Is Russia a ‘Sub-Imperialist’ Power?
Posted by INTERNATIONALIST 360° on AUGUST 8, 2023
Renfrey Clarke
There has recently been a lot of debate on the topic of imperialism, particularly as applied to the current war in Ukraine. Members of several left and progressive tendencies suggest a number of ways in which present-day Russia might be categorised.
Some describe Russia as an “imperialist” power; others refer to it as a non-imperialist country, part of the “semi-periphery” of world capitalism; others still use the more complex concept of “sub-imperialism”. That term emerged during debates over Third World development during the 1950s and 1960s. It describes a state that is dependent with relation to the “core” countries of global capitalism but acts as an imperialist power in its relations with weaker countries of its region, seeking to dominate and exploit Russian “spheres of influence” in Central Asia and Ukraine.
As a formulation, ‘sub-imperialism’ was coined in 1965 by the Brazilian scholar Ruy Mauro Marini, one of the founders of dependency theory. More recently, it has been employed by left scholars including David Harvey, Patrick Bond and Alex Callinicos, often with relation to the political economy of the BRICS countries. For Marini, sub-imperialism is “the form which dependent capitalism assumes upon reaching the stage of monopolies and finance capital”.[1] Harvey speaks of “the BRICS nations as ‘sub-imperial’ powers, featuring the super-exploitation of their working classes, predatory relations regarding their hinterlands, and collaboration (although tensioned) with imperialism, especially as intermediaries in the transfer of both surplus labor values and ‘free gifts of nature’ (unequal ecological exchange) from South to North.[2]
Marini and Bond have demonstrated, in the cases of Brazil and South Africa respectively,[3] that certain nations now part of BRICS collaborate with imperialism and join in plundering their hinterlands, much as Harvey indicates. In this regard, the ‘sub-imperialist’ function played by these countries is relatively straightforward. Callinicos, however, goes much further, substantially blurring the line between the acknowledged countries of the world capitalist “core” and much poorer, dependent states said to collaborate in or expedite the robbery of the global periphery. To Callinicos, “sub-imperialist” states such as Turkey, India, Pakistan, Iran, Iraq, and South Africa[4] are simply imperialists of a lesser order.
Where in this scheme does Russia stand, as a BRICS nation kept under intense military-political pressure by the world centres of imperialism and with its economy besieged by sanctions? Like the other countries of BRICS, Russia is separated from the countries of the imperialist “core” by a huge developmental gulf. Its GDP per capita is about one-sixth that of the United States[5] and its finance capital is strikingly weak.[6] Russian foreign direct investment is also notably small,[7] as would be expected for a capital-poor country with vast natural resources awaiting development.
Russia is clearly not an imperialist power in the terms of the modern industrial-capitalist imperialism described by Lenin early in the last century.[8] The country’s limited foreign direct investments have either been related to its strategic and diplomatic goals or else have simply been cases of “capitalists being capitalists” – pursuing lucrative openings outside the national borders, despite the lack of any pressures exerted by a non-existent excess of capital at home.
If Russia is to be described as practising “sub-imperialism” with relation to Central Asia and Ukraine, this will have to emerge from a more detailed study of Russian dealings over the years with the parts of the world concerned. We can be certain, though, that the charge of “collaboration with imperialism” will not stick. If the Russian state is to be judged as sub-imperialist, this will have to be the result of an imperialist-like essence as understood by Callinicos.
Spheres of influence? The case of Central Asia
Present-day Russia, it is argued by some, seeks to impose or defend “spheres of influence” adjacent to its borders. The concept of “spheres of influence” dates back to the 1880s and has its origins in the efforts by rival European states to avert inter-imperialist wars by negotiating areas of the world where each power could exercise uncontested colonial plunder. Applied to Russia and present-day Central Asia, the idea is strangely primitive and out of place.
Russia, it should be recalled, has only a middling-sized economy, about as large as that of South Korea.[9] Meanwhile, Central Asia is a vast and diverse region, with a population of 76 million people spread across five countries. These countries share with Russia a common heritage as former republics of the Soviet Union, but all have a lively sense of their particular interests. Exercising any kind of hegemonic leverage over them would be a huge undertaking, for which Russia would be poorly equipped even if it ventured this task.
Further, Russia is not the only regional power that adjoins Central Asia. The transport routes that extend through Central Asia are crucially important to China’s Belt and Road Initiative”, and the various countries of the region are also vital sources of natural gas for China. In general, Central Asia with its resources of energy carriers and metal ores as well as its surplus of agricultural products such as cotton and wheat is a much more natural trade partner for China than for Russia, whose own export offerings tend to compete with those of Central Asia rather than complement them.
Unsurprisingly, a marked trend over the past decade has been toward rapid increases in trade by the Central Asian countries with China, and in Chinese investment within Central Asia. In the case of the two most populous Central Asian states, Uzbekistan and Kazakhstan, trade exchanges with China now closely match commercial turnover with Russia.[10] The Central Asian countries have the opportunity to balance between Russia and China in their diplomacy and economic dealings, and as a recent commentary remarks, this has allowed them “to retain a surprising autonomy over domestic affairs”.[11]
Meanwhile, the countries outside Central Asia that come closest to exerting hegemonic influence over the region’s economies are those of Western Europe, along with the United States. Since the 2000s, the economies of Kazakhstan and Uzbekistan, in particular, have boomed in response to strong inflows of foreign capital. Of U.S.$28 billion in foreign direct investment that entered Kazakhstan in 2022, the largest sums are recorded as having come from the Netherlands (U.S.$8.3 billion), the United States (U.S.$5.1 billion), Switzerland (U.S.$2.8 billion) and Belgium (U.S.$1.6 billion). Russia and South Korea were recorded as contributing U.S.$1.5 billion each, and China $1.4 billion.[12] In cumulative terms, Kazakhstan’s total stock of foreign direct investment in 2021 amounted to $152 billion.[13] Of this, Russia is reported as having provided $11.2 billion.[14]
The acceptance by Central Asian countries of massive Western investment – which has created a high degree of dependence on U.S. and other Western firms in the vital oil and gas industry –has been offset to a degree by agreements with Russia in the fields of weapons supplies and security provisions. Kazakhstan, Kyrgyzstan and Tajikistan (though not Uzbekistan or Turkmenistan) are members with Russia of the Collective Security Treaty Organisation (CSTO) military alliance. With its goals that include jointly combating “terrorist activities”,[15] the CSTO provides a valued back-up for Central Asia’s authoritarian-capitalist regimes. When fuel price rises sparked mass popular protests in Kazakhstan in January 2022, the CSTO command dispatched a force of some 2,500 peacekeepers, mainly Russian, that helped to calm the protests. By the time the force departed several weeks later, Western sources were saying that 225 people had been killed and 10,000 arrested.[16]
By providing a shield against military intervention in Central Asia by NATO or other anti-Russian forces – not to speak of worker unrest – the CSTO undoubtedly serves Moscow’s strategic interests. Whether the CSTO defends a Russian sphere of influence is much less obvious. The region’s anti-worker despots do not want Western military interference or foreign-sponsored “colour revolutions” any more than Russian leaders do, and in this sense the CSTO is as much a reflection of the Central Asian governments’ own concerns as of those of the Kremlin.
Meanwhile, the Central Asian governments are at pains to establish that they decide their own foreign policies. In 2022, spokespeople for Kazakhstan, Uzbekistan and Kyrgyzstan publicly criticised the Russian intervention in Ukraine and defended what they called Ukraine’s territorial integrity.[17]
… and Ukraine
In a certain sense, Ukraine is necessarily a Russian “sphere of interest”, since countries normally show an intense interest in developments within states with which they share lengthy borders. But if Russia is a ‘sub-imperialist’ country, then Ukraine will be important to it not just for military-strategic reasons, but also as a likely sphere for economic expansion. Is this latter the case?
Following the dissolution of the Soviet Union, Russia sought amicable diplomatic and trading relations with Ukraine. For more than two decades, this sentiment was generally reciprocated. There were very good reasons for the collaborative attitudes, since in economic terms, Ukraine and Russia remained joined at the hip. Numerous large enterprises in both countries were connected via monopolised supply chains to suppliers and customers on the opposite side of what had earlier been a purely administrative border.
In particular, the two countries needed one another as sources of countless specialised manufactured goods. For example, most of Ukraine’s production of locomotives was exported to Russia, and almost all the engines used in Russian helicopters continued for many years to be supplied by the Ukrainian firm Motor Sich. For the Russians to have tooled up to produce substitutes would have been inconvenient and expensive.
Throughout the years from 1991 to 2015, Russia consistently remained Ukraine’s largest single commercial partner.[18] There was nothing notably exploitative about this trade. On both sides, the exchanges included substantial quantities of high-value, knowledge-intensive goods, and while Russia normally recorded strong surpluses on its goods trade with Ukraine, this was mainly because Russia also supplied Ukraine with large amounts of natural gas, along with other raw materials and semi-manufactured products. The patterns of this exchange were thus quite unlike those of the “sub-imperialism” described by Harvey, let alone Callinicos.
If Russian capitalism had indeed sought to impose ‘sub-imperialist’ economic subjection on Ukraine, the picture would have been very different. As well as seeking to crowd local manufacturers out of Ukraine’s domestic market, Russian capitalists would have attempted to take direct control over the major sources of value creation in the Ukrainian economy, especially extraction of the natural resources that made up the “gifts of nature”. Very little of this behaviour was apparent; Russian direct investment in Ukraine remained strikingly small.
In particular, Russian investment in Ukraine was minor even when compared to the very limited sums entering Ukraine from the West. Ukrainian government figures at the end of 2012, one source records, “put Russia well behind Germany and the Netherlands as a source of cumulative foreign direct investment, with a slender seven per cent of the total.”[19] The most notable Russian investments were in the area of telecommunications, with others in fields such as oil and aluminium refining, ferrous metallurgy and mechanical engineering that provided a close fit with the activity of Russian enterprises across the border.[20]
Russian capitalists showed very little yearning to take over the extraction of Ukraine’s “gifts of nature”. On its European expanse alone, Russia has massive unexploited reserves of the coal, iron ore, manganese, titanium and lithium that make up Ukraine’s key mineral resources. Meanwhile, outside investment in the Ukrainian agro-industrial complex, that historically has dominated the country’s export earnings, was restrained by laws that made foreign purchases of farmland effectively impossible.
Although Ukraine’s economic relationship with Russia was logical and advantageous, many Ukrainians – especially among the country’s big-city intelligentsia – sought ardently to replace it with integration into the developed West. Central to this project was the negotiating of an “Association Agreement” with the European Union. Projected as including “deep and comprehensive free trade” between Ukraine and the EU, this agreement was viewed as a precursor to Ukraine eventually gaining EU membership.
Drafted originally in March 2012, the proposed Association Agreement reflected deep illusions among Ukrainian liberals concerning the role that Ukraine would be destined to play as a relatively poor and undeveloped periphery of a genuinely imperialist bloc. In Moscow, the attitude to Ukraine’s proposed “shift to the West” was sharply hostile. In part, this reflected dismay at the economic adjustments Russia would be compelled to make. But more fundamental to shaping Russian responses was the fact that the Association Agreement explicitly prefigured Ukrainian integration with European security arrangements – that is, with NATO.
The EU’s Association Agreement also featured the requirement for ruthless austerity measures aimed at “stabilising” Ukraine’s heavily indebted economy at the expense of the population. Then-Ukrainian President Viktor Yanukovych concluded that accepting these terms was politically impossible, and in November 2013 he postponed acceptance of the Agreement, calling for further discussions. As an alternative, the Putin administration in Moscow offered an emergency Russian loan package, accompanied by price concessions on supplies of Russian natural gas and without stipulations as to Ukraine’s domestic policies. It was after Yanukovych accepted Putin’s offer in December 2013 that the Euromaidan “Revolution of Dignity” broke out in central Kyiv. Yanukovych was overthrown in February 2014 in a violent uprising in Kyiv spearheaded by extreme-right and neo-Nazi vigilantes.
Do the events surrounding the Euromaidan vindicate the position that the Moscow authorities were anxious to preserve Ukraine as a Russian “sphere of influence”, and as a result, strenuously resisted its defection? The trouble with posing the question in this way is that it conflates two essentially distinct considerations.
In strategic terms, post-Soviet Russian governments have attached great importance to keeping Ukraine as a friend and ally, and failing that, as at least as a neutral state without Western troops or military installations on its territory. The Russian goal has been to prevent Ukraine from acting as a fire-base for NATO aggression.
The notion of a “sphere of influence”, however, is primarily economic in character. In classical terms, a “sphere of influence” exists to allow the exclusive extraction of value from a given territory by a particular imperial power. Russian actions with regard to independent Ukraine have not had anything like this nature.
To make an elementary point, Russia has never sought to impede or prevent investment in Ukraine by third countries. Moscow’s economic objections to the Association Agreement, leaving aside the deal’s security provisions, related largely to the fact that the Agreement necessitated the ending of free-trade arrangements between Russia and Ukraine, imposing substantial costs on Russian industries.
Following the Euromaidan uprising and the installation in Kyiv of a right-wing, pro-NATO government, the economic elements of the Russia-Ukraine relationship were quickly and thoroughly eclipsed by the security aspects, as witnessed by the developments in Crimea and the Donbass.
During the same period, Ukraine began swiftly to be incorporated into the European trading bloc. Between 2013 and 2015, Ukraine’s bilateral trade with Russia declined by 68 per cent.[21] By the end of 2016, the EU collectively had displaced Russia as Ukraine’s largest trading partner.[22] Ukrainian imports from Russia, worth about US$29 billion in 2011, amounted to only US$5.8 billion by 2021.[23]
Plainly, the Moscow leadership has not been delighted by Ukraine’s economic and diplomatic reorientation. But it should be stressed that Russia has never denied the right of Ukraine to seek economic integration with the West or to join the EU. Where Russia has actively contested Ukrainian policies, this has been on the military-strategic level.
Two failed concepts
As can be seen, the notion of ‘spheres of influence’ has proven useless as a tool for explaining Russian policies both in the case of Central Asia and Ukraine. Again and again, the notion’s postulates have been contradicted by the facts.
The inadequacy of ‘Russian sub-imperialism’ as a concept may, perhaps, be regarded as less clear-cut. But in Central Asia, this supposed sub-imperialism has not seen Russia dominating the scene, either by comparison with China or with relation to the countries of the region, which despite Western economic encroachments have kept their self-determination notably intact.
Nor does the idea of Russian sub-imperialism show real explanatory power in the case of Ukraine. Until about 2016, independent Ukraine existed and operated within Russia’s economic orbit, and during that period, it grew drastically poorer.[24] The evidence, however, shows clearly that Ukraine’s long economic slide resulted from the mayhem of its own capitalism, installed on the basis of Western advice and on the neoliberal dictates of lending organisations such as the IMF.[25] It was not the consequence of Russian actions.
For decades, Russian purchases of Ukraine’s advanced manufactured goods were almost alone responsible for keeping the relevant sectors of Ukrainian industry from collapse – a curious ‘imperialism’ or ‘sub-imperialism’, if you will. Moreover, Russia throughout much of this period allowed Ukraine to purchase Russian gas at a heavy discount on the price paid by Western customers, including for Ukrainian resale to third countries at a higher price than what was initially paid to Russia. This is, again, strange behaviour for an alleged ‘Russian imperialism’.
Ukraine characteristically has recorded strong deficits in its merchandise trade with Russia, but during the years leading up to the Euromaidan, the trade deficits with Russia were much smaller than those with the West.[26] Furthermore, the deficits with Russia have throughout been traceable mainly to Ukrainian purchases from Russia of relatively low-tech industrial inputs, not of the high-value finished goods typical sold by imperialist companies to the developing world. In 2021, the main Russian exports to Ukraine consisted of coal briquettes, refined petroleum, petroleum gas, and ammonia.[27] The category of “machines” made up less than ten percent of the total, and in dollar terms, was only a little larger than sales of Ukrainian machinery to Russia.[28]
To put Russia’s economic dealings with Ukraine in better perspective, we may reflect in more detail on Ukraine’s experiences since it began its integration with the undoubted imperialism of the West. The years following the Maidan did not see a revival of Ukraine’s economy. An early blow came following the secession of Crimea and its rejoining to Russia, when the new Kyiv government in April 2014 placed a ban on sales of military-related goods to Russian purchasers. The effect was to cripple numerous hi-tech Ukrainian enterprises that had produced components for Russia’s defence sector. Falling world prices for Ukraine’s wheat, iron ore and steel then exacerbated the impacts of reduced trade with Russia, and Ukraine entered a sharp recession. In 2021, its real GDP was still almost ten per cent below the level reached in 2013.[29]
Even with most tariffs removed, European purchasers showed little interest in Ukraine’s manufactured goods. These were unfamiliar and, in technological terms, often behind the cutting edge of Western menufacturers. Sales of the country’s agricultural produce remained restricted, caused in numerous cases by continued EU import quotas. At the same time, reduced Ukrainian import tariffs saw the national market flooded with the sophisticated, attractive products of European manufacturers. Numerous Ukrainian firms were outcompeted and plunged into bankruptcy.
Defying predictions, Western investors did not flock to Ukraine to buy up ruined enterprises, refurbish them and begin using cheap labour and cheap raw materials to manufacture products for Western consumers. Ukraine’s chaotic governmental processes and the notorious corruption of its governing and regulatory institutions proved powerful deterrents to foreign investment. It remained tiny.
A radical de-industrialisation, under way since the return of capitalism to Ukraine in the 1990s, thus accelerated under “deep and comprehensive free trade”. As the years passed, industries as important as automobile and aerospace manufacture ceased effectively to exist. European capitalism was incorporating Ukraine not as a developed country but as a cheap supplier of low-tech generic goods such as iron ore, steel billets, basic chemicals and chicken meat.
The genuine peripheralisation and plunder of Ukraine, it can be seen, has been carried out by the advanced capitalism of the West. In these circumstances, arguments designed to blame Russia for Ukraine’s economic dilemmas over the years are distracting and unhelpful.
Notes
[1] Cited in:
https://www.cadtm.org/Western-Imperiali ... obal-South
[2] Ibid.
[3] See:
https://roape.net/2018/05/16/is-imperia ... rick-bond/
[4] Ibid.
[5] World Bank data. See:
https://en.wikipedia.org/wiki/List_of_c ... l)_per_cap
[6] This may be judged from the scale of Russia’s financial wealth (bank deposits, stocks, bonds, money market funds, and so forth) per adult. According to the Credit Suisse Global Wealth Databook, this figure at the end of 2021 was U.S.$13,683. The corresponding figure for the U.S. was U.S.$468,295.
[7] See:
https://newcoldwar.org/the-myth-of-russ ... -analyses/
[8] Ibid.
[9]
https://en.wikipedia.org/wiki/List_of_c ... _(nominal)
[10]
https://www.silkroadbriefing.com/news/2 ... ve-months/;
https://www.russia-briefing.com/news/ru ... mics.html/;
https://www.silkroadbriefing.com/news/2 ... nvestment/
[11] See:
https://thediplomat.com/2022/09/what-do ... tral-asia/
[12]
https://thediplomat.com/2022/09/what-do ... tral-asia/
[13]
https://www.lloydsbanktrade.com/en/mark ... investment
[14]
https://roscongress.org/en/materials/ro ... razvitiya/
[15]
https://www.mfa.am/en/international-organisations/1
[16]
http://www.hscentre.org/asia-and-pacifi ... azakhstan/
[17]
https://thediplomat.com/2022/09/what-do ... tral-asia/
[18] See: Renfrey Clarke, The Catastrophe of Ukrainian Capitalism: How Privatisation Dispossessed and Impoverished the Ukrainian People. Sydney, Resistance Books, 2022, p. 85.
[19]
https://newcoldwar.org/the-myth-of-russ ... -analyses/
[20] Ibid.
[21] Clarke op. cit., p. 80.
[22] Ibid., p. 84.
[23]
https://tradingeconomics.com/ukraine/imports/russia;
https://tradingeconomics.com/ukraine/imports-by-country
[24] World Bank figures indicate that in 2021 Ukraine’s real GDP was still 41per cent below its pre-independence peak, recorded in 1989. See:
https://data.worldbank.org/indicator/NY ... cations=UA
[25] This is the thesis my book The Catastrophe of Ukrainian Capitalism, op. cit.
[26] Ibid., p. 56.
[27]
https://oec.world/en/profile/bilateral- ... rical-data
[28]
https://oec.world/en/profile/bilateral- ... artner/ukr
[29]
https://data.worldbank.org/indicator/NY ... cations=UA
https://libya360.wordpress.com/2023/08/ ... ist-power/
******
What is happening in the Russian economy?
Enforced separation from the world market has reinforced moves back towards nationalisation and planning.
Proletarian writers
Tuesday 8 August 2023
All serious commentators now agree that, far from bringing Russia to its knees, the need to respond to the sanctions war that was launched in 2014 has motivated a consolidation of its economy and a big shift back towards planning and state control of key industries. Whilst continuing to sing hymns in praise of capitalism, Russia’s leaders are increasingly looking to the period of socialist construction for inspiration.
Ever since the treacherous ‘secret’ speech given by Soviet premier Nikita Khrushchev in 1956, the reputation of the revolutionary period of socialist construction in the USSR (personified in the figure of Josef Stalin) has been routinely traduced and slandered to the descendants of those who built it – first by revisionist leaders and then by their openly capitalist successors across the formerly Soviet territory.
This was done in spite of the fact that these leaders stood on the achievements of this period – as even Mikhail Gorbachev was forced to admit in his book Perestroika. Revisionism degenerated to such a degree that by the time the Soviet Union entered its period of counter-revolutionary collapse (1989-91), the leadership of the party and state was dominated by openly anticommunist leaders who sought to bury Stalin – and with him all the great achievements of the revolutionary period.
Advanced economy destroyed by looting and imperialist domination
As the planned economy was destroyed, the 1990s saw the impoverishment on a mass scale of the Russian working class, with devastating effects that President Vladimir Putin has recently stated were similar to a war.
It was indeed a war – a brutal class war unleashed by the Russian comprador bourgeoisie, during which many of the achievements of the Socialist period were destroyed by the ‘market reforms’ enacted by Boris Yeltsin’s regime, under the firm tutelage of the IMF, the World Bank and all those other US-aligned bastions of ‘freedom’ and ‘democracy’.
During his speech to the Valdai Club last November, President Putin reflected on the effect that the unrestricted flow of foreign capital had had upon Russian industry.
“How are things going today? If the west is selling medicines or crop seeds to other countries, it tells them to kill their national pharmaceutical industries and selection. In fact, it all comes down to this: its machine tool and equipment supplies destroy the local engineering industry.
“I realised this back when I served as prime minister. Once you open your market to a certain product group, the local manufacturer instantly goes belly up and it is almost impossible for him to raise his head. That’s how they build relationships. That’s how they take over markets and resources, and countries lose their technological and scientific potential.
“This is not progress; it is enslavement and reducing economies to primitive levels.”
This is indeed what happened to Russia in the period of the comprador Yeltsin regime. Many long-established and very advanced industries in Russia were destroyed by the actions of the compradors and their American masters.
The telling description of Russia by the late senator John McCain sums up the approach of imperialism to its victim countries. When McCain called Russia a “gas station run by a dictator”, this was not really a correct definition of Russia in the Putin era, but it was an acturate description of how the American imperialist bloc wishes Russia to be.
As President Putin observed, the effect of western ‘investment’ in Russia during the period of unbridled looting of the Soviet people’s wealth had been to set the country back economically and socially by decades.
Gradual restoration of national sovereignty
The story of the Putin era has been one of a slow, incremental repair of the economy and state, with the US imperialists screaming about Putin the ‘dictator’ every time he took a step to restrict their interests or those of their puppets within Russia. The Putin era represents the slow turn away from the Yeltsin period – and the reassertion of the power of the Russian state over the national economy has become an ever more important factor in this process.
It is in this light that we should understand the moves being made by in Russia’s ruling circles to learn lessons from the great period of industrialisation represented by the five-year plans of the 1930s, 40s and early 1950s.
In June of this year, a meeting was held in the Kremlin as part of the St Petersburg International Economic Forum (Spief). It was attended by high-ranking members of the Putin administration and regional governors including Denis Pushillin, acting head of the Donetsk People’s Republic.
The meeting was focussed on a discussion of a new book entitled Crystal of Growth. To the Russian Economic Miracle, and the Kremlin website read-out of the meeting was remarkable, after decades of anti-Stalin propaganda, for its positive assessment of the Soviet revolutionary period:
“In the face of even stronger western sanctions than today, the [Soviet] economy without external financing grew 14 times, became the first in Europe and the second in the world, and the average annual growth rate was 13.8 percent – excluding four war years. At the same time, life expectancy increased by 26 years, the population – by 46 million people, despite the Great Patriotic War, which falls in the middle of this period of rapid growth.” [Note well this large population growth despite the incredible losses of the war!]
The report also made an important observation about the changing international situation:
“The participants of the meeting emphasised that today Russia is at the epicentre of the formation of a new world order, and answers to some questions that need to be addressed in order to form a new model of economic growth can be obtained by analysing historical materials related to the period of phenomenal growth of our economy in 1929-55.” (Our emphasis)
This represents a significant step away from the hysterical anticommunism of the 1990s, which has been slowly fading since then but is still very much present in Russian bourgeois-liberal circles.
And this changing perspective is at the root of the survival of the Russian economy in the face of the attempt to kill it via the imposition of ever-greater sanctions after 2014.
These were meant to destabilise the Russian economy by cutting it off from European markets in particular, but what actually ended up happening turned out to be a net positive for Russian economic development. It has now come to be acknowledged, even by reports in the imperialist press, that the sanctions campaign waged by the USA and its allies against the Russian Federation has failed.
US president Joe Biden promised in 2022 to “reduce the ruble to rubble” as Russia launched its special military operation in Ukraine, and this quickly failed as well.
The strategy that the imperialists had been trying to pursue ever since 2014 (when Crimea voted to rejoin the Russian Federation rather than submit to the diktat of a west-imposed fascist junta in Kiev) was to unbalance and cause a crash in the Russian economy – one which would in turn cause the collapse of President Putin’s government.
All of these attempts have failed, and the Russian economy continues steadily to improve its performance. Despite everything the imperialists have thrown at the country, and amidst a worldwide global crisis of capitalist overproduction, the Russian Central Bank is predicting GDP growth of around 2 percent for this year.
Ending the reign of the comprador class
So why has this happened? One answer lies in the slow reorienting of trade towards China, India and Central Asia over the course of the last decade. This has enabled the Russian government to avoid too negative an impact from the sanctions placed upon the previously lucrative energy trade that had been built up with the countries of the European Union.
According to the work done by Richard Connolly of the University of Birmingham, who has written one of the few serious studies of the Russian economy by a bourgeois academic, the sanctions regimes introduced since 2014 have triggered a fundamental restructuring of the Russian economy that have made it much less reliant on imports and foreign capital.
This has involved the Russian state taking a far greater role in economic planning than was previously the case. Russian government ministers (and President Putin himself) still sing hymns in praise of capitalism, but the reality of their actions tells a different story.
The restoration of capitalism in Russia was defined by extreme parasitism. The comprador elements of the new ruling class (bandits and mafiosi every one) destroyed large areas of the economy as they asset-stripped and closed down production on behalf of their imperialist masters. The only area that saw significant investment during the 1990s was the energy industry, in which British and US-based monopolies had become major players, seizing hold of large sections of the country’s assets.
This period of unbridled gangsterism started to come to an end in 1998, when an economic collapse triggered the devaluation of the rouble and a default on the country’s foreign debt. At that point, the remaining authority of the Yeltsin regime was critically damaged and the Russian parliament (the Duma) forced him to appoint a coalition government, headed by former foreign minister Yevgeny Primakov and including two communists – Yuri Maslyukov (finance minister) and Gennady Khodreyev (anti-monopoly minister).
One can imagine the panicked response of the imperialists after the reappointment of Communist party members to government positions, even if only for eight months. The cabinet lasted from September 1998 to May 1999, but it was an important development in Russia in that it represented a fatal blow to Yeltsin and also set the stage for much of what was to come by increasing state control over the economy, ending the free-for-all that had enriched the comprador clique, and imposing such measures as capital controls.
The Primakov ministry was also significant for its shift in approach to foreign relations. It was the first post-Soviet Russian government to oppose the actions of the USA, with Primakov publicly opposed Nato’s bombing campaign against Yugoslavia.
Although Yeltsin succeeded in dismissing Primakov in May 1999, he was himself forced out of office six months later. The return to elements of state control from 1998 onwards has been noted by Connolly in his analysis:
“The process of building a market economy was uneven and subject to reversal from the late 1990s onward. Consequently, what emerged was not a smoothly functioning market economy based on competition and strong property rights. Instead, a hybrid system of political economy emerged, in which pockets of relative freedom and competition coexisted alongside large swathes of the economy in which market-oriented economic change proved intractable.” (Our emphasis)
The Putin era essentially carried forward the work that the Primakov ministry had already begun, with the Russian state exerting increasing control over the economy – beginning with the removal of the most egregious compradors such as Boris Berezovsky. As Professor Richard Sakwa noted in his book The Putin Paradox:
“Putin threw the old-style oligarchs out of the Kremlin and in the famous roundtable between business and state representatives in July 2000 imposed a new balance in relations. This was accompanied by elements of ‘business capture’ by the state, in which businesses could conduct their affairs as long as they aligned their strategies with those of the state.” (2020, our emphasis)
Increasing state control in the national interest
The model that has emerged through this period is one where the state plays a central role in crucial economic sectors such as energy. In these areas, state-run firms such as Gazprom, Rosatom and Rosneft play a dominant role, and even privately-owned companies are obliged to follow state direction.
According to Connolly, the government has used profits accrued from Gazprom to promote growth in important industrial sectors that had been run down to the point of collapse. The machine tools sector, for example, has had its turnover boosted by the Russian government’s taking a more protectionist line since the 2008 global economic collapse.
This evolved further following the beginning of the Ukraine crisis in 2013. According to Sakwa: “This was not outright nationalisation, but it certainly impeded the implementation of the various plans for privatisation. This was a quasi-war economy, which anticipated confrontation with the west and allowed Russia to weather the sanctions from 2014.”
Recent changes in the defence sector, it must be noted, were starting from a substantial base. Still in existence from the Soviet period were such facilities as the giant tank production plant at Uralvagonzavod. While Gorbachev and Yeltsin had overseen partial privatisation and extensive production cuts in production (laying off three million workers in the process), this began to change direction in the late 1990s and reversed definitively in the Putin era.
Now the defence sector is organised under several giant conglomerates over which the state has direct control. According to Connolly, the decision to re-arm was taken in Moscow after the war with Georgia in 2008, which had been instigated by the US puppet regime of Mikhail Saakashvili.
Since that time, Russia’s defence industry has steadily grown in terms of budget and importance in the economy. “By reducing the industry’s dependence on imported items, and by maintaining predominantly Russian ownership (usually by the state) of the means of defence industrial production, the country’s ability to preserve an independent capability to produce a wide spectrum of military equipment was sustained.” (Richard Connolly, op cit)
This has been crucial in allowing Russia to sustain its production of war materiel during the 18 months (so far) of the special military operation. Having decided to boost its defence capabilities, Russia’s leaders were able to make use of their immense Soviet legacy, building up a war industry that was free from foreign interference.
The ability of the Russian war industries to dramatically upscale their production on demand also speaks to a far superior industrial capacity than exists across the entire US imperialist bloc – and is a direct legacy of the model of Soviet economic planning.
Meanwhile, the Russian government also encouraged import substitution in the food industry, rebuilding Russian agriculture and drawing upon the legacies of heavy investment made in the Soviet period. This has enabled the Russian government to free itself from dependency on European and US imports – and thus to free its people from many of the tools of imperialist blackmail and coercion.
The ever-more draconian rounds of sanctions enacted against Russia by the US-led imperialist bloc since February 2022 have, therefore, failed because the Russian government had spent almost a decade building up self-reliance in key areas such as energy and food production, as well as creating a system of state planning to direct certain vital economic sectors, having realised that ‘the market’ was in actual fact a very poor master in any area that really matters for a country’s independent survival.
The unparalleled power of Soviet central planning
In this situation, it is not surprising that a greater openness now exists even in government circles towards learning from the period during which the USSR succeeded in the teeth of the opposition of the entire imperialist world – and when the latter was much more powerful than it is today. Added to this is, of course, a growing partnership with the People’s Republic of China, with its rapid advances on all important fronts and its new position as the world’s biggest manufacturing economy.
The renewed Russian interest in the USSR’s successful building of a strong and resilient industrialised economy (one that not only survived imperialist economic attacks but which broke the back of the Nazi war machine in WW2) is perhaps unsurprising after the imperialists have spent a decade trying to put Russia into a state of siege.
Reflecting upon the successes of this period, Russian Communist leader Gennady Zyuganov observed recently in a programme document of his party (CPRF):
“Under the brutal blows of the war, the agriculture of the USSR also confidently survived. In the eastern regions, the acreage increased by five million hectares during the war. Agricultural science had successfully worked on the development of new, more resistant to cold grain crops. Winter crops in Siberia increased by 64 percent, in Kazakhstan and in Central Asia by 44 percent. Sixty-seven million wagons of cargo were transported from these regions to the front and other areas of the rear.”
Even after the forces of German imperialism had inflicted horrific damage upon the country, the planned economy was able to secure a recovery of the damaged areas in record time. As Zyuganov stated:
“A third of the fixed assets destroyed by the Nazis were restored before the end of the war. The prewar level in industrial production was reached already in 1948, and in agriculture by 1950. Real per capita incomes in 1950 were 40 percent higher than in 1940. From 1946 to 1955, 201 million square metres of housing were put into operation – almost as much as during all the prewar five-year plans combined.”
These incredible achievements were made possible by the fact that a planned economy makes far more effective use of resources than capitalism can ever do, and also because of high level of involvement of the masses in the planning process. The workers in the USSR during the Stalin period understood that they were playing a vital role in the building of a new society in which they were the rulers.
When speaking of the results of the first five-year plan in 1933, Stalin observed: “The party’s confidence in the feasibility of the five-year plan and its faith in the forces of the working class were so strong that the party found it possible to undertake the fulfilment of this difficult task not in five years, as was provided for in the five-year plan, but in four years, or, strictly speaking, in four years and three months, if the special quarter be added. That is what gave rise to the famous slogan, ‘The Five-Year Plan in Four Years’. And what happened?
“Subsequent facts have shown that the party was right.
“The facts have shown that without this boldness and confidence in the forces of the working class, the party could not have achieved the victory of which we are now so justly proud.” (1933)
What the leadership of Communist Party of the Soviet Union (CPSU) understood at the time was that the planned economy was not a bureaucratic process but an expression of the direct role of the masses in the building of socialism.
The same holds true when we examine the achievements of other, even more backward societies that were able to achieve incredible results in reconstruction after the second world war. Albania, for instance, starting from a very low base managed to industrialise, become self-sufficient in food production, and eliminate illiteracy by the mid 1950s.
This was done by harnessing the revolutionary energy of the masses within the framework of a planned economy.
Speaking of these developments in Albania, British communist William Ash wrote: “Socialist economic planning takes the same form of democratic centralism, of the mass line, as every other aspect of Albanian life. It is based on the maximum participation of the masses …
“The meetings of working collectives on the fourth five-year plan, which ended in 1970 with greater increases than those proposed in every branch of the economy, involved 174,000 discussions in which 141,000 proposals were put forward. The fact that state plans for economic and cultural development ‘bear the marks of the people’ guarantees their being successfully put into effect.”
The process by which the direct participation of the masses in the construction of the national economic plan is ensured, and by which the proletariat is thus equipped to truly become the ruling class, has of course been subjected to endless lies by revisionists and bourgeois academia alike. But now that the wheel of history is turning away from the unrestricted domination of the imperialists, much of this buried history is re-emerging – as can be seen from the evolving debate in Russia.
Once the question of the 1929-55 period is reopened in a spirit of learning, the central role of the masses cannot be ignored. The crucial part played by the revolutionary energy and creativity of the people in shaping and implementing the five-year plans of Soviet socialist construction was at the very heart of their success.
As President Putin’s recent speech shows, it is now commonly accepted in Russian government circles that the model imposed on the country via the compradors was a failure. The Russian masses, however, have always remembered the revolutionary period and Stalin far more accurately than the likes of Khrushchev, Gorbachev and Yeltsin would have liked.
It can thus be seen that the return to elements of economic planning marks a very important development within Russia – and is one of the key reasons the imperialists have increased their hostility towards President Putin every year since he came to power more than two decades years ago.
It is Putin’s slow but steady restoration of Russian sovereignty, his government’s slow pushing out of the compradors, and Russia’s moves towards a more state-directed economy that have animated the fury of the imperialists – and of the USA in particular.
All over the world, the long period of suffocating domination by global imperialist system is moving towards a cataclysmic – and potentially final – explosion as the concentration of capital reaches ever more absurd proportions, and the impoverished masses of the world are forced to confront the fact that without socialism and planning there is no way out of the downward death spiral.
The war in Ukraine and the economic changes it has brought about in Russia are all part of this process. There will be much more to come as US imperialist control continues to disintegrate and a new revolutionary wave is unleashed by the deepening crisis of the global imperialist system and its accelerating and self-destructive war drive.
https://thecommunists.org/2023/08/08/ne ... -planning/
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Explosion in Sergiev Posad
August 9, 15:59
A large-scale explosion in Sergiev Posad, with a huge mushroom cloud, was not the result of an arrival, as some had time to think, but a consequence of a violation of safety regulations and some kind of "human factor" (the possibility of sabotage cannot be ruled out) in a warehouse for storing pyrotechnic products. The consequences of the explosion and fire are being eliminated. The large hangar of the Piro-Ross company was completely destroyed (at the same time, the company itself is in a state of bankruptcy and there have been claims against it for several years through the Ministry of Defense). The buildings of the Zagorsk optical-mechanical plant were damaged. Windows were shattered in nearby houses. Dozens of people were injured, the rubble continues to be cleared.
I immediately remembered similar explosions at similar enterprises and warehouses in China and India.
https://colonelcassad.livejournal.com/8555720.html
swallowing dust
August 9, 14:50
swallowing dust
The Spanish authorities seized property allegedly associated with Russian entrepreneurs who fell under European sanctions. This was reported by radio station Cadena SER, citing data from the Department of National Security.
It turned out that 10 aircraft, 5 yachts, 357 residential properties and 22 cars of businessmen from Russia were arrested in the country. At the same time, the journalists did not disclose the names of the owners of the mentioned property. According to the radio station, the total value of the detained yachts exceeds 900 million euros (95 billion rubles).
Among other things, 65 funds were frozen in Spain, including accounts and shares that are allegedly related to Russian citizens. It is noted that all these assets are frozen pending the administrative decision of the competent authorities in each specific case.
https://lenta.ru/news/2023/08/09/yachtrussian/ - zinc
These are not a pity. All the more for a long time warned. Everything that the patriotic propaganda of the 90s warned about with regard to funds withdrawn from Russia confidently comes true in the 20s. The Russian oligarchs who brought their capital to the West now look like absolutely finished degenerates, who almost to the very end were sure that no one and nothing could take away from them.
https://colonelcassad.livejournal.com/8555407.html
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