It wasn't free enterprise that failed Russia, but the leaders of the West

The West supported Yeltsin because he was their stooge who followed IMF and World Bank advice

Ken Livingstone
Tuesday 01 September 1998 23:02 BST

THE AMERICAN media are already devoting pages to the debate "who lost Russia?" The truth is, no one at the highest levels of the US or UK governments really wanted to save it. In fact the strategy of the main Western institutions has been to systematically tear apart their old adversary in the East. With the collapse of the USSR, Bush and Major saw the chance to leave Russia permanently weakened. Ruthlessly, they took it.

When the Soviet Union collapsed the decisiveness of the right was not matched on the left. Indeed, many on the left regarded the appalling Boris Yeltsin as thoroughly good news. Anything had to be better than Stalinism. Socialism has spent the best part of a decade in a state of confusion, because so many mistook a very bad thing for a very good thing. That is why the crisis of wild unfettered Russian capitalism is not a crisis confined to the right.

Whilst the left floundered, Yeltsin was taking IMF and World Bank advice to introduce the most hard-line fundamentalist version of free market capitalism. This was a grand asset-stripping exercise. Don't worry, we were told - this is just the inevitable early stage of capitalism, like America's robber barons, or British corruption under Walpole.

These assurances ring hollow today. From a world superpower, the former Soviet Union was being transformed into a Third World country.

There always were alternatives. In 1993 I attended a conference of Russian trade unions, and I was introduced to the Speaker of the Russian Parliament, Ruslan Khasbulatov, effectively the second most powerful figure in the country's vast political system.

Khasbulatov's reforming credentials were impeccable. He had written the appeal read out by Boris Yeltsin from a tank when leading the opposition to the August coup of 1991. When I asked him about the composition of the Russian parliament, he told me, "There are more Keynesians than either monetarists or communists. We want something like the European Economic Community between Russia and other former republics of the USSR, with a central bank and central economic institutions but with the different republics maintaining their sovereignty." The more I spoke to Khasbulatov the more I realised that his economic policy was somewhat to the right of Bryan Gould's.

Khasbulatov's moderate Keynesian proposals did not fit with the policies of the IMF, and throughout the world he was caricatured as a hard-line communist. The final ignominy came when his moderate alternative to Yeltsin's wild capitalism was smashed by the shelling of parliament in 1993. In all my time in politics I can think of few more sickening displays of hypocrisy than the support given to this gross violation of parliamentary democracy by the leaders of the free world, Clinton and Major.

The West supported Yeltsin because he was their stooge who followed IMF and World Bank advice. At the time of my visit that year, the consequences of that for the Russian people was already becoming clear. Moscow had a murder rate twice that of New York. Machine gun killings in broad daylight were a common occurrence. There were estimated then to be 15,000 dollar millionaires in Moscow, whilst the majority of the population was living below the poverty line. The Russian parliament was cleared out of the way because defending even the most elementary social justice inevitably leads to conflict with the IMF-inspired policies of Yeltsin's government.

Russia need not have prostrated herself in this way. Compare the route taken by that other authoritarian centralised communist superpower, China. Like China, Russia could have retained state control of heavy industry while allowing light industry and a consumer sector to develop in private hands. By refusing to follow the economics of the Western financial institutions, China has become the most rapidly growing economy in the world, doubling its GDP quicker than any nation in history.

Instead the USA wanted Russian oil and gas cheap and encouraged Yeltsin to write off manufacturing industry. Inevitably, as Russian industry declined the country was weakened as a military force.

Two years ago I returned to Russia, and as with Khasbulatov in 1993, I was lucky enough to meet another key figure in the new Russia, the communist leader Gennady Zyuganov. He worked from a functional office, making notes with a cheap pen, sipping apple juice from a carton. This seemingly uncharismatic figure is now at the centre of the massive international whirlwind that is encircling Russia. It is in the hands of Zyuganov and his left-patriotic bloc to decide whether they will use their parliamentary majority to prevent the appointment of Yeltsin's anointed successor, Viktor Chernomyrdin, or whether they will bow to the growing international pressure and hand the free marketeers a life line.

Many have been surprised that the communists, so discredited by their stewardship of the Soviet Union, should have re-emerged as such a major force in Russian politics. But Zyuganov is an astute politician who has assembled a powerful coalition of communists and nationalists. He has positioned the Communist Party as the patriotic defender of Russia, winning over millions of ordinary people who initially considered supporting the extreme right wing politics of Vladimir Zhirinovsky.

When I met him, he explained the importance of this new role for the communists: "The break up of the USSR was a disaster which crippled every former republic." It is easy to see what he meant - the Russia I saw defied belief. Corruption was not only endemic, but intrinsic to the new system. Ninety per cent of all private economic activity was linked to organised crime, and $20 billion a year was being exported to western banking havens. Yeltsin was running a campaign in which the boss of the former KGB, and the head of the NTV television channel were members of his election committee.

In 1996 I concluded that Zyuganov would have made a much more democratic leader than Yeltsin. I did so because he called for a reduction of arbitrary power concentrated in the presidency and the mayors of the big cities, and because of his contempt for the intellectual stagnation of the former soviet system. "The party claimed a monopoly on everything: property, ideas, truth," he said. "We could not return to that even if we wanted. Yeltsin has accumulated more power than the tsar and the general secretary put together."

For politicians in a newly impoverished "Third World" nation such as Russia, the issue of who defends the interests of the country is paramount. That is unsurprising in a country where male life expectancy has fallen to 58 years.

The dilemma the Russian Duma now faces is acute. If it endorses Yeltsin's nomination of Chernomyrdin, the deputies will be seen to have accepted a new government committed to the further humiliation of the country. If they reject Chernomyrdin, the President may well try to shut parliament down and rule by decree. This is a dilemma no parliament should have to face. I hope that if it exercises its right to put the people of Russia first, the West will not behave as badly in 1998 as it did in 1993.

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