House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Third Report

II. THE RUSSIAN CONTEXT OF THE UNITED KINGDOM'S OBJECTIVES

8. This inquiry was conducted at a time when, as Professor Margot Light told us, anti-western sentiment is strong.[11] This worsening of relations was heightened in 1999 by NATO military action against Serbia during the Kosovo conflict and by Russian military action in Chechnya. With regard to Kosovo, senior Russian political leaders told us that they believed NATO had flouted the UN Charter, and had consequently regained the image of an enemy among many Russians. Russian action against Chechnya has met with widespread condemnation in the West. This has antagonised Russia. We discuss below the implications of Chechnya, but the crisis colours every other aspect of our current relationship with Russia. The long-term effect of the Chechen conflict on the cohesion of the Russian Federation is not yet apparent. It is unclear whether the war in Chechnya will prove to be a turning point for Russian domestic and international policy, or a self-contained event without widespread and lasting impact.

9. The domestic context of the inquiry consists of Russia's progress, or otherwise, towards democracy and a market economy since the collapse of the Soviet Union. The political legacy of the Soviet era was that the removal of the one-party Communist system also removed many of the power mechanisms by which that state was ruled. Links between the regions and the centre had to be recrafted, and institutional linkages at all levels had to be recreated. Russia has also needed to adjust to its new relationship with the independent states which were formerly part of the USSR. In terms of the economy, the Soviet legacy was an increasingly obsolescent state-owned industrial base, producing—apart from weapons—goods of little worth on the world market, and being subsidised at prohibitive cost by the state. Economic reform meant the end of price controls, a reduction in state subsidies, and large-scale privatisation. The manner in which these reforms have been implemented in Russia has meant high levels of inflation, unemployment and poverty.

10. We now look at developments in Russia in each of the areas where the FCO believes that there are important objectives for British policy.[12]

Development of political stability and democracy

POLITICAL DEVELOPMENTS

11. Russia has held three parliamentary elections in the 1990s (1993, 1995 and 1999) and one presidential election (1996). The next presidential election is now due in March 2000. Xan Smiley told us that Russia "is an extremely flawed democracy" albeit "hugely more of a democracy than it was ten years ago."[13] However, written evidence from Professor Peter Frank suggests that a different timescale might produce a different judgement. According to him, in terms of democratic choice, accountability and the rule of law, Russia made "some initial progress" in the early 1990s but "has regressed over the past three years, rather than moved forward."[14] During the period 1998-2000 Russia has had five prime ministers, and former President Yeltsin's inclination to change prime ministers and governments "created a chaotic policy-making environment."[15] The consequences of President Yeltsin's unexpected resignation on 31 December 1999, and of the interim presidency of Mr Putin, remain matters of speculation and concern.

12. The major criticisms which we heard concerning Russia's democratic credentials were not about democratic procedure. Dr Pravda asserted that "basic democratic features (free and fair elections, pluralism of publicly expressed opinion)" are likely to be retained in the future.[16] Dr Roy Allison of the Royal Institute of International Affairs agreed that progress in conducting freely contested elections had been commendable. However, he pointed to factors which "have undermined popular faith in good governance or processes of democratisation"; namely, allegations of corruption amongst politicians, the influence of business groups on the political process and the media, and suggestions of links between some businessmen, politicians and organised crime.[17] It is also the case that political parties are based around personalities, rather than policies. Grigory Yavlinsky, leader of Russia's major liberal-reformist political party, Yabloko, reminded us in Moscow that all of Russia's prime ministers have been drawn from the Communist Party or the KGB and consequently were not well placed to bring about reform.[18] Mr Putin is, of course, the latest of these.

13. Prospects for the future of Russia's democracy depend to an extent on the result of the presidential election in March 2000. Despite the progress that has been noted, both Xan Smiley and John Lloyd told us that the possibility of a return to militarism or authoritarianism could not be ruled out.[19] Against this, while the hand over of power to Mr Putin did not occur following a democratic election, the transfer was constitutional, and President Yeltsin was the first leader in Russian history to leave power voluntarily. The timing of President Yeltsin's resignation, and the results of the December 1999 parliamentary elections, make it more likely that Mr Putin will be successful in the presidential elections—depending, naturally, on events in Chechnya. When we visited Russia in October 1999, it was quite clear that Mr Putin remained a figure about whom British diplomats—and indeed many Russians whom we met—knew little. He is now emerging as a strong personality.

14. Support for the forces of democracy in Russia has been the Government's stated policy since the collapse of the Soviet Union. However, Anatol Lieven, whilst urging support for particular policies, cautioned against backing particular politicians in Russia, noting that "we have done that in the past and it was a mistake."[20] We were also given this message emphatically by a number of politicians whom we met in Russia.

REGIONS

15. In all areas of policy-making, Russia's size and its federal structure must be taken into account. The Russian Federation's 89 regions vary greatly in size, wealth, population, ethnic make-up and independent-mindedness. Many act with scant regard for Moscow. Of the 89 regions, 21 have the title "republic." At the last census in 1989, 20 per cent of Russia's 147 million population were not ethnically Russian.[21] The FCO noted "increasing regionalisation in Russia."[22] Dr Pravda judged the relationship between the federal authorities and the regions to be an increasingly uneasy one, with economic and political divergence likely to continue "making it even more difficult to generalise about how Russia as a whole is doing."[23] Our meetings in St Petersburg and Ekaterinburg made us very aware that centralised decision-making has been weak in recent years.

CHECHNYA

16. Russian political stability has been most threatened by events in the North Caucasus, and particularly Chechnya, the scene of long drawn out conflicts in the nineteenth century. In the war of 1994-1996 Russian forces had been unable to subdue Chechnya. In the autumn of 1999 Russian armed forces restarted their war with the separatist republic. Several reasons for the launching of a fresh attack in 1999 have been put forward. In August and September 1999 over three hundred Russian civilians were killed in bomb attacks in Moscow and elsewhere in Russia which the Russian authorities blamed on Chechen terrorists. According to an argument we heard on several occasions in Russia, the Russian armed intervention in Chechnya was an internal anti-terrorist act, analagous to United Kingdom actions in Northern Ireland. We heard two further explanations from Russian politicians: first, that the armed forces had been looking for an opportunity to avenge their defeat of 1994-1996; second, that political motives had played a part in the decision to intervene. Mr Putin wanted to gain popular support and strengthen his hand as a presidential candidate, and saw a successful military campaign as the way to do this. Sir Rodric Braithwaite told us that this latter purpose might well backfire in the medium term and that Mr Putin's high ratings might "rocket downwards when he is seen as the man who has failed to solve the problem around about next March."[24] In the light of recent events, this is an interesting prediction. A further factor in Russia's conflict with Chechnya has been the question of oil pipelines and the exploitation of Caspian hydrocarbon reserves (because of Chechnya's proximity to the Caspian basin and the fact that a key pipeline runs through Chechnya). The history of pipeline diplomacy has made many Russians particularly suspicious of external interest in Chechnya.

17. Russia's military action in Chechnya is of international concern for a number of reasons. The FCO's memorandum to us noted that the situation in the North Caucasus poses a serious threat to the territorial integrity of the Russian Federation.[25] Dr Allison argued that Russian military action in Chechnya heightens the danger of regional destabilisation across the Caucasus. According to him, "this is also likely to generate larger refugee flows than at present, encourage more terrorist attacks on targets in Russia, and revive international human rights concerns about the effects of Russian policy in the North Caucasus."[26] Such concerns were expressed to us by Amnesty International, for example over the bombing of civilians in Chechnya and the creation of around 250,000 refugees, both inside the Russian Federation, and, to a lesser extent, in neighbouring states.[27] In our recent report on the South Caucasus and Central Asia, we referred to concerns in Georgia and Azerbaijan about Russian attempts to dominate the South Caucasus.[28]

18. The response of the United Kingdom and the West to the renewed Chechen conflict of 1999-2000 has been to condemn human rights violations in the prosecution of the war, while recognising both the territorial integrity of Russia and the serious problem posed by terrorism.[29] The Organisation of the Islamic Conference (OIC) has reacted in a similar manner. Following a visit by an OIC delegation in late January, the Conference called for an end to fighting as a first step in the political process, a general amnesty and return of refugees. Some evidence before us suggested that United Kingdom condemnation of Russian action had been too slow and insufficiently forthright. Professor Archie Brown of Oxford University argued that former President Yeltsin was responsible "for the deaths of more citizens of Russia than any Kremlin leader since Stalin" during the 1994-1996 conflict, and yet criticism from western governments had been muted both then and, at least initially, when the war restarted in 1999.[30] Mr Lieven told us, on the other hand, that there is an appropriate balance to be found between condemning certain military actions in Chechnya, whilst at the same time sympathising with Russia's post-colonial dilemmas and problems.[31] Some have claimed that there is a similarity between Russian actions in Chechnya and Milosevic's ethnic cleansing of Kosovo, but, as the Foreign Secretary put it, "nobody in their right mind" would suggest that NATO action in Kosovo should be replicated by NATO action in Chechnya.[32]

19. Instead the Chechen conflict of 1999-2000 has provided evidence of the multiple channels of communication and pressure which the United Kingdom and western governments employ in relations with Russia. The Foreign Secretary told us of the approaches made to Russia through these channels in November-December 1999. First, he noted that the visit of the OSCE Chairman-in-Office to Russia came as a result of pressure put on Russia at the Istanbul Summit. Second, he anticipated that a report on the Chechen conflict would be presented to the Council of Europe in January 2000.[33] Third, he welcomed the multilateral forum for dialogue with Russia offered by G8 meetings.[34] Fourth, the Foreign Secretary noted that economic pressure could be exerted through the International Monetary Fund (IMF): although under the IMF charter its decisions can only be made on economic and not on political grounds, the Kremlin would not be under any illusion that a decision to delay loan funding had been "connected with the conduct of Russia's present relations in Chechnya."[35] Fifth, he stated that the United Nations had a role to play in the Chechen situation, but that Russia's veto on the Security Council could block attempts to raise the issue.[36] Sixth, he spoke of close contact and shared concerns with the USA regarding the Chechen conflict.[37] Finally, the Foreign Secretary told us that the European Union (EU) could use the weapon of aid to Russia as a means of exerting pressure, as this is the EU's "connection with Russia."[38] In addition to these multilateral forums, the Foreign Secretary also informed us of bilateral representations made by himself and by the Prime Minister to their Russian counterparts.[39]

20. The main focus of this pressure has been first to encourage dialogue between Russian and Chechen leaders, and second for Russia to improve access for humanitarian agencies. The Foreign Secretary told us that "the very strong messages delivered by Britain, by our European partners and by the United States have made their mark in Moscow."[40] None of these strong messages and diplomatic pressures achieved any meaningful change in Russian attitudes, or actions in Chechnya. FCO Ministers have made it plain that Chechnya dominates current diplomatic relations with Russia, and that "it cannot be business as usual while indiscriminate use of force continues".[41] Comparisons are being made between Chechnya and Kosovo. The effect of the Russians' military action in Chechnya has been as devastating upon the region's population as Milosevic's in Kosovo. The destruction of urban life in the province matches that of Kosovo. There is a clear ethnic element to the assault, with continuing violations of human rights, particularly of Chechen males of military age. Western governments have been forced to accept the impossibility of any effective intervention to prevent such a humanitarian disaster in Chechnya. We should be frank enough to admit such impotence. We conclude that Russian action in Chechnya is the most severe impediment to good relations with Russia at this time, and we recommend that pressure must continue to be put upon Russia to respect humanitarian norms and allow in the international aid agencies.

21. Some commentators have used the Chechen conflict to re-invigorate old arguments about the otherness of the Russian approach to politics,[42] and to argue that fundamentals have not changed in the relationship between Russian and the West. Certainly the disregard for civilian life displayed by Russia in Chechnya must colour future relations between Russia and the United Kingdom, though the beheading of four western technicians in Chechnya in December 1998 indicates that humanitarian abuses are not confined to one side. However, we believe that Chechnya is a reason for greater rather than lesser western engagement with Russia. Using the conflict in Chechnya to stoke the embers of mutual suspicion is in the interests of neither party.

Development of a stable market economy

22. Economic reform in Russia has been traumatic and the results to date have been disappointing. Annual inflation exceeded 100 per cent in every year from 1992 to 1995, hitting a peak of over 2000 per cent in 1992. According to official data, 1998 GDP was roughly 56 per cent of the level of 1989 in real terms. As we discuss below[43], real household incomes have fallen dramatically. While official data should be handled with caution, there is no doubt that output, employment and living standards have fallen sharply, while income disparities have increased dramatically, both across households and, as Professor Hanson noted, across Russian regions.[44] As we note below,[45] one of the consequences of economic decline has been a fall in life expectancy, particularly for men. In addition, the economic transformation has been associated in the minds of ordinary Russians with crime and corruption, the inability of the Russian state to perform even its most basic functions, and the emergence of a number of other problems, including the de-industrialisation of the country,[46] the widespread de-monetisation of economic exchange,[47] rising unemployment,[48] and pervasive wage arrears.[49]

23. Within Russia there is resentment of what is seen as the West's role in this. Western governments and multilateral institutions are associated with what are now seen to be failed policies and "radical reformers".[50] Indeed, polls suggest that much of the population believes the West to have acted deliberately to weaken Russia through interference in its economic policies—a belief reinforced by the West's apparent willingness to use multilateral funds to prop up favoured Russian politicians, to turn a blind eye to evidence of corruption on the part of its favourite reformers and to the increasingly evident failure of their policies.[51] The West stands accused, by many of our witnesses as well as by large numbers of Russians, of having facilitated—whether deliberately or not—the emergence of crony capitalism in Russia.[52]

24. Ironically, it is not clear to what extent Russia has actually experienced radical economic reform: the gap between the rhetoric and the actions of Russian governments since 1992 has been pronounced, partly because, as we discussed above[53], the Russian state has lacked the authority to introduce reforms. The "reformist" governments of 1992-98 pursued monetary and fiscal policies designed to please the IMF and contain inflation while shying away from micro-level structural reforms for fear of their social and political consequences.[54] The crisis of August 1998 was above all the consequence of this contradiction: the macroeconomic stabilisation achieved during 1995-98 was not underpinned by the micro-level structural changes needed to make it sustainable without considerable external financial support. Stabilisation was based on monetary measures (mainly exchange-rate management) and was not accompanied by sufficient fiscal adjustment.[55] The government's inability to put its budget in order was, in turn, largely a product of the failure of structural reform.[56] Nevertheless, the "post-reform" governments of 1998-99 have, despite a marked change in rhetoric, followed in their predecessors' footsteps, maintaining a fair degree of macroeconomic discipline while avoiding structural reform.

11 Ev. p. 51. Back

12 See para 2 above. Back

13 Q136. Back

14 Ev. p. 169, Appendix 9. Back

15 Ev. p. 162, Appendix 5 (Dr Roy Allison). Back

16 Ev. p. 53. Back

17 Ev. p. 162, Appendix 5. Back

18 Mr Yavlinsky was referring here to the Soviet-era Communist Party, not to the Communist Party of the Russian Federation, which has not supplied any prime ministers. Back

19 Q135, Q136. Back

20 Q136. Back

21 Natsional'nyi sostav naseleniya SSSR published in Moscow, 1991. Back

22 Ev. p. 116. Back