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Businessweek Archives

Three Days That Shook The World



Hard-line Soviet party and military leaders launched their abortive power grab as a preemptive strike to protect their own jobs and influence. Their immediate aim was to prevent Russian President Boris Yeltsin and leaders of eight other republics from signing a treaty on Aug. 20 to set up a looser federation--thus shifting to the republics much of the power and resources controlled by the central government apparatchiks (page 20).

But their failed coup has paved the way instead to precisely the sort of decentralized, democratic federation that they desperately sought to torpedo. Now, the bungled coup seems certain to give a powerful new impetus to the political and economic reforms that had been set in motion by Soviet President Mikhail Gorbachev but which the hard-liners had partly stalled. If the move toward democracy accelerates, as seems likely, Western governments will be dealing with leaders in the Kremlin and the other republics who have real electoral mandates to normalize relations with the West and sweep away the vestiges of the cold war. And economically, the hard-liners' implosion should clear away many of the political and ideological roadblocks to market reforms. The immediate result will be the signing of the treaty to restructure the Soviet Union. For the U. S. and its Western allies, conducting relations with a decentralized federation may be more complicated, in some ways, than doing business with the former tightly run Communist regime. Yeltsin and his huge Russian Republic will clearly dominate the revamped union, but the West will now have to sort out the overlapping authorities of Moscow's weakened central government and the newly assertive republics.

Up to now, the U. S., Western Europe, and Japan have rightly taken a wait-and-see attitude toward Gorbachev's efforts at economic reform. Now, with Yeltsin in a position to help push reforms farther and faster, the West can have greater confidence that Gorbachev will deliver on his pledges of radical market reform. With that reassurance, Washington and other Western capitals should consider giving more help now, when it is badly needed to bolster Soviet democrats and make sure that the Marxist hard-liners are permanently swept aside.

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