The International Monetary Fund and the World Bank have announced they will lend the Yeltsin government in Russia as much as $24 billion, some of it outright aid with presumably no strings attached. This deal is likely to affect relations between the former Soviet Union and the U.S. in a most profound way. It will also add a new burden to workers in both countries.The U.S. is about to get more and more deeply involved in the affairs of Russia in particular. And the workers in the former USSR will over time become more educated about the true nature of U.S. magnanimity when it comes to loans or credits.
What is the World Bank?
The IMF and the World Bank, which interchange staffs, bring together a small nucleus of bankers and financiers who dominate the world economy's financial and economic structure. As of 1991, 153 countries, covering the vast majority of the human race, were members.
Many countries throughout the world that have dealt with the IMF and the World Bank have learned to their grief that the relationship becomes more and more a burden. They soon find themselves unable to get out of its grip.
Superficially, the IMF is set up so that population, economic stability and other factors are weighted such a way that there is a modicum of equality among the members. How does it actually work out? Well, the Netherlands, with a population of 10-15 million, has the same share in the bank--2.5 percent--as China with its population of 1.1 billion.
There's another small difference: the Netherlands is an exploiting, imperialist country whose ruling class has lived off the sweat and blood of colonial peoples. China, despite some of its socialist achievements, is an oppressed country. In China the government is in daily conflict with pro-imperialist forces.
India has a slightly larger share, 4.3 percent of the total assets, but that's only because it's bracketed with Pakistan, Bangladesh, and some smaller countries.
The managing director, always a European, comes from France at present. The president of the World Bank is always from the U.S.
The countries with the most invested are the U.S., France, Britain, Germany and Japan. Originally India was one of the inner group, but it was replaced by Japan. India is hugely indebted; Japan is a creditor nation.
The U.S. at one time completely dominated the organization, lock, stock and barrel. But over the decades, capitalist Japan and Germany have made their economic and technological weight felt to the extent that the U.S. now has to treat them as partners.
Each country is assigned its quotas according to its economic strength. Under this system and given the tremendous decline in production since perestroika was introduced, Russia and the republics' share will probably be about the same as China. But Boris Yeltsin, the leader of the counterrevolutionary cabal now in power, says that ``out of pride'' Russia should be higher than China.
Attitude toward Third World
The workers of Russia should know who they will be dealing with at the World Bank. For instance, there is the bank's chief economist, Lawrence Summers. On Feb. 10 the Washington Post cited a lengthy internal memo he wrote in which he said, "Just between you and me, shouldn't the World Bank be encouraging more migration of dirty industries to the LDCs [less developed countries]?''
He proceeded to list the reasons, noting that "underpopulated countries in Africa are vastly underpolluted."
Summers then explained, the Post reported, that "carcinogenic emissions are of greater concern in a country `where people survive to get prostate cancer' than in one where a fifth of the population dies in childhood and that countries with the lowest wages should have `a given amount of health-impairing pollution. ... I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable, and we should face up to it."
As you can imagine, this generated a strong backlash. Later he apologized, saying it was only meant as irony. Some joke!
The Post let a little sunshine into what are usually dark areas. Up until now, there has been nothing but praise for the Harvard MBAs and other hotshots who run these powerful institutions.
They want it both big and small
There's a curious contradiction in the package deal being offered to Russia. The big business press here will try to make it appear to U.S. workers smaller than it is, while at the same time the press must make it look larger than life to Russian workers.
Also, the architects of this deal, especially those in the United States, have had to craft it with a view to the presidential primary elections here. But it is also framed as to make it appealing to the Congress of Deputies now meeting in Russia.
There are dozens of countries belonging to the IMF and World Bank whose governments haven't the slightest idea of when this package deal was arrived at and who was or was not consulted about it. These smaller nations must soon try to learn how much each one must pledge to the package. While they have to account for the expenditure in their own countries, they have little say over how it is spent.
The big problem with this package is that it is mainly the work of the seven nations called the G7: the United States, Britain, France, Germany, Italy, Canada and Japan. The U.S. government is the principal lender. Germany has already contributed much more to the former Soviet Union, but that is pursuant to an agreement to withdraw Soviet troops from Germany, which will take a period of time.
How is it that the U.S., now the world's biggest debtor nation--that is, the biggest borrower--is also forced by circumstances to become the biggest lender? Is this not a very acute contradiction that is bound to lead to an explosion?
Yet this contradiction is not discussed in the big business press here. The only question raised is whether, in Bush's own words, "It is in our own interests and will redound to our benefit." Bush says it will.
Generosity or `interest'?
Here we have a little admission from Bush that it's not all generosity. It's in "our" interest. But who does he mean by this? Does he mean, for instance, the workers who have been on strike against Caterpillar for more than five months? Does the word "our" mean the hundreds of thousands who have been displaced as a result of the advances of technology, and who will never get their jobs back? Just who does he mean by "our" and what does he mean by "interest"?
Of course he means the bankers and the industrialists. They are rubbing their hands at the prospects for advancing their interests through this deal.
If it is to benefit anybody, it will be the bankers and industrialists, not just in the U.S., but in all the leading imperialist nations--Britain, France, Germany and also Japan, although Japan has many competing interests with the U.S. They see a broken-down, dismantled USSR, which just a few years ago they called a "superpower." Then they stood in awe, perhaps even fear, of the USSR. Now they feel on the verge of being able to lay their hands on its fabulous wealth.
What Gorbachev thought he was doing
It is now more than six years since Gorbachev took over in the USSR as General Secretary of the Communist Party. He tried to get the world capitalists to make concessions to him in the form of loans and credits. In return for these concessions, he offered to open up the USSR to investments by these capitalists. He promised them full freedom to operate on an open market.
It should also be noted that from practically the first month Gorbachev took over, the imperialists praised and then flattered him as a great, wise leader. He never seemed to take the advice of August Bebel, who said that any workers' leader being praised by the enemy should ask himself why. Bebel had headed the German Social Democratic Party in the 19th century when it was militant and progressive.
Henry Kissinger, the former U.S. Secretary of State and a principal adviser to the old Rockefeller dynasty, says Gorbachev, whom he knew well, just wanted to liberalize communism but couldn't do it. This really means Gorbachev thought he could maintain a socialized economy where the workers owned the means of production, while allowing capitalism to grow in areas like agriculture and the service industries. He would also let foreign capitalists come in and invest in the huge industries like oil, gas, metallurgy, even gold mining, as long as they behaved themselves politically and didn't infringe on the sovereignty of the USSR.
Gorbachev was a conciliator to world imperialism. He thought the two systems--capitalism and socialism--could work together peaceably. And in response to his concessions, the U.S. in particular would considerately allow the USSR to become part of that small, inconspicuous group of seven bandit imperialist nations who run the world capitalist system when it isn't running them.
No concessions from imperialists
After six long years, it became very clear in both the disintegrating USSR and in the U.S. that Gorbachev's plan to remodel the Soviet Union to suit the leading world capitalist financiers would not succeed. The capitalists took advantage of every concession. They gave none in return. They wouldn't even let Gorbachev or the USSR put a foot in the door of the IMF or World Bank. He got something called an associate membership for the USSR, but nobody knew what this status meant.
It certainly didn't mean the IMF or the World Bank would open their cupboards and lend money or give aid to the USSR. In one way or another, Gorbachev had to go because the biggest, most powerful and most predatory bankers and industrialists in the oppressor, imperialist countries no longer had any use for him. At home in the USSR, his plans proved to be a series of disasters, one after the other.
Boris Yeltsin then came to the rescue. Of whom? Not the workers, not the peasants, not the ordinary working people who had built the vast land called the USSR with 70 years of work and struggle. The USSR had had so many monumental victories--in industry, agriculture and in military affairs, not to speak of its achievements in outer space. The chaos and dislocations which have taken place in the USSR cannot be regarded as arising from socialist construction.
Yeltsin promised so much when he was Gorbachev's opponent. Now the country is in a worse situation than when he took over. None of the promises Yeltsin made has been kept. Most important, he promised to quickly improve the economic situation of the mass of the people if only he could push through his program of privatization. He has so far completely flopped in this.
But the imperialist countries' bankers and industrialists are eager to help him because they feel he is their last card.
They have decided to go full steam ahead at this time for two reasons: First, they have become confident that Yeltsin will be obliged to fully cooperate with them and carry out the IMF and the World Bank's "recommendations". Second, the imperialist system is in the throes of its deepest economic crisis since the early 1930s. This time no "small" wars like the massive invasion and destruction of Iraq can be the means to reverse the process of economic decline.
The democrat dictates to Congress
Right now, the Congress of Deputies, Russia's parliamentary body, is in session. The package deal the imperialists have worked out is calculated to entice them into accepting the diktat of the imperialist banks. If that doesn't work, many will be bribed--or bludgeoned.
Should they fail to accept the imperialist-imposed privatization and supervision, the imperialist banks will support Yeltsin's penchant to rule by decree instead of by parliamentary legislation.
Yeltsin calls himself a democrat. He is a democrat who would rather abolish this very fragile bourgeois parliament and rule by dictatorial decree.
Despite the unrepresentative character of the Congress of Deputies, the growing discontent and frustration in the country are so strong they find a reflection in that parliament. That is why Yeltsin would prefer to abolish it altogether.
Yeltsin took up where Gorbachev left off. Gorbachev thought he would retain the basic socialized ownership of the means of production and maintain a looser but united federation of all the republics in the USSR. Yeltsin is headed in the direction, clearly and unambiguously, of continuing the breakup of the USSR and putting the nationalized industry up for sale by auction.
The imperialists are at last united in thinking the time is ripe to intervene in full force to virtually seize the USSR's economy. No, they're not moving in militarily, just financially and economically. This package deal symbolizes all their hopes and aspirations. It is calculated to guarantee a peaceful transition to a full-scale capitalist system.
Soviet property on auction block
We used the word "auction" earlier. It's not hyperbole. It's actually a process already going on in light industry in the USSR.
An April 4 Associated Press dispatch from Nizhni-Novgorod, Russia, was titled, "First Mass Auction of State Property Held in Former Closed Zone." It describes the auction of a hairdressing shop, the first in a series of auctions of state-owned businesses in that city. The auction was organized with the help of a World Bank affiliate. "It's the first serious attempt," wrote the AP, "of privatization in Russia."
The World Bank's International Finance Corporation hopes to devise "a plan to privatize in six months all 2,000 city-owned small businesses, including cafes, barbers, tailors and shoe repair shops." Admittedly, this is not a big deal even if carried far and wide; it is still in the area of the service industries. However, note under whose auspices this privatization is being done. It's the World Bank, which works hand in glove with the IMF. Both are controlled by the imperialists, with the lion's share in the U.S. government's hands.
If this auction is to continue as planned, the sellers must of course have bidders or buyers with money. Where does the money come from? That is the big question. And it's all the more questionable because these bidders or buyers of large shares refuse to divulge the sources of their money.
It is true that inflation has reduced the value of the ruble, so more rubles have to be printed. But those who have large sums of money available not only refuse to reveal where it comes from but, according to earlier reports, are attempting to change current laws in Russia and elsewhere so they won't have to.
The existence of the "shadow economy" over a long period of time was an admission of the shortcomings in socialist construction. On the one hand it supplemented the economy; on the other hand, it challenged it. Now the shadow economy has joined forces with the bourgeois elements in the state apparatus. It spawns a social grouping eagerly waiting for the imperialist loans and credits to start coming in. They are not builders; they are wreckers. This is widely acknowledged in the U.S. imperialist press.
Workers' demonstration in Nizhni-Novgorod
The IMF's overall objective with the loans and credits in the package deal is to supply funds to rob the industrial and technological apparatus of the USSR and to ravage its natural resources. This is well understood in Nizhni-Novgorod. The first auction, the AP reported, became the site of a significant demonstration protesting the privatization of the hairdressing company. An estimated "250 workers, mostly women, demonstrated outside the auction hall. Many feared they would lose their jobs or that necessities, such as bread and milk, would disappear as shopkeepers stock more profitable goods."
The process that began with Gorbachev's maneuvers to accomplish what he and many of his supporters thought was a means of enticing foreign capital to help build the USSR turns out to be in truth a process to bring back capitalism and ensure the enslavement of the former USSR to the predatory imperialist powers. Could anything be clearer?
Of course, this is not yet an accomplished fact. But the capitalist reforms have accomplished the breakup of the union and poisoned relations among the republics and the many nationalities. They have revived greed and avarice, which accompany privatization. They've brought back all the old prejudices and stimulated bourgeois individualism as against socialist collectivism.
The net result is what was a narrow social grouping of bourgeois elements, nurtured by the privileged, bureaucratic apparatus of the state and the party, has now grown to such menacing proportions that it threatens to completely swallow up the old state and the party apparatus as well.
Yet communism lives, even as this process goes on. The the workers' demonstration in Nizhni-Novgorod may have been small even in comparison to others in Moscow and around the country, but it is the wave of the future.