The turning point came after the referendum of 25 April, when the population voted decisively for Mr Yeltsin. That give him the strength and confidence to tackle his real opponents. These are not the recalcitrant members of parliament, who appear so often in the news, but those for whom many of them speak: the industrial and agricultural managers of the old regime, who demanded subsidies to protect them from market forces, threatening massive unemployment and social breakdown if they were refused.
It was they who last year forced the reformists under Yegor Gaidar, the then prime minister, to permit an uncontrolled expansion of credit and keep oil prices far below world levels. The result was to preserve a great deal of unproductive industry and its attendant power structures, and to make a lot of fast operators extremely rich. The penalty was the destruction of the government's authority, dismay among Western aid-givers and inflation that reached 2,500 per cent by the end of the year.
By May, however, the government felt strong enough to promise the International Monetary Fund that the central bank would stop printing money to cover debts between companies. Such promises have been made before and broken; but a more confident government, driven on by Boris Fedorov, the finance minister, is becoming more credible. Some conservative officials have been sacked. Inflation is already reasonably steady, at about 15 per cent a month. Privatisation has been accelerating. About half of all small businesses have been privatised, and most of the rest are due to follow by the end of the year, together with 5,000 medium and large companies. This process is gradually producing a larger constituency for the market economy and changing managers' habits and assumptions.
At the same time, the reformists are trying to construct the political base they have so far lacked. Mr Gaidar, now restored to influence, is building up the Association of Privatised and Private Enterprises to support parliamentary candidates and promote the interests of the private sector.
Clearly, Russia is not yet out of the woods. Inflation is still too high, and the full cost of cutting it has not been felt. Corruption and gangsterism are badly damaging legitimate enterprise. Many of the regions, particularly those rich in natural resources, are breaking away. But, considering the unfavourable conditions in which Russia is trying to introduce reform, it is extraordinary how much progress has been made. If a sensible compromise can be reached on Mr Yeltsin's ill-judged constitutional proposals, and if elections then produce a more representative parliament, the country will have worked its way through a peaceful revolution of enormous historical significance. Everything could still go wrong; but this is surely a moment for Western countries to risk being more generous with aid.Reuse content