Spectre of a new Iron Curtain in ailing Russia

THE Russian President is staging a dramatic recovery but his country is suffering from a serious illness for which radical surgery appears to be the only hope. Tough economic policies invariably lead to a political backlash and once again Mr Yeltsin's communist led opponents are gaining ground. The possibility of a new Iron Curtain descending across Europe from the Baltic to the Black Sea is once more being openly discussed.

Mr Yell sin is reported to be ready to resume his presidency with renewed vigour and he will need all his new found energy to deal with an economic and political situation which has been allowed to drift to the point of crisis.

Pocketbook politics has arrived and this in its own way shows a new political maturity, but a less than welcome side effect has been a growing resentment of things Western, a feeling that the blame for the plight of impoverished Russians lies firmly with the West, in descending order from the United States, through Japan and the European Union to even smaller European countries.

The market economy is a western phenomenon, the thinking goes, so therefore the impoverishment of large sections of the community is a deliberate ploy by the old enemy to debilitate Russia. Inept and often corrupt administration of the market comes a distant second when Russians apply the writer Alexander Herzen's "eternal Russian question", Chto delat i kto vinovat? (what is to be done and who is to blame) to their position.

This thinking is expressed not merely by those whose financial position has driven them to desperation, but has, according to observers, permeated the highest levels of what is known here as the "political elite".

Mr Strobe Talbott, who has been President Clinton's deputy Secretary of State in a speech to the Harriman Institute of Columbia University in New York, said that Cold War attitudes still existed in Russia and in the US, and he strongly attacked unnamed members of Mr Yeltsin's administration for harbouring the view that the United States is out to destroy Russia.

He cited Russian opposition to the eastward expansion of NATO as an example of this type of attitude but in doing so he may only have been touching the tip of an iceberg of resentment. Russia, after striking improvements in its economic performance in the earlier part of its transition to market economics, is now entering its most serious economic crisis since the reform programme was instituted in 1992.

IN such trying circumstances people and governments can feel under threat. NATO's expansion, promised for 1999 by President Clinton in his reelection campaign, looks likes a threatening manoeuvre from the Russian side, despite all the reassurances to the contrary which come from across the Atlantic.

One friend who has consistently supported Mr Yeltsin and his reform policy is beginning to have his doubts. He had looked forward to the personal freedom which the end of communism would provide, but now as the fifth anniversary of the dissolution of the Soviet Union approaches, he puts his view concisely in a single sentence: "Freedom with out money is no freedom at all."

The situation in the country as a whole is reflected in the position in which the giant truck factory KamAZ finds itself. Employing a workforce in the tens of thousands, KamAZ is one of several major companies which is threatened with closure for failing to pay its taxes.

The huge company argues that it simply doesn't have the money to pay its taxes because its customers don't have the money to pay for its products. These customers are, in the main, state owned industrial and agricultural concerns which do not even have enough money to pay their own workers.

In short, if the state had enough money to pay KamAZ, KamAZ, would have enough money to pay the state its taxes. This situation is repeated throughout the vast land of Russia, where workers, after months without wages, have had just as much as they can bear.

Miners in the mineral rich Northern region of Vorkuta, who in the old days struck in favour of Mr Yeltsin and against the old regime, have announced an open ended hunger strike in their demands for the £50 million the state owes them in wages.

Doctors have gone on strike in some areas and, as the harsh Russian winter approaches, regions, particularly in the far east, are already becoming used to sporadic supplies of electricity in a country which is one of the largest producers of oil in the world.

BUT if workers are paid, the money supply will rise and feed inflation. The International Monetary Fund, which supplies an economic stabilisation fund to the Russian state, wants inflation down to 20 per cent, this year and it also wants strict tax collection policies from the Russian administration. In order to stress this it has postponed payment of the latest tranche from its $10 billion stabilisation fund.

If the Russian state wrote off, KamAZ's tax debt and if KamAZ wrote off the state's debt to the state, very little money would be outstanding on either side, but the more likely even eventuality is that it will be the jobs of the KamAZ workers and the employees in other factories in a similar plight which will be written off.

The workers will blame western ways and the western intention to weaken Russia. These attitudes are becoming clear as the results of the staggered elections for the country's regional governorships come in. Regional governors make up the membership of the Federation Council the upper house of the Russian Parliament. The Duma, the lower house, has been under communist dominance since December of last year but Mr Yeltsin could always look to the upper house, made up largely of his own appointees, for support.

Until shortly before his operation about half the regional elections were going to Mr Yeltsin's supporters but more recently the opposition, mainly communist and anti western, has been moving into the lead, as witnessed by the striking success of the former vice president, Alexander Rutskoy, jailed for his part in the parliamentary revolt of October 1993; he received almost 80 per cent of the votes in the Kursk region.

Mr Yeltsin, by nature a populist, will have taken note of these trends. His reaction in the past has always been to steal his opponents' clothes.