THE FORTNIGHT IN REVIEW

The Fortnight in Review

THE FORTNIGHT IN REVIEW

As U.S. president Bill Clinton and Russian president Boris Yeltsin prepared to meet in Helsinki, Russia launched yet another barrage of criticism of NATO’s enlargement plans. Ukraine, meanwhile, was strengthening its links with NATO. In Moscow, President Yeltsin reshuffled his government to include newcomers with strong reform credentials.

NATO and Russia on the Road to Helsinki

The hectic pace of diplomatic activity surrounding the issue of NATO enlargement grew even more frantic over the past fortnight as Russian and Western leaders positioned themselves for the March 20-21 Russian-U.S. summit in Helsinki. Moscow’s diplomatic efforts remained based upon a dual-track approach. Publicly, Russian leaders restated their implacable opposition to NATO’s plans and rehearsed their familiar arguments that expansion would harm both Russia’s and Europe’s security interests. In formal negotiations, however, Russian diplomats were reported to be quietly adopting a pragmatic stance that suggested resignation to the fact that invitations will be extended by the alliance to an initial group of Central and Eastern European aspirants at NATO’s July summit in Madrid. Rather than trying to stop enlargement altogether, Moscow appeared to be maneuvering to wring concessions out of the West as the price for its acquiescence.

Such seemed especially to be the case in the days leading up to — and in the immediate aftermath of — Russian foreign minister Yevgeny Primakov’s March 9 talks with NATO secretary general Javier Solana in Moscow. Both sides signaled with cautious optimism that Russia and NATO were close to a political agreement. NATO sources pointed to several draft Russian documents handed by Primakov to Solana at their February 23 meeting; these were described as surprisingly close to NATO’s own thinking. Indeed, in the days following the March 9 talks there were hints that Moscow was preparing to drop its earlier insistence that any political agreement between Moscow and NATO be "legally binding" (which would require ratification by all 16 NATO member states), and that the Kremlin was focusing its attentions instead on halting the extension to Eastern Europe of NATO’s "military infrastructure" (troops, weaponry and basing facilities).

Yeltsin Takes a Harder Line

The proportion of bluster to bargaining in Russia’s diplomacy appeared to shift toward the former in the week preceding the Helsinki summit. This shift was previewed in Boris Yeltsin’s March 6 state of the nation address to parliament, in which the Russian president described NATO enlargement as a "direct threat" to Moscow and an effort to "push Russia out of Europe" and leave it "strategically isolated." But those remarks were only a warm-up for a series of hard-edged statements Yeltsin made over a period of several days beginning on March 14. Yeltsin described his upcoming talks with President Clinton as likely to be "the most difficult in the whole history of Russian-American relations" and declared with some truculence that it was time for the U.S. to make concessions if it wanted to preserve its "partnership" with Russia. Yeltsin also intimated that Moscow would express categorical opposition during the Helsinki talks to two proposed NATO actions: the extension of NATO’s infrastructure into Eastern Europe and the longer-term possibility of NATO’s offering membership to the Baltic countries or other Soviet successor-states. On the latter point, Yeltsin said the Russian leadership was "alarmed" by Solana’s recent visits to the capitals of a number of these countries. Against this background, Primakov’s March 15-17 pre-summit talks with U.S. leaders in Washington concluded, not surprisingly, with little apparent progress in resolving differences between Russia and the West.

In what looked like a pointed rebuff to Yeltsin, U.S. secretary of state Madeleine Albright on March 18 declared that NATO’s expansion would go forward this summer irrespective of Russian objections and regardless of whether Russia and NATO had managed by that time to conclude a political agreement. Albright urged Moscow to stop viewing European security issues as a zero-sum game and to start instead to work in partnership with the West. "We do not face a choice between diminishing NATO or diminishing Russia," she stated. Albright insisted that neither she nor Clinton would "bargain away" the interests of the Central European states during the Helsinki talks. That assertion followed several similar public statements by Clinton Administration officials, and was aimed at easing fears in some Eastern European and Baltic capitals that the West might negotiate a security arrangement with Russia at their expense. With that same goal in mind, Washington has emphasized that it is opposed both to the placing of any limit on the number of countries eligible to join NATO and to proposals that new member-states be granted something less than full NATO membership.

Russia Gets Reformist Leaders

President Yeltsin followed through on the pledge in his March 6 state of the nation address to rejuvenate his cabinet. His first move was to appoint his chief-of-staff, Anatoly Chubais, Russia’s most determined reformer, as first deputy prime minister. Next the Russian president ordered almost the entire government to resign. The sole exceptions were Chubais and Prime Minister Viktor Chernomyrdin, whom Yeltsin instructed to put together a new team. There followed a period of behind-the-scenes horse-trading as Chubais tried to build a broad-based government of reformist politicians capable of defending a program of radical economic liberalization against the opposition of Russia’s Communist-dominated Duma.

The ten days that elapsed before the first names of the new government were announced, and a series of media leaks, indicated that Chubais was having difficulty putting such a team together. Then, on March 17, Yeltsin announced the appointment of Boris Nemtsov, one of Russia’s youngest and most popular regional leaders, as first deputy premier alongside Chubais. Meeting the two men in the Kremlin, Yeltsin told them to "start from scratch." Russian stock markets and foreign investors were jubilant, convinced that Chubais/Nemtsov team was a signal that, after more than a year of drift, Russia is about to begin a new round of economic liberalization.

Yeltsin said the reshuffle would not be confined to a change of personalities but would also entail changes in the way the government is organized. On March 16, he signed a decree outlining the planned structural changes. The aim is to restructure the government apparatus to escape the heritage of Soviet central planning, under which ministries and government departments were established on an industry by industry basis. The plan being adopted seems to be that drafted last summer by then economics minister Yevgeny Yasin and his deputy Yakov Urinson (who has just been appointed to Yasin’s post and promoted to the rank of deputy premier). Yasin’s was one of two competing plans for reorganizing the government. The other was drafted by the chief of staff of the Russian government, Vladimir Babichev, a close Chernomyrdin associate.

Yasin’s plan aimed to downsize the government apparatus by eliminating the sectoral ministries altogether. The Babichev plan sought merely to streamline the apparatus by amalgamating the sectoral ministries into a new, powerful Ministry of Industry. In the end, Yeltsin’s heart problems kept him out of active politics and the Babichev plan prevailed. In the eyes of Russia’s reformers, the result was disastrous. According to Nemtsov, the giant Ministry of Industry has proved to be a ready-made, within-government lobby for corporate interests, corruption, and resistance to change. It now looks as if the ministry will be disbanded and, after eight months on ice, the Yasin plan will be implemented.

Russia Shows Signs of Economic Growth

The Russian government released data confirming that Russia’s economy grew in February for a second consecutive month. Gross domestic product in real terms at the end of February was 0.9 percent above February 1996Õs level, while industrial production and retail sales both grew by 2 percent. Real household income was up by 5 percent over the 1996 level, while the share of the population classified as living below the poverty line fell from 25 to 21 percent. In January 1997, GDP rose 0.1 percent from last year, the first time the economy had increased since market reforms were launched in 1992. The World Bank has predicted that, if economic reforms are successfully implemented by the new Chubais/Nemtsov team, the Russian economy could by 1998 be growing by as much as 6 percent a year.

Russia Issues Second Eurobond

Russia launched a seven-year eurobond denominated in German Marks. The issue — only the second Russia had made since the 1917 Revolution and the first to be denominated in DM — raised DM 2 billion (US $1.2 billion). The issue was larger than expected, but the government was forced to offer a higher than expected interest rate premium and, in contrast to Russia’s debut $1 billion eurobond of last year, the entire offering was not sold out on the first day.

Lebed Launches His Party

Before leaving for the Helsinki summit, Yeltsin boasted that he was "fighting fit." This was bad news for Aleksandr Lebed, who makes no secret of his presidential ambitions. The longer Yeltsin remains in power, the harder it will be for Lebed to realize his hopes. Lebed’s popularity peaked last fall, after he almost single-handedly ended the war in Chechnya and Yeltsin sacked him for his pains. Since then, Lebed has had to struggle to keep himself in the public eye. Apparently convinced that ill health was about to remove Yeltsin from the political scene, Lebed turned down the chance to run in the March 23 election for governor of Tula oblast, a post he would almost certainly have won and which could have served as a springboard for national office.

On March 14, Lebed took an important step toward the Kremlin when he presided at the founding congress of his own political party, the Russian Popular Republican Party (RPRP). Inviting all Russians to join the new party, Lebed said the RPRP already had ten thousand members and spoke confidently of the army of "unknown but mighty Russians" who will back him since "there isn’t a single Russian home that isn’t fed up with those in power." Though the new party so far has few members, little financial backing and no economic policy, Lebed exuded confidence that all these essentials would soon be put in place.

Ukraine Draws Closer to NATO and Regional Countries

The collapse of Soviet communism, rather than "ending history," highlighted history’s continuity by returning the East-West contest to its age-old arena on Europe’s eastern marches. Many Western politicians appeared loath to recognize this fact and to draw the policy consequences. Britain’s foreign secretary Malcolm Rifkind came close to doing so last week when he pointed to the decisive role played by Ukraine in European geopolitics "because of its relevance to the collapse of the Russian empire." For this and related reasons, Rifkind called for the eventual enlargement of NATO all the way to "Ukraine’s eastern border."

Rifkind’s statement broke the taboo against "drawing a new line in Europe" in terms of NATO security guarantees. With Russia inherently ineligible to join NATO, the issue is not whether but simply where to draw that line as inclusively as possible. By identifying the line as Ukraine’s eastern border, Rifkind indicated that Ukraine belongs on the side entitled to NATO protection. And, in a signal not only to Ukraine but also to other newly independent countries, he called for semantic vigilance against the term "former Soviet Union" in order to avoid "unconsciously legitimizing the possibility that Russia may recreate an empire."

Rifkind was delivering his landmark address in the U.S. at the same time that Ukrainian foreign minister Hennady Udovenko was holding talks with Secretary of State Madeleine Albright. On the agenda was what Albright termed "formalizing NATO-Ukraine relations" through a special partnership agreement. And almost simultaneously, in Tysovets (Lviv region), the military component of the U.S.-Ukrainian intergovernmental cooperation (Gore-Kuchma) commission was discussing U.S.-Ukrainian military cooperation activities scheduled for 1997.

Inserting Ukraine in one way or another into the West’s security system would be an epoch-making development. Except for fleeting moments in the early eighteenth and early twentieth century (the Mazepa episode during the Swedish-Russian war, and the rebirth of Ukrainian statehood around the end of World War One), Ukraine has for most of the past 300 years formed a Russian imperial salient cutting into Europe. By the same token, Ukraine has been used by Russia’s adversaries as a corridor for invasion. Today’s Russian policymakers apparently fail to perceive that a Ukraine anchored in NATO would stabilize and secure Russia’s own western flank.

Bolder Vision in Kiev

Paralleling developments in western policy, new and significant nuances emerged this fortnight in Kiev’s statements on security issues and NATO enlargement. A Ukrainian Foreign Ministry spokesman unveiled a considerably enlarged set of objectives for the upcoming negotiations on a special partnership agreement with NATO. Kiev’s new and more ambitious priorities include a mechanism whereby Ukraine could, when necessary, appeal to the alliance; institutionalization of links between Ukrainian government agencies and NATO; and written guarantees that Ukraine would not become a "gray zone." Udovenko and the head of the foreign policy department of President Leonid Kuchma’s administration, Volodymyr Ohryzko, last week urged that "NATO’s door must remain open to all countries interested in joining the alliance in the future." In sum, Ukraine seeks some form of security assurances for the present and the option to join NATO in a follow-up stage.

Ukraine’s top leaders were frank about their reasons for seeking an institutionalized relationship with NATO. In a March 16 televised interview, President Leonid Kuchma said Ukraine’s "non-bloc status" suits both NATO and Russia at the present stage. But, the president went on, Russia’s "policy of pressure" is "pushing Ukraine toward NATO." Elaborating on Kuchma’s statement, National Defense and Security Council chief Volodymyr Horbulin said that "certain actions and statements by Russia’s Duma and members of the Russian government force Ukraine to seek protection within a security system." Udovenko, too, deplored the "sharp turn for the worse in Russia’s relations with Ukraine." Kiev leaders continued even at this point to pay lip-service to Yeltsin’s presumed ability to end existing disputes. But they clearly understand that Yeltsin remains unlikely — and is indeed becoming increasingly unlikely — to challenge the consensus within the Russian elite that is driving the "policy of pressure" toward Ukraine.

A Potential Regional Counterweight to Russia

In parallel with its negotiations with NATO, Ukraine is developing closer relations with certain neighboring countries on the basis of shared security interests. Two partners in this policy — Georgia and Moldova — were in evidence this fortnight and, in both cases, Ukraine cautiously emerged as a potential counterweight to Russian influence. Thus on the opposite yet nearby shore of the Black Sea, Ukraine evidenced its interest in aiding Georgia to form a naval force after Russian warships attacked and detained Turkish fishing vessels in Georgian waters. It was not the first incident of its kind: a Ukrainian cargo ship was also detained and towed to Russia from Georgian waters recently. The incidents highlighted Georgia’s helplessness which stems from Russia’s refusal to allot Georgia a share of the ex-USSR’s Black Sea Fleet. Responding to the latest incident, the Ukrainian naval command offered to train Georgian naval officers and lower ranks at Ukraine’s naval academy in Sevastopol and aboard Ukrainian ships. According to a senior command representative, Kiev aims to "develop a Ukrainian-Georgian naval partnership in the Black Sea." Last year, Ukraine endorsed Georgia’s claim to a modest share of the Russian-controlled Black Sea Fleet. Ukraine is currently turning over one of its own warships to Georgia and training that ship’s Georgian crew. In a related development in the area of economic security, Kiev and Tbilisi are discussing the creation of a transit corridor which would convey Caspian oil via Georgia and the Black Sea to Ukraine. The planned corridor would help circumvent the Russian choke-hold on Caspian oil flows and reduce Ukraine’s own dependence on Russian fuels.