Crying `Wolf-ovich' Today - The Danger Is Yet to Come

THE results of Russia's Dec. 12 election have caused pundits to cry ``Wolf-ovich.'' The strong showing by Vladimir Volfovich Zhirinovsky is disturbing more for what it says about a possible future than for what it tells us about political power in Russia today. Yet the Clinton administration seems to be responding with a policy lurch rather than with a balanced approach.

The response to Mr. Zhirinovsky's success has been to repeat facile campaign slogans from groups that did poorly in the election - to suggest that Russia needs ``therapy without the shock.'' Economic shock therapy is one of the great errors in the nomenclature of the 20th century. But the ill-chosen title should not obscure the policy's essence. There is no alternative to continued market reform. The economic debacle that was once Ukraine shows the results of eschewing serious change and believing that national independence equates with prosperity.

The crucial lesson that must be acknowledged is that there will be no economic improvement without pain. That pain can be distributed in different ways, and in some cases it can be spread over longer or shorter time spans. But it cannot be avoided.

During the period that Mikhail Gorbachev sought to implement perestroika, he faced moderate opposition and massive resistance. The opposition was generally defeated; the resistance was far harder to overcome. Directors of factories and collective farms, regional satraps, and communist party officials were reluctant to surrender power. Many still hope that change can be avoided or at least delayed.

Under the control of old managers who basically oppose reform or new reformers who don't know how to manage, many of Russia's enterprises are unprofitable dinosaurs. But even the potentially profitable facilities are stymied by their obligation to provide a vast array of social services to their workers, and sometimes to the entire community, since many of Russia's cities are company towns.

A Russian factory manager still controls housing, food supplies, schooling, day care, vacations, medical services, and other aspects of employees' lives. This power is not surrendered willingly, even if a manager is told that hard work might bring riches. Why trade a sure thing for a gamble? The only hope for these enterprises is to turn over their social welfare burden to the local government and become competitive economic actors under managers who understand the need for efficient production. Far from all will succeed. Many will avoid trying for as long as they can.

Under these conditions, to suggest that there can be therapy without shock is a major disservice. The Russian people need to hear from their leaders that genuine economic reform and privatization will continue, that it will be difficult, and that the government will do everything it can to cushion the pain. From the West, they need to hear that we are concerned about the pain and will do what we can to help, but that such help must be correlated to their following the path of serious reform.

The last thing we should do is support continued subsidies to inefficient enterprises that resist reform, no matter how popular this may be politically in Russia. We should not be party to a formula suggesting that voting for a fascist is the way to open Western wallets.

Will the Russian electorate support such an approach? Here I believe many have been crying wolf. President Boris Yeltsin has interpreted the election results as a ``protest against poverty.'' In part, yes. But the results are even more a protest against the disorganization, infighting, and inarticulateness among supporters of reform; and against the corruption, inequality, and rapid changes in social status that accompany economic upheaval.

Russian voters are angry, but they are not stupid. Zhirinovsky, cynical and manipulative, relishes talking about fooling the voters. But many ostensible democrats also think of their electorate as dolts, not ready for democracy. I remember Yuri Afanasev explaining that many of his voters were ``cattle.'' Valeria Novodvorskaia, another leader of the democratic group, referred to those voting for Zhirinovsky as ``not people.'' Dehumanizing one's electorate is not a proven vote-getting technique.

In exit polling during the election, 70 percent of respondents indicated that they support continued market reforms. This striking statistic correlates reasonably well with the majority who voted in favor of continued reform in the April 1993 referendum. It suggests that while voters may comprehend the need for reform itself, the politicians advocating reform performed poorly. They failed to explain programs to voters and failed to balance hard choices with compassion.

Mr. Yeltsin himself failed to play a positive electoral role, remaining aloof from party squabbles and focusing on gaining approval of his Fifth-Republic-style constitution.

Faced with unappealing choices and a horde of candidates engaged in recrimination rather than deliberation, many Russians voted for a man who resembles Mussolini more than Hitler. Many of those votes were ``soft,'' spur-of-the-moment decisions rather than serious political commitments. A combination of more effective reform and politically astute reformers could produce a different result.

Outsiders can help alleviate some of the worst results of economic dislocation. The challenge is to provide help without undermining the stimulus to reform. A few suggestions:

* Social safety net: At the beginning of 1993, financier and philanthropist George Soros was advocating a $10 billion social safety net, to be provided by the G-7. It is possible to quibble about the numbers but not about the need. Such aid could be focused on supplementing the pensions of retirees - the most visible and politically sensitive group - and on retraining assistance for those losing their jobs as enterprises reorganize.

* Target supporters of reform: Social groups that supported Gorbachev's initial efforts at reform have fared badly in the past two years. The large contingent of professionals - teachers, doctors, scientists, cultural workers - constituted a major portion of the Soviet middle class. Many possess critically needed skills. But they are deserting their professions in droves as economic conditions deteriorate. Focusing assistance on these groups would maintain vital social services and bolster communities supportive of reform. The cost of supplementing salaries for teachers and doctors would be a fraction of what it will cost to replace these highly educated personnel later.

* Investment: A major obstacle to breaking up monopolies and privatizing enterprises is the lack of investment capital. The chaotic legal and political situation in Russia has deterred foreign investors. An internationally constituted investment fund for use by Russian entrepreneurs is one way to help. Recent congressional action to increase funding levels for the Overseas Private Investment Corporation is a step in the right direction.

* Communication: Many private sources of assistance and cooperation are stymied due to the difficulty of communicating with Russian partners. Efforts to include Russia in the data highway would reduce many problems. While working for the International Science Foundation, I helped to provide Internet access for Russian scientists. It makes an enormous difference but must reach more people.

Anyone taking solace in Yeltsin's vast presidential powers should remember that in the story of the boy who cried ``wolf,'' the genuine danger came later. In two years Russian voters are slated to choose a new parliament and a new president who will wield those enormous powers. Zhirinovsky is already running. If Russia's political leaders and the international community fail to act intelligently with a combination of serious reform and genuine social support, Russian voters might opt for Vladimir Volfovich.