Breathing Room for Russia

The hasty decision by President Boris Yeltsin’s government to devalue the Russian ruble and postpone some payments on foreign debts gains it a little more time during which, in the most optimistic scenario, it may finally be able to muster the will to adopt overdue economic reforms.

Devaluation--technically, letting the value of the ruble float within a defined range--and the moratorium on debt payment spare Moscow from having to dip further into its scarce dollar and other hard currency reserves. It might even make it easier for the government to begin paying some of the back wages it owes restive coal miners and millions of other state workers.

But all this comes at a stiff price. Much of Russia’s food is imported, and so already hard-pressed consumers will soon be hit by inflated grocery prices. At the same time a cheaper ruble will do little to boost income from Russia’s chief exports, oil and gas, whose prices are depressed worldwide.

While the full political consequences of devaluation can’t be calculated, it’s obvious that Yeltsin’s popularity will fall even more, along with trust in government generally. The Communist- and ultranationalist-dominated parliament, the Duma, meets on Friday, but there’s no assurance that this latest crisis will make it more ready to approve the economic reforms sought by Western nations and the International Monetary Fund.

The guiding political rule for extremists seeking power is that the worse conditions get, the greater their chances for success. Some will see advantage in letting things further deteriorate in advance of the presidential election two years hence.

The reforms that might have helped head all this off--financing government budgets through more effective tax collection, an overhaul of the banking system, laws guaranteeing property rights--have been pending for a long time. Warnings about what could happen if they weren’t adopted have been frequent and insistent. Moscow now has about 90 days--the scheduled length of the moratorium on debt payment--to try to keep a bad situation from collapsing into something infinitely worse.