Lost Leaders

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What a telling picture the Moscow summit made. Bill Clinton looking weary and spent, his head sunk in his hands, his lips tight in a glum line as reporters badgered him about Monica. Boris Yeltsin next to him, befuddled and disoriented as he struggled to link answers coherently to questions. When a journalist asked whether the Russian President would accept someone other than Viktor Chernomyrdin as nominee for Prime Minister, Yeltsin paused for a moment that grew painfully long. "Well," he finally said, "I must say, we will witness quite a few events for us to be able to achieve these results. That's all."

Huh? The scene crystallized fears that the world's top rulers have lost their direction at a time when leadership is desperately needed to pull the global economy out of its tailspin. If confidence lies at the heart of finance, Russia stands as a metaphor for how much of it has been lost. Instead of propping each other up at this most surreal of summits, the two key Presidents seemed to be dragging each other down. Clinton's lackluster public performance only seemed to emphasize the feeble condition of his host country. Yeltsin's failing faculties and crumbling power base reflected badly on the strong backing the U.S. has given him. At one level, Clinton's tough-love advice to "play by the rules" of free-market democracy is sound advice, but it may well be ignored. To citizens around the world anxiously weighing the turbulent course of events, the summit looked like Potemkin leadership.

The ill-timed meeting spotlighted how much the financial crisis rippling around the world is not simply an economic breakdown but a political one as well. Russia was exposed as a country with no government and no plan for recovery. The massive dislocations in country after country lay in the mismanagement or malfeasance of top political and business figures, and the difficulty the world is having in repairing the damage owes much to a set of leaders who are weak, venal or tarnished.

The sweep of the political breakdown is astonishing. In Thailand, where the disintegration of the baht one year ago set off the tidal wave, the Prime Minister presided over a spectacularly corrupt regime. General Chavalit Yongchaiyudh, a former army chief turned politician, wasted billions propping up ailing finance companies owned by political cronies. When the currency crumbled under the pressure, he chose to throw good money after bad in a futile attempt to avoid a humiliating devaluation. Malaysia's cantankerous, 72-year-old Premier Mahathir Mohamad, strongman for 17 years, ran a one-man show with total control over the country's economic machinery. In his obsessive search for respect from the West, he spent lavishly to build the biggest and the tallest--the world's tallest skyscraper, the highest flagpole, the tallest control tower--wasting the foreign investment that streamed eagerly in.