What was the shouting about at the Congress of People's Deputies?

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Protests against Yeltsin's price rises in Moscow. 'Tensions are high?

Wind storm at Soviet Congress changes nothing Despite the declarations of both sides ister, Andrei Nechayev, as saying: "This Congress's program. concerning the disasters that would means we have settled our relations On the other hand, the chances of the result from their respective proposals, with the Congress on a moral level, and public-sector workers and the pensionthe neo-Stalinist/Yeltsin dispute ended I hope they will not intertere in our ers collecting on the Congress's implication was that the Yeltsin gov- The Congress voted on April 11 to good. Something obviously had to be emment's policies, however weakened, cut taxes on enterprises, bring public offered to the pensioners, whose buying sector wages into parity with the pri- power has vanished like smoke. But it The Congress adopted a statement (by vate sector, provide automatic cost of is not likely to amount to much in an a vote of 578 to 203, with 64 absten- living increases for pensioners, and economy where the great majority of tions) declaring that it supported the restore subsidies for state farms. measures of the government and the The taxes that the Yeltsin goverment president "aimed at a fundamental trans- has imposed on industry have been an extremely sore point for both state Fundamentally, there is no way to At the same time, the statement enterprise managers and entrepreneurs. square privatization and the return to a instructed the government to take heed This points up one of the sharpest market economy with protection of the of the earlier decisions of the Congress contradictions of the crisis. The price living standards of the masses of peobut with consideration for the actual increases have meant an enormous ple.

increase in the incomes of the enterpris- However, all sorts of adjustments This qualification, in fact, gave the es. This represents a big increase in the among the various layers of the bureaugovernment latitude for doing what it rate of exploitation of the masses, and cracy are possible. Thus, according to considers economically necessary. Dur- is a source of explosive resentments. At Der Spiegel of April 13, Yeltsin is now ing the debate, supporters of the the same time, privatization makes it promising to bring some of the big govemment argued that what they con- impossible for the state to draw rev- industrial managers into his cabinet. sidered economic laws were as enues directly from the tills of the And concessions were made on the taxaphysics.) All of this makes taxation a primary It is undoubtedly such issues that "Mr, Gaidar [Yeltsin's economics battlefield between the enterprises and were at the heart of the dispute at the czar] and his colleagues in the Govern- the state. The neo-Stalinists have tried Congress, and not the "plundering of ment emerged smiling and claiming to use this issue to enlist the new capi- the people," in which all layers of the victory, " The New York Times reported. talists and would-be capitalists in their bureaucracy and the piratical would-be It quoted Yeltsin's new economics min- campaign against the Yeltsin govern- capitalists share responsibility.-G. F.

14 SOCIALIST ACTION MAY 1992 The confrontation in April between the Yeltsin government and its critics in the Russian Congress of People's deputies ended with several shamefaced deals. There are two apparent reasons why the noisy confrontation faded out in a general muddle. Both sides are fundamentally in favor of capitalist restoration, and both sides fear the people.

The leader of the anti-Yeltsin bloc, Sergei Baburin, pledged: "The Russian Unity bloc has not hid the fact, and will not hide it, that if the president calls on the Opposition to form the government, we will do so without hesitation. We are ready to take responsibility for continuing the economic reforms, but without giving up the principles that brought us together. On the other hand, we do renounce the adventurism of the present government."

That is to say, the market reforms are OK, but they should be carried out more slowly. This continues the dispute in the bureaucracy that already existed before Yeltsin assumed effective government power. The same divisions ran through the Gorbachev government.

The Russian Congress of People's Deputies was elected two years ago, when the Communist Party was still able to manipulate the electoral system. Some 86 percent of the 1046 Russian people's deputies are former members of the now legally dissolved Communist Party. Two thirds of them were functionaries under the former regime.

This unrepresentative body has three years (an eternity in the present crisis) before it has to face the voters again. However, the last thing the great "de-Communizer" Yeltsin is interested in is new elections. According to Der Spiegel of April 13, Yeltsin has told his supporters that parliamentary rule would mean "suicide" for Russia. The British business magazine The Economist of April 18 agreed:

"Yeltsin is trying to set up what he calls a 'presidential republic,' in which he would have the freedom to appoint ministers without parliamentary scrutiny and to appoint local governors. There are signs that such a system could work. In Nizhny Novgorod, for example, Mr. Yeltsin appointed a reformist governor, who then appointed the mayor. The two organized Russia's first showpiece auction of shops, at last putting privatization plans into practice."

"Plundering the people"

The contending camps in the Russian Congress of People's Deputies hurled accusations and threats against each other. The head of the central bank, Georgii Malyukhin, for example, denounced Yeltsin's policies as "plundering the people."

On April 11, the Congress passed a resolution demanding that Yeltsin in a short time cease holding the combined posts of premier and president. This would thereby curb Yeltsin's power to rule by decree. The resolution also proposed 300 adjustments that the government considered would undermine its policies. In response, Yeltsin's cabinet threatened to resign, and said in a statement issued the same day:

"The sum of the demands raised by the Congress will condemn the country to hyperinflation, mean stopping the process of privatization, and curtailing the agrarian reform. The proposals to lower taxes and at the same time increase social and other spending are incompatible and can lead only to a collapse of the financial system. It is necessary and wise to realize that such decisions will perforce lead to curtailing the support from world society and return Russia to the road of isolation. ", On April 13, the Russian government issued another statement that was still more explicit and detailed the whole diabolical mechanism involved in the campaign to restore capitalism: "In 1992, the republics of the former USSR are obliged to pay about $21 billion for service on the foreign debt. The share of this that Russia has agreed to pay is 51 percent, that is, about $12.5 billion.

"With the agreement of the commercial banks and the official credits, an extension was offered for a series of payments. Thus, the total for 1992 was reduced from $21 billion to $10 billion. The extension is conditional on the support of the IMF and operates until June 20."

The government statement then went on to explain what the dire consequences would be if they did not stay the course: "The volume of aid decided on by the Big without any clear decision. But the daily work* would be continued formation of the economy."

economic and social conditions."

immutable as Newton's laws in enterprises Seven and the IMF amounts to $24 billion. Of these, $6 billion are to go into the fund for stabilizing the ruble, without which it cannot be made convertible....

"Foreign investors believed in the seriousness of the market reforms in Russia. Changing the course toward deep-going economic transformations will inevitably lead to stopping big potential investments. Without serious foreign investments and achieving the convertibility of the ruble, the integration of Russia into the world economy is impossible.

Financial sleight of hand The Big Seven's trumpeted announcement of a $24-billion aid package for Russia was well timed for the session of the Russian Congress of People's Deputies, and was obviously designed to offer the restorers of capitalism some carrots to wave. In fact, it was mostly a financial sleight-of-hand trick. The bulk of the money was not real.

In the April 3 New York Times, Andrew Rosenthal explained that the Big Seven had agreed among themselves to create a $6 billion fund to maintain the value of the ruble. They agreed also that the IMF and other lending institutions should lend Russia $4.5 billion. The countries that extended credit to the Soviet Union before Jan. 1, 1991—this does not include the United States— would defer $2.5 billion in debt payments. And that, a total of $13 billion (only $10.5 billion in new money), Rosenthal pointed out, was all that was really committed in aid.

In other words, this latest and loudest promise of aid stays within the narrow limits of what the capitalists have felt able to offer up until now. Fundamentally, they offer no capital for developing production in the ex-USSR but only credits to make it possible for them to increase their markets there.

This "aid" is, therefore, essentially a subsidy to the capitalists' own export industries. Moreover, it is designed to overcome the difficulty of selling more products to a country whose own production, and therefore income, is declining disastrously.

What is more, the totally insufficient aid that Russia Washington Post has been promised is only the bait in a trap of growing dependence on the capitalist financial institutions In an editorial published in the period of the confrontation in Moscow, The New York Times noted with satisfaction that threats from the IMF had been effective in preventing the Polish government from retreating from its austerity policies when faced with strikes and protests. It recommended a similar medicine for Russia and other countries trying to restore capitalism.

The confrontation at the Russian Congress of People's Deputies marks the first time the capitalist countries have openly applied pressure to assure continuation of the capitalist restoration process in the ex-USSR, and the first time that a bureaucratic faction has directly based itself on this pressure against an opposing faction.

The capitalist states are thus becoming openly involved in the struggles in the ex-Soviet Union. This is an extremely dangerous step, not only for the peoples of the ex-USSR but for international peace.L ment. It is a safe bet that there will be tremendous pressure on the goverment to implement the tax-cut plank in the promissory notes to them are not so the people are facing dire impoverishment. tion of enterprises.