Getting Russia Dead Right.

Western journalists claim Putin wants to ‘rebuild the Soviet Union’.

What’s wrong with this picture?

If we want to understand Putin’s Russia we have to look at the way the Russian Federation emerged from the tumultuous collapse of the USSR. Not simply a mindless KGB thug Putin was a supporter of Gorbachev and opposed the Communist attempt to overthrow Mikhail Sergeyevich and turn back the tide in 1991. The possibility of a new order was realistic in those days. Gorbachev had initiated a modicum of reform. The bloody war in Afghanistan was over. It looked as if the US might actually want a settlement on missiles. Bush had promised Gorbachev that he wouldn’t expand NATO any further eastwards. No wonder then that the majority of Russians, along with Putin, were on the side of glasnost and perestroika.

The Russian President Boris Yeltsin used this to his advantage. He was the right man for the time and the wrong man for Russia. Around this time the Bush administration was busy backing nationalists in Yugoslavia and had adjusted its aid policy to back secession to break up Tito’s dream of a state for all Southern Slavs. In the same way George HW Bush took the side of Russian nationalism to break up the Soviet Union. The great reformer Gorbachev had become a hindrance to be thrown on the wayside. The US sought to align itself with Boris Yeltsin. The Russian people flocked to Yeltsin after he became a political centre of gravity for democrats in the midst of the botched coup. It wouldn’t last. The real agenda had nothing to do with ideals of democracy.

The preference was for a selection of tiny fractured states which could easily be picked off one by one and subjected to economic underdevelopment. This matched Yeltsin’s personal aims for power and grandeur. In a series of manoeuvres Yeltsin cut deals with the leaders of Soviet republics, including Leonid Kuchma of Ukraine, and saw the Soviet Union dissolved. This is one of the ironies of the present crisis in Ukraine. The coalition of neoliberals and ultra-nationalists who seized power form Yanukovich have done so to pull Ukraine out of Russia’s orbit and closer to the EU and NATO powers. Yet it was nationalism followed by neoliberal prescriptions which have led to this conjunction of rebellion and incursion. It’s very likely that the people of Ukraine will not be served by these events as we can see from recent Russian history.

Within a week of Gorbachev’s resignation the new path was embarked upon. The Russian Parliament gave the President free reign to implement an economic programme of deregulation and privatisation. Yeltsin had the advice of the economist Jeffrey Sachs and such creatures of the market as Larry Summers. The plan was to establish the conditions for a market society as fast as possible. First the price controls were eliminated. The resulting hyperinflation quickly ate through the savings of most Russians. This was soon followed with a rapid privatisation of over 200,000 state-run companies. The Russian people suffered for this and the devaluation of the rouble, millions fell into unemployment and even those working were not guaranteed a wage. Every Russian was given vouchers to buy shares in the newly private companies. Desperate for cash most people sold their vouchers cheaply to ruthless businessmen. But it was just the beginning.

After a year of ruling by decree Yeltsin faced the first signs of opposition from the Parliament. With the approval of Washington the Russian President dissolved Parliament and suspended the Constitution. When the parliamentarians occupied the building in protest Washington backed his decision to besiege the building with tanks and shell them into submission. The economic reforms were taken further. Even more controls on prices were removed (going as far as to remove controls on basic food goods like bread), state expenditure on social services was slashed to the bone, and the pace of privatisation was raised. Yeltsin found his real constituents in the emergent bourgeoisie – later to be dubbed ‘the oligarchs’ – who, with his help, were stripping $2 billion out of the country every month. He undersold enormous industrial assets and resources to these people at sometimes less than 2% of their real value.

What was the end result of all this? By the end of the decade 74 million people were plunged into poverty, with 37 million living in poverty ranked as ‘desperate’. Meanwhile Moscow became the home city to the most billionaires of any other city in the world. In 1999 Boris Yeltsin was a barely functioning figurehead with a coterie of close advisors and cronies around him known to the press as ‘the family’. It included oligarchs like Roman Abramovich and Boris Berezovsky. It would be this same coterie which selected Putin to succeed Yeltsin. It was appealing as the Kremlin was wracked with corruption scandals and Putin was the head of the FSB, the successor to the KGB. The oligarchs thought they could control him and use him as a battering-ram against their enemies who were looking to crack down on corruption. Putin was soon made Prime Minister. Terror attacks in Russia gave Putin the opportunity to wage war on Chechnya and boost his popularity.

The oligarchs expected Putin to be compliant and follow the Yeltsin plan of handing over Russia’s vast wealth of resources to them and their friends. Putin became President in 2000 after Yeltsin’s resignation was secured by the oligarchs. Putin had been underestimated by his allies. He soon consolidated his position and turned on them. Boris Berezovsky fled to London to escape arrest. He was soon joined by other oligarchs. Putin smashed his old allies and set out to strengthen his position as a Hobbesian force of order and stability after the disarray of the 1990s. He has aligned himself to oligarchs running the energy industry. The role of the state would now be reasserted and buttressed with tough populist appeals to chauvinism. Putin stands as the man who can flush out all the “problems” facing Russian society, whether it’s Chechen terrorists, corrupt oligarchs, or more recently homosexuals. He’ll even keep the factories running on schedule.

Now with Putin in the Kremlin the West is much more nostalgic for the days when Boris Yeltsin ran a money laundering operation out of that very building. There was never much scorn in Western governments for Russia for its savagery towards the Chechens and their bid for independence. Instead the Russian state is to be demonised for its incursions into Georgia in 2008 and, of course, Ukraine in 2014. Yet the killing of tens of thousands of people in Chechnya, since 1994, on and off, hardly gets substantive coverage in the Western media. The real problem Putin’s Russia poses for the EU and NATO is that Moscow is much less willing to accept the expansion of NATO outposts to border-states. The Russian Federation has a brutal government, but it is not feared or loathed because for its brutality, it is despised because it stands as an abandonment of Yeltsin’s market reforms and an opponent to US influence in its old backyard.

This was written and published for the Third Estate.