Today's great Russian fiction: Moscow's claims about reforms are mere noise to attract Western aid, says Jonathan Eyal

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As President Boris Yeltsin is fond of saying, after decades of wanton terror, Russia should now be regarded as a 'normal' country. Indeed, the agenda for debate in the Duma (Russia's lower legislative chamber) today, budget day, looks healthy enough: calls for the dismissal of ministers and appeals for special subsidies to various economic sectors predominate. There are even a few allegations of corruption to complete the image of a democracy grinding away in its mundane but reassuring fashion.

Yet Russia is far from being either a functioning democracy or a normal state. Behind the appearance of calm lurks a serious political crisis, which may ultimately cost President Yeltsin his job. All Western governments are aware of this reality, but since not one has a real policy towards Russia, most pretend that nothing untoward is happening. Optimism about Russia's future is now an article of faith.

On paper, the optimists have a case: defying a history of state controls, the Russians are creating capitalism without the initial capital. Half the nation's wealth is now generated by the private sector, and a new managerial class, energetic and cosmopolitan in outlook, is at last flexing its political muscles.

Official figures still record catastrophic falls in industrial production.

But such statistics should not be taken seriously, mainly because they fail to reflect the true extent of private enterprise. The question is not whether the country could return to its old state command structures - these have been irretrievably broken - but, rather, whether Russia can become a truly functioning market economy in the foreseeable future. And on this point optimists part company with reality.

When all the West's favoured Russian reformers were roundly defeated at last December's parliamentary elections, the affection heaped on Yegor Gaidar and other reformers was rapidly transferred to the Prime Minister, Viktor Chernomyrdin. Whereas his predecessors had at least tried to implement changes and encountered great failure, Chernomyrdin made few changes yet claimed permanent success.

In the West Chernomyrdin has earned praise for slashing his country's budget deficit in order to control inflation. Few have noted that these cuts were not backed by any any long-term strategy and that, therefore, they were ultimately unsustainable. State-owned factories have continued to produce goods for customers who could not pay, and built up vast debts in the sure knowledge that, when faced with the choice between widespread bankruptcy or wholesale bailing out, the government will opt for the latter. This is precisely what has happened.

The Russian prime minister's insistence on the fiction of continued economic reform reflects Moscow's perception of Western fears and aspirations.

Officially, international financial institutions are committed to providing aid only when Russia embarks on true reform. But the Kremlin knows only too well that this assistance is offered not out of love, but as a result of the West's stake in maintaining stability.

Taken to its logical conclusion, the argument implies that the imperative for providing Western aid is most urgent when Russian reforms falter, not when they are succeeding. All that Moscow needs to do is to make the appropriate noises about change, the right excuses why these are not feasible this year, and the promise that they will be implemented in the future. During the Communist years, the people of the Soviet Union used to joke that they pretended to work and the authorities pretended to pay them.

Today's Russian government operates a variant: it pretends to bring about reform, and the West pretends to believe it.

The same air of unreality surrounds Russia's internal situation. The West claims to uphold Russian democracy. In fact, it prefers to ignore the inconvenient results of Russia's democratic experiment. The biggest compliment paid to President Yeltsin, for instance, is not that he has encouraged diversity and toleration in his country, but that he has carved for himself powers which allow the head of state to bypass parliament.

Everything from economic reform to foreign policy initiatives has been accomplished by presidential decree.

This week, for a second time, the Duma debated Yeltsin's appointment of a new prosecutor-general. And, for the second time, the president's nomination was rejected. Yet the debate was utterly irrelevant: this close friend of Yeltsin's from the old Communist days has been functioning in his post for months, and will continue, regardless of what the Duma wants.

Nor is this an isolated case: instead of encouraging local democracy, Yeltsin has dispatched his friends to the provinces, where they act as colonial governors. And, although the printed press is often critical of Yeltsin, the much more influential electronic media remains under tight government control.

A good case can be made that this is as much as could have been achieved in Russia in such a short time. Gloomy scenarios about the break-up of Russia itself have been proven wrong and the collapse of the Soviet empire has been remarkably peaceful. And Yeltsin's strong guiding hand may at this stage be preferable to an erratic and divided parliament.

But each of these achievements also carries heavy liabilities. The still-powerful myth of vast Western aid just waiting to pour into Russia acts more as a justification for Moscow's inability to implement reforms than as an incentive to make them. The strong hand of Yeltsin has managed to alienate both genuine reformers and hardliners in equal measure, and the president is now in a similar state of political isolation to that facing Mikhail Gorbachev before his fall in 1991.

More importantly, precisely because the Soviet empire's collapse was so sudden and peaceful, many Russians still believe that it was all a ghastly mistake. But instead of trying to explain to his people that the loss of empire was a necessary precondition for Russia's own prosperity, Yeltsin is pandering to nostalgia by dreaming up plans which would somehow retain Moscow's old sphere of influence.

For many years to come, Russia will not be a 'normal' country. Instead, it will resemble the Ottoman empire at the turn of the century: a state feared in equal measure for its expansionist potential and internal strife; a country that is sometimes our ally and sometimes our opponent - and very often, a neighbour who must be paid off in order to be kept at a safe distance.

(Photograph omitted)