Russians are grabbing pieces of their country’s great wealth-and the outcome of the April 25 referendum will help decide who gets their hands on what. If Yeltsin consolidates power, his reformers will try to block the governing elite from appropriating property and prevent bosses like the ones in Chelyabinsk from discrediting the reform program. Yeltsin wants to privatize enterprises in open auctions, forcing Russia’s crumbling factories to compete–or go bankrupt. But if he loses? Conservatives led by Vice President Aleksandr Rutskoi will probably continue subsidizing industry, leaving bad bosses in place and further fueling inflation. Yeltsin has threatened “decisive, tough measures” to push through his reforms. But the election results may be so murky that both sides claim victory. In the ensuing chaos, the brutal scramble for the country’s riches will continue.
Russia’s past, however, is gone forever. Though Yeltsin likes to invoke the danger of a communist revival, the country has gone too far to turn back. The new class of entrepreneurs and owners is tiny, but even mammoth industry has already begun to forge new-sometimes profitable-business ties without Moscow’s help. Corrupt bureaucrats and old-style managers don’t want a return to central planning, either. The conservatives would most likely opt for a more authoritarian government to re-establish order and try to control the economy more tightly. Corruption would flourish, but private enterprise would probably be allowed. The bastardized semi-reforms that have already transformed the country-and lined the pockets of the former ruling class and nouveaux riches-will continue.
Right now, privatization in most of Russia is a sham, little more than a new name for old-style collective ownership. Former communist officials, collective-farm directors and factory bosses are blocking real reform, which directly threatens their power. In Chelyabinsk, the local council, taking its cue from the conservative Parliament, temporarily banned Yeltsin’s voucher program, under which every citizen is entitled to buy a share in a factory with a privatization voucher. “We scared the people opposed to us,” says Vladimir Golovlev, director of the Chelyabinsk privatization program. “They started to understand that they could lose power forever.”
He’s right. “We didn’t want in any case to have the factory sold to strangers,” admits Vladimir Prokudin, the new director of the disputed Chelyabinsk Steel Mill, sitting under an etching of Lenin. That, of course, is exactly what reformers want to happen. After workers become shareholders, many will sell their shares. Only after some investors gain controlling stakes in enterprises can they start to make decisions based on pure profits.
As Yeltsin has found, winning support for reform isn’t easy. Russian attitudes remain a hybrid of Soviet-indoctrinated egalitarianism and traditional envy for anyone who excels. In Bryansk the Selkhozmash farm-machinery factory is scheduled to privatize soon. But the manager, Ivan Alekhin, still holds staff meetings in the factory’s old Communist Party headquarters, decorated with a huge bust of Lenin and a sign calling for BETTER IDEOLOGICAL WORKERS. His panic at the arrival of a NEWSWEEK correspondent suggests that reforms have a long way to go. “You’re not one of us,” he screamed. “We don’t need any American helpers or help!”
Making the transition to a market economy would be painful enough, but a weak central government crippled by power struggles will make it worse. Still, if Yeltsin and his reformers can hang on, real privatization will gradually take hold. At the Volgograd Brewery, which makes watery, flat beer, Gennady Serov, a surly, pasty-faced man who has been director since 1970, grumbles that he is losing control over his factory. He foresees that many workers will sell their shares, bought with vouchers, to outsiders–and that he and many workers will lose their jobs. What can he do to stop the process? “Absolutely nothing,” he says. “It’s out of my control.” That’s the way it’s supposed to be. But in the meantime, the old apparatchiks will do what they can to forestall a new Russia.
To win on the first two questions, Yeltsin simply needs a majority of the votes cast. But approval of any new elections requires “yes” votes from more than half of all registered voters. Yeltsin has vowed to resign if he loses on the first and fourth questions.
Do you trust President Boris Yeltsin?
Do you approve of the socioeconomic policies pursued by the president and the government since 1992?
Do you believe an early election for president of Russia is necessary?
Do you believe early elections for parliamentary deputies are necessary?
