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Russia: Crisis Requires New Social Contract, Says Kiriyenko

London, 18 November 1998 (RFE/RL) -- Former Russian Prime Minister Sergei Kiriyenko says a new social contract between government and people could provide a way out of the country's economic crisis.

Kiriyenko, who served as prime minister for five months until his cabinet was sacked by President Boris Yeltsin in August, spoke yesterday at the Royal Institute of International Affairs in London.

Kiriyenko says abortive reforms over seven years since the collapse of communism have led to a loss of public trust in Russia's political elite.

He cited a TV poll which found that 17 percent regarded the government as the "main enemy of the people", compared with 15 percent who named criminal circles and 16 percent business circles.

He said the poll illustrated the complete estrangement of society from government, reflecting the "fatigue of expectations" caused by prolonged delays in securing genuine economic reforms.

He said the power elites and society need a new social contract that would likely fall into one of three possible scenarios.

The first scenario would require an open declaration of an honest and rational economic program that would be painful but, given the severity of the present crisis, would be accepted by the nation.

A second scenario would involve a populist program modeled on what President Carlos Menem introduced in Argentina. Kiriyenko said there was a third possible scenario: a Chile-style dictatorship.

Kiriyenko said the evidence suggests there is popular support for the first option --a rational economic program that would likely secure the backing of Russia's newly-emerged middle class.

Citing the importance of an assertive middle class, Kiriyenko said a recent poll showed that 61 percent of Russians wanted to be self-reliant and were not seeking paternalistic government help.

This was a 20 percent increase over a similar poll conducted only last year and, according to Kiriyenko, represented a "colossal" 28 million Russians whose attitude had changed in 18 months.

Kiriyenko cited this public support for self-reliance to defend his claim that seven years of largely abortive reform had not been in vain. He said there is now a general realization that a social consensus in the nation cannot be provided for "without a market economy because the mentality of the nation has changed."

Kiriyenko said professional managers who so far have not been admitted to the power structure constitute a new political force.

And he said the younger generation who now account for 28 percent of the electorate are "a gigantic resource" who will radically change the pattern of political preferences in future elections.

He said a sign of the greater savvy of Russians came in a poll which found 48 percent said the government should not print money to get out of the present crisis, a result "impossible a few years ago".

Kiriyenko says one of Russia's main problems is that it is one of the least developed of industrial nations but at the same time it has a budgetary load that is equal to that of the United States.

He said Moscow faces a basic need to reduce state spending while at the same time introducing an efficient tax collecting system. He said the present burden of social spending, at 16 to 19 percent of gross domestic product, cannot possibly be sustained.

Kiriyenko said the main problem in Russia is not the economy -- because its weaknesses are soluble -- but the ineffectiveness of the power structure, reflecting the difficult transition from socialism. Kiriyenko paid tribute to the man who replaced him as prime minister, Yevgeni Primakov, for providing what he called "a great service to the nation in providing political stability." But he said the government faces critical decisions on December 1 when a draft budget is due, presenting it with hard political decisions.