In the wake of the August 1998 financial meltdown, many predicted that political breakdown would soon follow. Throughout the summer and fall, Russian analysts of all political orientations began to speak openly and often about the specter of Russian fascism should the economic crisis continue. Others, including even Yeltsin, have warned about coup plots aimed at toppling Russia's fragile democracy. The threat of Russian federal dissolution also loomed as a possible nightmare scenario as individual regional leaders began to deal with the economic crisis with little regard for national laws or national interests. In this new political context, challenges to Russian electoral democracy have proliferated. Before August 1998, it was taboo to speak of, let alone advocate, alternatives to elections as the method for selecting political leaders. After August 1998, discussions of alternatives have renewed again.

Only a few weeks ago, Russia was one of the most downtrodden and detested countries in the eyes of Washington's elite. One could not utter the word "Russia" without adding adjectives such as "crime- ridden," "collapsing" or "corrupt." Russia was considered a basket case of a country that had failed at capitalism and democracy and was soon to fail as a state. Russia's reputation in the United States was so bad that Russian businesspeople began courting American public relations firms to help rectify Russia's image.

With the United States fixated on crime and corruption in Russia, Russians obsess about two other dramas: upcoming parliamentary elections and the war in the Caucasus region. The first drama might well have a happy ending, rare for Russian dramas these days. The second is almost certainly a tragedy in the making. Worse, the war in the Caucasus may eventually subsume elections altogether, resulting in their cancellation, civil resistance and even civil war. Before such a scenario gains more momentum, U.S. officials should look beyond Russian corruption and do what they can to lower the probability of democratic collapse in Russia.

According to conventional wisdom, the United States "lost" Russia in the 1990s. This

assessment can be found on the pages of The Nation, The Washington Times, The New

York Times magazine, or foreign policy issue papers prepared for presidential candidate

George W. Bush. These attacks fall into two contradictory categories. One school holds

that the policies pursued by the United States over the last decade have failed to establish capitalism and democracy in Russia, and instead have fueled corruption, crime, and ill will towards the United States. The other school argues that the United States was wrong to try to engineer domestic change within Russia in the first place.

To the Editor:

You quote President Clinton as saying that ''Russia and China, where the shackles of state socialism once choked off enterprise, are moving to join the thriving community of free democracies'' (news article, May 19). Both are moving to join the community of market economies, but only Russia has taken steps to become a free democracy.

Although flawed in many ways, Russia is an electoral democracy. China is an authoritarian regime. In Russia, leaders are elected, people can assemble, worship and travel freely, and the press can criticize the Government. In China, none of these freedoms exist.

Perhaps Mr. Clinton made a slip of the tongue. But for those who worry that he too often ignores violations of democratic rights in pursuit of market opportunities, this did not look so innocent.

From both the right and the left, critics of U.S. policy toward Russia have had a heyday in recent weeks asserting that the Clinton administration got Russia wrong. The refrains are by now familiar: "Clinton became too close to Yeltsin." "The IMF was naive." "The West funded crony capitalism." "Russians are not culturally predisposed to markets," etc. The policy conclusion from these observations is that the United States neither can nor should do anything more to aid Russia but instead should reconstruct a firewall around this basket case of a country and try once again to contain the Russian threat to markets and democracy around the world.