THE RESOLUTION OF THE BUDENNOVSK HOSTAGE CRISIS LEADS TO TALKS IN GROZNY, POLITICAL CRISIS IN MOSCOW

The resolution of the Budennovsk hostage crisis leads to talks in Grozny, political crisis in Moscow

Three stories dominated the week just past: a peacefulresolution of the hostage crisis in Budennovsk, the start of peacetalks between Moscow and the Chechens in Grozny, and the Duma’sapproval of a resolution of no confidence in Prime Minister ViktorChernomyrdin’s government.

Crisis Resolved

The peaceful resolution of the Budennovsk hostage crisis earlythis week as the result of negotiations gave a momentary boostto the political fortunes of Chernomyrdin, who engineered thisoutcome in talks with the Chechen fighters who had seized morethan 1000 hostages in the southern Russian city. And initiallyit hurt President Yeltsin’s standing with both the population,and with the political class, who were angered by his failureto focus on Budennovsk. But the consequences of the deal betweenthe Russian government and the hostage takers quickly became apparentand the political sands in Russia shifted once again. By promisingthe Chechens a ceasefire, talks in Grozny, and a means of escapingfrom immediate Russian retribution, Chernomyrdin, it became clear,had shown anyone with a grievance that terrorism works. Thatin turn led many Russians to conclude that their government wasincapable of guaranteeing their security, causing some to backany measures, including authoritarian ones, to guarantee publicsafety, and others to conclude that a new government, more responsiveto the population and more willing to make concessions to groupslike the Chechens, was the answer, albeit an unfortunate one.The end of the hostage crisis led to the two other most importantevents of the week: talks in Grozny between the Russian governmentand the Chechen forces and a direct challenge to Chernomyrdinand Yeltsin by the Russian parliament.

Peace Talks

The talks in Chechnya have made surprising progress, withthe Chechens condemning terrorism and promising to disarm, whilethe Russian side offered to reduce its military presence in Chechnyato under 6500 troops once elections produce a new government. But because each of the partial agreements was to go into effectonly after a general accord was reached, and because it is fairlyclear that the Chechen negotiators may not be able to deliverall Chechens for any agreement that is reached, none of this progressis guaranteed. Indeed, many Chechens indicated that they wouldnot surrender the author of the Chechen attack on Budennovsk,would retain their weapons, and recognized that terrorist actssuch as Budennovsk could be a valuable adjunct in their strugglewith Moscow. Consequently, despite celebratory language aboutthe talks, both sides must navigate a narrow path between renewedRussian military action, as threatened by the Russian commanderon the ground, and renewed Chechen actions which could put Russiain a difficult position once again.

No Confidence Vote

Meanwhile in Moscow, members of the Duma passed a no confidencevote against the government of Prime Minister Chernomyrdin bya narrow margin. Many of the deputies indicated that they wouldvote differently when the matter came up again–something theRussian constitution requires before the president has to dismissthe government or call new elections to the Duma– if Yeltsinwould sacrifice one or more of the power ministers held responsiblefor the fighting in Chechnya and the handling of the Budennovskhostage situation. Threatening to prorogue the parliament andpromising to fire some of those responsible for the Chechen fiasco,Yeltsin backed his prime minister, who demanded a quick new vote. The Duma has agreed to do so on July 1, two days after the president’sSecurity Council meets, presumably to decide who should be sacked. In another, communist-backed measure, the Duma failed to approvearticles of impeachment against Yeltsin, but the parliament didapprove three constitutional amendments which would expand parliamentarycontrol of the executive. These are unlikely to pass the FederationCouncil or be approved by the regions.

Also…

Other developments last week which received less notice thanthese three crises, but whiich also may cast a long shadow onthe future, include:

–For the first time, there was real progress in talks betweenArmenia and Azerbaijan on resolving the war in Nagorno-Karabakh. Participants in the OSCE-sponsored sessions in Helsinki saidthat the two sides were behaving in a businesslike fashion, andthat they had agreed both to extend the current round of talksand to hold another one in Austria in the second half of July.

–Armenian President Levon Ter-Petrosian’s efforts to controlthe difficult political situation in his country drew public bloodfor the first time this week when pro-government activists–probablymilitiamen not in uniform–attacked a demonstration in Yerevan’smain square. Although the pro-government forces fired into theair, they injured a large number of people with their nightsticks.The demonstrators in turn demanded the creation of an alternativegovernment and said that there was now "dual power"in that Caucasian country.

–The departure of Lt. Gen. Aleksandr Lebed from his commandof the 14th Russian Army in Moldova’s Transdniestr region continuedto have political fallout. Moscow’s new man on the scene promisedto prevent any leakage of weapons to the population, but the Dumashowed its lack of confidence in the new commander by passinga measure requiring the Russian government to maintain the existingarmy structures–a demand presented by Lebed–and to fund the14th Army by a special budget line, so that it would not haveto be reduced in size. In his last interview as a serving officer,Lebed said that he would enter politics, and he is expected tochallenge Yeltsin for the presidency next year.

–Russian President BorisYeltsin announced an election year budget,one that promised tax cuts, a war on waste and abuse, and morespending for the population’s social needs. The 1996 budget, however,is unlikely to be passed in the form he has proposed; and evenif it were, its optimistic assumptions about inflation and economicgrowth are unlikely to be realized. Moreover, even the ever-optimisticRussian finance minister said that the costs of Chechnya, andnatural disasters like the Sakhalin earthquake, could overwhelmMoscow and bust the budget. That would mean more inflation andless economic progress. And despite the Russian ruble’s riseagainst the dollar, Moscow’s budgetary problems continued, withthe regime announcing that it had collected less than 1% of themoney it had expected from its privatization of state-owned enterprises.

–The Latvian banking crisis continued, with Riga unable to raisefunds through the bond markets to cover its debts, and with officialsin both Estonia and Lithuania concerned about the stability ofbanks in their respective countries. A major bank in Lithuaniafailed last week and was taken over by the government. In Estonia,the government moved quickly to cover a deficit by one of itsmajor banks. Officials in all three countries have indicatedthat they believe Moscow, or at least some Russian officials,have provoked this crisis and may seek to use this lever againsttheir governments.