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A Referendum On Reform Once Again, Russia’s Choice Will Be Felt Around The World

Wed., June 12, 1996

The boss of the Karl Marx collective sees salvation for his down-at-the-heels beef and dairy farm in the communal traditions President Boris Yeltsin swept aside.

“The state has to take more control,” asserted Alexei Moloduyev, a native of this rural patch of central Russia where most people will vote for the Communists in this Sunday’s presidential election.

Prices of fertilizer for his 17,000 acres have to be capped and socialist farm subsidies restored, he said. As for those tycoons in the city hauling down paychecks 40 or 50 times higher than his 220 farmhands make - “Of course it’s abnormal.”

About 50 miles up the road in the provincial capital, Nizhny Novgorod, Nadir Hafizov draws one of those “abnormal” salaries. The president of the conglomerate EkOil fears a Communist-led Russia will do exactly what Moloduyev dreams about, and more.

He wants to protect a commercial empire which he started by exporting oil from nearby Tatarstan when government controls collapsed after 1991. He bought controlling shares in other industries as they privatized, as well as a couple of banks and scientific institutes. His companies now refine oil, make television sets and process sugar, and they employ more than 30,000 people to do it.

“Since the Communists will return to a regulated economy and repressive regime, we consider the current elections a very serious threat,” he said. “Any attempt to drive us back to the past will cause blood and tragedy.”

Nizhny Novgorod will not vote Communist.

These two communities symbolize the opposing stakes in the first race for the presidency of an independent Russia. The country’s 105 million voters will face a field of 11 candidates, but four-and-a-half years after the Soviet Union’s collapse, the election has come down to a choice between the competing visions of two men.

President Boris Yeltsin promises to continue down the new, pot-holed path of democracy and capitalism, a road that some Russians have negotiated with stunning success but many others have found filled only with bruises. However, he says he will go a bit slower now.

Gennady Zyuganov, the candidate of the Communist Party of the Russian Federation, is offering a route back to the older ways of big government that keeps much tighter control as it parcels benefits to more people. But he pledges not to revive abusive controls of the past.

The choice Russia makes Sunday and at a likely Zyuganov-Yeltsin runoff three weeks later will reverberate around the world - from the newly independent nations on Russia’s borders, who fear Zyuganov will try to restore the old Soviet empire, to Washington, which is concerned he may rekindle the suspicions and confrontations of the Cold War.

At stake is not just the threat of a new arms race but a potential $50 billion Russian market that American businesses and investors have only begun to tap into.

Nizhny Novgorod province has strong advocates of both the new and old routes represented by Yeltsin and Zyuganov.

Once a region of secret cities that most Russians couldn’t even visit, it has become the site of the country’s boldest free market experiments. More than 80 percent of its state enterprises are privatized, and even farmland has been on the auction block.

But under the gloss of progressive change is a rigid foundation of resistance.

The radical economic transformation Yeltsin promised once Russia became independent in 1991 has been painful. With a series of decrees he mandated agricultural reorganization, permitted a wide sweep of private business activities and, probably most importantly, removed price controls.

“The word ‘upheaval’ says nothing,” Nizhny Novgorod city Mayor Ivan Sklyarov recalled. “It was not simply upheaval, but a change of the entire consciousness, of the system of values.”

Prices soared. Suppliers and buyers that once worked under government fiat were left to figure out their own futures. Government orders and subsidies dried up. A climate or rampant criminality replaced the rule of law.

Sklyarov said officials never knew if bread supplies would last more than two days. Residents incensed at tobacco price hikes toppled buses and trolley cars in the central square.

Things have quieted since those early days. Yeltsin slowed the process, getting a handle on the plummeting ruble and beginning to tame inflation that had been multiplying at 20 percent a month.

But services that used to be free still are too expensive or nonexistent, like the day-care centers and vacations that big state factories used to offer. Pensioners will never replace the savings gobbled up by inflation. And prices are still dizzyingly high.

Under such conditions, Zyuganov’s promises have resonated among many voters who say they would willingly trade the freedoms of democracy for the certainties of the Communist era.

But the preponderance of opinion, fears, forecasts and wild imaginings puts Russia on a collision course with economic and social disaster if Zyuganov wins.

“There is going to be a hemorrhage of people and money out of Russia, even if the Communists don’t change anything significantly,” says Vladimir N. Voinovich, a dissident writer expelled in the 1970s who returned to his homeland five years ago.

While business people fear that a new Communist leadership would destroy the fragile market economy with price controls, money-printing and property confiscations, those who suffered at the hands of the party’s repressive forebears worry more about their newfound freedoms.

“It would probably be gradual, maybe starting with an attempt to prevent the loss of talent and materials abroad by requiring new passports, or government permission to travel. Maybe we would need exit visas again,” Voinovich says. “Then they would have to reintroduce censorship to control the public reaction.”

What is at stake is what too many now take for granted, he says: the right to say what one thinks, the freedom to choose a livelihood and lifestyle, the liberty to explore a world limited by finances instead of barbed-wire fences.

Like others who take a grim view of the consequences of a Communist victory, Voinovich warns that the instability would hardly stop at Russia’s borders.

“This historic undertaking could fail, and if it does it will be a catastrophe not only for Russia but for all the world,” he says. “But I believe there is an instinct for self-preservation that will prevail. If Yeltsin wins, this will create a kind of stability. It will be corrupt and stagnant, but stable.”

Although many expect economic damage under a Communist leadership, there is serious doubt among observers that Zyuganov would seek to limit personal freedoms like the right to travel abroad, hold foreign currency, to speak and worship according to conscience.

“All this anti-Communist hysteria that is being heated up by our wise TV commentators and analysts is stupid. Zyuganov is not Stalin, and not even Brezhnev,” says Vadim V. Bakatin, a former KGB chief under Gorbachev.

Any attempt to oppress dissenters or revoke individual rights would hasten the final demise of the party, he adds.

Russian society has changed to such an extent that it would be nearly impossible to make a sharp U-turn. Power is decentralized. The state has lost much of its capacity to exert administrative pressure. A new generation, though at times cynical and demoralized, is accustomed to freedoms and will not give them up without a fight.

“If (the Communists) put ideology ahead of everything else, they will lose,” Bakatin predicts. “If they start tightening the screws, they won’t be in office for four years - maybe not for one. Russia is already a different country.”

Graphic: What the polls predict


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