Russian Federation

Consequences of "shock therapy"

Social and economic development. Consequences of "shock therapy".

Results of market reforms in Russia by means of "shock therapy", realized in 1992-1993 by cabinet of E. T.Gaydar, showed their internal inconsequence and impracticability. Structural reorganization of economy and mass voucher, and then monetary privatization did not result in creation of "middle class" - a layer of proprietors-shareholders. On the contrary, the policy of the Government in sphere of economy resulted in arbitrariness of officials, illegal privatization, wild outburst of organized crime.

Social consequences of economic policy provided popularity and success to slogans of opposition party, stimulated searches for new, more moderate variants of reforms realization. The major tendencies in development of economy of Russia in 1994-1997 were attempts of stabilization of steadily falling level of industrial production, liquidation of budget deficit and final bridling of inflation and leveling of incomes of Russian people. The priority task for the Government was adoption of rigid financial discipline and reduction of on-budget expenditures. One of the most complicated problems became chronic arrears in wages and pensions, national debt, which reached enormous sums in the majority of Russian regions.

Money from realization of privatization program was seen as the major source of public revenues. In autumn of 1996 there was carried out a campaign on realization of mortgaging auctions - sale on competitive basis of state share holding of the largest industrial enterprises of the country in temporal management to private companies, which have financial resources. The greatest resonance, including political, had the auction on transfer for asset management of state share holding of Russian Joint-Stock Company 'Norilsk nickel'.

In opinion of the majority of experts the economy of Russia by the end of 1997 had passed the stage of long structural crisis. The majority of parameters testifies to some stabilization of industrial production. For the first time in the last seven years in our country the volume of gross domestic product, in comparison with 1996, did not reduce, but grew 0,2 %. 1997 was marked by significant reduction of inflation rate, which was limited to 12,5 %. Thus, Russia entered the stage of relatively stable, though rather high by world standards, prices. One of the major tools of the Government in achievement of financial stabilization was severe regulation of the exchange rate of the Russian currency, establishment of so-called "currency corridor" - firm limits of rouble - US dollar fluctuations.

The fixed exchange rate of rouble was provided by considerable foreign currency reserves of the Central bank of Russia, amounting in the middle of 1997 to 25 billion dollars, and also gold state stock (about 380 tons). A recognition of rouble stability was the announcement made by the Government in August 1997 of bank notes denomination from January 1998 in proportion 1000:1. The result of it was returning into the monetary circulation of traditional monetary unit - copeck. In 1997 for the first time in many years domestic industrial production began to grow, its volume by the end of year made already about 1,5 % on the average in extractive and processing industries.

Tasks of economic policy of the country in 1998 till 2000 were determined by medium-term government program. In the basis of guiding lines of structural reorganization and economic growth lie the parameters determined, first of all, by money and credit policy. One of the conditions of successful development of Russian economy is creation of favorable investment climate, which may be made possible by consecutive realization of tax reform and re-structuring of so-called natural monopolies.

Foreign policy in 1994-1997.

The main tasks of Russia on international scene in this period were: harmonization of foreign policy of the country with leading industrial powers of the world, increase of integration degree of Russia in the global economic system and Russia's active participation in activity of the influential international organizations, strengthening of leading positions of Russia on post-Soviet area with orientation towards closer and fruitful relations with CIS countries.

Russia and CIS countries.

In 1994-1997 the major task of the Russian Federation in foreign policy became the solution of the most difficult problems in relations with new independent states on the post-Soviet territory. In 1994 objective tendencies to greater economic and political cooperation within the CIS limits took shape. At the same time, struggle for leadership in integration processes between former republics of Soviet Union became more acute.

The principal direction of Russian cooperation with CIS countries was establishment of bilateral relations. In October 1994 at regular summit of leaders of CIS countries the decision on creation of Interstate economic committee and formation of Customs union of state-participants of Commonwealth was made. At that time Minister for Foreign Affairs of Russia was appointed skilled scientist and specialist in international law academician E.M. Primakov, who previously held the post of the head of Foreign intelligence service of Russian Federation.

Then, during forthcoming presidential elections in Russia, due to extraordinary active participation of B.N.Yeltsin, the permanent chairman of CIS countries leaders' Council, on March 29, 1996 the quadripartite Treaty "On deepening of integration in economic and humanitarian fields' was signed by Byelorussia, Kazakhstan, Kirghizia and Russia. The decision on creation of executive powers of "four" was made, and on April 2 in Moscow the Pact on formation of Community of Byelorussia and Russia was signed.

The chairman of the Supreme council of the Community was elected A.G.Lukashenko, the president of Byelorussia. The date of Pact's signing was declared the Day of unity of peoples of Russia and Byelorussia, which was for the majority of citizens of both countries an evident sign of revival of Slavic unity. Exactly in a year Russian-Byelorussian Community was transformed into the Union of Byelorussia and Russia.

Significant efforts marked the policy of Russia on strengthening of safety within the limits of CIS and realization of peace-making actions. So, on July 21, 1994 Russia -Moldavian agreement on stopping of military operations in Dnepr region and withdrawal of opposing forces was signed. On May 8, 1997, in Moscow, under supervision of Russian and Ukraine leaders, Moldova and Dnepr region signed the Memorandum on bases of normalization of relations.

Through the mediation of Russia, in summer 1997, direct negotiations between leaders of Georgia and Abkhazia in connection with settlement of the Georgian-Abkhazian conflict were held, signing of Agreement on termination of military operations and formation of commission on national reconciliation in Tadjikistan took place. Importance of Russia in protection of CIS external borders, including borders in Central Asia, is great.

By the end of 1997 about 800 basic interstate documents had been prepared and signed by interstate bodies of CIS. Within the structures of CIS, in addition to 10 statue bodies of interstate cooperation there operates about 60 branch integration bodies.

In relations with distant foreign countries since the end of 1993 Russian political leadership has been declaring Russia to be great power which has independent national and geopolitical interests on international scene. Manifestation of this tendency is felt through strengthening of relations of Russia with countries of Asia, first of all with China, India, South Korea, restoration of full value links with Vietnam, extension of contacts with the countries of the Near and the Middle East and even with Latin America.

Especially noticeable was the progress in strengthening of mutually profitable relations with the nearest northern neighbours, Scandinavian countries. Position of Russia has become stronger through solution of Arabian-Israeli conflict and regulation of the Balkan crisis. An important step became resolute requests of Russian government for necessity of creation of a new system of European safety instead of expansion of old structures of 'cold war' period.

At first, in 1994 NATO officials (on proposal of USA president B.Clinton) offered to Russia, as well as to other former republics of the USSR and the countries of Eastern and Central Europe, to join the program "Partnership for the sake of peace", which became a compromise between positions of USA and Russia. At the same period Russia continued withdrawal of its armies from the countries Central and Eastern Europe and Baltic states. Already by the end of 1994 the situation had undergone considerable change. So, in December 1994 at the Budapest meeting of OSCE the majority of European leaders, in spite of objections of Russian government expressed readiness to accept former countries of the "Socialist Commonwealth" into the NATO structures.

As a result, the period of 1995-1996 was marked by atmosphere of sharp political dialogue between Russia and leaders of the West on problem of NATO expansion to the East. So on May 27, 1997 in Paris a treaty on special partnership relations of our country with NATO was signed. In July 1997 at NATO session a fundamental decision on Poland's, Czechia's and Hungary's joining NATO in spring of 1999 was made.

In this connection Russia made efforts for activization of its policy on international scene, a policy, which would allow providing of own security in new conditions. Yeltsin proposed to create a Council of leaders of Russia, France and Germany - big European "three", which, probably, the Great Britain would also join. Thus, in 1996-1997 the foreign policy of Russia more and more distanced itself from Washington and at global level it reoriented itself for the role of leading Euroasian power, which plays a key part in development of new relations of leading industrial countries of Europe and Asia.

Parliamentary elections of 1995.

Election campaign to new Russian parliament was carried out in the heat of war between federal forces and Chechen separatists. Those two events greatly influenced all political development of the country in second half of 1995. Each of politicians aspired to establish his own political block or association on the threshold of elections to the State Duma.

In 1995, on the eve of autumn elections to the Russian parliament there were 50 parties, movements and blocks, which had united more than 250 various political organizations of a most various orientation. Reflection of inability to find a compromise between personal and group interests of Russian political elite resulted in registration of 43 election blocks and parties, which were to run in elections. Against a background of abundance of election associations, different from each other not so much in program, but in names of participants, ramified and organized structure of Communist party of Russian Federation, led by G.A.Zyuganov, stood out clearly. It had the political program, the core of which was severe criticism of B.N.Yeltsin's political regime and his "antinational course". Another organized and financially well-provided force, participating in elections was Liberal-Democratic Party (LDPR) led by V.V.Zhirinovsky.

According to Election legislation, which set 5 % barrier for parties, wanting to be represented in the State Duma, a convincing victory during the elections to the VIth State Duma, carried out on December 7, 1995, was won by the Communist party of the Russian Federation, it got about 22% of votes. The second place was taken by LDPR (about 11%), and the third was movement "Our home - Russia" (about 10%). Opposition-minded democratic part of electorate supported 'Yabloko" association headed by G.A.Yavlinsky and V.P.Lukin (about 7 %).

In single member constituencies the preference of voters and their sympathies were divided in the following way: the Communist party of the Russian Federation got 53 mandates, 'Our home Russia - 10, "Yabloko" - 14. A part of known politicians - leaders of election associations, which failed to pass 5 % barrier, appeared in Duma through victories in single member constituencies. Crushing defeat in parliamentary elections of 1995 suffered leaders of the Vth Duma - and first of all "Democratic choice of Russia" led by E.T.Gaidar.

Alignment of forces in the VIth State Duma was reflected in election of G.N.Seleznev, a representative of Communist party, to the post of the Chairman of State Duma. E.S.Stroyev, the governor of Orlovskaya oblast, a former member of Political Bureau of Central committee of C.P.S.U. was at the head of just formed Council of Federation.

Results of parliamentary elections of 1995 reflected a drastic contradiction between the tough policy of economic reforms, carried out by the administration of B.N.Yeltsin, and increasing opposition to social consequences of this policy in the Russian society.

Presidential elections of 1996

Elections to the VI State Duma were initially considered as a test of political forces on the eve of the main event of 1996 - elections of the Russian president. Already at the beginning of year the leading politicians - leaders of parliamentary fractions G.A.Zyuganov, G.A.Yavlinsky, V.V.Zhirinovsky and retired general A.I.Lebed officially declared their intention to run for the Presidency.

On February 15, 1996 B.N.Yeltsin declared an intention to participate in re-election for the second term, he specially arrived for this purpose to his native Ekaterinburg. Beside those basic candidates for the post of the President, the first and the last President of the USSR M.S.Gorbachev, a known public figure, former sportsman J.P.Vlasov, the vice-president of fund "Reforma" M.L.Shakkum, and also tycoon V.A.Bryntsalov were registered. A.M.Tuleyev - one of the leaders of the Communist party of the Russian Federation was registered too, but he withdrew on the eve of elections, calling his supporters to vote for Zyuganov.

Winter and spring of 1996 in the political life of Russia were marked by unprecedented propaganda campaign in B.N.Yeltsin's support and his radical reforms. Voters were put before a choice: construction of new Russia on democratic bases, or return to the gloomy totalitarian past.

In the first round of elections held on June 16, the majority of voices was given for Yeltsin, Zyuganov and Lebed. Soon after that A.I.Lebed was appointed to the post of secretary of Security Council of the Russian Federation and assistant to the President on national security. On July 3 in the second round of elections a convincing victory was won by B.N.Yeltsin, who got 53,8 % of support, or about 37 % of the total number of entitled to vote Russians. Thus, more than one thirds of our fellow citizens showed full support of social and economic reforms.

On August 9, 1996 an extraordinary solemn ceremony of inauguration, for the first time put into practice in Russia, assumption of the presidential post by B.N.Yeltsin took place. His election for the second presidential term till 2000 gave real chances to finish begun in 1992 reforming of social and economic structure of our society. Already on August 10, 1996 the State Duma ratified V.S.Chernomyrdin to the post of Prime Minister. Exactly at that time A.B. Chubais, the head of pre-election staff of Yeltsin, the theorist and practical man of privatization in Russia, was appointed head of President's Administration.

However, the beginning of B.N.Yeltsin's new presidential term - autumn 1996-winter 1997 - was marked by a compelled "pause" in political life of the country caused by long illness of the President, who due to peculiar features of the political system of modern Russia, became the important factor, rendering serious influence on the development of the whole society.

In March 1997 on Yeltsin's initiative significant changes in structure of the Government of the Russian Federation were made. The first assistants to the Prime Minister were appointed "young reformers" A.B.Chubays and B.E.Nemtsov, the governor of Nizhegrodskaya oblast. Campaign against corruption and bribery was launched. Information on incomes of leading statesmen and politicians for the period of 1996 was published in the press. This, in turn, became a precondition for beginning of "war of compromising evidences", which was launched in summer and autumn of 1997. This 'war' showed, that mass media in modern Russia became "the fourth power", which formed public opinion, a real component of political system in our country.

Other major event in political life of the country after presidential elections became elections of heads of federal subjects. Their successful realization promotes further strengthening of executive authority in regions, which objectively cements political system of Russian federalism.

The Chechen Crisis

The most urgent problem of state-political development of the Russian Federation in 1994-1997 was the problem of Chechen crisis settlement. Back in autumn 1991 on the eve of disintegration of the USSR on the territory of former Checheno-Ingush republic there appeared the Chechen republic Ichkeria, at the head of which, in the result of revolution in September 1991, was a former general of the Soviet Army, the leader of the National congress of Chechen people (NKCP) Dzhokhar Dudayev.

He proclaimed independence of the Chechen Republic from Russian Federation as the major task of his policy. Elected on the initiative of executive Committee of NKCP to the post of president of the Chechen republic (on October 27, 1991) Dudayev signed a decree proclaiming Ichkeria a sovereign state. In response, on October 7, 1991 Russian President signed a decree on introduction of state of emergency on the territory of Chechen Republic. Dudayev, during the period of the next two years, organized on the territory of republic a regime of personal authority, in a pointed manner not recognizing authority of Russian legislation in the Chechen Republic. He evaded settlement of relations between the federal centre and his republic.

Meanwhile, the Chechen Republic was officially considered by the Russian leadership as a full subject of the Federation. A lot of military engineering and weapon was accumulated on territory of the republic. Dudayev used it for equipping of his own armed forces. It was a dangerous and destabilizing factor for development of political stability on Caucasia involved in interethnic conflicts.

Attempts of realization of full-scale negotiations between Moscow and separatists ran against hard-edged position of Dudayev, who demanded unconditional recognition of state sovereignty of the Chechen Republic. In this situation the federal authorities carried out an inconsistent policy trying at one time to settle relations with president Dudayev, at another supporting his opposition. As a result after years of "sovereignty", the Chechen Republic turned into one of the most dangerous and criminogenic regions of Russia.

In summer 1994 the political and military confrontation in the Chechen Republic reached its apogee.

The sharp aggravation of the Chechen crisis coincided with the capture by Dudayev's soldiers on November 26, 1994 of a group of Russian tankmen who had participated in unsuccessful storm of Grozny city, the capital of the Chechen Republic. At the beginning of December P.S.Grachev, the Minister of Defence, on recommendation of Security Council of the Russian Federation, began official negotiations with D.Dudayev to free the captured. But they did not result in settlement of Russian relation with separatists.

Seeing no political solution of the crisis, Russian authorities applied to military force. A large-scale war waged by Russian government did not bring expected results. Instead of demilitarization of Chechen people, Russian army was involved into a long and bloody operations, and only by the end of February 1995 they managed to clear the Chechen capital of groups of Dudayev's insurgents. Grozny was completely ruined and population, caught in war, was left without homes and livelihood.

For establishment of peaceful life in Grozny city and areas, occupied by federal armies, in December 1994 a "national revival" government led by S.Hadzhiyev was set up in the Chechen Republic. In middle of 1995 termination of military operation of federal armies in the Chechen Republic was officially declared, final stabilization of the situation was assigned to forces of the Ministry of Internal Affairs of the Russian Federation.

Realization of military operation in the Chechen Republic from the very beginning brought split into the political movement of Russia.

S.A. Kovalev, a commissioner on human rights at the President of the Russian Federation and State Duma, and Gaydar, the leader of 'Democratic choice of Russia' (DVR) party, reacted against President's actions. Anti-war movement began in Russia.

President and the Government found themselves in a rather difficult political situation. In spite of the fact that Grozny and the bigger part of the Chechen Republic territory were formally under control of federal army, Dudayev's armed forces continued resistance and enjoyed growing support of local population. In fact, military operation on "appeasement" of the Chechen Republic developed into a civil war for national independence. Result of realization of this military campaign was not only huge material outlay, but, which is more terrible, human victims both among soldiers and local population.

A turning point in the course of "Chechen war" became tragedy in Budennovsk city in Stavropol region, which testified to the fact that Dudayaev applied to terrorist acts tactics. The drama in Budennovsk took away more than 100 lives of innocent Russians. These events pushed the Russian government to negotiations with leadership of Chechen Republic. During negotiations a number of agreements on military block of questions was achieved, but in the political meaning the Chechen crisis was not resolved.

During presidential election in Russia in spring of 1996 the promptest regulation of Chechen crisis became the major political task of the government. Stalemate situation - "neither peace, nor war", - the situation in Northern Caucasus, did not suit either the federal authorities, or leaders of the armed Chechen opposition.

Within the framework of B.N.Yeltsin's pre-election campaign on March 31, 1996 the presidential plan of "appeasement" of Chechen Republic was promulgated, the plan provided stage-by-stage withdrawal of federal army and establishment of civil government in republic. However, during realization of the presidential plan, at withdrawal from the Chechen Republic of the 245th regiment of Moscow command, a group of federal forces was ambushed in Shatoyskoye canyon and crushed on April 16, 1996. After this tragedy the armed struggle on territory of the Chechen Republic become more intense.

Peaceableness on both sides had, to a greater extent, a propaganda shade. Immediately after B.Yeltsin's re-election for the second presidential term, the armed Chechen confrontation again became more violent. Since August 8, 1996, according to earlier developed plan of opposition headquarters, groups of separatists attacked Grozny, Gudermes and Argun cities. In the bloody fights that followed federal armies were compelled to leave capital of the Chechen Republic and suffered significant losses.

On behalf of the President of the Russian Federation, from the middle of August the secretary of Security Council A.I. Lebed began negotiations with A. Maskhadov, the Chief of Staff of armies of Ichkeria.

According to the results of elections held in the Chechen Republic at the end of January 1997, Maskhadov became the president of the republic, he formed a new structure of Chechen government, comprised basically of terrorists (V.Arsanov, S.Basayev, A.Zakayev, M.Udugov etc.). Political negotiations began from that very moment; I.P.Rybkin, the secretary of Security Council of the Russian Federation and his assistant B.A. Berezovsky represented at them federal authorities. The Chechen leaders put forward the question of the status of republic and restoration of post-war economy.

On May 12, 1997 the first meeting of presidents of Russia and the Chechen Republic was held in the Kremlin. At the meeting the treaty on peace and bases of relations between the Russian Federation and the Chechen republic was signed.

On the basis of achieved and realized agreements on financing of the Chechen Republic as a subject of Federation, restoration of its national economy, renewal of running of the pipeline for transportation of raw Caspian oil from Azerbaijan, the government of the republic pressed on Moscow with the purpose to achieve concessions in gaining of "real independence" of Islamic republic Ichkeria. Activity of Grozny on international scene, good contacts of Maskhadov's administration with the countries of Islamic world was subordinated to same task. The sovereignty of Ichkeria, however, has not been acknowledged by any state of the world

The Constitution of the Russian Federation

State-political development. The Constitution of the Russian Federation

Since the end of 1993 the renovated Russian state has entered a new phase of development. Accepted on December 12, 1993 at the All-Russia referendum, the fifth in the history of the country, Constitution of the Russian Federation has proclaimed formation of new system of state-political system, put an end to the Soviet period of Russian history.

Full authority in the Russian Federation belongs to the President and bodies of legislative (two-chamber parliament - Federal Assembly), executive (Government of the Russian Federation) and the judicial authority, which work independently. The system of governing bodies of subjects of the Federation is established by them independently, according to bases of constitutional structure of Russia. President as the head of the state is the guarantor of Constitution of Russian Federation, rights and freedom of a person and a citizen. He determines the basic directions of internal and foreign policy of the state; he is the Supreme Commander-in-chief of Armed forces of Russia.

The president of the Russian Federation is elected for the period of 4 years. His impeachment, though stipulated in the Constitution, is rather difficult to carry out, as the concrete mechanism of this procedure has not been worked through. At the same time, the fact of stipulating of impeachment possibility in the Constitution does not allow to make authority of the President absolute.

The lower chamber of Federal Assembly - the State Duma consists of 450 deputies elected for the term of 4 years.

The Council of Federation - the upper chamber of parliament - is formed by representatives of subjects of Federation (one from legislative and one from executive authority).

For the first time in the Russian history the Constitutional Chapter contains guarantees of rights and freedoms of a person, mechanism of their protection. In the Constitution the freedom of occupation is proclaimed, a person may enter into labour disputes. A person, his rights and freedom are the supreme value, and the recognition, observance and protection of rights and freedoms of a citizen is a duty of the state.

Influence of the Federal Assembly on executive authority headed by the President is determined, first of all, by fixed in the Constitution obligatory approval by its both chambers of the state budget and confirmation of nominees to the supreme state posts represented by the President. However during 1994-1997 the real political impact and influence of the lower chamber of the Russian parliament was much wider than stated in the Constitution.

President and his nearest advisers began to pay an increasing attention to problems of strengthening of national unity and increase of the role of federal structures in the system of public administration. Within the framework of realization of the given course, the President of Russia in February 1994 put forward the initiative on achievement of public consent, the first step to which was the realization of amnesty.

The following step was the preparation and signing on April 28, 1994 of Public Consent Pact. Its participants became representatives of federal authorities, subjects of the Federation, heads of political parties, social movements and other organizations.

At the same time the events, happening after adoption of Russian Constitution, show, that the created legal basis of Russian statehood is still far from solving all problems standing in its way of development. In this connection, as a means of resolution of conflicts between interests of federal and regional authorities, there appeared a necessity of development and signing of bilateral treaties on differentiation of duties and mutual delegation of authority between federal bodies of Russian government and authorities of federal subjects.

The first document of such kind became the pact signed on February 15, 1994 between federal authorities and the Tatarstan Republic. Such a form of strengthening of federal relations and development of principles of federalism of the Russian statehood was recognized as optimal. Therefore, following the example of the Tatarstan Republic, similar pacts were and are being signed with all other subjects of Federation.