Thu, 06 Jan 2000

Russia could have done worse than Yeltsin

By David DeRosa

NEW CANAAN, Connecticut (Bloomberg): Many Russians were celebrating President Boris Yeltsin's surprise New Year's resignation.

Yeltsin's farewell address harked of former U.S. President Lyndon Johnson's speech in March 1968 when he shocked the nation by announcing he would not seek re-election. Both Yeltsin and Johnson looked like hell. Their offices had reduced them to thoroughly shopworn old men.

God only knows what would make a human being want to be president of any country. What kind of person wants to assume such responsibilities?

Johnson destroyed his presidency with his conduct involving the Vietnam War. After leaving office he vanished like a ghost. You never heard his name mentioned in the present tense. That's what is going to happen to Yeltsin now. One minute at the center of attention, the next as good as dead.

Yeltsin's nemesis was his attempt to rapidly transform Russia from communist dictatorship into whatever it is today. He was done in by acute economic disappointment.

He even said so in his speech: "I was not able to justify the hopes of some people who believed that we would be able to move forward in one swoop from a gray totalitarian and stagnant past to a bright, rich and civilized future."

Then he launched into a melancholy confession: "I want you to know, I never said this before: today it is important that I tell you. I felt the pain of each of you as my own, in my heart. Sleepless nights, torments: what could I do to make life easier and better for people, even just a tiny bit?" In psychobabble speak, the man is looking for closure.

So cry me a river? How did Boris do? His No. 1 accomplishment is that he kept his country from falling back into dictatorship. Not to underplay his sometimes-bizarre public behavior, or his alleged fits of intemperance, the Russians owe the man a great deal. He made free Russia what it is today.

And what is Russia today? It looks like a democracy -- but we will find out very soon if that is true.

As for the Russian economy, I think it's a market economy but you hear such astonishing stories. Is it a democratic market economy when a handful of people gets to divide up the national wealth in a privatization boondoggle to end all boondoggles?

And that is what made Yeltsin such an economic failure. It wasn't just that people were getting poorer every day. Russians are famous for their endurance of suffering. But nobody had to rub their noses in it by having robber barren "oligarchs" walk off with billions.

And who is Vladimir Putin, who stepped in as acting president? By one account he spent his early career as a KGB spy, headquartered in Berlin, and assigned to get information on American technology. Apparently IBM Corp. was his target on his occasional jaunts across Checkpoint Charlie into West Berlin. Well at least that means he can probably operate a computer. But having an ex-spy as president?

Sometimes you only need your eyes to learn things about a person. Have you noticed Putin is one of those guys who looks like he is wearing a military uniform even though he long ago converted to civilian dress? It's the way he stands and moves; he has retained perfect military posture.

And talk about a poker face. When he accepted the presidency from Yeltsin he had absolutely no expression on his face, just as though nothing of any matter was happening. Just look at his steely eyes. This is one tough hombre.

The writer is president of DeRosa Research and Trading and manages an investment fund. He is also an adjunct finance professor at Yale School of Management. His opinions don't necessarily represent those of Bloomberg News.