TIME: Almanac 1993/TIME Almanac 1993.iso/time/092391/0923001.000

Text File | 1992-08-28 | 9.9 KB | 206 lines

                                                                                WORLD, Page 32

SOVIET UNION

Will a Weak Democracy Spawn a Dictatorship?


Wild inflation and pending economic collapse stir worries of a
rebound to authoritarian government

By GEORGE J. CHURCH -- Reported by James Carney and James O.
Jackson/Moscow and Christopher Ogden with Baker


    Inflation runs riot, sapping an already weakened economy;
people go cold and hungry. A weak democratic government fails
to maintain order, and is vilified by nationalists furious at
the country's fall from world power to beggary. An attempted
coup designed to install a dictatorship collapses, and its
leaders are tried for treason. But after a final economic
breakdown marked by mass unemployment, fascists come to power
with wide popular support and institute a ruthless
totalitarianism.

    Historical parallels are never exact, of course. The
Soviet Union is not fated to replay this capsule history of
Germany's Weimar Republic. But the possibility cannot be
dismissed either. And this time the drama might not take as long
as the nine-plus years that elapsed between the failure of Adolf
Hitler's 1923 beer-hall putsch and the founding of the Third
Reich.

    Some experts fear trouble in Russia and other Soviet
republics even this winter, if food shortages deepen into famine
and provoke riots. "Perhaps the threat of dictatorship has been
removed for the time being, but the danger persists," says
former Foreign Minister Eduard Shevardnadze, who accurately
foretold the failed August coup attempt by old-line communists.
"I am afraid of uncontrolled, spontaneous ((crowd)) movements,"
he adds. "The people are tired, and food is lacking."

    Lev Timofeyev, a prominent Russian republic economist, is
more specific, and even gloomier. Says he: "If we do not
introduce full-fledged private-property rights and freedom of
private entrepreneurship within the next two months, we are in
for such catastrophes and upheavals that they will sweep away
((Russian President Boris)) Yeltsin, ((Prime Minister Ivan))
Silayev and you and me. This country is already in the midst of
a real economic and financial catastrophe. If the West does not
help us, we are in for some very serious attempts to restore a
fascist-type regime."

    Moreover, even if Russia and the other republics somehow
get through the winter and begin the economic shock treatment
Timofeyev demands, they face a gargantuan long-term job of
converting to a free-market economy, which may not bring
prosperity for many years. Meanwhile, the nation is certain to
suffer rising unemployment as inefficient industries are shut
down and continued inflation as more and more prices are set
free. That would be an explosive mix anywhere, but especially
in the U.S.S.R. (or whatever loose confederacy may succeed it).
Inefficient as the old communist economy was, it did provide
jobs of a sort for everybody and a steady, if meager, supply of
basic goods at low, subsidized prices; Soviet citizens for more
than 70 years were conditioned to expect that from their
government. Says a Moscow worker: "We had everything during
((Leonid)) Brezhnev's times. There was sausage in the stores.
We could buy vodka. Things were normal."

    But if there are disturbing resemblances to Weimar, there
are also heartening differences. One is the diametrically
opposite attitude of foreign governments. The victors of World
War I were bent on humiliating and punishing Germany and saddled
the Weimar regime with ruinous reparation payments that drained
off badly needed resources. The winners of the cold war are
warmly encouraging nascent democracy in what used to be the
U.S.S.R. and are considering pumping in money and goods to prop
it up.

    Prospects that such aid will become a reality improved
markedly last week. U.S. Secretary of State James Baker,
visiting Moscow, declared that help need not be delayed until
a new union of Soviet republics actually begins carrying out
sweeping economic reforms. Commitment to a credible plan, he
said, would be enough. For his part, Soviet President Mikhail
Gorbachev announced that the U.S.S.R. would withdraw its
personnel from Cuba and eliminate economic subsidies, thus
meeting a major condition the Bush Administration had laid down
for American aid. Russian officials began talking about handing
back to Japan the southern Kurile Islands, which were seized at
the end of World War II. Tokyo has insisted on return of the
islands as its principal condition for Japanese participation
in any major aid program.

    But it is not at all certain that aid will be either large
or timely enough to rescue the economy. A common estimate in
the West is that $15 billion to $20 billion a year for three
years would be needed. Soviet officials have never given an
overall estimate, but Gorbachev and Silayev last week asked the
12-nation European Community for a stunning $6 billion to $7
billion worth of food (grain, meat, butter, powdered milk) just
to get through the first half of 1992. E.C. President Jacques
Delors so far has talked of only an immediate $2 billion. There
is a serious question, too, of how to distribute any additional
help: Through what remains of the central government or through
republics or even smaller political units?

    Moscow is thronged these days with representatives of
republics and even municipalities besieging foreign diplomats
with separate pleas for help. But the political disorganization
is so severe that even the aid already pledged cannot be
properly distributed. The Bush Administration has offered to
guarantee bank loans this year of $1.5 billion to the Soviet
Union to enable it to buy American grain, but only $915 million
has been advanced. Banks are balking at putting up the remaining
$585 million. They fear the central government will either
stretch out repayment of the U.S.S.R.'s foreign debt or parcel
out that debt among the republics; some might be unable or
unwilling to repay. The banks conceivably could lose the 2% of
principal, and interest in excess of 4.5%, not covered by
Washington's guarantee.

    Meanwhile, the Soviet economy is imploding at an alarming
rate. Grigori Yavlinsky, chief economic policymaker for the
transitional central government, estimates that prices are
rising 2% to 3% a week, and his figure is conservative; Yevgeni
Yasin, another leading economist, puts the increase at 191% just
in the first half of 1991. The Soviet mint is currently printing
rubles at four times the 1987 rate. Money is becoming so
worthless that growing numbers of citizens are turning to
barter.

    Total production so far this year has fallen 10%, and the
decline for all 1991 might reach 15%. Food shortages occurred
last winter because of distribution breakdowns, even though the
grain crop came in at a near record 237 million tons. This year
farmers seem likely to harvest only 190 million tons, and
distribution is, if anything, worse. There is a real question
of how much Western food sent in aid might spoil before reaching
consumers.

    The first essential for even moderating the slide is an
agreement restoring some sort of economic cooperation among the
republics. Without it, says Yasin, "I think we would have a 20%
to 30% drop in production and inflation of 1,000%," a
Weimar-like figure. Yavlinsky last week sent to the republics
a draft of an agreement that would provide for a common banking
system and a common currency -- the ruble -- and would make
private property the basis for a new Soviet economy. But there
are at least two competing plans being bruited about, and while
the debate rages, the tide is running against any sort of
cooperation. Republics are starting to set up customs posts and
other hindrances to the movement of goods across their borders,
and people are beginning to hoard food.

    Authoritarianism is cropping up in some of the republics.
The leaders of Azerbaijan, Georgia and some Central Asian
republics, while fiercely bent on independence from Moscow, are
anything but lenient toward internal opposition. "There are a
lot of Saddam Husseins arising in the Asian part of the
country," warns Vladlen Sirotkin, a prestigious Soviet
historian.

    The major arena, however, is Russia, which by sheer size
and wealth is sure to dominate any new union. Some
intellectuals are already worried about the eclipse of the
Supreme Soviet, the union-wide parliament, and the concentration
of what central power exists in jerry-built executive bodies.
Effective power has flowed largely to Yeltsin, whose habit of
issuing frequent and sweeping decrees is making liberals
apprehensive.

    Few thinkers believe that an avowedly communist
dictatorship can be re-established. Popular hatred of the last
one runs too deep. But many do fear an alliance of former
communist apparatchiks with Slavic nationalists who reject
parliamentary democracy as un-Russian.

    Even if such an alliance were formed, of course, it might
be prevented from coming to power. Sheer self-interest may well
push the republics, or at least most of the bigger ones, into an
alliance that, combined with massive and timely Western aid,
would stop the economic disintegration. And Russians have what
German democrats in the Weimar period woefully lacked:
forceful, popular leaders like Yel tsin -- who on the whole has
been more democrat than autocrat -- St. Petersburg Mayor
Anatoli Sobchak and Moscow Mayor Gavril Popov. Authoritarians
as yet have no leader with any comparable clout. But a lawyer
named Vladimir Zhirinovsky did run third in last June's Russian
presidential election despite -- or because of -- his wild ideas
(he now speaks of solving food shortages by invading the former
East Germany with an army brandishing nuclear weapons). Says
economist Timofeyev: "Right now, Zhirinovsky seems like a fool,
but we have to remember that nobody took Adolf Hitler seriously
until it was too late."