable authoritarian regime. It believes that such a regime is more normal than changing government regularly by means of free - and unpredictable- elections.

This apparent paradox is easy to explain: the new capitalist elite in Russia was formed primarily from the ranks of the old Communist nomenklatura. This is not surprising, since there were no professionals outside the Communist Party who were capable of managing administrative and economic organisations. Former Komsomol staff became bankers and brokers (the young find it easier to master these professions), while former regional Party secretaries were appointed governors. Chairmen of the old district Soviets and city Party secretaries became mayors, and the former district-level Party elite were made presidential representatives. The new owners of industrial enterprises, mines and factories are former industrial directors and executives. KGB personnel also went into business, specialising in security services for the new elite.

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Initially the opposition consisted of those truly idealistic communists and socialists of whom there were not very many in the former Communist Party. They were joined by those of the former elite who failed to get anything out of the division of property and posts. It also included nationalists who believe that Russia's loss of a considerable part of its historical territory and of superpower status at the time of the disintegration of the Soviet Union was unjustified.

Because of the Chechnya war, the government lost the support of those democratic reformers and civil rights defenders who were responsible for the beginning of the economic reforms (Yegor Gaidar, Boris Federov, Sergei Kivalev, Gavriil Popov and others). When the Democratic Russia bloc on which Yeltsin had relied when he was elected president in 1991 shifted into opposition, it collapsed. Holding new elections in such circumstances would be political suicide for both Yeltsin and Chernomyrdin.

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The 1991 events which led to the Soviet Union's disintegration were not determined by conflicts between different social groups, but by a struggle between republican and local elites on the one side, and central government on the other. The republican and local elites wanted more autonomy and more power, which was only natural given the collapse of the totalitarian model of government brought about by the general reconstruction which began in 1985. But even more important than the struggle of national elites for autonomy, the disintegration of the Soviet Union was brought about by the determination of the Russian Federation, previously its nucleus, to achieve its own "Russian" sovereignty. The implementation of "Russian" independence began with the establishment of the post of president of Russia, and then with the decision by Boris Yeltsin, the elected president, to launch radical economic reform independently of the other republics.

The Russian Federation was the first former Soviet republic to create a free market capitalist economy. However, in the attempt to accomplish radical reform quickly and by purely administrative means, the Russian leadership managed only to redistribute property without changing the structure of production. A unique hybrid capitalist financial system appeared in Russia, consisting of thousands of private commercial banks coexisting with monopolistic industries. The result was galloping inflation, the destruction of the economy, and living standards which have continued to fall for the past four years.

Not surprisingly, the authority and popularity of the president and other state institutions are in decline. At the same time the new constitution, adopted in December 1993, has given the president powers almost equal to those of a dictator. Thus a change of president could mean not only a change in political course, but a change in economic relations. That is why the young bourgeoisie is afraid, considering new elections a dangerous social experiment.

The economy is usually the main factor determining the outcome of democratic elections. The economic situation in Russia suggests that the government will inevitably be beaten. In 1991 Yeltsin defeated his few rivals by promising an improvement in welfare, low prices, high salaries and the removal of the many privileges enjoyed by state and Party officials. In 1995 all he can promise is to slow the pace of economic decline and the rate by which unemployment rises. Since he was elected, industrial production has halved, and it continues to fall.

Inflation and the fall in living standards of the majority of the population remain the main problems. By April 1995 the retail price index had risen to 5,470 times the 1990 level, while the average wage had only increased 1,220 times. The monthly income of more than half the population was lower than the minimum considered necessary for survival. In the first third of 1995 consumption fell by 10 per cent, mostly at the expense of food products. In 1991-95 the average life expectancy of men fell sharply, by five years. However, the huge budget deficit in 1995 makes it impossible to entice voters with pre-election social subsidies.

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A small wealthy minority, known in the international press as "the new Russians", was quick to appear. Quite unlike the typical American or West European capitalist class, which accumulated capital and property over several generations and as a result of the development of manufacturing and service industries, this minority is the product of the redistribution of state property and the acquisition of control over state resources and finances. Its main source of income is not from investment in new industries, but from trade, unrestricted exports, corruption and organised crime. Members of the government, governors, mayors of large cities, directors of large enterprises and chiefs of mafia syndicates have become very rich. The new ruling elite is formed from an alliance between these groups and the many private commercial banks which control the circulation of foreign currency and the trade turnover it finances.

However, not having a political party, this elite cannot participate in democratic elections. A seemingly "legitimate" way out of a similar situation was found in the Central Asian republics, Tajikistan, Uzbekistan and Kazakhstan, where the presidents prolonged their tenure in office until the year 2000 not by being re-elected but by means of national referenda. This protected them from rivals and the discussion of alternative programmes. But this device is unsuitable for Russia: Yeltsin's ratings in the polls, which hovers around the 10 per cent mark, makes the outcome of a referendum too unpredictable.

Lacking a convincing reason for postponing the December elections to the Duma, the ruling elite decided to form its own powerful conservative party with a manifesto demanding stability. Established on May 12 1995, it took the propagandistic name "Our ÁñÁ«ÊÓƵ is Russia" and defined its political position as right of centre. All government members including Chernomyrdin, heads of departments of the presidential administration, the leaders of many of Russia's republics, governors and mayors, and the directors of large industrial concerns and banks, gathered together for the founding Congress where Prime Minister Chernomyrdin was elected leader of the party. As soon as it was formed, "Our ÁñÁ«ÊÓƵ is Russia" became the ruling party, and will enter the campaign as the "party of power".

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According to the first scenario worked out by Yeltsin and Chernomyrdin, a moderate, left-of-centre party was meant to be created simultaneously. Ivan Rybkin, who has proven himself a master of political compromise as chairman of the Duma, agreed to lead it. On May 18 Rybkin announced the registration of this party, called Soglasie (Accord). So far, however, no prominent figures have joined it and the moderate left wing parties (Agrarian, Socialist Party of Workers, Social Democratic, Women of Russia) which already occupy the political space left of centre have refused to join it in a common electoral bloc.

At the inaugural congress, Viktor Chernomyrdin forecast that his party and Rybkin's bloc would obtain at least 70 per cent of the Duma seats and would form a coalition government of unity and stability. It was obvious that such a government would join with the Duma and the Federal Council to propose a postponement of the presidential elections in 1996 and the extension of Boris Yeltsin's tenure in that office. It would be too risky to destroy the harmony between parliament and government planned in this scenario by allowing Vladimir Zhirinovsky, Grigory Yavlinsky, Yuri Luzhkov or even the Communist leader, Gennady Zyuganov, each of whom may, according to current public opinion surveys, defeat Yeltsin to reach the pinnacle of political power. The election of a president who has far more power in Russia than parliament is a very dangerous experiment.

The failure of Yeltsin and Chernomyrdin to unite the newly formed ruling party in a coalition of stability with a moderate left opposition makes parliamentary support for the government after the December 12 election very problematic. Russia's ruling and propertied groups face an acute dilemma: either they risk losing political power to the left in the forthcoming elections, or they must find an excuse for postponing both parliamentary and presidential elections indefinitely, waiting for better times to experiment with democracy. The West is unlikely to criticise Yeltsin for defeating the communists and nationalists again, even if he does it by not giving them the chance to enter the political ring.

In the meanwhile, the Duma and the president are deadlocked about the composition of the next Duma and the electoral law has not yet been adopted. Unless it is passed before parliament's summer recess, the elections will have to be postponed. This is a tactic devised by the Duma to prolong its own life: many deputies resent the fact that they were elected for only two years, while the next Duma will be elected for four years. They want the presidential and parliamentary elections to take place simultaneously. Yeltsin, on the other hand, broke his promise to the West to stand for re-election in December 1993 on the grounds that the two elections could not take place simultaneously. He might find the postponement of the parliamentary elections a convenient pretext for delaying his own.

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Zhores Medvedev is the author of Gorbachev (1986), Soviet Agriculture (1987) and The Legacy of Chernobyl (1990).