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This article recently appeared in FREEDOM (anarchist fortnightly) FREEDOM carries at least a page in every issue of international news of interest to the anarchist movement around the world. For a free trial edition write to: FREEDOM PRESS IN ANGEL ALLEY 84B WHITECHAPEL HIGH STREET LONDON E1 7QX Focus on... THE FORMER SOVIET EMPIRE BACK IN THE XUSSR Part One Last year we looked at the former USSR arguing that it was being set up as an investment opportunity for the west with 'stability' being engineered by oppressive regimes led by ex-communists. Eight months on has the west turned its back on this region as the press seemed to be saying it might after the election 'triumph' of the Liberal Democrats?... When we last focused on the Ex-USSR at the turn of the year the press in this country was full of stories of emergent fascism, Russian military involvement in the former Yugoslavia and indeed nuclear war was being touted as back on the cards. We said this was a smokescreen to cover up for the non-democratic activities of 'our man in Moscow' Mr Yeltsin and we said that the truth of the matter would out in the investment strategies of the west. So what has been happening in the aftermath of the election so decried over here? Richard Layard writing earlier this year in the Financial Times demonstrates that it is now safe to talk down the panic started by the west when he says that Russian politics, 'is probably more stable now than at any time since the reform began. The government is a broad national coalition in which most of the key industries are headed by reformers. Few westerners seem to realise this'. Not surprising given the over the top hype given to Mr Zhirinovsky's mediocre election performance. What has happened to those Liberal Democrats who were going to blow the reform programme off course as papers like the FT were proclaiming last December? Indeed it is very much business as usual in the Ex-USSR. Mr Yeltsin continues with his high handed approach dismissive of all except his new found G7 friends and the IMF. The latter now have virtual control over the budget with Yeltsin the man up front laying down the orders. In May he announced the scrapping of quotas and licences for oil and gas exports and a three year tax holiday to foreign investors in the manufacturing sector. At the same time he 'instructed' the government to submit to parliament by mid September legislation lowering companies taxes by between 10 and 20%. Finally he decreed a three year exemption from profit tax for all manufacturing ventures with more than 30% foreign ownership. The rationale for all this rush of economic activity is of course justified in the name of 'development' or 'convergence' - the need to stake out one's place in the Old American Disorder. Who pays the bill for this rejection of the notion of a self sustaining economy for one of the world's areas the richest in resources? Is all this foreign capital paying dividends? Acording to the FT the former Soviet block is suffering from a crisis 'more serious and crushing than any developed country has had to withstand since the second world war' They continue to talk of 'reeling' and 'plunging' economies. Our man Boris solemny concured in May saying that the economy was on the brink of collapse. But we don't have to listen to Boris. The figures speak for themselves. All the major indicators are currently in a pretty doleful state. There have been record slumps in industrial production (down 25% on last year). GNP has gone down to about a third of the level it was at when the wall came down back in historic times. Unemployment is set to hit 7% (having started from a 0% base rate). Over the same period inflation has nearly doubled (rising by some 400%). Such figures of course are just the shorthand for the human trajedy taking place. Staple foods such as bread and 'luxuries' like meat are well beyond the pockets of those who are unimportant to the new world order. Reports of pensioners pawning their teeth in order to eat, people selling their clothes (or themselves) on the street. It was all too predictable. Five years ago there was nothing in the shops but you had the money now the shops are full and you can't afford it. In one anecdotal tale on BBC Radio 4 (11/11/94) a Russian spoke of how under the Soviets he knew he would have to save 20 years in order to get a car - now he knows he will have to wait a lifetime. A EUROPEAN PERIPHERY The former USSR is fast on the way to becoming a new cheap manufacturing hinterland for western capital in the form of multinationals and the western banking system. Soon they will own the commanding heights of the economy. Indeed the process is well under way. To take a couple of examples. The UKs biggest multinational (after the Anglo-Dutch TNC Unilever) BAT industries announced, also in May, that it is to invest ?133 million in Uzbekistans tobacco industry. This, according to Ulrich Hertez, BAT's tobacco managing director, will improve BATs export prospects to republics in Central Asia and elsewhere in the Ex USSR. The investment makes it a monopoly supplier - so much for competition - and will be added to lucrative deals already secured in the Ukraine and Hungary with Moscow and Southern Russia next in line. Uzbekistan is a favourite for investment with the stability brought by its president Islam 'We are prepared to set straight the brains of hundreds' Karimov who is widely suspected of having arranged the car bombing of his main political opponent a few years ago. No political parties here - but you'll look far to find a businessman put off by such minor details. As for foreign investment coming in from the west's banking institutions stage two of the privatisation programme began on July 1st when westerners were invited in to buy up some of the pickings. The world's biggest gas company GASPROM is to offer 10% of its shares to foreign investors. Likewise LUKOIL the largest oil company in the country is to offer 25%. NORILSK NIKEL the world's biggest nickel producer is seeking an undisclosed level of investment from abroad as is UNITED ENERGY SYSTEMS again the world's biggest. This turmoil and the fact that industrial production is down 25% on last year and unemployment - as we have seen - is set to hit 7% leads Andrei Illarionov - the deputy head of the Economic Reform Centre in Moscow to claim that Russia may be on route to becoming 'normal' in the sense of a developing country, dependant on the west for investment, 'Russia is now likely entering the so called Romanian or Latin American way - with periods of high inflation and attempts at financial stabilisation following each other'. Clearly a Pinochet or a Chiauchesku will be required to keep the lid on the kettle. OPPRESSION TO CONTINUE But of course we've already got one. Indeed in a short article in June The Guardian informs us that the speakers of both Russian parliaments have backed a proposal to suspend the parliamentary and presidential elections that were due to take place in 1996. This will allow Mr Yeltsin to stay at the helm until the turn of the century. 'The almost casual way in which the issue was mentioned belies the desperate efforts of all concerned to batten down the hatches against a wave of social unrest capable of unseating them.', the report continues pointing out also that the date passed with no comment in the media the first sign of 'a growing consensus between parliament and president that it was in neither's interests to stick to the terms of the new constitution'. In our last FOCUS.. we said that as anarchists we were alarmed by the rise of the right but asked, 'How will Boris and the west react, not just in the immediate aftermath, but in the medium and long term?' Now we have our answer: they're all in bed together. 3rd June 1994 FT 30/9/94 Le Monde Diplomatique November 1994 22 June 94