The new clothes of
USSR
- a process which the bureaucracy gained momentum after the publication of the agreement between the centre and the nine republics on April 23 (the "document of the ten"). This document envis-
Boris Yeltsin ages a quick drawing up of a new Union Treaty followed by a new constitution and elections for the all-Union Supreme Soviet and Presidency. The agreement for the first time de facto acknowledges the right of republics to break away from
IT WAS hardly surprising that Boris Yeltsin, former CPSU boss in Sverdlovsk and Moscow, turned champion of the liberal democrats, managed to get his crown, gaining about
58% of the votes (on a turnout of 70%) in the first ever presidential elections in Russia, held on June 12. The post was tailored by the Russian People's Congress to suit
Yeltsin's needs in pushing for wide-reaching liberal reforms of
Soviet society, and the competition from five other candidates was so weak that his victory was never in doubt.
POUL-FUNDER LARSEN
HE former prime minister, Nikolai Ryzhkov, supported by the
Russian Communist Party and the military-industrial complex, was not really a serious opponent given his record of total failure as head of government and his links to the party apparatus, despised by the majority of the people.
Several other candidates ran: Vadim
Bakatin, unprolific Gorbachevite;
an
Vladimir Schirinovsky, the populist leader of the insignificant Liberal Party;
Aman Tulejev, head of the Kemerovo
(Kusbass) district soviet, trying to play the card of regional self-determination from a liberal angle; and the sinister figure of Albert Makaschov, commander of the Volga-Urals military district, playing on anti-semitism and law and order but none of them stood a chance.
Given the competition there was no need for Yeltsin to overstrain himself in acterized by a restrained absence of real mass mobilizations. Yeltsin highlighted the conciliatory line of his campaign by appointing as his vicepresidential candidate Alexander Rutskoy, Soviet army colonel and leader of the moderate Communists for Democracy faction of the CPSU in the Russian parliament.
Once again Yeltsin played with some success the role of a national rallying point: in a gesture designed to cater for national and religious sentiment he promised to restore the property rights of the Orthodox church, while several regions of Russia were promised special advantages (for example, Leningrad becoming an "economic free zone").
This assured support from nearly all lib-
6 eral and social democratic currents, with
International Viewpoint #210 • July 8, 1991 the Democratic Russia movement, the Russian Democratic Party, the Republican Party, and the Russian Social Democratic Party all endorsing his candidacy.
In the end the moderate approach was enough to sweep Yeltsin, as well his lieutenants in Moscow and Leningrad, Gavril Popov and Anatoly Sobchak, into power. The result shows that Yeltsin still retains his status as the symbol of change and opposition to the old order, although his support is probably declining. It also demonstrated the political paralysis of the CPSU, which was only able to come up with candidates such as Nikolai Ryzhkov for president and Valery Zaikin for Mayor of Moscow.
Meanwhile, the left wing had great difficulties breaking into the race, due to its numerical and political weakness, and the very rigid rules for the nomination of candidates for the election - for example, a candidate for the presidential had to be supported by 100,000 signatures.
### Yeltsin enforces undemocratic rules
While there was no attempt to put forward a left wing presidential candidate, the left in Moscow managed to collect enough signatures for the candidacy of the people's deputy, Tatyana Korzhagina, as mayor, running together with the Socialist Party's Alexander Popov. Only undemocratic rules, enforced by Yeltsin as head of the Russian Supreme Soviet, hindered Korzhagina's candidacy.
The comparatively quiet elections followed renewed attempts to establish a consensus among the main factions of the Union, but this is followed by a veiled threat of economic blockade: "The top leaders of the Union republics taking part in the meeting, while recognizing the right of Latvia, Lithuania, Estonia, Moldavia, Georgia and Armenia to independently decide on the question of accession to the Union Treaty, at the same time consider it necessary to establish the most favoured nation treatment for republics signing the Union Treaty, within the framework of a single economic space formed by them." Special work regime in basic industry
At the same time, the agreement contains a series of measures intended to strengthen central control and end the wave of strikes unleashed by the miners' struggle: "Participants in the meeting spoke out in favour of introducing a special regime of work in basic branches of industry, at enterprises which manufacture consumer goods and on railway transport", and "the leaders of the union and republics regard as intolerable any attempts to attain political ends through incitement to civil disobedience, strikes or calls for the overthrow of the existing legally elected state power bodies."2 This was concretized in a presidential ukaz from Gorbachev on May 16, decreeing a ban on strikes in the key sections of industry for the rest of the year.
Following the agreement, rumours of "secret protocols" were proliferating. These should include major concessions to the republics, such as that republican laws would take priority over union laws in most fields, and that the republics would be the motor force in the transition to a market economy with the centre acting as a mere regulator.3
In any case, the agreement aroused considerable anger among supporters of Yeltsin, first of all inside the workers' movement, where many felt betrayed by the attempt to end the strikes from above.
After the tenth of May, all the striking miners returned to work, but with the threat of resuming action if their demands are not fulfilled by mid-July. The agreement was also criticized by the ultra-liberals within Democratic Russia 1. Pravda, April 24, 1991. 2. Ibid. 3. See, for example, Kommersant, April 22, 1991.
who see it as a sell-out to Gorbachev: "It is not only a compromise between the party bureaucracy and the democrats, not only a compromise between two leaders. By all accounts, it is a mutual agreement on carrying out a certain reform variant, that is an agreement on a Communist variant of reforming society. What does this imply in our circumstances? It implies the Pavlov reform in the economic sphere a partial privatization of the industries working for the consumer market with the government retaining the "commanding heights" in heavy industry) and the contracting of a union treaty among the republics where the Communists are in power."4
This "document of the ten" is tightly bound up with the process of working out an anti-crisis programme, which can unite the two main currents of the bureaucracy. The draft of a liberal economic programme, replacing a new five-year plan, announced at the beginning of April (see /V 205), was presented to the Supreme Soviet on April 24. It was criticized by the Yeltsinites, re-worked to conform to the demands of the republics and launched in mid-May with the approval of all republics minus Georgia.
A cornerstone of the programme is massive privatizations, in the first place within trade, services and light industry, followed by the transformation of large enterprises into joint stock companies. It implies a radical restructuring of the whole system of economic regulation of society.
The number of ministries and state committees is to be cut down to 47, and three of the main pillars of the system of bureaucratic planning — the state committees for planning, material-technical deliveries and prices (Gosplan, Gossnab, Goskomtsen) - are being abolished. Some of the functions of these commit-
GORB
HAND OVER
THE CASH,
OR YOUR
tees will now be performed by a new of Economy and Economic Schcherbakov, a "modernist" apparatchik of the generation of liberal economists like Grigorii Yavlinsky and Nikolai Petrakov. On his departure for the USA to discuss Western support for the anticrisis programme, Shcherbakov painted a gloomy picture of the state of the Soviet economy: "During the last four months the national income has dropped
Sharp falls in industrial production
"Production in the basic branches of industry (oil, gas, coal, metallurgy) has dropped by 5 to 10%. Agricultural production is down 12%, and the production of consumer goods has fallen by The situation inside light industry is disincome of the population has grown by 12-20%, spurring inflation. If we do not intervene in a firm manner the national income will be down 22% and the number of unemployed reach 20 million by the end of the year." This of course was an overture to a bid for massive Wester "aid" which is increasingly seen by the main currents of the bureaucracy as the only possible option for implementing a radical market reform.
But so far the interest of private Western investors has been limited, with the credits by goverments and supranational bodies of the imperialist world being far below what liberals are hoping for. By the turn of the year, approximately 3,000 joint ventures had been registered in the USSR, but of these only 400 were actually functioning and 60% of the capital inside these firms is in Soviet hands.
The total amount of foreign invest-
USSR ments does not exceed two billion roubles, which is little more than 1% of total investment in the economy. Meanwhile, all granting of commercial loans from the
West has ceased and the much-talked-about European
Bank for Restructuring and
Development has turned out a disappointment for impatient marketeers: during the next three years, projects within the Soviet Union (primarily in the private sector can only receive aid worth
$225m. Instead the bank will efforts on its concentrate
Eastern
Europe, where the conditions for a pro-capitalist
However, the proponents of market reform are trying to mobilize much more substantial support from imperialism, which is deemed essential to get the anti-crisis programme off the ground.
The government of Valentin Pavlov has agreed that firms operating in the Soviet
Union can be owned wholly by foreigners and repatriate their profits. The next step, according to government spokesmen, is internal convertibility of the rouble by January 1992, with the aim of making it fully convertible after two
A major offensive in the diplomatic field was launched in late May spearheaded by the pro-Yeltsin
Grigory Yavlinsky (co-author of the 500day plan) and Yevgeny Primakov, member of Gorbachev's security
They published
Group of Seven", which calls for large support for the Soviet
Union in exchange for a programme of liberal reform supervised by countries. The injection of capital envisaged by the Soviet side amounts to at least $150bn in credits and investment over the next five years.
This programme could force a series of concessions from the bureaucracy and act as a major instrument for furthering development
Union, but the reaction on the part of the imperialist centres has, even so, been
One reason is the sheer size of the sum, but the question of control is just as the big imperialist powers want a strong, pro-capitalist force at the
4. Igor Klyamkin, editor of the weekly, Demokraticheskaya Rossiya, May 17, 1991.
6. Although thus sur has been called the "grand bargain" it is in fact nowhere near enough to finance the huge cost of a deepgoing economic transformation of
Soviet society. According to The Guardian of June 4,
1991, an updating of the USSR's telecom network could in itself cost as much as $163bn over the next
USSR heart of Soviet society, and in the present power vacuum neither Gorbachev nor Yeltsin can play such a role.
So far some bilateral deals have been struck with the major imperialist powers, for example the recent agreement on one and a half billion dollars in credits for agricultural products from the USA. Further agreements could be concluded at the forthcoming G7 summit for political reasons, in return for further Soviet concessions in the international arena, such as big cuts in defence spending and a reduction in aid to Cuba, but the "grand bargain" is likely to vanish into thin air.
However, the question remains whether the political alliance between Yeltsin and Gorbachev can survive even the first phases of the implementation of an anticrisis programme. A confrontation between the central apparatus and the Yeltsin wing of the bureaucracy is likely for example around the question of tax policy, where the Yeltsinites insist that only the republics should have the right spite of the government's compensation payments.
In 1990, the state committees for labour and statistics (Goskomtrud and Goskomstat) fixed the subsistence level at 97 roubles a month — after the price rises this jumped to 207 roubles. But even when compensations are counted, women on maternity leave now get 80110 roubles, students 120-130 roubles and pensioners on the lowest rate 135 roubles a month. In reality, the picture looks even bleaker, because many goods and services may only be obtained through the black market or at "negotiated" (free) prices.
For the first time in decades the people of the Soviet Union are experiencing widespread poverty, while the question of generalized unemployment is being freely discussed in the media. The liberals are well aware of the discontent among the masses and are calculating how to counter this.
As the indiscreet and merciless Yavlinsky put it recently: "All reserves have been exhausted and the people's patience is at an end; a start can be made now by force and by shooting all the offenders, but that failed in the past and is unlikely to work now."° So for now the use of dictatorship is deemed inexpedient -though that could change - while the liberals are hoping that the new clothes of Emperor Boris will suffice to keep them on the offensive in the coming months. * 7. Izvestiya, May 23, 1991. 8. One telling incident took place in Chita in eastern Siberia at the end of April: hundreds of furious people spontaneously went out blocking the main street because there had been no milk in the shops for six months. 9. Argumenty i Fakty, nos 16 and 17, April 1991. 10. Moskovskiye Novosti, no. 20, May 1991.
to collect taxes.