Home » SUITE101 » Russian Politics » What Is To Be Done?

What Is To Be Done?

© Jeffrey Deutsch

(Trivia question for the week: name the Russian who popularized that phrase. Bonus points if you can give his real name.)

By now, you've probably heard the big news of the week: Russia is letting the ruble float. (That means it will stop spending foreign currency and gold reserves to keep the ruble's value at some minimum.) Following promise after promise not to do just that.

One Russian official, in a display of characteristic Russian humour, said that that would be much less of a problem since the poor Russian pensioners and workers, who haven't been paid in weeks or months, don't have any rubles anyway. New Russian proverb: One broken promise deserves another.

This came in the wake of "Black Thursday," Thursday August 13th, in which the Russian stock market went into a tailspin. It did so again on August 19th, when stocks dropped almost another 10 per cent.

The bond market, you ask? It's out of commission for now. The government froze the bond market once the ruble was allowed to fall (no way is anyone going to buy bonds in rubles now, and no way are the Russians going to sell bonds in any other currency). Oh yes: some current foreign debtholders are getting a 90-day moratorium - in plain English, that means Russia has unilaterally withheld payments for 90 days.

Currency markets are also out of commission - many currency exchange offices have simply closed. This is even worse than it sounds: many Russians feel it necessary to have dollars for domestic use.

And of course, the obligatory new firing: now it's the turn of top economic advisor Alexander Livshits. Meanwhile, tax chief Boris Fyodorov is now a deputy premier, responsible for macroeconomics and managing the state debt. In other words, he's now in the hot seat. Still in their seats are Premier Sergei Kiriyenko and Central Bank Chairman Sergei Dubinin - a senior presidential source told Interfax that President Boris Yeltsin had rejected their offers of resignation. At least they had the integrity to make those offers. (A certain former first deputy premier might want to remind them, though, that Yeltsin had rejected his resignation last November in the wake of a certain book-publishing scandal...)

Russia Today is having a poll: regarding Russia's economic situation, do you think there's no way to go but up, we're only seeing the beginning of the bad news, or not sure? I was the 375th person to vote, and I went the same way over three-fourths of the others did: we're only seeing the beginning.

The copyright of the article What Is To Be Done? in Russian Politics is owned by . Permission to republish What Is To Be Done? in print or online must be granted by the author in writing.