CWI 10th World Congress: Eastern Europe and the CIS (former Soviet States)

"For nearly a decade, economic collapse, worse in many countries than the depression of the thirties, with its associated crime waves, corruption and social degeneration devastated the region."

This document on Eastern Europe and the CIS is one of the resolutions from the CWI’s 10th World Congress. Documents were agreed on World Relations, Europe, Latin America, the Middle East, Asia, Russia and Eastern Europe, and on the situation in Africa.

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Twenty wasted years

Twenty years ago the Soviet bloc collapsed. For nearly a decade, economic collapse, worse in many countries than the depression of the thirties, with its associated crime waves, corruption and social degeneration devastated the region. The collapse of the ruble in 1998 and the rise of Ural Crude oil prices from $11 in 1998 to over $135 in 2008 laid the basis for nearly ten years of economic growth. A series of “colour revolutions” saw unpopular, undemocratic leaders ousted by mass movements. And then in 2008 the global crisis hit.

The whole region has been dealt a devastating blow with a 5.5% decline in GDP in 2009 (compared to 4% in EU and 2.5% in US). The three Baltic States have undoubtedly suffered the worst recessions in the EU, if not in the world, with their GDPs collapsing by between 13 and 18% in 2009 leaving them with unemployment levels of between 13 and 17%. The Ukraine too suffered a 15% drop and Russia 8%. The response of the governments has been to introduce sweeping budget cuts, so dramatic, in fact that in the Baltics even World Bank experts consider that no more money can be cut from the health and education sectors.

The legacy of capitalist restoration

In the late eighties, the regimes of the region were toppled like dominos by mass movements opposing the horrific excesses of the ruling Stalinist bureaucratic elite. If these movements had been armed with a programme for the political revolution against the authoritarian one-party states, the conditions could have been created for establishing a genuine democratic socialist federation of Europe. Instead, in the absence of working class political parties, they were hijacked by the very same ruling elite in alliance with pro-market forces, leading to the restoration of capitalism.

This led to economic collapse and, as the ruling elite split asunder in its squabble for power and wealth, a decade of brutal ethnic wars in Tajikistan, between Armenia and Azerbaijan, in Georgia, in Russia (Chechnya), Moldova, Bosnia, Kosovo, Croatia and Slovenia resulting in over 400,000 people dead and 5 million refugees. But these were not the only deaths. According to the British Medical Journal “The Lancet” over a million men of working age in Russia died “due to the economic shock of mass privatisation and shock therapy”.

The decade of significant economic growth which followed 1998 was barely enough for most countries to overcome the consequences of the nineties. The combined GDP for the whole region was only restored to 1989 levels in 2005, although the situation was considerably better in the western part of the region. From 1988 to 2008, those Central European Countries that have joined the EU (Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia) experienced GDP growth of 51%. The Baltic states (Latvia, Lithuania, Estonia), which are also in the EU 45%, the non-EU Central European States (Albania, Bosnia, Croatia, Macedonia, Montenegro and Serbia) 46%. Russia, Ukraine and Belarus grew by 92%, the Caucasian states (Armenia, Georgia and Azerbaijan) by 155% and Central Asia (Kazakhstan, Turkmenistan, Tajikistan, Kirghizstan and Uzbekistan) by 126%.

The fastest growth was achieved by those economies with large amounts of raw materials (i.e. oil, gas, rare metals) or commodities (i.e. iron and steel, wheat, cotton) to export to the global market at a time when prices were rising. This confirms the prediction made by the CWI in the early 1990s; the restoration of capitalism in the region would lead to the destruction of its industrial base and leave it subject to the exploitation of natural resources by the developed countries and thus, extremely susceptible to the whims of global price fluctuations.

Growth for the rest relied on the increase in trade from East to West in the form of energy and commodity exports, and from West to East, in the form of the purchase of manufactured goods using the massively increased incomes from the sale of these commodities. At times this has had spectacular consequences. During the “gas wars” Russia cut off or threatened to cut off supplies through the Ukraine and Belarus, thus depriving Western Europe of 25% of its natural gas, until new prices for transit were agreed. In those countries bordering the richer West European Countries, the exploitation of cheap labour has also played a certain role.

Some of the poorest countries in the world are found in Central Asia. About 25% of the population in the region lives on less than USD 1.25 a day, 55% on less than USD 2 a day. The GDP per head in Kazakhstan is at least 5 times below the EU average – in Tajikistan and Kyrgyzstan at least 20 times! With the exception of Kazakhstan, they have managed to maintain modest positive growth during the crisis (according to official statistics and CIA figures) not through any particular policies of their governments but solely because they are barely integrated into the world economy. Where global events have affected these countries, paradoxically this has had a positive effect during the crisis. In Turkmenistan’s case, (as far as the statistics can be believed as they are considered ‘state secrets’) oil and gas pipelines to Iran and China started operating in 2009 and this helped to maintain growth. Despite this, up to 60% of the population is unemployed.

The rusting of the “orange revolution”

The driving force behind the colour revolutions was the huge discontent of the masses affected by the economic conditions, the corruption and lack of freedoms and, eventually the blatant attempts to manipulate election results. The tragedy is that there were no mass left organisations in these countries presenting a working class alternative.

Some on the left believe that the Western powers formented these revolutions through the establishment of an array of NGOs and anti-regime political movements. There is no doubt that the capitalists attempted to set the agenda and establish their own agents in the movement. But these events exploded into life because the objective situation demanded it and the masses were no longer prepared to tolerate the crimes of the elite. In the absence of a left alternative, the energy of the movement was derailed by a section of the bourgeois ruling elite.

Having used the masses as a stepping stone to power, the bourgeois then turned their back on them. Discontent in these countries is widespread. In Serbia, where political life is polarized between radical Serbian nationalists and pro European liberals, the masses are left with no voice.

Following the collapse of the Ukrainian economy in 2009, Yanukovich, who was defeated by the ‘orange revolution’, in 2005, was returned to power in 2010. He immediately started to wind the clock back in a more authoritarian direction. It is estimated that up to 80% of the population want rid of Georgia’s President Saakashvilli, who they blame for the war with Russia in 2008. Protests organised by the opposition in spring 2009 were not able to overthrow Saakashvilli because they did not present policies able to end the hardship of the masses. In Kyrgyzstan, a further revolutionary protest swept Bakiyev, the victor of the previous “tulip revolution”, from power.

From a decade of growth to a decade of crisis

When the global crisis hit, Romania, Hungary, the Czech Republic, Russia and Ukraine, accounting for 60% of the region’s population suffered devastating declines. In response, governments have used the whole range of policies already seen on a global scale in an attempt to hold back the crisis. Banks have been nationalized in Kazakhstan, Russia, the Ukraine and Latvia. Huge stimulus packages have been used (for example 15% of GDP in Kazkhstan), often far exceeding in proportion that used in the US (7% of GDP). There have been massive currency devaluations in a number of countries (the Ukrainian hryvnia, Russian ruble and Polish zloty have all been slashed by 40%). Ten countries have had to seek help from the IMF in the form of stand-by loans and other financial institutions have also given large loans.

Unlike the rest of Europe, Poland’s economy actually grew by 1.7% in 2009. This was thanks to a combination of a number of factors. Firstly, the end 2008 devaluation made exports cheaper. Secondly, the country is favourably located on the German border with low labour costs and a highly-skilled workforce. The German stimulus package and now the recovery in Germany, which is dependent on Chinese growth, created demand for Polish manufactured consumer goods. Thirdly, during the crisis foreign companies, in order to cut their costs, continued to relocate production from Western Europe to Poland. An example is Dell, once Ireland’s largest exporter, contributing 5% of Irish GDP, which shut down its Limerick factory and moved production to a new plant in Poland. Finally, in connection with the upcoming “Euro 2012” football championships, Poland has embarked on large scale infrastructure investments, partly funded by the EU. As a result, the total amount pumped into Poland by the EU between 2007-2013 will reach 67 billion euros. It has been estimated that if it hadn’t been for “Euro 2012”, Polish GDP would have fallen by about 1% in 2009.

However, Poland’s economy is extremely fragile. The national debt is growing out of control and the budget deficit now stands at over 7%. Only some major privatisations over the last year prevented a financial disaster for the Polish state. Regardless of developments in the world economy, sooner or later the Polish government will have to carry out a vicious austerity programme and further privatisation of essential services. The ruling Civic Platform, currently at 50% in opinion polls, hopes to postpone this until after next year’s general election, fearing that such policies could provoke massive social protests and erode its support.

Governments in crisis

Governments in the region, at least those without oil and gas, have had less room for manoeuvre than their west European counterparts, as they have little money for stimulus packages, while austerity measures are extremely unpopular. Hatred is enhanced by the massive corruption and fraud scandals. Opinion polls indicate that 79% of Romanians, 79% of Lithuanians, 77% of Bulgarians and 76% of Latvians and Hungarians are dissatisfied with the functioning of their ‘democratic’ systems. There is barely a country that has not suffered a change of government or major crisis in this period.

The government of Latvia has resigned and ruling parties have been thrown out in elections in the Czech Republic, Serbia, Slovakia and Hungary. The ruling coalition in Romania collapsed. The results of Albania’s 2009 parliamentary election are still disputed. In Bosnia, results confirmed an entrenchment of ethnic blocs. In Moldova, 3 parliamentary elections in 2 years have failed to end a stalemate over who forms the government.

The dominant feature, however, as in most other parts of the world, is the lack of independent parties representing the interests of the working class. “Communist” parties (under various names) can be found throughout the region. At best, they present a weak form of Keynesian politics, at worst they act as a conduit for Russian interests. The latter, sharing the neo-liberal political agenda of their west European counterparts, lack their history as former workers’ parties. More often than not, they lobby the interest of sections of the ruling elite. Typical is the Ukrainian United Social Democratic Party of oligarch Viktor Medvedchuk or the former Moldovan President, the “Communist Voronin”, who while privatizing the country also realigned it back with Moscow.

With no party prepared to challenge the existence of capitalism, the new governments end up following the logic of capital. In Latvia, in February 2009 the government of Godmanis was dissolved and replaced by the cabinet of Valdis Dombrovskii, with most of the former right wing ministers still in place and conducting the same fiscal austerity policies. Latvia has seen four more massive protests since then. In Kirghizstan, where the Bakiyev government was overthrown by a revolutionary movement, the new government consists of ministers from the former two regimes. The interim President, Rosa Otunbaevoy, managed to serve under not just Bakiyev and Akayev but under the Soviet regime too!

The rise of the far right

The far right has made big gains in several countries. In Hungary, the right populist and authoritarian and chauvinist "Fidesz" party won the 2009 Parliamentary election with a majority of seats and while 16% voted for the Jobbik party. Hungary was the first EU member to get assistance from the IMF in 2008. The government of the time, led by the “Socialist Party” (which developed out of the former Stalinist ruling “Communist” Party and now describes itself as social democratic) fully accepted the IMF conditions for the $18 billion loan. The working class areas of Hungary suffered most severely from austerity but, in the absence of a left wing opposition, the far right were able to capitalize on the opposition mood. Responsibility for giving Jobbik this opportunity lies heavily with both the “Socialist” Party and Fidesz. The former not only implemented cuts, it then tolerated Jobbik, which it thought would undermine support for Fidesz. The latter incorporates some of Jobbik’s agenda and at local level is prepared to form alliances with Jobbik, arguing that responsibility will moderate it.

Jobbik’s fascist elements are seen in its extreme nationalism, hostility to foreigners, agitation against Roma, Jews and the "international bank conspiracy" and IMF. It has an armed wing, the fascist “Hungarian Guards”. In the current period, such groups divert the attention of the masses by blaming minority groups in society for the horrific conditions caused by capitalism – in Hungary against the Romas, in Slovakia against the Hungarians, in Bulgaria against the Turks rather than representing the mobilization of the petty bourgeois against the worker’s movement in the way the fascists in the 1920’s and 1930’s did. Nevertheless they represent a serious threat for the workers’ movement, not least because if support for the Fidesz collapses following its implementation IMF conditions and or budget cuts, Jobbik could well capitalise on the discontent if there is no workers’ alternative.

In Russia, the government, while making the more extreme fascist groups “illegal” and complaining about marches by former SS soldiers in the Baltic states, tolerates large fascist marches in Moscow. There are several immigrants and anti fascists murdered every month and the police practically never take the perpetrators to court. In addition, big business and the Russian regime are increasingly using hired thugs to deal with opponents. The wave of attacks on activists and journalists in November is to warn activists to keep their heads down.

It is not enough to adopt a moral stand against the far right. It is even worse, as many anti-fascists do, to drop any political slogans in the interests of “unity” with pro capitalist parties against the fascists. The extreme right gains support precisely because of the economic conditions caused by capitalism and because there is no mass working class left wing alternative offered to show a way out. Only when the workers’ movement in these countries moves into organised opposition to the cuts and presents a clearly defined class alternative will support for the fascists be undermined.

Political turmoil – a precursor of future events

There have been some spectacular precursors to a wider social explosion in the region. In Bulgaria, up to 75% of the population is estimated to be fed up with life in the European Union’s poorest and most corrupt nation. This found expression in a riot in January 2009, when an anti government protest turned violent as youths threw snowballs at the police! (Snowballs were also thrown in Latvia’s capital Riga at about the same time – but they were joined by cobblestones and the occasional Molotov cocktail). Within a month, the government was forced to take an emergency IMF bail-out loan of 7.5 billion euros and nationalize the country’s second largest bank, ‘Parex’. By the end of February the Prime Minister Ivars Godmaris had resigned and a new government was formed. In April 2009, youth in Moldova used twitter to organize mass protests against the election results.

Revolution and counter revolution in Kyrgyzstan

Neither twitters nor snowballs were suitable in Kirghizstan, when the government shot and killed dozens of demonstrators in April 2010. The masses replied with an armed uprising, which overthrew the regime. These remarkable events are a warning to the region’s ruling elites that the people will only take so much before coming onto the streets. But the bloody events of July, when ethnic slaughter swept the south of the country, are a stark reminder of what happens if the working class does not offer a lead to the masses in an impoverished country.

The uprising was sparked of by the announcement of a doubling of electricity prices and a 5-10 times increase in heating costs in a country with deep poverty, with an average monthly wage of $30-50. In the absence of a revolutionary organization, the leadership of the uprising was taken by the bourgeois opposition. They made a priority of “restoring order”. With power and the resources of the country still in the hands of different sections of the ruling elite, it was practically inevitable that one section would attempt to whip up ethnic conflict to further their interests. The only solution that the new government could propose to end the horrific clashes that left hundreds dead in Osh, in June 2010, was to bring in either the Russian army or the OSCE (in this case, it would have meant Kazakh troops) as “peacekeepers”. If that had happened, they would inevitably have stayed, in effect as an occupying force.

There is an urgent need to take over all the natural resources of the country so they can be used for the benefit of all and to build workers’ organisations to unite workers and youth of all nationalities. The lesson of the Kirghizstan revolution is that until the workers and poor masses are organised and armed with a socialist programme, the revolutionary energy of the masses, which was demonstrated in April, will be exploited by different sections of the capitalist class in their own interests.

The workers’ movement stirs

The first signs on an awakening workers’ movement in the region can be clearly seen. Hungary has experienced an effective transport strike. Romania, during the course of 2010 has seen several public sector strikes and demonstrations. Croatian trade unions are threatening a general strike over the new Labour Code and discontent at the economic situation. In September, 40,000 nurses, police officers and clerks marched in Prague to protest against a plan to cut public sector wages. In Slovenia, over half of public sector employees walked out in protest at government attempts to increase the pension age from 58 for men (57 for women) to 65 for all and a wage freeze until the end of 2011. At the same time, there has been a one month-long strike by 6000 members of the Police Trade Union. In October, unions in Slovakia organized protests over the austerity package. In Poland 3000 railway workers demonstrated in Warsaw against privatisation and the further destruction of the railways, warning that their next action will be a national strike involving workers from all the railway companies.

Workers in Eastern Europe have little option but to resist the austerity measures. The scale of cuts is draconian. Workers in Romania face 10% wage reductions. In Latvia, wage cuts of up to 30% have been accompanied by wide spread school and hospital closures. In August, in the “battle for Bauska”, the national police were sent to break up a protest against a hospital closure because the local police were themselves taking part.

Following the ‘shock therapy’ of the 1990s, workers have practically no social safety net. In a number of countries, the employers are using the crisis to step up an offensive against even those workers’ rights that do exist. In Russia, a new Labour Code has been proposed by the employers’ federation, legalizing a 60 hour working week.

Pipelines, missiles and airspace

The region is riddled with “geo-political” contradictions, each of which remain unresolved as the different imperialist powers (the US, the EU and its constituent parts, Russia, China, and in some parts Turkey, Iran, Japan) continue to promote their own interests.

The control of oil and gas supplies is used as a bargaining chip by all sides across the region. Russia has the highest reserve of natural gas and the second highest reserve of oil in the world with Kazakhstan, Azerbaijan, Turkmenistan and Uzbekistan having significant amounts. Russia supplies 30% of the EU’s crude oil, 22% of its hard coal and 30% of its natural gas, leading to conflict over the control of the energy transit routes. The EU, with US support, wants “diversification of energy supplies” away from Russia. It supports the Nabucco project to pipe gas from Central Asia through Turkey bypassing Russia into Bulgaria, Romania, Hungary and finally Austria. Russia, wanting to diversify routes so it can dictate transfer fees to the Ukraine and Belarus, is promoting its own “South Stream project” from Russia across the Black Sea directly into Bulgaria, Serbia, Hungary and Austria. It also wants “North Stream” under the Baltic Sea bypassing Poland straight into Germany.

The political clashes between Russia and the Ukraine and increasingly also between Russia and Belarus are reflected to a large degree in the position of political parties in South Eastern Europe. Although Romania has planted itself firmly in the pro US-EU camp, Russia is attempting to win its support by offering a deal to allow part of the South Stream pipeline to transit the country. Russia is attempting to blackmail Bulgaria to stay in its camp.

The plans of the Bush administration to base missiles from the US-EU Defense initiative in Poland and the Czech Republic have been put on the back burner, although one launch site has been established in Poland, close to the Russian border. The argument that these were the best places to defend the US from Iran-based missile attacks was never convincing. Now Romania and Bulgaria are competing to provide bases for the missile shield. At the root of this dispute are crude economic interests, including the fact that Russian companies are the main contractors to build the Iranian nuclear reactors.

The imperialist powers cynically abandon any pretence at treating democracy and human rights as sacrosanct when their economic and military interests are at stake. They supported and encouraged the bourgeois opposition to the Kazkah and Azeri authorities until the latter succumbed to the demands of their oil companies. In Kazakhstan, this has entered the consciousness of a wide layer who complain that “democracy has been sold for oil and gas”. But airspace is another “natural resource” exploited by the imperialist powers, which tone down their already mild criticisms about the authoritarian regimes of Turkmenistan, Uzbekistan and Kazakhstan, as long as their military aircraft can cross the region on the way to Afghanistan. Russia acts in exactly the same way, using energy resources to blackmail neighbouring countries.

China

The growing might of China, particularly in a period when the Western imperialist powers are facing major difficulties, is creating another source of conflict across the region. Hungry for new energy resources, China is building pipelines from Turkmenistan to Xinjiang. It has even done a deal with Nazarbayev for the lease of a million hectares of agricultural land to Chinese farmers. From the point of view of the region’s authoritarian rulers, the Chinese are not only less concerned about human and democratic rights but are also seen as not as predatory as the Western-based multinationals. China is prepared to invest in the local economies, as well as build pipelines. In Turkmenistan, nearly 40 factories have been built with Chinese capital since 2000. But workers living in these areas are finding that Chinese managers are imposing Chinese work conditions. While this is fuelling support for the demand of nationalization, when a clear lead by the trade unions is given, in its absence it can also result in anti-Chinese pogroms, as happened recently in North Kazakhstan.

Strengthening of authoritarianism

With the mass of workers growing increasingly disillusioned with their governments, the ruling elite have felt the need to move in a more authoritarian direction, even in those countries that have, until recently, maintained large elements of bourgeois democracy. In Romania, President Băsescu acts in a classic Bonapartist manner, portraying himself as a champion of the people against "the corrupt political elite", “parliament”, “media moguls” and “doubtful privatisations”. During the 2009 presidential election, Băsescu proposed a referendum reducing the number of MPs by a third and abolishing the second tier of parliament. In neighbouring Hungary, the Fidesz government is introducing ‘reforms’ making it more difficult for opposition parties to participate in elections and severely restricting press freedom. With the return to power of Yanukovich, in Ukraine, legislation in the direction of strengthening the role of parliament introduced after the2005 events is being reversed with the aim of introducing the Putin model of the “power vertical”.

Ethnic conflict and war

The experience of the Balkans, the Caucasus and Central Asia demonstrate that no form of “peacekeeping” troops or “trust building” measures can provide any long term solution to ethnic and national conflict, as long as the underlying causes are not resolved. There are plenty of danger zones that could burst out into ‘hot war’ in the next period, in the same way as the South Ossetia conflict between Russia and Georgia or the ethnic pogroms around Osh in Kirghizstan demonstrate.

The recognition of Kosova/o by the Western powers angered the Serbian government and the Serbian minority in Kosovo. In nearby Bosnia, the results of October’s parliamentary election led to political deadlock after Muslims supported parties favoring a united Bosnia, Serbs backed nationalists urging secession, and Croats voted for parties seeking their own entity within Bosnia.

Even more alarming is the situation in Nagorno-Karabakh, scene of the 1992-94 brutal war between Armenia and Azerbaijan. Reuters warn of a “looming war in the Caucasus” following large scale military exercises by Armenian forces close to Azerbaijan army positions. In response the Azeri President Ilham Aliyev threatens to use the country’s “powerful military capability” to end the “occupation of its territories”. The number of breaches of the cease-fire agreed in 1994 is growing dramatically – now the figure is over 150 a month.

The conflict between Moldova and the TransDniester region is also “warming up”. Following three inconclusive Parliamentary elections and the “Twitter revolution”, the “Communist” President Voronin resigned and Mihai Gimphu, leader of a pro-EU party was elected as acting-President. He argues there is “no difference” between Moldovans and Romanians (the issue that sparked the first TransDniester conflict) and has demanded that Russian troops withdraw from the region.

According to the last Minister of Nationalities of Russia, there are over 180 potential conflicts in the former USSR. The continued tension between Georgia and Russia, the dispute over the status of the Crimea in Ukraine, the spread of the Chechen conflict from Chechnya to the neighboring North Caucasian republics, and the Osh events, demonstrate that it is almost inevitable there will be more explosions of ethnic conflict.

In such a situation, it is essential not to succumb to chauvinist moods. The position adopted by many left organisations that the main imperialist force in the world is the US, and therefore, the workers’ movement should side with any force ‘opposing’ the US, leads them into the wrong position of supporting Russian imperialism in the region. It is necessary to argue against support for any of the imperialist forces in the region, to argue for the unity of workers and the poor against the warlords and for an end to the capitalist system that divides people along ethnic lines.

Russia – the ‘tandem’ goes separate ways

Having initially deluded themselves that they could avoid the crisis, the Russian ruling elite now finds that economy is reeling like a boxer after a knock-out blow. In 2009, there was an 8% collapse. The Putin government reacted by devaluing the ruble by 38%, bailing out a number of key banks and launching a $500 billion stimulus package (7% of GDP).

The authoritarian nature of the regime offers opportunities to use methods not available to the capitalists in other countries. Regional governors and managers were ordered to “prevent’ job losses. Rather than lay-offs, workers found their working week in many cases reduced to 1 day a week to keep them off the unemployed register. Up to 6 million migrant workers were sent home. When workers protested, Putin stepped in to order local managers to ‘resolve’ the problems.

The figures for the Russian economy in 2010 indicate a certain picking up in the first half of the year, but a further weakening in the third quarter. Present trends suggest that the government’s target of 4% growth will not be achieved. One thing most analysts are agreed on, however, is that it is unlikely that the economy will simply return to the period of almost feverish growth that preceded the crisis.

The Russian regime has been storing up problems that it can no longer resolve. Even compared to other countries in the CIS, the gap between rich and poor is extreme. The top 10% of the population is 17 times richer than the bottom 10%. There are now twice as many bureaucrats per head of the population than at the end of the Soviet period. The cost of the average bribe paid has risen by 50% in the last year. Federal budget revenues have declined by 25% over 2009-2010 and there are huge cuts in money available for education, health and social services

The heat-wave and widespread forest fires over the summer brought into the open all that is wrong in Russia today, and has made the splits within the ruling regime, once hidden from view, open for all to see. The sacking of the Moscow Mayor Luzhkov has opened up a Pandora’s box of corruption and cronyism.

With parliamentary elections due in 2011 and a presidential election due in 2012, the regime is increasingly having difficulties in hiding the divisions within its own ranks. Supporters of “conservatism”, that is a continuation of policies that are increasingly seen as having failed, are lining up behind Putin while the “modernisers”, who want even more neo-liberalism are pushing Medvedev. Although the contours of this conflict are becoming clear, it is impossible to predict in advance exactly how, and how far, it will unfold.

Undermining his reputation of being more ‘liberal’ than Putin, since Medvedev was elected President in 2008, twenty journalists have been murdered or have died in “mysterious circumstances”. A significant number of these have died in the North Caucuses, underlying both the fact that the Chechen conflict has not been resolved, and the violent methods the regime uses in an attempt to put down opposition. Now brutal attacks are taking place on the streets of Moscow. The gunning down of the anti-fascist lawyer, Stas Markelov (who was once active in the YRE), and the wave of terror around the attempt to build a new road through the Khimkinskii forest, outside Moscow, demonstrate the lengths the regime is prepared to go to in defense of its interests.

While the mighty Russian working class has not yet put its mark on events, all the conditions are ripening for mass protests to develop. Since the start of the crisis, many lefts have been disorientated, have either abandoned the struggle or gone into coalition with the bourgeois opposition. Not only do they not raise a clear left wing programme, they try to stop others from doing so. As events in Kirghizstan, the Baltics, Romania and elsewhere demonstrate, it is inevitable the Russian working class will move into struggle. As events in Kazakhstan show, if left forces position themselves decisively with transitional demands as part of a socialist programme, they can quickly win a significant base in the working class.

Belarus – joining the mainstream

Since the collapse of the USSR, Belarus has been an anomaly. President Lukashenko, on coming to power in 1994 on a populist programme, stopped the further privatisation of industry, but not to protect the planned economy, which had already been destroyed with the break up of the USSR. Instead industrial organisations remained in state hands, but the managers run them using the normal rules of the market, fulfilling, when necessary, orders from the state, and after paying allocated amounts to the state budget, distributing profits as they see fit.

Lukashenko maintained his authoritarian rule by using these budget inflows, supported by the money made by oil and gas transit incomes, to maintain at least minimum living standards particularly for the rural population. By 2008, Lukashenko had to lean more on foreign credit to plaster over the holes appearing in the state budget. Within weeks of the global crisis hitting the country, trade dropped by 30% (2009 compared to 2008) and the country’s external debt tripled to reach 45% of GDP by 2010. The standard measures of devaluing the ruble in Belarus by 40% and accepting a $2,5 billion IMF loan have barely eased the crisis and the IMF are already discussing a further input. Significantly, as a result of the crisis a new programme of mass privatization has been pushed through.

Aware that in such a situation the coming presidential election could provide a shock result, Lukashenko has brought forward the election to December. Desperately trying to shore up his support, he has increased wages in the state sector by 15%. The only way he can finance this is by turning on the printing presses – this year, the monetary mass has increased by 21% whilst GDP volume has plummeted from 60 billion rubles to 48 billion. Inflation, which is already growing dramatically across the central and eastern Europe, has the potential to reach crisis proportions in Belarus.

Kazakhstan – testing ground of resistance

Kazakhstan has a GDP greater than the rest of the Central Asian republics put together. Although, according to official (and CIA) statistics there has been no annual drop in GDP, the effects of the global crisis have been devastating.

The nationalisation of four key banks and a bailout of $3,5 billion could not prevent the economy collapsing into recession in the first half of 2009. The situation was only reversed by a $19 billion stimulus package (at 15% of GDP, proportionally twice as much as the stimulus package agreed by the US government) and a 20% devaluation of the Tenge. These policies have allowed those companies relying on exports of natural resources to maintain their profit levels, but this has been at the expense of the manufacturing sector, which has led to the closure of many companies and the cutting of wages.

The regime is under siege. Social protests occur on almost every issue. The most dramatic have been against the brutal regime of torture that exists in the prisons, where in several prisons inmates have cut their own stomachs open. Increasingly democratic rights are being attacked. A series of strikes have taken place, most notably by oil and gas workers, with most calling for renationalization under workers’ control.

The social base of the regime is becoming narrower. Power and wealth in the country is very much concentrated around the Nazarbayev family and clan. Having already lost the support of even part of his own family, the elite is beginning to split in preparation for the power struggle that is inevitable once Nazarbayev is no longer in power. This was reflected in the extraordinary saga in the summer, when the Health Minister, Zhaksylyk Doskaliye, was arrested. It was soon suggested he was involved in a coup plot, together with senior figures in the police. Whether or not there actually was an attempt to organize a coup, or whether this was raised by the regime to get rid of unwanted figures, is not so important as the fact that it shows how rotten and fragile the regime actually is.

The left in Kazakhstan, which is unified in the Kazakhstan 2012 organisation will play an extremely important role in this process. Kazakhstan 2012 is determined to avoid the pitfalls of watering down its demands to enable alliances with the bourgeois opposition or avoiding the raising of socialist demands for fear of frightening some supporters away. Its current role of mobilizing the various social protests together and building a strong independent trade union movement, place it in a strong position. The need for such an organization has already been demonstrated by events. So too has the need for the building of a strong Marxist cadre at the centre of Kazakhstan 2012.

Conclusion

The economic perspectives for the region are not good. Growth at the beginning of the decade was driven by a world oil price of over $100 a barrel and the countries of Central Europe relied on the strength of the European Union. Now a wave of budget cuts is sweeping across the East. Inflation, fuelled by rocketing food prices, is reducing the chances of a return to the pre-crisis levels of growth.

Workers, the rural poor and the youth, as well as a significant section of the petty bourgeois are being driven into struggle. By doing so, they have to stand up to growing repression, leaving aside the threat of sackings and evictions. Repression, rather than lessening the resolve to struggle, is radicalising new layers, as they move into action.

As in Western Europe, workers are testing out the organisations that exist. The All European Day of Action on September 29th saw significant demonstrations in a number of East European countries. 10,000 trade unionists marched in Warsaw demanding an end to budget cuts and an increase in the minimum wage. In Bucharest 30,000 marched, in Prague 40,000. But the ETUC bureaucracy, led by John Monks, is using these protests like a pawn in a chess game to pressurise the European elite to make some minor concessions. Monks argues that cuts will have to be implemented in the Mediterranean countries, Ireland, Hungary and the Baltics! Many workers will find that their determination to fight job and wage cuts is in opposition to the position of their leaders who believe that compromises on these issues are needed.

The oil and gas workers in West Kazakhstan remember that, not so long ago, the country’s natural resources were state owned and that work conditions were better. They quickly took the demand for nationalization with workers’ control into their arsenal. In Serbia too, a similar process has taken place. Throughout the summer of 2009, over 30,000 workers from about 40 companies took part in strike action over unpaid wages. In Russia and Ukraine, workers fighting for their jobs have demanded nationalization.

As they move into struggle, workers in the CIS and Eastern Europe face the task of either transforming existing organisations or, where necessary, establishing completely new ones during the struggle itself. In this situation the CWI’s tasks include not only concretising and generalizing the radical demands that are thrown up, but in presenting a political and organizational strategy for developing the movement.

With no clear alternative pole of attraction, the vast majority of workers remain, by inertia, in the trade unions that were inherited from the Soviet regime, usually led by members or stooges of management and without any structures for the involvement of members. In a number of cases, workers, who due to the cutbacks were forced into struggle, found themselves immediately in conflict with those trade union structures. In Kazakhstan, the Scientific Workers’ Union, fighting privatization, broke away from the official structures and acting as a pole of attraction for workers who genuinely want to struggle. Such new organisations can play a huge role in the future providing they avoid following the course of retreat and compromise, proposing instead a clear programme and strategy.

Generalised explosions of discontent, similar to the ‘coloured’ revolutions or the recent Kyrgyzstan events, are inevitable in the current situation. Mass dissatisfaction with living standards, repression, election fraud or even an industrial or environmental disaster, at certain stages, will result in mass protests and movements. In such situations, the left will often find itself competing with the bourgeois opposition for leadership of these movements. It will have the responsibility to expose the fraudulent content of any populist demands presented by the bourgeois opposition, whether they be on democratic rights, against corruption or on economic and social issues. It can do this not by dropping political demands or forming blocks with the bourgeois, but by instilling the demands of the movement with a class content.

The whole region is in ferment. The reawakening of workers’ and socialist movements in Western Europe will undoubtedly encourage those workers and youth in Eastern Europe looking for an alternative. The region has some heroic traditions – from the Russian revolution to the struggles of the Hungarian and Polish workers against the Stalinist dictatorships. The way in which the demands for nationalization and workers’ control have sprung up again indicates that radical traditions will re-emerge.

The CWI has gained some important positions in the region. If it acts in an energetic and decisive manner, if it succeeds in developing its own political cohesiveness and organization, it can develop quickly and help to arm the developing mass movements with the socialist ideas and strategy necessary to end the nightmare of capitalism, replacing it with a genuine socialist society.