The day before, President Boris Yeltsin resigned from the post he has held for over nine years. "I have signed a decree placing the duties of the president of Russia on the head of government, Vladimir Vladimirovich Putin," said Yeltsin. "In three months presidential elections will take place," he said, and "I don't doubt what choice you will make at the end of March 2000."

After being named prime minister last August by Yeltsin, Putin publicly campaigned in support of the war. At one point he employed a barracks-room phrase to emphasize his position, stating that he would wipe out Chechen rebels even if they were killed in their toilets. In the December elections for the parliament, or Dumas, Putin gained ground when parties supporting him increased their vote by around 30 percent.

Following Yeltsin's resignation, Putin signed a decree shielding the former president from criminal charges and granting him a lifetime pension, housing, bodyguards, and medical care for his family. Yeltsin will receive a pension equivalent to 75 percent of his salary, which was $40,000. The deal throws a little light on social relations in Russia, which after a decade of market "reforms" remains a workers state. Yeltsin has been a member of the ruling bureaucratic layer in the Soviet Union for all of his adult life. But he must still appeal to the state to provide health care, housing, and income in his retirement. U.S. President William Clinton stated that Putin's succession is "encouraging." According to the New York Times, Clinton administration officials say the president elected in March might "negotiate with authority Washington's proposal to modify the 1972 Anti-Ballistic Missile Treaty."

"Russia has objected to changes," the article went on, "that the United States wants to allow both nations to field national defenses against limited long-range missile attacks. Moving up the election could buy both sides three more months to resolve the dispute before next summer, when President Clinton is to decide whether to begin building a missile defense."

Washington is pressing ahead with the development of a system designed to shoot incoming enemy missiles out of the sky. The deployment of such systems would give the Pentagon the ability to carry out a first nuclear strike while fending off a retaliatory attack.

Putin and other Russian officials have refused to bow to Washington's demands for changes to the ABM treaty, recognizing that the Russian and Chinese workers states are the ultimate target of the new weapons systems.

Washington's military preparations stems from the recognition by the U.S. rulers that capitalism will not be reintroduced into Russia by means of loans and investment alone, but will require military pressure and ultimately force.  
 

Oil reserves

The major oil reserves that are already being exploited by the Russian government and some foreign oil companies in the regions of the Caspian sea and the Caucasus mountains have also whetted the appetite of the imperialist governments. Moscow is a competitor for the exploitation of these reserves. Washington has concluded a deal to route a pipeline through Georgia, Kazakhstan, Azerbaijan, and Turkey from the oil-rich Caspian sea. Meanwhile, Moscow is constructing a diversion of its current pipeline to bypass Chechnya, claiming that theft of the oil is common in the "lawless region."

While Washington proceeds with its more confrontational course, it also entertains hopes that Putin and his allies may provide some openings for new inroads on the social and economic relations that prevail in Russia.

Following the December parliamentary elections, Clinton stated that his administration would not seek to block economic aid to Moscow. On December 28 the World Bank granted the country a $100 million loan. "We support this disbursement of funds, which will be used to restructure the coal sector," said a Clinton administration official. "It is fully consistent with the common objective of promoting market reforms in Russia."

The money in fact is earmarked for closing down mines considered by capitalist concerns to be "inefficient." Publicly, some of the funds are to be used for payments to miners who will be laid off in the 116 mines that Moscow has agreed to close. Now attention is focused on a $640 million loan to Russia frozen by the International Monetary Fund in September amidst criticism of the war in Chechnya.

"He has been a prime reformer," said U.S. Secretary of State Madeleine Albright of Putin's record. In a paper released last year Putin espouses his support for the kinds of "economic and political reforms" that Albright refers to. " How can we make the new, market mechanisms work to full capacity?"he asks in the lengthy document.

Beyond the rhetoric, however, Putin lists statistics that indicate the deep crisis in the Russian economy. Russia's Gross Domestic Product "nearly halved in the 1990s," he writes, "and its [Gross National Product] is ten times smaller than in the USA and five times smaller than in China.... Productivity... is extremely low.... It rose to well nigh the world average in the production of raw materials and electricity, but is 20-24 percent of the U.S. average in the other industries....

"This is the result of the consistently dwindling national investments... And foreign investors are not in a hurry to contribute to the development of Russian industries. The overall volume of direct foreign investments in Russia amounts to barely $11.5 billion. China received as much as $43 billion in foreign investments."  
 

Quality of life has deteriorated

Putin reports that "the overall monetary incomes of the population, calculated by the UN methods, add up to less than 10 percent of the U.S. figure. Health and the average life span, the indicators that determine the quality of life [have] deteriorated."

Most Russian politicians avow support for "reforms" and integration of the Russian economy into the world capitalist market. In his document, however, Putin hints at the social relations which have stymied attempts at the reintroduction of capitalism to date. "The majority of Russians are used to connecting improvements in their own condition more with the aid and support of the state and society than with their own efforts, initiative and flair for business. And it will take a long time for this habit to die."

This "habit" is a legacy of changes wrought by the socialist revolution in Russia, which triumphed under the leadership of the Bolshevik Party in 1917. Although the Stalinist regimes that held sway from the 1930s crushed the initiative of working people and rolled back many of their gains, they did not overturn nationalized property. And working people in Russia are determined to hold onto the social rights they have won - rights that stand in the way of the triumph of the "free market."

Calling for "Russian renewal, "Putin states that the country "was and will remain a great power.... Russia needs a strong state power and must have it." Putin is presently laying out his qualifications for the role of strongman ruler in the crisis-ridden country. In one statement he called for a 57 percent increase in military spending. He left no doubt of the importance he attaches to the offensive in Chechnya when he visited the front on his first full day as acting president. On his return to Moscow Putin said that "everything we have done so far has been justified."  
 

Stiff resistance in Grozny

The Russian commanders themselves report that Moscow's forces are facing stiff resistance inside Grozny and in the south of the country.

"Our first real losses started when we entered Grozny," 20-year-old private Aleksei Lyulin told reporters on January 1. He had previously been stationed in Alkhan-Yurt to the west of the capital. Another private, Sergei Chigayev, said, "You can see from the way the villagers stare at us that they really don't want us here." Russian forces attacking Grozny behind heavy artillery fire and air strikes face ambushes and sniper fire. Official figures place the death toll at 10 a day. "Soldiers are killed by the dozen," said one soldier, complaining that "we are hit by our own mortar fire." Hospitals are "filling up fast with the wounded," according to one report.

Larger scale combat was also reported on January 3 when Chechen rebel forces launched an attack westward from Grozny to the towns of Alkhan-Kala and Alkhan-Yurt, occupied by Russian forces for a month. Two days later Chechen fighters attacked Russian troops in Grozny's northern outskirts. After these kinds of clashes Russian soldiers point to the "fearlessness" of the city's defenders. An Associated Press journalist reported, however, that "the Chechen offensive could be short-lived. The rebels in Grozny are reportedly short of ammunition."

"The period of the Russian army's triumphant march through Chechnya is over. A turning point in the second war in Chechnya is about to occur," stated Chechen presidential administration chief Apti Batalov in a rare publicized statement of the Chechen forces. Moscow's invasion has targeted not just the Chechen military forces but the official elected government of the territory, which has held sway since the defeat of the Russian offensive in 1995.

"After the operation is completed... a full army division will remain. A full brigade of Interior Ministry troops will ensure the maintenance of constitutional order on this part of Russian territory. and border troops will seal the state border," said Col. General Valery , Manilov, a senior officer on the Russian General Staff on December 28.

The stiff resistance mounted by Chechen forces may force the generals to redraw those plans. It also buys time for the erosion of the popular consensus in Russia that has so far allowed the war to proceed with little organized opposition. Vladimir Putin's electoral prospects, and a great deal more besides, rest on the outcome of the fighting in Chechnya.  
 
 
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