BY MAURICE WILLIAMS
The attempts to reimpose capitalism in Russia by the proimperialist regime of President Boris Yeltsin has wrought economic turmoil while edging the country towards the brink of a social explosion. Washington and its imperialist allies in Bonn, London and Paris are alarmed at the escalating struggles by coal miners, teachers, and other working people against the effects of Yeltsin's "market reforms." This working-class resistance to the attempts to sweep away the remaining gains of the October 1917 Bolshevik revolution has also exacerbated political instability in Moscow.

On August 17, one month after the International Monetary Fund (IMF) concluded a $17 billion loan agreement, Moscow announced that it will default on some of its debts and devalued its currency. The move included a 90-day moratorium on payments of foreign debts owed mostly by banks, restructuring government bonds, and allowing the currency to drop from 6.4 to 9.5 rubles against the dollar.

On September 1, during the state visit of U.S. president William Clinton, Yeltsin said that his government might make "tactical changes" to increase state control of the economy. Five days earlier the Russian parliament had also made public a program it adopted calling for increasing state control over the economy, including the nationalization of strategic industries that had been formally privatized.

Yeltsin endorsed the terms of the "forced debt restructuring" in an August 25 decree under which foreign investors will face losses estimated at between $33 and $100 billion. The next day the Dow Jones Industrial average dropped 357 points; four days later it fell another 512 points, wiping out all its gains for the year. Capitalist investments in Russia total more than $200 billion. Nomura Securities, Japan's largest investment firm, announced September 1 that its joint U.S. and British operations lost $350 million on their holdings of Russian government bonds at the end of August. Barclays of London choked on losses totaling $540 million. German financiers, who are the heaviest lenders to Russia, are now demanding major concessions from Moscow before extending new loans.

Some capitalist traders expect to see the value of their holdings in Russia plummet by 90 percent. "It's total outright illegal confiscation," muttered an official with III Offshore Advisors, a West Palm Beach investment firm.

Other investors are debating whether to push for seizing Russian banking assets held overseas. "There is no likelihood that things will be any better in three months when the moratorium ends," asserted Max Gutbrod, attorney with a U.S. law firm that represents imperialist investments.

`Abide by the rules'
Clinton flew to Moscow August 31 to lecture the Russian people about the harsh realities of capitalism, to tell them to continue tightening their belts, and abide by "the rules" of the profit system. "I do not believe there are any painless solutions," he told students and Russian leaders at a September 1 meeting at Moscow State University. "To get your fair share of investment, you have to play by the rules that everyone else has to play by.... How will my investment be protected? If I lose my money I want to know it's because I made a bad decision, not because the law didn't protect my money." Clinton also made it clear that no major new loans or other infusions of cash to prop up confidence in the drowning Yeltsin regime are forthcoming from Washington.

The imperialists are demanding that the Kremlin adhere to the austerity program prescribed by the U.S. and other imperialist interests through the International Monetary Fund (IMF), which includes measures to eliminate the social conquests that have survived in the Russian workers state despite its tattered condition. IMF demands, if implemented, would lead to the eventual elimination of free child-care centers and health clinics; doing away with price subsidies of food, rent, and other necessities; and deep cuts in education, pension, health, and other hard-earned entitlements. It is only through these social gains that working people have been able to survive for months and sometimes years without being paid. Miners and other workers are refusing to allow these entitlements and the social relations they embody to be dismantled without waging massive battles to defend them.

Yeltsin has repeatedly been forced to back off pressing for draconian policies for fear of setting social forces in motion that could spiral out of control. Last March, the day after former deputy prime Minister Aleksie Kudrin declared plans to fire 208,000 teachers and medical workers, Yeltsin denied the announcement.

A recent national survey of 6,000 people conducted by Sociology and Parliamentary Institute in Russia found that 11 percent of the respondents said they would support an armed uprising against the government and 12 percent of the participants said they were ready to join a strike.

Regime of permanent instability
In a move to save his own skin, Yeltsin dismissed his entire cabinet on August 23, including Prime Minister Sergei Kiriyenko, who had announced the devaluation of the ruble and the default on the treasury bonds. This action came five months after Yeltsin's last cabinet shuffle. This time the Russian president rehired Viktor Chernomyrdin as prime minister, the same man he had dismissed from that position on March 23. But the Duma, the lower house of parliament, where the opposition Communist Party and its allies hold a majority of seats, rejected Chernomyrdin by a vote of 253 to 94 on August 31. "Russia today is, in essence, on the verge of economic and political breakdown," Chernomyrdin declared prior to that vote.

Before he was fired, Boris Nemtsov, the former deputy prime minister, said the government planned to implement the IMF program on August 24. This program included shutting down insolvent banks and oil and other companies and inviting foreign investors to take control of some of these institutions.

Yeltsin gave no official explanation for the August 23 cabinet firings. According to the Financial Times, Yeltsin's "formal justification" for dismissing his entire cabinet on March 23 was in response to simmering outrage among working people over back wages. "We cannot allow wage arrears to accumulate," Yeltsin asserted the day after that earlier cabinet reshuffle.

Workers in Russia are owed more than $11 billion in back wages. A barter system has spread throughout the country - a phenomenon not found in a society where capitalist social relations predominate. The Wall Street Journal reported August 28 that "an official survey of 210 enterprises at the backbone of the economy estimated that barter, debt-swaps and other nonmonetary deals accounted for 73% of transactions in 1996 and 1997. The businesses surveyed paid only 8% of their taxes with real - what Russians call `live' money."

Millions of workers who have not been paid in months, or even years, survive on garden plots and living on their parents pensions. According to official figures in 1997, some 25-30 percent of Russians now live in poverty. Male life expectancy dropped from nearly 64 in 1990 to 58 in 1995 -roughly on par with Kenya.

Russia's population has been declining by about 1 million a year, with the death rate overcoming the birth rate by 1.6 times. According to John Gray, in his recently published book, False Dawn, Russia's population "is likely to fall by about a fifth over the next thirty years, 147 million to 123 million - an unparalleled demographic collapse."

Gray added, "The life expectancy of a Russian male aged sixteen a century ago was higher than his counterpart today. Despite two world wars, a civil war, famine and millions of deaths in the purges and the Gulag, a sixteen-year-old male had a 2 percent higher chance of reaching sixty than he does today."

Workers step up strikes, protests
In response to this social catastrophe engendered by the so far fruitless effort to integrate Russia into the world capitalist system, protests and demands for payment of back wages by working people are mounting. Coal miners, who have been camping outside the government building in Moscow, blocked key railways in May, paralyzing the country's transportation network. In the far eastern port of Vladivostok, teachers, ambulance staff, and other workers have organized strike and protest actions every week for months. Doctors in the Orenburg region have been on a hunger strike for two weeks and teachers plan a strike in September. And unpaid soldiers have started shooting their commanding officers.

Russian trade unions are planning a general strike on October 7 to demand back pay and protest the IMF austerity program. "If the government wants total war, it's going to get it," declared Andrei Isayev, a leader of the Federation of Independent Trade Unions. It is the determined resistance of these workers that worries capitalist politicians and pundits from Washington to Bonn and Tokyo.

As he pondered the social convulsions in Russia, New York Times columnist Thomas Friedman noted in an August 29 column that the "basic pillars" that have defined stability of the world capitalist system are falling apart, including the "notion that Russia had made an irreversible leap from Communism to free-market capitalism."  
 
 
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