But all was not good news for Putin & Co. An IMF report identified Russia as the most corrupt state for investment. The concern is still valid and tangible that scientists from former Soviet republics could sell their knowledge to the highest bidder from various rogue regimes. Are these realities consistent with the conclusions of the EU, US, and NATO, or is the obvious disconnect ignored in deference to some less obvious goal?
The adage that people get the government they deserve is often quite true, but the assertion is only partly valid in Russia. Consider these data: At the December 1995 Duma elections, Communists won 22.5% of the vote; the LDP won 12%; the Chernomyrdin Our Home is Russia bloc won only 5.6%; forty-one other parties barely broke the 5% requirement to hold any Duma seats. Any substantive reforms seemed unlikely because of the un-co-operative Duma, but the economy stabilized. The ruble traded at settled rates, and the free enterprise system seemed to gain progress. Thousands of workers were unpaid; the middle class/entrepreneurial sector was formative, but fiscal indicators implied Russia finally was a "normal country", as Mr. Yeltsin described it.
That presumed normality ended on 17 August 1998 when the ruble was released from its trading band, and Russia defaulted on its foreign debts. This crisis actually began in Marcy 1998 when Mr. Yeltsin abruptly sacked Mr. Chernomyrdin as prime minister. On its third vote the Duma confirmed Sergei Kiriyenko as his successor. A thirty-five year old reformer who had only one year of national political experience, Mr. Kiriyenko diligently collected taxes and shunned the influence of the "Oligarchs" as the powerful Russian investment bankers derisively are known.
Despite his efforts and mainly as a consequence of declining values of shares traded on Asian stock exchanges, the value of shares traded on the Moscow exchange dramatically fell. During August and September 1998 the ruble lost almost 50% of its value. Mr. Yeltsin then sacked Mr. Kiriyenko and designated Mr. Chernomyrdin as acting prime minister. The Duma twice rejected Mr. Chernomyrdin, and Mr. Yeltsin sought then-foreign minister Yevgeny Primakov as a compromise candidate. The Duma quickly confirmed Mr. Primakov - who had neither economic experience nor a plan to solve the problems that plagued Russia. His role was simply to wait his time until the business cycle improved.
