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September 2002



Part 10. Russia

380) Following the collapse of the planned economy and the installation of open bourgeois regimes, signalled by the failure of the coup of 1991, Russia experienced an unparalleled social, economic and ethnic catastrophe. The economic contraction was probably the greatest in the history of capitalism. Even the slump in Argentina has not yet been on the scale of the economic meltdown which the former USSR as a whole experienced. Between 1991 and 1997 more than 50 per cent of outmoded and backward Russian industry was rendered obsolete. In its wake came mass impoverishment, the non-payment of wages to those who precariously clung onto a job, national and ethnic strife, and searing racism in cities such as Moscow. All of this was aggravated by the plunder of state assets by different groups of rapacious ex-bureaucrats who transformed themselves into gangster capitalists and carried through a wholesale looting of state assets.

381) The political struggle was, essentially, one between the section of the bureaucracy which had successfully appropriated to itself the lion's share of the former state pie and the bureaucrats who had lost out. The first group of 'oligarchs', typified by Berezovsky, sheltered under the corrupt political umbrella of Yeltsin and his regime, and often were the political 'king-makers' - effectively controlling Yeltsin - behind the scenes. Bribes, influence peddling, a massive drain of stolen money abroad and a growing 'body trail' (murdered opponents) were the main features of the rise of weak Russian capitalism in the early part of the 1990s.

382) Those groupings which opposed the Kremlin, including the Yeltsin clique, were ex-bureaucrats who lost out in the division of the spoils; neo-liberals who vainly dreamt of a 'cleaner' capitalism, which they imagined existed in the West and a section of the new Russian bourgeoisie which had found its road to further development blocked by the oligarchs surrounding and controlling Yeltsin.

383) The leaders of the present 'Communist' Party, comprised overwhelmingly of the ex-bureaucracy who lost out to Yeltsin and Co at a national level, have also helped themselves to lucrative slices of former state industry and in particular state power with all its money-making potential at local and regional levels.

384) The same goes for the so-called 'liberal' right, which stands for a 'normal' capitalism, as opposed to the 'wild' capitalism of most of the 1990s. Represented by parties such as Boris Nemtsov's 'Union of Right-wing Forces' and Gregorii Yavlinsky's Yabloko Party, they also enunciate phrases about 'the rule of law', a fairer, honest judicial system, etc., while at the same time they have grown fat on the back of the rich pickings they were able to make in the period immediately after the collapse of the Soviet Union.

385) The rise of Putin coincided with the need for Russian capitalism to curb the more open mafia-like features which it displayed in its moment of rebirth in the early 1990s and to consolidate and centralise the state structures, reversing the trend of the break up and growing devolution of the Yeltsin period. Moreover, the mass of the population, confronted with a seemingly endless downward spiral in their conditions, yearned for stability and 'order'. Putin is a former KGB operative, Deputy Mayor of St Petersburg in the early 1990s and later head of the FSB (the successor to the KGB) under Yeltsin. The fact that he hailed from St Petersburg and was not part of the intrigues in the 'vipers' nest' of Moscow in the early 1990s probably added to his 'clean image' and attractiveness to the capitalists. He surrounded himself with the same types, ex-KGB and military men with ties to his native city, and has ensured that many of his colleagues have been installed as regional governors and media bosses.

Economic growth

386) In the absence of an alternative, a key factor in allowing him to step in after the demise of Yeltsin and to rise to a level of popularity - 70 per cent in recent polls - equivalent with Bush in the US, is the performance of the Russian economy since the crisis of 1998. While this threatened to unleash a world financial crisis, its consequences for Russia had some similarities with what happened to Britain following 'Black Wednesday', when Britain came out of the European Exchange Rate Mechanism (ERM) in 1992. The devaluation of the pound which followed this was seen as a catastrophic blow to British capitalism at the time and effectively sealed the political fate of the Tory party at the next general election in 1997. However, this devaluation, in cheapening British goods, was an important factor in the upswing of the British economy in the 1990s. So, also, the devaluation of the rouble by nearly 30 per cent, and the effects in cheapening Russian exports (of oil in particular, whose world price rose), has been an important factor in the small but, nevertheless, important growth in the Russian economy since then.

387) The 'favourable climate' for foreign investors, above all the bolstering of property rights by Putin, has been crucial. As one commentator put it: "The oligarchs have been relieved of the threat of expropriation by an unknown successor to the Yeltsin administration, and incentivised to develop their businesses". Instead of looting and stripping companies as the 'oligarchs' did earlier, they now have the incentive to invest, increase extraction of oil and sell it worldwide.

388) Russian exports are largely of raw materials and, therefore, with the high price of oil and increased exports this redounded to the benefit of the Russian economy. The oil and gas industry accounts for half of all industrial investment in the country. Also the rouble crash of 1998 resulted in a certain increase in investment in light manufacturing, especially the food industry which stepped in and filled the gap left by prohibitively expensive imported foreign products. Also some industry which had been left idle in the collapse of 1991-97, and which was not obsolete, was brought back into production.

389) Russia has offered itself to world capitalism as a cheap source of energy against the unstable Middle East. Its gas reserves are, if anything, more important than its oil. It already supplies more than half of Western Europe's natural gas. The prospect has been dangled before Western oil companies of Russia loosening domestic ownership of the 'crown jewels', the Russian oil giants. The 'possibility' has been floated of a Western oil major taking over one of the Russian oil companies.

390) Russian statistics are still notoriously unreliable but there has been some growth, substantial compared to the pre-1998 period, which has fed through into an improved situation for the working class. Wages are growing and, whereas in pre-1998 when substantial sections, if not a majority, of workers were frequently or never paid, wage arrears have been declining. Most workers receive a regular wage. There has been a certain growth in industry, particularly of manufacturing. The arms and atomic energy industries, for instance, have increased exports to Iran, India and China. But in 2002 the signs are that economic growth is beginning to slow down. Despite Putin's 'instructions' that economic growth should be 8 per cent this year, it is nearer 3 to 5 per cent.

Trade unions

391) At the same time, the government's 'reforms', in effect counter-reforms, are coming up against resistance from the masses. The planned abolition of housing subsidies has met with opposition, including huge demonstrations and the spontaneous seizure of the City Government buildings in cities like Voronezh. Putin's so-called 'labour reform' is also designed to quell any independent voice or movement of the working class from developing outside of the tightly bureaucratically controlled 'official' trade unions.

392) These unions are largely the old state unions which existed under Stalinism but which are now tied hand and glove to the bureaucratic apparatus of the capitalist state. Independent unions are prohibited from being officially recognised unless they have a base in every area of Russia, something which is impossible, for instance, for the miners' independent unions, because there are not mines in every region. This is just part of Putin's attempt to centralise all power in the hands of the Kremlin and his stooges.

'Managed democracy'

393) Even a centre-right figure like Yavlinsky has pointed to Putin's attempt to give Russia a 'managed democracy'. All political institutions, he quite correctly says, save the presidency itself, are becoming 'empty forms'. Independent TV companies have been forced to toe the state's line or been forced off the air, and the legal system carries out orders from the top. Putin's control of parliament is virtually complete. In the lower house, the Duma, a coalition of four parties loyal to the Kremlin guarantees Putin a permanent majority. Although the 'Communist' Party of Zyuganov still is the largest party in the parliament and throughout Russia, it has lost control of the ten Duma committees it controlled and expelled leading figures, including Duma Speaker Seleznov. The most powerful state bodies of the defence, foreign and interior ministries, the public prosecutor and the security services answer to the president and not to the prime minister and parliament. As the Financial Times comments: "Real power lies mostly inside the Kremlin walls and, save for Mr Putin's, its faces are not very visible".

Putin's foreign policy

394) In the changed balance of world politics and relations in the aftermath of 11 September, Putin appears to have firmly nailed his colours to the US mast. This has set up big contradictions which will come to the surface in the next period. It has provoked opposition from sections of the Russian state and bourgeois opinion who are steeped in the hostility to the world hegemony of US imperialism, which was a feature under the previous Stalinist regime. This has its roots in the 'imperial' great-power status of Russia, going back to Tsarism. Prior to 11 September, Putin reflected this harkening back. He opposed the enlargement of NATO in an eastward direction which it perceived as a threat to Russia's 'national security'.

395) In the post-11 September reality, Russia, as a reflection of its weakened military position, has closed military outposts in Cuba and Vietnam and was forced to acquiesce to US forces in the Pankisi Gorge in Georgia. Putin has also been compelled to accept US troops in Central Asian countries, partly because they signalled to the Kremlin beforehand that they would accept US forces, whatever Russia said. They did this in the futile hope that the flow of western capital to their corrupt regimes would increase. Putin has done his about turn and focused on integrating Russia into Europe and NATO whilst linking the moves to Russia being recognised as 'fully a market economy', opening its entry into the WTO.

396) Despite these attempts to integrate Russia fully into Europe, it still remains a power that also straddles Asia. But Russia's relations with its former friends have been weakened. Both North Korea, whose leaders were entertained in the Kremlin just months before 11 September, and China, which only two months before had signed a treaty of 'friendship and cooperation' with Russia, have suffered from cooler relations. Even Saddam Hussein is, it now seems, expendable. Iraq owes $8 billion of foreign debt to Russia and Russian companies expected to profit from the development of Iraqi oilfields once United Nations sanctions were ended. However, the US, in order to keep Russia on side if Iraq is invaded, has offered to "look for ways in which Russian commercial equity could be preserved in a post-Saddam Iraq".

397) Putin's shift in foreign policy has met with considerable opposition. This has come not just from the 'Communist' Party and intransigent sections of the army, but also perhaps from a section of Russian capitalism's political representatives and thinkers, particularly a section of the bourgeoisie who are urging more caution in relation to the WTO.

398) A general who stepped down as head of the army's international relations section in 2001 put it far more brutally when he declared that the interests of the US and Russia "do not coincide". He went on to say that the real object of the US war on terrorism is "control over countries in key regions of the world".

399) At the moment, most are prepared to swallow their opposition because of Putin's apparent approval ratings. Fewer than one in ten people in opinion polls even mention foreign policy when they talk about Putin and his qualities. He is valued, it seems, because of the relative stability which he represents compared to the previous period. One phrase which recurred when pollsters asked about Putin was: "He wishes well for his country".

400) This triumph of illusion over reality will not last either in Russia or in relation to foreign policy. There has been no trade-off for Putin from his capitulation to US imperialism, nor is there likely to be. Russia has been thrown a few meaningless baubles such as the NATO-Russian council and the recent agreement on nuclear warheads. But it has been elbowed aside by the US in its former 'spheres of influence'. This must have incensed the military elite and a considerable part of the capitalists. It is likely they will assert themselves once Putin moves into choppier economic and political waters.

Attempt to join the WTO

401) That situation could be sooner than he thinks. On the basis of feeble Russian capitalism, the conditions of the Russian masses lag far behind even the poorest countries of Western Europe. At the rate of growth of the economy in 2001, in a favourable period, it would take Russia 18 years to reach the average living standards of Portugal today. Also, Putin's so-called 'land reform', in effect, a partial privatisation of the land, if implemented will prove to be a disaster. It goes hand in hand with pressure which will be exerted on Russia if it enters the World Trade Organisation.

402) One of the targets of the WTO will be the abolition, as with other applicants, of farm subsidies, estimated at $13.8 billion a year in Russia. If this was to be carried through it would result in the spiralling upwards of unemployment for the agricultural population. Through the implementation of such measures, the US and the EU hope to unload their surplus agricultural products on the Russian market. This to a country which, prior to the agricultural disaster of Stalinism and its split from the Ukraine, was the 'breadbasket' of Europe. There is considerable opposition in the rural population to any proposed privatisation which the 'Communist' Party has attempted to tap into.

The 'Communist' Party

403) The CP also has a base amongst those sections of the population who have lost out from the collapse of the former USSR. Despite the efforts of some alleged 'Marxists' to breathe some 'working-class life' into it, this party is not a genuine workers' party. It is comprised of ex-bureaucrats, crypto-Stalinists and Russian nationalists, and is based primarily on the older, mainly rural layers of the population. However, given the lack of a genuine mass party of the working class, some workers see it as a point of reference in opposition to Putin and Russian capitalism. This is the case in elections when the CP can appear to some workers, despite their opposition and reservations of the Zyuganov leadership, as the only viable mass voting tool to use against Putin. Once in power at regional level, the CP has done little to oppose Putin and has seen its support drop.

404) Some workers may enter into this party in the naïve hope that they can transform it into a vehicle for the working class. We do not exclude an episodic radicalisation of sections of the party at some stage. To some degree this has happened with the attacks on the party in the Duma. We would therefore not be averse to temporarily working within or around the party where the opportunity presents itself. But in general it is far more effective now to offer a viable independent alternative to important sections of youth and workers who are probing for answers to the problems which confront them today and who look back for inspiration to the traditions of Bolshevism and Trotskyism.


405) Events both internationally and within Russia itself could wipe away in one blow the seemingly indisputable position which Putin now enjoys. The rioting which followed the defeat of Russia in the World Cup at the hands of Japan is just one symptom of the feelings of national humiliation which the 'triumphant' return of capitalism has meant for the Russian people. Undoubtedly, mixed up with this were elements of Russian nationalism but also a feeling that another 'blow' had fallen on the shoulders of the long-suffering Russian people. This seemingly inconsequential event is, moreover, a warning of the latent Russian nationalism which can burst to the surface. It has already been used by the ruling elite to push through their 'Anti-extremism laws', ostensibly aimed at the fascist right and skinheads but, in reality, directed at strikers and political parties "who challenge the current rule of law".


406) In Chechnya, Putin continues to exercise the imperialist character of the state. Officially, Russian estimates that 12,000 Chechen 'terrorists' have been killed so far, and more than 4,000 Russian soldiers. However, the figure is probably double or treble this amount; dozens die each month despite the current low intensity fighting which is taking place. Chechnya is the scene of terrible crimes by the Russian state: assassination and murder of any perceived indigenous 'dissident', and the rape and brutalisation of Chechen women at the hands of out of control Russian troops. Even the Russian authorities' own human rights office has received more than 7,000 complaints. These have been brushed aside by the Russian authorities, particularly in the changed situation which has followed 11 September.

407) Putin's support for Bush has resulted in most of bourgeois world opinion turning a blind eye to Russian crimes in Chechnya. The Chechen fighters are pictured as collaborators and dupes of al-Qa'ida, while indications are that most of the weapons and money which sustain their struggle comes from within Russia itself. Despite this, there is pressure on Russia, both domestically and internationally, to come to some kind of political compromise.

408) Moreover, the fear which Chechnya generates amongst soldiers and their families has contributed to the now annual crisis over conscription into the Russian army. Violence within the army from brutalised officers towards conscripts is a significant factor in the reluctance to join up. But the overwhelming reason - named by 44 per cent of those resisting conscription - is Chechnya. A whole industry has sprung up to ease draft dodging on educational or medical grounds. The going rate for a bogus medical certificate showing lung or stomach problems is between $2,000 and $5,000 depending on the wealth of the youth and his family. A certificate for psychological problems costs less than $1,000, while the cheapest, at $300 to $500, are for alcohol or drug addiction. The latter, it seems, are unpopular because you might escape the army but job prospects will be severely undermined as a result.

409) This is just one symptom of the legacy of the past domination of Chechnya under Tsarism, which was perpetuated by Stalinism and is now brutally reinforced by re-born Russian capitalism. But it is impossible to keep a whole nation in chains, even one like the Chechens, tiny in comparison with the mighty Russians. The cost in treasure and blood to the Russian state will eventually tell. The desolation which Grozny typifies today, together with the sheer war weariness in Russia and Chechnya, will give way to negotiations at a certain stage. Some kind of transitional regime, a form of autonomy, is not ruled out. However, on a capitalist basis the national question will never be solved.

The former Soviet Republics

410) The complete failure of Russian Stalinism on the national question, perpetuated by capitalism, is summed up in the plight of many of the nationalities which formally made up the 'Soviet Union'. Part of the former USSR is now economically bracketed with sub-Saharan Africa. The same kind of debt relief policies are suggested for countries such as Armenia, Azerbaijan, Georgia, Kirghizia, Moldova, Tajikistan, and Turkmenistan. Only by building powerful sections of the CWI in all the states which previously made up the states of the 'USSR' will it be possible to solve the national question and eliminate the heritage of poverty, national, ethnic and religious divisions of Stalinism and capitalism.

411) Successful efforts have been made to establish a viable section in Kazakhstan, the Ukraine, Moldova and, of course, Russia in what has been one of the most difficult periods in history for revolutionaries. While others have abandoned Russia, or linked up with the most weird and eccentric of Russian sects, we are the only Trotskyist organisation to have successfully dug roots and established a firm reputation in Russia and throughout the CIS. We must ensure that the tremendous work that has been undertaken so far is not dissipated in the next period. That requires, above all, political and theoretical clarification and an organisational audacity to seize the opportunities which are presented.


412) The elections in the Ukraine in early 2002 left the mass of the working class with little choice between dozens of competing parties and blocs muckraking and hurling accusations against one another. Predictably, there was little to celebrate. Just six parties managed to gain more than the 4 per cent needed to gain deputies from the proportional lists. Despite the radical sounding names of some of them - the Socialist Party, the Communist Party, the United Social Democratic Party - none of them really represent workers' interests. The 'Our Ukraine Party' came first in the party list with almost a quarter of the vote. This party, which was involved in street protests a year previously, is pro-Western and pro-NATO, with a neo-liberal programme. Led by former premier Lushenko, it only moved into opposition to the Ukraine government when the Western business interests it represented began to lose out.

413) The national question, however, was played down because of the peculiar economic position of the Ukraine, which has benefited because of the oil boom in neighbouring Russia, which in turn has allowed Russian business to buy from and invest in Ukrainian industry. The 'Communist' Party came second but, because of the electoral system, only has half the number of deputies it had previously. Its support came mainly from the Russian-speaking East, with little support from the Ukrainian-speaking West. Its dramatic collapse was a result of its lack of opposition to the government, in particular to privatisation.

414) There was no real alternative to the left of the CP, with the Progressive Socialist Party, which gained a respectable 11 per cent in the last presidential election, losing all its seats and gaining only 3.22 per cent of the popular vote. In the previous two years it has ditched most of its radical programme and linked up with Kiev businessmen. The bloc of parties in opposition to Kuchma gained 70 per cent of the vote. However, Kuchma's 'For a United Ukraine' bloc gained just under 12 per cent of the popular vote but over 25 per cent of the seats in parliament, becoming the biggest fraction. The domination of the mass media by pro-Kuchma propaganda was a huge barrier to the opposition. So was the sinister habit of opponents of the regime perishing in accidents or simply getting shot. A local leader of the United Social Democrats was murdered on the eve of poll.

415) The Ukrainian section of the CWI, which has managed to put down important roots in a number of cities throughout the country, played an active role in these elections. The Ukrainian proletariat is one of the biggest in the whole of Europe. Its potential power is huge. Our comrades argue for the establishment of a genuine workers' party and several comrades standing for different positions received respectable votes. One of our comrades came twelfth out of 25 candidates. Events, and the intervention of our organisation, are preparing the ground for the development of genuine socialist and Marxist ideas in the Ukraine.