19.08.1999

Yeltsin’s last throw

With the “failure of market capitalism” Russia continues its disastrous spiral

Few things in Russia are as they seem. First, constitutional democracy is a fig-leaf for autocratic rule by a sclerotic and unstable president. The levers of power are manipulated not by elected politicians, but by a coterie of thieves and swindlers at the court of Tsar Boris. Russia has only one mass political party - the Communist Party of the Russian Federation; ‘communist’ only in name: in truth the voice of a nauseating red-brown national chauvinism that, under the cover of “anti-Zionism”, grotesquely blames international Jewry for the plight of Russia.

The other main political forces in Russia consist not of organised parties, but of shifting movements and coalitions, two of which stand out: the Fatherland movement of Yury Luzhkov, mayor of Moscow, and the All Russia front of regional governors. The merger of these two groups into a potentially powerful bloc capable of capturing both the government and the presidency is what lies at the heart of the present crisis.

Secondly, economic ‘reform’ has led not to the restoration of a capitalistic market economy, but has instead produced a primitive and freakish form of capital accumulation, characterised by plunder, fraud, parasitism and reckless self-enrichment on the part of a narrow stratum of elite business and financial oligarchs. The supposed economic recovery of the last 12 months is for the most part an illusion created by a massive devaluation of the rouble. Little, if anything, has changed since the dark days of August 1998, when Russia stood on the brink of an economic and political abyss, and when the Financial Times wrote that “only a miracle” could save Russia (August 27 1998). Chronic political instability and an economic decline that can only be described as catastrophic are the reality.

It is against this background that we must assess the latest heightening of political tension caused by the sudden dismissal of Sergei Vadimovich Stepashin from the post of prime minister, an office he held for just 82 days, and the appointment of Vladimir Vladimirovich Putin as Russia’s fifth premier in only 17 months. Writing in Komsomolskaya Pravda, Stepashin claimed: “They threw me out because I am not for sale,” and that his removal was brought about by his refusal to “service the interests of a certain group” (August 13). There is undoubtedly much truth in this allegation.

The “group” in question is, of course, the so-called ‘family’ of Yeltsin: courtiers and apparatchiks headed by his daughter Tatyana Dyachenko, for whom the prospect of presidential elections in 10 months’ time poses an acute dilemma of self-preservation. For these people, failure to consolidate support around a Yeltsinite candidate will mean not just political defeat, but the real prospect of criminal proceedings. Small wonder, therefore, that Stepashin’s creditable refusal to put a stop to investigations of Kremlin corruption played a major part in his downfall. Equally disastrous, from the Yeltsinite point of view, was Stepashin’s failure to use his prime ministerial authority and patronage in order to stem the tide of defections by regional governors from Yeltsin’s camp to that of Luzhkov. The newly formed All Russia is My Fatherland bloc represents a powerful focus of opposition and a credible alternative, especially now that it has secured the support of Yevgeny Primakov, the popular prime minister whom Stepashin replaced in May this year.

Hence, for the Yeltsinites, the ejection of Stepashin became a political necessity. His replacement by Putin represents Yeltsin’s last throw of the dice in an attempt to secure a stable ‘succession’ and protect himself and his entourage from the consequences of their criminal misrule.

Attention has rightly been drawn to the fact that Putin (like his two immediate predecessors) has a background in the security organs. For the last year he has been head of the Federal Security Service (FSB), Russia’s internal secret police, whose support the Yeltsinites rightly regard as critical to their chances of survival. Putin’s background in intelligence is of crucial significance so far as the Yeltsinites are concerned: he knows (literally in some cases) where the bodies are buried and it is no coincidence that one of his last acts as head of the FSB was to instigate investigations into the business activities of Yury Luzhkov’s wife.

Perhaps more important is the fact that for the last three years Putin has worked at the heart of the Kremlin administration, where he proved himself a staunch Yeltsin loyalist, particularly as a tough head of the Control Department, coordinating the Kremlin’s delicate relations with Russia’s 89 regional governors. One of his first tasks will be to use his inside knowledge and networks of contacts in order to damage the cohesiveness of the Luzhkov oppositionist bloc.

It came as no surprise that the duma gave its approval to Putin’s nomination as prime minister. The last thing the CPRF-dominated parliament wants in the run-up to the December 19 parliamentary elections is to find itself in confrontation with Yeltsin, for there is still a strong feeling that the president, if need be, will use his power to declare a state of emergency as a way of suspending ‘democracy’ and prolonging his tenure of office.

In his first speech to the duma Putin predictably sought to appease the CPRF and other nationalists by pledging to quash the current islamic fundamentalist incursion into Dagestan, and to protect the rights of ethnic Russians in all former republics of the USSR: “Russia’s territorial integrity cannot be an object of discussion, much less bargaining or blackmail” (The Independent August 17). It would appear, rather pathetically, that the Kremlin counterparts of Millbank are intent on packaging Putin as a new Yury Andropov, at least that is the impression which they presumably sought to create by having him place repeated emphasis on the need for “more discipline”. On the economy, Putin had little to say, except that he intends to continue the process of reform (whatever that may mean) and that the government must do more to protect the poor from the consequences of devaluation.

If we turn, with some relief, from the Byzantine power struggles of current Russian politics to the economy, we find a picture of unrelieved gloom, indeed an impending collapse.

In 1997 GNP was a little over half the 1989 figure. Industrial production was down by 52%, agricultural production by 36%. Since the Yeltsin counterrevolution there has been a steep decline in investment as a proportion of GNP: in 1991 it was 23%, in 1997 a mere 8%, and still falling. Means of production are ageing rapidly: in 1995 only 10% of industrial plant was less than five years old.

It is, however, in the sphere of agriculture where the situation is most acute, with declines almost commensurate with those experienced during the 1930s campaign of collectivisation. In the period from 1990 to 1996 we find the following figures: grain down 40%; eggs down 34%; cows down 21%; beef cattle down 41%; sheep and goats down 59%; pigs down 49% (statistics derived from research published in International Socialism No81, winter 1998-99). The only area of foodstuff production that has shown any increase is potatoes, no longer simply a staple food, but practically the only means of survival for the mass of the population, leaving aside what they can scrape together from their private plots and dacha gardens.

A historical comparison is telling: whereas at the end of the 1918-21 civil war in Russia industrial and agricultural production dropped by 15% and 60% respectively from 1913 levels, by 1926, eight years after the start of the civil war, most 1913 levels had been regained or surpassed. Contrast this with the fact that again eight years after the implosion of the USSR there is still no sign of revival.

Even the leader writers of the house journal of international capitalism, while talking up prospects for “positive output growth this year”, acknowledge that this resurgence in the Russian economy is part illusory, part fortuitous: the 70% devaluation of the rouble over the last year has obviously made Russian exports competitive and the doubling of the oil price has served - for the time being - to rescue Russia from financial collapse (Financial Times August 17). Of course, the same commentators omit to mention the effect of devaluation on the already severely depressed living standards of Russian workers, millions of whom now live in abject poverty.

On the financial front the picture is equally ominous. Only the latest $4.5 billion IMF loan has enabled Russia to escape another default on debt repayment that could have triggered a systemic banking crisis. Finally the western capitalists have learned their lesson, so that not one cent of the money will actually go to Russia and be swallowed up in the voracious bellies of the oligarchy. Instead, the funds will merely be used to pay off some small portion of existing loans. As the Financial Times concedes, the export of capital out of Russia continues unabated: in the five years from 1993 some $136 billion found its way abroad - much of it was plunder from privatisation racketeering or money siphoned off from earlier IMF and World Bank aid programmes by the financial oligarchs and their placemen in the Yeltsin regime. This capital has to a large extent been invested in foreign stock markets, used to buy real estate, hoarded in foreign bank accounts or squandered on consumption by the ruling elite. In the meantime, as the paper again acknowledges, “much of the [Russian] banking system is bankrupt” (August 17 and August 10).

One is left to wonder in amazement, given the circumstances, how any informed commentator can claim that post-Soviet Russia is a capitalist state, when some 75% of all exchange takes place in the form of barter, and when real wage labour and anything resembling authentic capital accumulation through production represent a negligible percentage of the economy. As Hillel Ticktin pointed out in his lecture to our Communist University ’99, the course of events in post-Soviet Russia represents “a world historical failure of capitalism”.

What of the Russian working class? There is at present no viable revolutionary party capable of articulating the interests of the Russian proletariat. Isolated strikes break out and are often brutally repressed, including by regional and local authorities under the control of the CPRF. Attempts at forging an all-Russian congress of strike committees are still embryonic and tend to founder because of ideological arguments and simple lack of financial support. Anecdotal evidence suggests a universal cynicism towards all politicians and an understandable preoccupation with the problem of survival against the odds.

It is hardly surprising, given the conditions under which they are condemned to live, that many Russians look with fond nostalgia to the ‘golden age’ of the Soviet past. Early this month, an opinion poll indicated that 85% of Russians regretted the dissolution of the Soviet Union, the highest figure since its collapse in 1991. In another poll, Russians said that not Lenin, not even Stalin, but Leonid Ilyich Brezhnev, general secretary of the Communist Party of the Soviet Union from 1966-82, was the best Kremlin leader of the 20th century (The Times August 2). A fascinating test of the political strength of such nostalgia will come next month, when Leonid Ilyich’s grandson, Andrei Brezhnev, leader of one of the many splinter groups from the CPSU, contests the post of governor of Sverdlovsk.

Clearly, a return to the past is not and can never be the answer to the problems of the Russian working class. Sooner rather than later, they will realise that the only real answer is to take power into their own hands, that only the working class can emancipate itself from its slavery. In that lies our ultimate optimism that Russia has a truly revolutionary, socialist and democratic future.

Michael Malkin