It is Mr. Eltzin’s comeback and forming a new aligning of forces within Russian legislature which became major political events last December.
The first steps of the President proved the supposition we made in the preceding publication of the bulletin. We assumed matters of taxpayers’ discipline, payment of salaries and wages, and military reform should become the priority in presidential activity for the forthcoming period. All these problems are both political and economic. Both stability and a range of crucial characteristics ( including constitutional grounds) of further development of the Russian society depend on resolution, or non- resolution of them. At the same time, all of them are directly linked to the problem of budgetary stableness, and, therefore, to implementation of a start of post- stabilization economic growth.
Therefore, in the course of last December the executive power undertook certain measures aimed at reorganization of an administrating the military forces and at perfecting the army’s structure. At the same time, Mr. Eltzin’s personal participation in the work of should serve as a powerful spur to the government’s struggle for enhancing budgetary discipline. It is worthy noting that the President stipulated rather distinctly the obvious fact that resolution of the said problems required not so much economic, or military skills, as political will, the power’s readiness to be uncompromising towards those who violate current normative acts.
During last December, relationships between the government and the Federal Assembly started gaining new contours. The beginning of December was marked by a number of acute attacks against the government from the part of the Council of Federation being ever rather loyal to the former. At the same time, some experts had envisioned that the chances for getting the Federal budget approved by the State Duma would be rather low, which seemed to betoken an intensification of the struggle between the power branches. However, the actual development of the situation has taken the directly opposite path.
In the first place, as we have supposed, the government managed to find common language with governors, regardless of their certain bias towards the left. Ideas to appeal to the Duma to raise the issue of non- confidence voting have not finally gained any support in the Council of Federation. Moreover, the Upper Chamber declined the Law “On the Government” adopted by the constitutional majority in the Duma. The Law included in particular an extension of the Duma’s rights against the executive body.
Secondly, the leftist and nationalist majority in the Duma have decided to compromise with the government. The CPRF and LDPR groups supported the draft of the budget, and it has had rather good chances to be adopted within reasonable term. This became possible partly because of the Parliament’s fear to be dissolved (on December 17 the year after the last elections passed), and partly due to the leftists’ aspiration to play a political game to make the government split. However, in the long run it was clear, that the budget itself is insignificant: one may suppose that its implementation would be highly improbable. Nevertheless, political soundness of this document allowed the opposition to receive certain political, and even practical dividends from the government.
Results Of Expert Survey For December 1996
The Center for Expert Researches conducted a regular survey on experts in December 1996. The 13 respondents were six leading politologists, four journalists dealing with political problems, and three politicians. All of the latter were of democratic hue.
From the viewpoint of the absolute majority of the experts, in general terms the last month of 1996 has not brought about anything new. As Mr. A. Yakovlev, one of the expert team, expressed that: “<December> is significant, since nothing happened which might have shook the country. However, it is hard to mention anything positive”. Relative “lull” in politics has given some illusory impression of stability. It is not accidental that, comparing with the preceding month, the experts were more inclined to estimating general political situation as ”quiet, although there are problems”, and, at a less degree, “tense”. It is unlikely that one may consider such a “calm” to be a sign of prosperity. As one of the experts- journalists noted “The bad thing is that the power even does not attempt to drastically change the situation” and exit the stagnation. What events, happened in December, should be recognized as most significant ones In the first place, all the experts noted “political struggle”, “intrigues” around that. Secondly, many of them nominated the development of the situation in Chechenya, both the continuation of peaceful regulating and “trouble” and tragedies ( hostages, and assassination of the Red Cross medical staff). Eltzin’ s comeback to the Kremlin was mentioned as a significant event only once, as well as the change in refinancing in the Duma, which was noted by a Duma deputy, while the other respondents have not even noticed that such a change had happened. Two experts nominated a new, “rather alarming” trend to communists’ activization as the most significant event of the last month. The communists, indeed, held their Congress and declared their readiness to” take responsibility”, should certain development of the situation happen.
As for estimation of general political situation, a half of the experts stated that “it is quiet”, although there are problems”, while the others thought it was “tense”. The general economic situation likewise in the preceding month seemed more alarming to the experts: nearly all of them ( except one) defined it as “ tense”, while some of them ( three experts) pointed out that the “tension” included dangerous elements of “critical situation”.
While estimating the government’s activity, the experts seemed being more inclined to granting negative marks. Only one of them estimated the course as “being generally right”, and yet four experts described it as “ partly right”. Five experts assumed that the government “ made grave errors and flunks”, and yet two ones stated that “ there was not any certain course”, and “the course is amorphous”.
What do current economic and political processes reflect- a trend to stabilization, although a “regardless- of” one, or to intensification of the critical situation The experts’ opinions divided again, as it was in the preceding survey. Four of them expressed their optimistic view: they thought that a trend to both stabilization and exit out of crisis was observed. Three experts, on the contrary, were convinced that the crisis trend would intensify. Yet four of the team thought that stagnation was observed, and three others expressed their opinion that a simultaneous development of the two contradictory trends was observed: if one fact testifies to the stabilization trend, the other one gives an evidence of the destabilization one. It is symptomatic that three of the team thought that an “unstable equilibrium” state was observed, and “one can change the situation in any direction at any moment”. The experts were unanimous in estimating a rate of manageability of the general economic and political situation from the part of the state power. It was described as “rather low”, and some members of the team stated that “ it was not a bad factor, though”, while the other part of the experts assumed that the trend to a “ situation per se, power per se” state was gradually intensifying. Whose impact on political situation is the strongest It was the names of Chernomyrdin and Choubais, and Eltzin who influenced “even by his absence” which were mentioned most frequently. Lebed was mentioned once, and Zyuganov- two times. It is characteristic that new powerful “figures” appeared in the experts’ opinions over the last month: one expert think that it is a group of banks who influence the situation to a higher extent. Another expert noted that it was governors who became a kind of “influential figure”. In this case, according to Mr. S. Blagovolin’s estimation, it is important that having won the elections, the Governors thus have gained new status of elected people’s representatives. The appearance of the new “Pleiade” of such figures has resulted in a new balance of forces in politics. In general terms, “the Presidential Administration has succeeded to concentrate more power in their hands”.
According to the revised data the execution of the Federal budget in October had not much difference from the September one. Slight decrease of the tax revenue was observed, thus making a further improvement of the budget situation possible. Considerable decline of the federal budget deficit should be noted. The government succeded to decrease the deficit rate to the one stipulated in the law. This could be explained by the evident willingness of the government to finish this year with no inflexion from the promulgated budgetary policy.
The preliminary data given in the Table 1 proves this statement. Besides, we think that the annual estimated execution of the federal budget should secure no excess of the given deficit (3,85% GDP).
The service of the public interior debt, given the secondary deficit, amounted to 6.24% GDP.
The aggregates of the consolidated budget show the same dynamics as respective data on the federal one, as it was already observed in September. On the background of the stability of the local budget deficits, the consolidated one decreased considerably. Over the last two months the trend to decline of the consolidated budget expenditure has been occured (near 1% GDP every month).
As it is seen from the Table 3 the growth rate of the overall real (deflated by CPI) tax arrears have slowed down in November despite a sharp temporary (explained by the seasonal factor) increase of the Profit tax arrears.
Table 1. Execution of the federal budget of Russia in 1996 (% of GDP)