Chechnya: the region was crucial to Russia’s econ-
omy as it is crossed by the main oil pipeline from
Baku. The unpopular war, begun in December
1994, was ended but not for long when General
Lebed took negotiations into his own hands; it had
led to more than 70,000 deaths and 240,000 casu-
alties and had solved nothing; the question of
independence was postponed. In June 1996
Yeltsin cleverly harnessed Lebed’s popularity to
secure his own re-election, only to dismiss him a
few months later from his senior position as
national security adviser.
The catalogue of what is wrong in Russia is
interminable and tends to overwhelm the more
positive growth economic indicators: a fluctuating
Stock Exchange, the small positive growth of
GDP in 1997 after eight years of continuous
decline, and the taming of hyperinflation from
2,500 per cent in 1992 down to a more acceptable
15 per cent. Russia possesses huge natural re-
sources, particularly gas, 40 per cent of the world’s
reserves of oil, much coal and timber, and almost
a third of the world’s nickel; its low costs and
educated workforce should now encourage devel-
opment. However, a country that has suffered
communist rule for over seven decades cannot be
transformed in a decade. Russia’s failure to achieve
sustained economic recovery was evident in 1999.
Corruption remained a serious obstacle. Russia
came close to economic breakdown. Instability
increased as Yeltsin changed his prime ministers
while his health was failing – troubles enough even
without renewed war in Chechnya. But the
Stalinist days of isolation are over and a funda-
mental change of attitude has taken place: Russia’s
leaders no longer fear an attack by their ‘capitalist’
enemies. Their country has now joined the global
economy and lives at peace.
Over the final years of the twentieth and early
years of the twenty-first century the roller-coaster
ride of Russia’s progress came to an end. The
Russian economy had reached its nadir in 1998
with the rouble default. The income of the people
took a sharp drop, greater in an instance than dur-
ing the past five years. Inflation soared once more.
The ‘oligarchs’, the old communist bosses who
had obtained state industries and resources for a
fraction of their true value, had shifted their loot
abroad into safer currencies. Yeltsin’s court and
family were enmeshed in corruption allegations.
Worst of all, the ‘tiger’ who had stood on a Russian
tank defying and defeating the coup against
Gorbachev, seen on television occasionally receiv-
ing a foreign guest was wooden, immobile, quite
obviously a sick man, so political instability was
added to Russia’s economic woes. When in the
summer of 1999 he appointed Vladimir Putin act-
ing prime minister and nominated him as his suc-
cessor, Russians and outsiders were astonished. No
one had heard of him outside a narrow Kremlin
circle. Was this another of Yeltsin’s whims, the fifth
prime minister in seventeen months? Yeltsin unex-
pectedly resigned early in 2000 instead of waiting
for the end of his term designating Putin as his pre-
ferred successor. Elections followed. Putin cam-
paigned to restore Russia internationally, and to
stamp out resistance in Chechnya. In March 2000
he was elected president.
As it was to turn out, Yeltsin had made a shrewd
choice. Putin had risen to power in positions
behind the scenes. Still only forty-seven, he was
young and vigorous. A law graduate of Leningrad
University in 1975, he worked for fifteen years in
the KGB espionage network. He gained civic
administrative experience in the offices of mayors
of St Petersburg and Moscow before being
brought into the centre of government. From July
1998 to March 1999 he directed the State Security
Service of the KGB as well as being secretary in the
Kremlin of the Presidential Security Council which
advised Yeltsin on the armed forces, police and the
security services. He was completely loyal to
Yeltsin and promised if elected president to safe-
guard Yeltsin and his family from corruption
charges. A small athletic man with unflinching eyes
rarely seen to smile, internationally he was an
unknown quantity, his past career not auguring
well for Russia’s constitutional progress.
He began by renewing and stepping up the
deeply unpopular war in Chechnya. The towns
were in ruins, but complete pacification continued
to elude the Russian military. He attempted unsuc-
cessfully to counter increasing Western influence
among former satellites of Eastern Europe and
opposed their adhesion to NATO. His assertion of
Russian power got him nowhere. In the autumn of