By Boris Kagarlitsky
For almost a year now, the president and the government have been implementing their reforms. They started by promising us that prosperity would come in only seven or eight months. Later they told us that "as we warned you", still worse was in store.
"Still worse" means that there will be mass unemployment, and instead of the stabilisation of the rouble, a new round of price rises which wage increases will have no hope of matching. Enterprises will shut down, labour collectives will collapse, and the destruction of social services will finally become a reality.
Neither vouchers nor privatisation are saving the economy. In fact, the government's "medicine" is simply worsening the disease. We were promised that privatisation would ensure a rise in productive output, but in practice it has brought a precipitous decline.
It is enough to compare the situation in the republics where privatisation is going ahead with that in the republics which have so far avoided this fate. In the Baltic states the situation is catastrophic, and in Russia things are getting worse by the day. In "conservative" Kazakhstan and Ukraine, by contrast, the situation is nowhere near so grave.
Does this mean that reforms in general are not needed? No, there is a great deal that we absolutely have to change. The structure of the economy clearly fails to meet the country's modern-day needs. Production of items of mass consumption is insufficiently developed, and we have fallen behind the leading countries in the field of new technology.
If market relations help make the economy more efficient, let's have the market. If private entrepreneurship creates new jobs and products, then let private entrepreneurship develop. If Western firms help us raise our technological level of production, then let them operate in our market.
But why must all this be accompanied by the destruction of the state sector of industry, by the theft of collective property, by the uncontrolled privatisation of everything that can be privatised, by the destruction of social services, and by the impoverishment of the population? Why can't we encourage the creation of new private firms without privatising the state ones? Why can't we make a serious job of converting military to civilian production, setting aside money for state programs and establishing state investment funds? Why can't we encourage the production of goods for the population, in every sector of the
economy, thus helping to maintain people's buying power and living standards?
The answer is simple: because the government wants it otherwise.
It's said that President Yeltsin and the present government have made countless mistakes. If this were the only problem, it might be possible to suggest how these mistakes could be put right. It's said that the country's leaders are incompetent. If this were their only fault, it might be possible to help them by recommending competent advisers.
But there haven't been any mistakes. The course which the government is consistently following is the one it deliberately chose, and on which it reached agreement with the International Monetary Fund. This is a course in the interests of the new rich, of the old and new nomenklatura, of the mafia and bureaucratic bourgeoisie — of all the forces which are incapable on their own of ensuring that production goes ahead, but which have a marvellous capacity for growing fat through plundering the assets of the state sector.
This is a course pursued in the interests of the Western banks and of the transnational corporations, who need Russia only as a source of raw materials. The state sector is the guarantee of our economic independence, and this is precisely the reason why these forces are so anxious to destroy it. Formally this is called privatisation, but in fact it is nothing other than destruction.
Ever greater numbers of people are now coming to realise that what needs to be changed is not just particular ministers, or even the government, but the organs of power themselves. Are Moscow residents really better off for the fact that for more than a year now the city administration and the Moscow Soviet have been blaming one another for the chaos in the city? Is the present Supreme Soviet, which made Yeltsin the leader of the country, which brought Gaidar to power, and which adopted numerous laws totally in keeping with the dictates of the International Monetary Fund, capable of offering us a real alternative? And does it really have the moral right to do this? Hasn't it lost the confidence of voters just like the government? Isn't it true that the Supreme Soviet was elected almost three years ago under conditions completely different from those which apply today, with totally different powers, and on the basis of laws which everyone now considers anti-democratic?
Our country needs a new course, agreed not with the IMF but with the people themselves — with the trade unions, which represent the great majority of workers, and with the labour collectives. We also needs new democratic elections, through which new organs of power could be formed — competent, effective bodies responsive to the wishes of the people. Only then would we see a power in our country that was committed to
creating jobs, to defending national interests, to raising the standard of living and to finding genuine solutions to the crisis.
[Translated from the October Special Issue of Solidarnost, paper of the Moscow Federation of Trade Unions.]