On December 19th Russians went to the polls to elect a new Duma, the lower house of parliament. Of the 450 seats, half were for single member districts, the other half were nation-wide, proportional seats for the parties that received more than 5 percent of the national vote.

The election brought no big surprises, although pro-Kremlin candidates did better than expected. The Communists still took the lead with 28%; next came the Unity bloc with 24%; third came the Fatherland-All Russia bloc with 12% according to preliminary results. The remainder of the Duma seats went to independent candidates, including many from lesser parties like the reformist Yabloko and Union of Right-Wing Forces (SPS) parties as well as several suspected criminals, whose seats in the Duma give them immunity from prosecution. The majority have been charged with extortion, though some, like St. Petersburg candidate Yuri Shutov and Taganrog candidate Sergei Mikhailov, have been accused of far worse crimes such as contract murder. Some of the most notorious Russian oligarchs such as Boris Berezovsky and Roman Abramovich, have stood for office in obscure provincial districts (as of last count each appears to have won).

Although the Duma possesses key powers over legislative review and the state budget, the significance of this election has little to do with its potential impact on parliamentary action. Rather, the elections were recognized by nearly all voters to be a dress rehearsal for the upcoming June presidential election. The period between now and then is vital to the future of the Russian political balance, as well as to the future of the country's democratic experiment itself. This Duma will be the setting where most of the pre-election gamesmanship will take place.

The Contest

There are two main alliances to watch during the coming six months. The first is the pro-Kremlin bloc led by the current prime minister Vladimir Putin. Given the strong electoral showing of the Unity (Yedinstvo) Party, which he sanctioned, he would be elected president if the vote were held now. But anything might happen between now and June. The Chechnya war could take a turn for the worse, the leading oligarchs could find a new candidate, the bloc itself could disintegrate or reshuffle with another bloc, and so forth. The other main alliance is the Fatherland-All Russia (OVR) coalition led by former prime minister Yevgeny Primakov and Moscow mayor Yuri Luzhkov. It has some strong allies in the regions, but will need the support of the Communists and their grassroots organization to beat the powerful forces allied with the Kremlin. (It should be noted that in spite of its preponderance in the Duma, few observers grant the Communist leader Gennady Zyuganov any real chance in the presidential elections.) Thus, unlike the last presidential elections which were characterized as a struggle between reform and regression (Yeltsin vs. the Communists), this election will be a more complicated struggle among several competing groups, all anxiously vying against one another to pursue or protect diverse economic and political stakes. Once again, the support of provincial governors will be key to determining who emerges on top. The determination of the people who support the current Yeltsin regime to protect assets they view to be threatened by other forces (principally the current Primakov/Luzhkov alliance) should not be underestimated. But neither should the flexibility the new administration gives itself in dealing with those most identified with the Yeltsin regime-nobody should be surprised if a Primakov or even a Luzhkov as president suddenly forgets all prior animus toward leading oligarchs. With the exception of ideological, reformist outsiders like Grigory Yavlinsky who have next to no likelihood of becoming president, almost all the leading candidates are in some way part of the emerging Russian establishment. In this larger sense the establishment is more monolithic than its complex and highly variable internal fissures would suggest.

Permanent Uncertainty

Yet the future is far from easy to forecast. The oft-paraphrased description of Russia as a riddle inside a mystery wrapped in an enigma is just as true today as when Winston Churchill first made it at the beginning of the century. Even during the time of the Soviet monolith the difficulty in understanding Russia occupied leagues of insightful Kremlinologists, of whom few ever promoted total certainty about their predictions. Perhaps because of its Byzantine heritage, there is something always so cryptic about the Russian scene that humbles even the most confident of outside experts. Still, the current period suggests even greater uncertainty than usual.

The reason is that Russia is approaching the first real reckoning of what type of post-imperial nation it is and will choose to be. Some observers say that the fact that Russia has held three sets of Duma elections and is about to pass through its first ever peaceful and democratic transfer of presidential power are enormous achievements in themselves, no matter all else that has taken place. Others say that present-day Russia is more corrupt, more disorganized, more authoritarian and certainly less stable than the Soviet Union was under Gorbachev and is bound to get worse in the free for all once Yeltsin leaves the scene. But this is an ancient question of seeing the glass half empty or half full. Outsiders, especially investors, who have to deal with reality on the ground really should not be bothered with ambitious attempts to come to any grand conclusions about where Russia is heading. Rather, they should simply work through the actual day-by-day problems in their specific areas of involvement and hope for the best.

This preference for cultivating one's own garden is shared by many Russians who are equally disoriented and exhausted by their country's bizarre politics. Recent polls show that anywhere from 60 to 80 percent of Russians think voting is worthless because so many politicians are dishonest. Thus, there may always be opportunities in a country so large and diverse as Russia, yet being dismissive about broader trends is a risky frame of mind for any business involved there. On balance, the deep cynicism of the Russian people and the almost limitless extent of corruption outweigh any formal, democratic achievements and positive signs in the economy, however slowly it muddles through. The overwhelming popularity of the anti-Chechnya campaign has little to do with the Chechens or even with terrorism. More and more Russians want to see a strong hand at the helm for its own sake. Fewer and fewer are eager to oppose abuses of authority when it means an effective display of respect at the top. This is the mood that produced so many authoritarian rulers in Russia's past, few of whom demonstrated restraint once in power. This means that whatever its achievements, Russia may become an even more dangerous place, one most sensible business investors should continue to avoid.

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