Skip to main content

Stepashin's Rise Is Evidence of an Uneasy Truce

The Duma's approval of Yeltsin's man staves off a crisis -- at least for this week.
  • Author:
  • Publish date:

Russia's lower house of parliament, the Duma, approved acting Prime Minister Sergei Stepashin Wednesday. This, combined with Saturday's defeat of a motion of impeachment against Russian President Boris Yeltsin, means that global markets can breathe a sigh of relief that the world's second largest nuclear power is not plunging toward constitutional chaos.

But even without a full-blown government standoff just now, it's going to be a long, hot summer in Moscow. Government bickering is growing ever more shrill,

International Monetary Fund

loans are teetering in the balance, and the country is in the hands of an ailing, capricious president and a new prime minister who isn't afraid to bend the rules in his pursuit of democracy. While the representatives of the Duma remain in office for now, they risk being dissolved at the slightest provocation.

The vote to approve staunch Yeltsin ally Stepashin met few problems, contrary to indications from the parliamentary body less than a week ago that the president's candidate for prime minister -- no matter who -- would meet with serious resistance. The Duma's ire was aroused May 12, when Yeltsin unceremoniously booted Prime Minister

Yevgeny Primakov

out of office, ostensibly because Primakov was not the man to drive reform in Russia forward.

In reality, interest in deep structural reform had little to do with Primakov's dismissal. Yeltsin, never good at sharing the sandbox with other players, had grown weary of his prime minister's growing popularity, and figured it was easier to chuck him before the July 2000 presidential elections began in earnest. But Primakov's preference for stability over change, his do-little approach to reform and his Duma-friendly cabinet were precisely why the Duma liked Primakov.

Still, the Duma rolled over and approved Stepashin in large part because it didn't want to run the risk of being dissolved by the president. This, believe it or not, would be the result if the Duma had rejected the president's candidate for prime minister on three successive votes.

The potential for constitutional instability doesn't stop there. Flexing his newfound power, Stepashin threatened that he would remove himself from consideration if he were rejected in today's first vote. This would have opened the door for Yeltsin to put up a candidate truly distasteful to the Duma, like so-called reformer

Anatoly Chubais

, or former Prime Minister

Viktor Chernomyrdin

(the present Kosovo envoy). Lodged between distaste and dissolution, the Duma blinked.

Surely not the least of the deputies' concerns were that dissolution would mean packing up and going home -- thereby losing their relatively cushy Moscow lifestyles and parliamentary perks. This would also cause problems for the dominant

Communist Party

. By moving up parliamentary elections, due to be held in December, the incumbent deputies would have been unable to use their present Duma infrastructure as the basis for their re-election campaigns.

Without a Duma, President Yeltsin would be free to rule by decree -- and thereby pass legislation that the lower house of parliament has been resisting for years. The Duma would prefer to maintain its role as the thorn in the president's side.

The More Things Change . . .

So, with Primakov gone, in which direction will a Stepashin government go? As former head of the


, Stepashin was hardly chosen for his reformist credentials. He was, after all, one of the masterminds of the disastrous Russian military experience in the breakaway republic of Chechnya a few years back. Most recently, he headed the Ministry of the Interior, in charge of maintaining domestic political control.

Though unlikely to spearhead a reformist campaign, he is, at 47, at least not prey to the worst of the Soviet-era mindset of many of his peers in the Russian government. But don't look for a resolution of the nation's problems -- the crumbling economy, a widespread grey market, the flimsy legal and regulatory infrastructure and the complete lack of a banking system -- anytime soon.

Stepashin has indicated a strong willingness to play hardball with the Duma, by threatening to call a vote of confidence if the lower house does not pass legislation required by the IMF in order to resume funding to Russia. The wide-ranging reformist measures are abhorrent to the anti-IMF, anti-Western, anti-reform Duma -- but crucial if Russia is to avoid defaulting on repaying loans to the IMF.

A failed vote of confidence would mean that Yeltsin could, and would, dissolve the Duma. Without the Duma, the president could rule by decree, and play fast and easy with the balance of power which is already heavily tilted in favor of the executive branch. Without a Duma to critique the executive office, Yeltsin and his henchman Stepashin would be virtual dictators.

The Duma has staved off dissolution for now, but will remain on a tightrope. With Yeltsin sinking lower and lower in the polls, and Duma deputies likely to make anti-Yeltsinism the foundation of their re-election campaigns, the rhetoric will only escalate.

The most likely course of events? As has been amply demonstrated in recent weeks, anything can happen, and the entire Russian political landscape can morph in a matter of hours. And with President Yeltsin's health an eternal wildcard, the mercury can only rise in Moscow.

Kim Iskyan is an equity strategist and senior analyst at Moscow-based brokerage firm and investment bank MFK Renaissance. At the time of publication, MFK Renaissance had no rating or investment banking relationships with any securities mentioned in this column. While he cannot provide investment advice or recommendations, he invites you to comment on his column at