19 February 2015
Ukraine, Russia & the Struggle for Eurasia
Tectonic Shifts in Global Politics
Ukraine, Russia & the Struggle for Eurasia
Tectonic Shifts in Global Politics
In September 2014, a television interviewer asked Zbigniew Brzezinski, former U.S. national security adviser and longtime Cold Warrior, what threat the “Islamic State” (aka ISIS) posed to the United States. He responded:
“…we are facing a kind of dynamically spreading chaos in parts of the world. Now in the Middle East, but that could spread to other portions of West Asia, to Central Asia, even into Russia, perhaps even into China. It could spread and is spreading somewhat into Africa, and so forth. And then we have this residual, late-Cold War – or Cold War revived – conflict with Russia, not directly by military force, but clearly overly [sic] the stability and security and freedom of Ukraine.”
— MSNBC, 14 September 2014
The chaotic wars in Ukraine and in the Levant are linked by the role U.S. covert operations played in both. While routinely ignored by the imperialist propaganda machine (the so-called free press), this connection is the operational aspect of the strategic framework Brzezinski laid out almost 20 years ago in his influential book, The Grand Chessboard. In the introduction, he opined: “It is imperative that no Eurasian challenger emerges capable of dominating Eurasia and thus of also challenging America. The formulation of a comprehensive and integrated Eurasian geostrategy is therefore the purpose of this book.” This region “has been the center of world power” for the past 500 years, Brzezinski explains, because some “75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil.” U.S. global dominance depends on controlling Eurasia – which includes Europe, Russia, the Indian subcontinent, East Asia and the Middle East.
Control of the massive petro resources of the Middle East has long been a key objective of American foreign policy. The invasion of Iraq in 2003 was intended to establish U.S. military/political command and control of the region. The project failed when the Shia-based regime imposed by American imperialism at considerable cost in blood and treasure gradually aligned itself with the Iranian theocracy in Teheran. To counter Iran’s growing influence, the U.S. and various Arab clients funded and armed jihadi insurgents in an attempt to overthrow Syria’s Baathist regime, Teheran’s most important regional ally.
In September 2013, Barack Obama aborted an unpopular bombing campaign to support the insurgents after Vladimir Putin, reluctant to lose Russia’s only Arab ally, proposed that Syria unilaterally relinquish its stock of chemical weapons (see “Middle East Upheaval,” 1917 No.36). Carl Gershman, the head of the U.S. National Endowment for Democracy, commented:
“Russian President Vladimir Putin has had some success recently using his support for the Assad regime in Syria to strengthen Moscow’s position in the Middle East. But his progress on this front is much less important than Moscow’s growing troubles in its ‘near abroad,’ as it refers to the strategically vital area to its immediate west.”
— Washington Post, 26 September 2013
Noting that “Ukraine is the biggest prize” in East Europe, Gershman suggested: “The United States needs to engage with the governments and with civil society….” He argued that “the opportunities are considerable” to open Ukraine up to foreign capital penetration, which would also advance the larger strategic project of subordinating Russia:
“Russian democracy also can benefit from this process. Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents.…
“Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.”
Gershman also observed that only a few weeks earlier “Ukrainian President Viktor Yanukovych called association with the European Union (EU) ‘an important stimulus for forming a modern European state.’ In short order, Ukraine’s parliament passed reforms required by the E.U.” 
Ukraine’s future was the focus of a September 2013 conference held in Yalta, Crimea, in the very building where Stalin, Churchill and Roosevelt held their famous 1945 confab. Attendees included Tony Blair, Bill and Hillary Clinton, former CIA head David Petraeus, former German Chancellor Gerhard Schröder, former World Bank and International Monetary Fund (IMF) chiefs and leading politicians from Sweden, Poland and other countries. Ukrainian President Viktor Yanukovych participated, as did Petro Poroshenko, the current president. Also in attendance was Sergei Glazyev, one of Vladimir Putin’s inner circle.
While most speakers painted a rosy picture of Ukraine’s future under the EU, Glazyev was far less upbeat about the consequences of an imperialist takeover. In a 23 September 2013 posting, Mark Adomanis, who covers Russia for the leading American business journal Forbes, wrote: “For most of the past five years Ukraine was basically playing a double game maneuvering between Russia and the EU,” and observed that “the stark differences between the Russian and Western views [at the conference were] not over the advisability of Ukraine’s integration with the EU, but over its likely impact.” While the imperialist contingent gushed about how opening up to the EU would put “Ukraine on a path of rapid economic convergence with the developed West,” the Kremlin representative projected an economic collapse that would require a massive bailout to avoid a default. Adomanis, whose readers are investors with a preference for hard information over spin, observed “there is some merit in the Russian position”:
“After all, in a perfectly equal competition between, say, German and Ukrainian consumer goods producers, who do you think is going to win? I hardly think it’s crazy to suggest that, in the short-term, leading firms from Western Europe are going to be able to significantly out-compete their Ukrainian counterparts.”
Of course, as Adomanis is well aware, very few Ukrainian producers are likely to survive long enough to see even the beginning of the “short term.” He concluded:
“the Russian position is far closer to the truth than the happy talk coming from Brussels and Kiev. Ukraine is going to need some serious financial assistance during the process of integration, and the Russians were absolutely adamant that they would not be the ones to provide it. So, who is going to cover these costs? Before the crisis I would have said ‘the European Union,’ but in 2013 that doesn’t seem particularly likely.”
The mechanism for “covering the costs” was contained in the IMF austerity plan attached to the EU accord, which proposed to eliminate government subsidies and slash social spending to protect the assets of Ukraine’s oligarchs and their Western financial partners. As Michael Hudson, a professor of economics at the University of Missouri, observed:
“The IMF was not set up to finance domestic government budget deficits. Its loans are earmarked to pay foreign creditors, mainly to maintain a country’s exchange rate. The effect usually is to subsidize flight capital out of the country – at a high exchange rate rather than depositors and creditors getting fewer dollars or euros.”
—RT, 7 July 2014
When Moscow offered a $15 billion loan on relatively generous terms, including a promise to continue to subsidize Ukraine’s energy purchases, Yanukovych, a corrupt servant of Ukraine’s billionaire oligarchs, abruptly changed course and turned down the EU. The response of the leaders of the “free world” was to engineer a coup.
While the foreign-policy establishment and news media generally blame Putin for the chaos engulfing Ukraine, “realist” analysts have taken a different view. John J. Mearsheimer, a prominent “realist” from the University of Chicago, published an article in the September 2014 issue of Foreign Affairs, the premier American foreign-policy journal, entitled “Why the Ukraine Crisis is the West’s Fault,” in which he noted:
“For Putin, the illegal overthrow of Ukraine’s democratically elected and pro-Russian president – which he rightly labeled a ‘coup’ – was the final straw. He responded by taking Crimea, a peninsula he feared would host a NATO naval base, and working to destabilize Ukraine until it abandoned its efforts to join the West.”
An earlier op ed by Brown University’s Stephen Kinzer, entitled “US a full partner in Ukraine debacle,” provided some historical context:
“From the moment the Soviet Union collapsed in 1991, the United States has relentlessly pursued a strategy of encircling Russia, just as it has with other perceived enemies like China and Iran. It has brought 12 countries in central Europe, all of them formerly allied with Moscow, into the NATO alliance. US military power is now directly on Russia’s borders…. This crisis is in part the result of a zero-sum calculation that has shaped US policy toward Moscow since the Cold War: Any loss for Russia is an American victory, and anything positive that happens to, for, or in Russia is bad for the United States. This is an approach that intensifies confrontation, rather than soothing it.”
—Boston Globe, 3 March 2014
After Russia’s capitalist rulers spent a decade and a half unsuccessfully seeking a place at the table as a junior partner/ally of the U.S., they began to have second thoughts, as Putin explained to a Wall Street Journal reporter in February 2007:
“we have removed all of our heavy weapons from the European part of Russia and put them behind the Urals. We have reduced our Armed Forces by 300,000. We have taken several other steps required by the [Conventional Armed Forces in Europe treaty]. But what have we seen in response? Eastern Europe is receiving new weapons, two new military bases are being set up in Romania and in Bulgaria, and there are two new missile launch areas – a radar in Czech Republic and missile systems in Poland. And we are asking ourselves the question: what is going on? Russia is disarming unilaterally. But if we disarm unilaterally then we would like to see our partners be willing to do the same thing in Europe. On the contrary, Europe is being pumped full of new weapons systems. And of course we cannot help but be concerned.”
—The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America by Robert Scheer
Maidan Protest – Orange Revolution Mk II
A few weeks after the U.S. “regime change” project commenced, Victoria Nuland, a former aide to Vice President Dick Cheney who had been handed the Ukraine file by Obama, told a “Ukraine in Washington 2013 Business Conference” that the U.S. had invested a whopping $5 billion to develop a network of clients and agents to influence Ukraine’s future political direction. U.S. hirelings helped initiate the revolt against Yanukovych and also helped shape its outcome, but the massive support for the Maidan protests was an expression of the profound social contradictions within Ukrainian society, which overlay longstanding ethno-linguistic divisions. While 70 percent of the population considers Ukrainian to be their first language, a significant minority identify as ethnically Russian. This minority, which constitutes a majority of the industrial working class, is concentrated in the eastern oblasts (provinces).
The Maidan protests were significantly more popular in the west than in southern or eastern Ukraine. This conforms to the pattern of the 2004 “Orange Revolution” when imperialist-supported protests, triggered by an attempt by Yanukovych’s supporters to steal an election, resulted in a change of regime. In the 2010 election, when Yanukovych (at that time in opposition) defeated Prime Minister Yulia Tymoshenko (a prominent oppositional figurehead in the 2014 protests), most of his support came from the south and east of the country.
The Maidan protests against Yanukovych began on 21 November 2013. Senator John McCain and other high-level U.S. political figures soon arrived to proclaim “America is with you!” Young people disgusted with the corruption and incompetence of the existing regime were quickly drawn into the demonstrations. Marxists would certainly have sought to intervene in these mobilizations to direct the anger of the participants to the root of the problem – capitalism – and the obscene social inequality created by the massive handover of public property to a tiny handful of wealthy oligarchs.
Yanukovych and his cronies were corrupt and self-serving, but their EU-oriented rivals, personified by Tymoshenko, were no better. By linking opposition to Yanukovych to demands to expropriate the oligarchs, restore social services and reorient economic activity to meet the needs of working people, socialists could have sought to turn the protests in a revolutionary direction, a development which would have been enthusiastically supported by tens of millions in Russia, East Europe and beyond. In the absence of any significant challenge from the left, the protest remained a dispute within the parasitic oligarchic elite over whether to tie themselves to Russia or the EU.
The Role of Fascists in the Maidan
The Maidan protest was described as “peaceful” and “democratic” in the imperialist media, despite the frequent use of Molotov cocktails and other weapons against the riot police. The mainstream Western media also avoided any discussion of the central role played by two fascist organizations, Svoboda and Right Sector, which, when they were mentioned, were described as hardline “nationalists.” Both groups openly identify with Ukrainian Nazi collaborator Stepan Bandera, whose Organization of Ukrainian Nationalists (OUN) carried out the mass murder of Communists, Poles and Jews during World War Two. Both Svoboda and the Right Sector advocate an ethnically pure Ukraine free of what Svoboda leader Oleh Tyahnybok described as the “Moscow-Jewish mafia,” as well as feminists, leftists and LGBTQ people.
Those leftist groups that welcomed the Maidan demonstrations as a popular revolt with potentially revolutionary implications naturally downplayed the role of the fascists. At the height of the conflict in Kiev, the ultra-opportunist continuators of the late Ernest Mandel’s United Secretariat (USec) proclaimed:
“We support the popular discontent and aspiration to live freely and decently, in a democratic state and to get rid of an oligarchic and criminal regime, expressed in the so-called Euro Maidan movement and throughout the country – while we are convinced that the EU is unable to satisfy such aspirations, and we say so.”
— “Statement on Ukraine by the IC of the Fourth International,” 25 February 2014
However, by this point it was clear that the Maidan protests were not led by people who aspired to live in a democracy, but rather by the heirs of Bandera whose goal was to rid Ukraine of Russians, Jews and Communists. Yet the USec “Trotskyists” continued to cling to the Maidan movement:
“While the main organized political forces are, for now, from the right and the far right, we support the social and political forces which are trying to build a left opposition within that movement. In so doing, they have refused to stay outside the movement and to identify the whole movement with its far-right component.”
The suggestion that Ukrainian workers and leftists should help build a “movement” against Yanukovych alongside their would-be executioners inverts Leon Trotsky’s policy of a united front of communists and social democrats to smash Hitler’s Nazis. The potentially suicidal strategy of maintaining “unity” with the sworn enemies of the workers’ movement is the logical outcome of an objectivist methodology that invests mass popular mobilizations with a necessarily and inevitably “revolutionary” dynamic regardless of their leadership and political program.
The USec adaptation to the Maidan reactionaries parallels its earlier support to various counterrevolutionaries in the former Soviet bloc – from the clerical reactionaries of Poland’s Solidarnosc in the early 1980s to Boris Yeltsin’s capitalist-restorationist rabble in 1991. Perhaps the lowest point in this sordid record came in 1989, when the USec solidarized with “Forest Brothers” – Nazi collaborators in the Baltics (see “How Low Can Mandel Go?,” 1917 No. 7, 1990).
Socialist Action, the USec’s American affiliate, which had no objections to supporting these counterrevolutionary forces a couple of decades ago, was less eager to be associated with the fascists of the Maidan, noting that “the leading political groups in the protest movement clearly point to a reactionary character” (“Ukraine protests: What’s at stake?,” 19 January 2014). The idea that socialists should work together with the political descendents of Stepan Bandera is a dangerous absurdity, yet entirely consistent with the USec’s historic record, which Socialist Action stands on.
The vast majority of participants in the mass protest against Yanukovych (which involved hundreds of thousands of people at its height) were clearly not fascists. But the fascists played a critical role, as Volodymyr Ishchenko, a leftist Ukrainian sociologist, described:
“In reality, only a tiny minority of the protesters at the rallies were from the far right. But in the tent camp on Independence Square they were not such a small group, when you consider that only a few thousand people were staying there permanently. More importantly, they had the force of an organized minority: they had a clear ideology, they operated efficiently, established their own ‘hundreds’ within the self-defence structures. They also succeeded in mainstreaming their slogans: ‘Glory to Ukraine’, ‘Glory to the Heroes’, ‘Death to the Enemies’, ‘Ukraine Above Everything’ – an adaptation of Deutschland über Alles. Before Euromaidan, these were used only in the nationalist subculture; now they became commonplace.”
—New Left Review, May-June 2014
Most protesters who chanted “Glory to the Heroes!” were not thinking of Bandera’s OUN of the 1940s, but the contemporary “heroes of Maidan.” Ishchenko observed that “liberals and progressives” who supported the Maidan protests “adopted this rhetorical strategy of downplaying the role of the far right, claiming it was being exaggerated by Russian propaganda.” The Banderaites refused to play along. When a group of anarchists sought to participate in the defense of the Maidan encampment, the fascists drove them off. Leftists and trade-unionists who dared to speak or distribute literature at the protests were routinely denounced as “communists” and often attacked.
U.S. Democrats & Neo-Cons Agree: ‘Fuck the EU!’
One of the key strategic objectives of American intervention in Russia’s “near abroad” has been to arrest the tendency toward economic integration between the EU and its chief energy supplier. Washington is particularly concerned about the possible implications of any rapprochement between Berlin and Moscow. Despite talk of a “reset” in relations with the Kremlin, the Democratic Obama administration has stayed the course set by the Republicans under George W. Bush.
In a January 2014 chat with U.S. ambassador Geoffrey Pyatt, Nuland expressed her preference for having the United Nations, rather than the European Union, mediate the crisis with the infamous phrase “Fuck the EU.” They also discussed which oppositionist should be handed the reins in Kiev once Yanukovych was gone. The Germans favored Vitaly Klitschko, a former heavyweight boxer, but the U.S. preferred Arseniy Yatsenyuk, aka “Yats,” a technocrat who supported IMF austerity and Ukrainian membership in the EU and NATO.
On 20 February 2014, dozens of people, including a number of riot police, were killed when snipers opened fire in the Maidan. These killings, which the opposition and imperialist media immediately blamed on Yanukovych, produced an enormous outpouring of anger. In the face of this pressure, Yanukovych agreed to conditions negotiated by the foreign ministers of Poland, France and Germany (in consultation with Maidan protest leaders) to move up the election date, restore the 2004 Orange Revolution constitution and withdraw riot police from central Kiev. As soon as the police pulled back, the fascist-led fighting squads took control of the parliament and other government buildings. Yanukovych fled, and on 27 February 2014 a new emergency government, with Yatsenyuk as interim prime minister, was sworn in. Four fascists were given ministries in the new government. Andriy Parubiy, co-founder of Svoboda, became head of National Security with Dmytro Yarosh, leader of the Right Sector, as his deputy. President Obama, who lost no time inviting “Yats” to the White House, congratulated the coupsters for following a “constitutional process.”
Vadym Karasyov, a former senior adviser to President Viktor Yushchenko, described the scramble at the top following the change of regime:
“Under recently ousted president Viktor Yanukovich, the oligarchs’ interests were threatened by his ‘Family’ of owners of interlinked companies. These interests are now likely to be shared out among the remaining tycoons. ‘Today they can say they are Ukrainian patriots who are making sure the country stays united,’ says Karasyov.”
“All of the oligarchs were financing the protests. European association suits them well as it expands the metallurgical quota for Pinchuk and Akhmetov, both of whom have already done so much to legalise their capital in the west,’ says Karasyov, who is also Ukraine’s best-known TV political pundit.”
—Financial Times, 27 March 2014
One of the first acts of the new regime was to repeal a 2012 law passed by Yanukovych giving languages spoken by 10 percent of the population in a given locality official status alongside Ukrainian. This legislation made Russian an official language in eastern Ukraine, and conferred similar status on Hungarian, Romanian and Moldovian in parts of the west. The outrage generated in Crimea and eastern Ukraine by the revocation of Russian language rights did not dissipate when the repeal was hastily reversed.
While the U.S. State Department immediately certified the new regime as “legitimate,” much of the population in eastern and southern Ukraine took a different view. When they began to demonstrate and occupy public spaces (employing tactics used by the Maidan protesters), the imperialist media denounced them as pawns of the Kremlin and blamed Putin for “meddling.”
Crimea Opts Out of Ukraine, Rejoins Russia
Opposition to the new regime was particularly strong in Crimea, a region which was only attached to Ukraine in 1954 by Nikita Khrushchev to mark the 300th anniversary of Ukraine’s incorporation into Tsarist Russia. The loss of Sevastopol, the base for Russia’s Black Sea fleet as well as a crucial transport link in its energy export system, would have been a devastating blow economically and, particularly, militarily to the Kremlin. But Putin had a strong hand to play.
In a hastily organized referendum on 16 March 2014, residents of the Crimea voted overwhelmingly (95 percent) to rejoin Russia rather than remain in Ukraine under the terms of the 1992 Crimean constitution, which had given it autonomous status within Ukraine. Almost 60 percent of Crimea’s population are Russian-speakers, while Ukrainian speakers account for 24 percent of the population. Crimea’s Tatar minority (which largely boycotted the referendum) makes up another 12 percent. The imperialist media ignored the results of the referendum and acted as if the Kremlin had subjected Crimea to the “shock and awe” treatment meted out to Iraq, Afghanistan and Libya by the U.S. and its partners. Secretary of State John Kerry cynically sputtered: “You just don’t invade another country on [a] phony pretext in order to assert your interests. This is an act of aggression that is completely trumped up in terms of its pretext.” But there was no aggression, merely a democratic vote, as the rightwing libertarians of the U.S. Ron Paul Institute pointed out:
“‘We reject the “referendum” that took place today in the Crimean region of Ukraine. This referendum is contrary to Ukraine’s constitution,’ said the White House immediately after the March  vote in that region. The February coup was also contrary to Ukraine’s constitution but that did apparently not bother Washington.
“Similarly, when referenda were held in eastern Ukraine this spring to determine that region’s future course, the White House spokesman [in a 12 May 2014 press conference] condemned them as ‘illegal under Ukrainian law and a transparent attempt to create further division and disorder.’
“When the wrong people hold votes, it seems, ‘division and disorder’ are the result.”
While imperialist mouthpieces brayed about violations of “international law,” Marxists have no reason to complain, given that the result clearly reflected popular sentiment. Indeed even Ukrainian military personnel in Crimea chose Moscow over Kiev:
“According to [Ihor] Tenyukh [a Svoboda member who was then minister of defense], about 6,500 Ukrainian soldiers and their family members are leaving Crimea – about a third of the 18,000-strong Ukrainian military force based there. The other two-thirds plus dependents had opted to stay on the peninsula, which the Russian Federation annexed last week. ‘4,300 servicemen and 2,200 family members who wish to continue serving in Ukraine's armed forces will be evacuated,’ Tenyukh said.”
—Guardian, 25 March 2014
In the aftermath of the Crimean vote, Putin pointed to some of the inconsistencies in NATO’s interpretation of international legality:
“Moreover, the Crimean authorities referred to the well-known Kosovo precedent – a precedent our Western colleagues created with their own hands in a very similar situation, when they agreed that the unilateral separation of Kosovo from Serbia, exactly what Crimea is doing now, was legitimate and did not require any permission from the country's central authorities. Pursuant to Article 2, Chapter 1 of the United Nations Charter, the UN International Court agreed with this approach and made the following comment in its ruling of July 22, 2010, and I quote: ‘No general prohibition may be inferred from the practice of the Security Council with regard to declarations of independence,’ and ‘General international law contains no prohibition on declarations of independence.’ Crystal clear, as they say.
“I do not like to resort to quotes, but in this case, I cannot help it. Here is a quote from another official document: the Written Statement of the United States [of] America of April 17, 2009, submitted to the same UN International Court in connection with the hearings on Kosovo. Again, I quote: ‘Declarations of independence may, and often do, violate domestic legislation. However, this does not make them violations of international law.’ End of quote. They wrote this, disseminated it all over the world, had everyone agree and now they are outraged. Over what?”
—BBC, 19 March 2014
Putin has a point regarding Kosovo and Crimea, but Marxists also extend the democratic right to self-determination to the people of Chechnya, who clearly wish to leave the Russian Federation. In this case, the Kremlin response has been to repress the separatists with savage brutality.
While the Western media has celebrated Russia’s international “isolation” over Crimea, in fact much of the world sided with Putin:
“Namely the BRICS grouping (Brazil, Russia, India, China, and South Africa) has unanimously and, in many ways, forcefully backed Russia’s position on Crimea.”
“Since many of its members are former Western colonies or quasi-colonies, the BRICS are highly suspicious of Western claims that sovereignty can be trumped by so-called universal principles of the humanitarian and anti-proliferation variety. Thus, they have been highly critical of NATO’s decision to serve as the air wing of the anti-Qaddafi opposition that overthrew the Libyan government in 2011, as well as what they perceive as attempts by the West to now overthrow Bashar al-Assad in Syria.”
—Diplomat [Tokyo], 31 March 2014
In the November 2014 issue of Foreign Affairs, editor Richard Haas alluded to the declining effectiveness of NATO’s cover stories: “the concept of ‘the responsibility to protect’ no longer enjoys broad support, and there is no shared agreement on what constitutes legitimate involvement in the affairs of other countries.” The cynicism of imperialist propaganda is widely recognized:
“Brazilians recall that ‘despite its principled rhetoric’ the West wasted no time in recognizing illegitimate putsch regimes – in Venezuela (2002), in Honduras (2009), and in Egypt (2013) and ‘actively support repressive governments when they used force against protest movements, e.g. in Bahrain.’ Brazilian observers ask, why did nobody propose excluding the U.S. from the G-8 in 2003 when it violated international law by invading Iraq? Why is Iran an ‘international pariah,’ while Israel’s nuclear weapons are quietly tolerated? Why are systematic human rights abuses and a lack of democratic legitimacy ‘in countries supportive of the U.S. acceptable, but not in others?’”
—German-Foreign-Policy.com, 10 December 2014
Revolt in the East
While opposition to the new regime in Kiev was strongest in Crimea, similar sentiment existed throughout the southeast, particularly in the industrial Donbass region (comprised of the Donetsk and Luhansk oblasts), where opponents of the coup began staging their own protests. In April 2014, after dissidents proclaimed “People’s Republics” in Donetsk and Luhansk, the central authorities announcing their intention to preserve the “territorial integrity of Ukraine” launched a brutal “anti-terrorist” operation.
The regular Ukrainian Army units initially sent to combat the eastern rebels exhibited little enthusiasm, and often openly sympathized with the dissidents. Some whole units joined those they had been sent to repress. To assert control, the new regime established a National Guard, which recruited many of the far-right thugs from the Maidan protests. The fascist character of many of Kiev’s new units was noted by British conservative newspaper the Telegraph (11 August 2014):
“Kiev’s use of volunteer paramilitaries to stamp out the Russian-backed Donetsk and Luhansk ‘people’s republics’, proclaimed in eastern Ukraine in March , should send a shiver down Europe’s spine. Recently formed battalions such as Donbas, Dnipro and Azov, with several thousand men under their command, are officially under the control of the interior ministry but their financing is murky, their training inadequate and their ideology often alarming.
“The Azov [battalion] men use the neo-Nazi Wolfsangel (Wolf’s Hook) symbol on their banner and members of the battalion are openly white supremacists, or anti-Semites.”
Given the character of these forces, it is not surprising that the campaign to subdue the east was accompanied by a wave of ugly chauvinism:
“One very disturbing development has been the spread of dehumanizing rhetoric against the movement in eastern Ukraine. People there adopted as their symbol the black-and-orange St George’s ribbon, commemorating victory over the Nazis in what the Soviets called the Great Patriotic War. The far right then started to call eastern Ukrainians ‘Colorado beetles’, after the black and orange stripes, and now the metaphor has moved firmly into the mainstream.”
—Ishchenko, op. cit.
On 2 May 2014, ultra-rightists in Odessa chased anti-Kiev protesters into a building, which was then set on fire. More than 40 people were slaughtered – some shot, some burned to death and others killed as they tried to escape. The vicious psychopaths responsible for this atrocity, which set the tone for Kiev’s subsequent scorched earth campaign, recorded this brutal crime and posted it on the internet.
In the rebel camp there was a symmetrical wave of reactionary Russian nationalism “with the arrival of Russian volunteers, very well equipped, who organized the armed seizure of Sloviansk”:
“Many of these are far-right Russian nationalists with very conservative views, whose interests go far beyond the Donbass – for them, Kiev is the mother of Russian cities, and they think they should annex a much larger part of Ukraine than just the east. These people really had an influence on the ideological complexion of the Donetsk People’s Republic that was declared in early April . For example the Orthodox Church of the Moscow Patriarchate was effectively declared the state church of the DPR, and the DPR constitution banned abortions, on the grounds that the defence of human rights starts at conception. The separatists’ appreciation for the Soviet past was based mainly on the imperial ideal of a great country that could compete with the American superpower; any socialist elements of that legacy were very weak. Some leftists voiced admiration for the Donetsk People’s Republic because it advocated nationalization. But their constitution gave no priority to state ownership, in fact they put private property first.”
From the outset the imperialist media treated the Donbass rebels as agents of Moscow and downplayed their popular support. Yet while Russia provided arms and “volunteers,” the eastern separatists can legitimately claim to be “self defense” fighters, as Stephen F. Cohen pointed out:
“They did not begin the combat; their land is being invaded and assaulted by a government whose political legitimacy is arguably no greater than their own, two of their large regions having voted overwhelmingly for autonomy referenda; and, unlike actual terrorists, they have not committed acts of war outside their own communities.”
—The Nation, 30 June 2014
The leaders of the Donetsk and Luhansk Peoples' Republics pointedly ignored Putin’s advice and carried out a referendum on 11 May 2014, two weeks before Kiev’s presidential elections. Donbass voters overwhelmingly opposed the new regime in Kiev, but what was less evident, because of the ambiguously worded referendum question, was whether they favored autonomy within a federated Ukraine (Moscow’s preference) or outright fusion with Russia (the policy favored by most of the separatist leadership). Attitudes toward issues of nationality in the region have traditionally been somewhat ambivalent:
“Another particularity of the Donbass is that ethnic identity has historically been much weaker than regional and professional identities. They have always had a mix of nationalities there, but this wasn’t considered important. They have always seen themselves as Donbass people or as miners first. In western Ukraine it’s the other way around: national identity is much more significant. It partly explains why the people in the Donbass rejected Ukrainian nationalism, which seemed completely alien to them. The Maidan’s tolerance for the far-right groups’ veneration of Bandera was also a factor mobilizing people in the east.”
—Ishchenko, op. cit.
Rinat Akhmetov, Ukraine’s richest oligarch and a longtime Yanukovych backer who opposes the separatists, held a series of mass workplace meetings to persuade his 300,000 Donbass employees to go along with the new rulers in Kiev. The workers were not impressed:
“Most of them, when questioned, said they actually supported the Donetsk People's Republic, though they also expressed worry that the current situation could impact jobs and regional stability.
“‘Some people are for joining Russia and others are for staying in Ukraine,’ said Vladimir Sadovoy, the head of the factory trade union. ‘But everyone is against the current Kiev government.’”
—Guardian, 20 May 2014
Boris Kargalitsky made the following observations on Moscow’s attitude toward the eastern rebellion:
“The Kremlin faced a dual problem. On the one hand, it was essential to stop the movement developing in the direction of social revolution – rebel workers were variously seizing control of enterprises, or demanding nationalisation, or advancing anti-oligarchic and anti-capitalist slogans.
“In both Lugansk and Donetsk, the leaders of the republics were constantly declaring the need to set in place ‘elements of socialism’. In practice, everything was restricted to general utterances, but in themselves these statements bore witness to a growing pressure from below, while the demands put forward in Donetsk were also finding clear support on the other side of the Ukraine-Russia border.
“On the other hand, it was necessary to restrain the radicals who were anxious to pursue the war with the Kiev government to a victorious end, overthrowing the existing Ukrainian authorities. For all the frictions that now exist between Moscow and Kiev, preserving the current regime in Ukraine is the Kremlin’s most important policy priority. The oligarchic regime of Petro Poroshenko is more or less understandable and predictable. Its fall would automatically set in train a cycle of far-reaching changes in both countries, putting in question the survival of the existing order in both Ukraine and Russia.”
—Links, 10 November 2014
According to Kargalitsky, by late August 2014 the Kremlin gained effective control over the insurgents through a combination of carrots and sticks:
“Either cutting or increasing supplies of foodstuffs, weapons and ammunition, and directing these supplies to certain sub-units or to others, the Russian administrators gradually established the configuration of forces they needed, blackmailing the dissatisfied and encouraging the loyal.”
The majority of the population of the Donbass clearly thinks that they would be better served by a different arrangement of bourgeois state power (whether through separation or autonomy). Many would prefer to remain part of Ukraine, but not on the terms laid down by those running the murderous “anti-terrorist” campaign against them.
Marxists approach questions of national (and subnational/communal) conflicts from the perspective of resolving differences in the most democratic fashion – which usually means acceding to the desire of a subject population wishing to separate from a state which they find oppressive. We support the right of nations to exercise self-determination not because we favor smaller national units, but because this is the shortest path to the elimination of national antagonisms. In some cases the separation of peoples is necessary in order to bring class contradictions to the fore (thereby clearing the way for eventual voluntary assimilation).
Leninists have no reason to oppose the desire of the people of the Donbass to be free of Kiev’s control. Their separation would pose no threat to the rights of any other people. In the bloody conflict in eastern Ukraine, we therefore side militarily with the indigenous Russophone resistance against the oppressor nationalist centralizers. The fact that the latter are relying on fascists to spearhead their attacks is not a decisive consideration, as many of those resisting Kiev’s forces are far-right Russian nationalists with similarly abhorrent politics.
IMF Plans to Ravage Ukraine
Popular disaffection with the new regime in Kiev is based on perceived material interests as well as cultural and historic differences. It is common knowledge that the agreement signed with the IMF is going to impose a lot of pain on the population:
“Ordinary people will be the undisputed losers in Ukraine, since they’ll pay for the so-called reform program rather than the oligarchs who continue to freely move billions of dollars to offshore tax havens. The biggest winners will be currency speculators; Western banks whose loans will be repaid via austerity measures; and European corporations who will gain access to the country’s markets and cheap Ukrainian labor under an EU association agreement set to be signed in May .”
—The Nation, 7 April 2014
The IMF “structural adjustment” plan does not even pretend to begin to revive Ukraine’s collapsing economy. The oligarchs, who seized chunks of state property after the 1991 counterrevolution, will function as local agents for the global financiers carving up the country:
“Ukraine’s leaders are mainly kleptocrats. Their aim is not to help the country, but to help consolidate their own power. George Soros has written that their best way to do this is to find Western partners. This will provide US and European backing for the kleptocrats tightening their hold on the economy. Western support will provide more IMF and European lending to support the currency so that the Ukrainian oligarchs can move their money safely to the West, to British banks and US banks.”
—RT, 7 July 2014
While the oligarchs and their foreign partners will do well, working people can look forward to reduced wages and pensions, higher taxes and soaring heating bills. A central feature in the IMF playbook is the privatization of public assets:
“The effect is to turn the economy into a renting ‘tollbooth economy.’ Hitherto free public roads are turned into toll roads, and other transportation, water and sewer systems also are privatized. This raises the cost of living, and hence the cost of labor – while overall wage levels are squeezed by the financial austerity that shrinks markets and raises unemployment.”
Ukraine has already suffered two decades of the “free market,” during which the country’s “rapacious leadership have left the average Ukrainian about 20% poorer than she was when the Soviet Union collapsed” (Economist, 15 November 2014).The campaign against the Donbass has severely damaged an economy already in bad shape:
“The war in the provinces of Donetsk and Luhansk, the country’s industrial power-house, has compounded these failings. The two normally account for 16% of Ukraine’s GDP, supply 95% of its coal [which produces 40 percent of the country’s electricity] and produce a disproportionate share of exports. In September  industrial production in Luhansk fell by 85% year-on-year; in Donetsk it fell by 60%.”
The situation in Ukraine, already desperate, will get worse, as some $14 billion in debt (payable in foreign currency) comes due by 2016.
Ukraine’s economic value to Russia is mainly as a transit route for oil and gas pipelines to Europe. Russia is much more important to Ukraine, as a recent study by the Brookings Institution bluntly observed: “The simple fact is that Russia today supports the Ukrainian economy to the tune of at least $5 billion, perhaps as much as $10 billion, each year.” Most readers of the “serious” business press in the U.S., along with many leftists, presume that Russia’s relationship to Ukraine has roughly approximated that of an imperial power to a colony. But the reality is very different:
“When we talk about subsidies, we usually think of Russia’s ability to offer Ukraine cheap gas – which it does when it wants to. But there are many more ways Russia supports Ukraine, only they are hidden. The main support comes in form of Russian orders to Ukrainian heavy manufacturing enterprises. This part of Ukrainian industry depends almost entirely on demand from Russia. They wouldn’t be able to sell to anyone else. The southern and eastern provinces of Ukraine are dominated by Soviet-era dinosaur enterprises similar to Russia’s. They were all built in Soviet times as part of a single, integrated energy-abundant economy. They could be sustained only thanks to the rents from Soviet (overwhelmingly Russian) oil and gas. Russian subsidies have continued to maintain the structure in the post-Soviet era. Because most of these subsidies are informal, they do not appear in official statistics. (In fact, not even Putin talks about them, though it might be to his advantage to do so, because acknowledging the existence of hidden Russian subsidies to value-destroying Ukrainian enterprises would expose the fact that the same thing goes on, on a much greater scale, with their Russian counterparts. They, too, are not producing real value.)”
—“Ukraine: A Prize Neither Russia Nor the West Can Afford to Win,” 22 May 2014
In an article entitled “Ukraine Is On The Brink Of Total Economic Collapse,” the Business Insider website reported:
“Deep economic ties with Russia have resulted in painful adjustments in recent months. The nation's exports are down some 19% from last year in dollar terms and expected to fall further. A great example of Ukraine's export challenges is the Antonov aircraft company known for its Soviet era large transport planes as well as other types of aircraft.
“As the military cooperation with Russia ended, Antonov was in trouble. It had to take a $150 million hit recently by not delivering the medium-range An-148 planes to the Russian Air Force. The Russians will find a replacement for this aircraft, but in the highly competitive global aircraft market, it's far less likely that Antonov will find another client.”
—21 September 2014
With GDP shrinking, public debt soaring, industrial production collapsing, currency reserves exhausted and the value of the hryvnia (Ukraine’s currency) plunging, the article concludes: “the country's public debt problem is simply unsustainable and default is becoming increasingly likely.” Kiev’s NATO friends, who have no intention of refloating its economy nor providing significant aid to its stricken population, are pushing for Ukraine’s full “integration” into the “free world” as an impoverished neocolony, as Diana Johnstone describes:
“Ukraine has some of the largest shale gas reserves in Europe. Like other Europeans, Ukrainians had demonstrated against the harmful environmental results of fracking on their lands, but unlike some other countries, Ukraine has no restrictive legislation. Chevron is already getting involved.
“As of last May, R. Hunter Biden, son of the U.S. Vice President, is on the Board of Directors of Burisma Holdings, Ukraine’s largest private gas producer. The young Biden will be in charge of the Holdings’ legal unit and contribute to its ‘international expansion.’
“Ukraine has rich soil as well as shale oil reserves. The U.S. agribusiness giant Cargill is particularly active in Ukraine, investing in grain elevators, animal feed, a major egg producer and agribusiness firm, UkrLandFarming, as well as the Black Sea port at Novorossiysk. The very active U.S.-Ukraine Business Council includes executives of Monsanto, John Deere, agriculture equipment-maker CNH Industrial, DuPont Pioneer, Eli Lilly & Company. Monsanto plans to build a $140 million ‘non-GMO corn seed plant in Ukraine,’ evidently targeting the GMO-shy European market. It was in her speech at a Chevron-sponsored meeting of the U.S.-Ukraine Business Council a year ago that Victoria Nuland mentioned the five billion dollars spent by the U.S. in the last twenty years to win over Ukraine.”
—Counterpunch, 9 December 2014
The full implementation of the IMF austerity package has been postponed until 2016, presumably to gain time to stabilize eastern Ukraine, but essential groundwork for the upcoming sell-off of public assets is being laid. The U.S. State Department felt it best not to entrust this important task to anyone who might harbor some sentimental attachment to either Ukraine or its people, so it was decided that three key portfolios should go to foreigners.
The new finance minister is Natalie Jaresko, an American citizen and former State Department employee who has long headed a private-equity fund. Jaresko was originally sent to Ukraine in 1992 “to head the economic department of the newly opened U.S. embassy” in Kiev:
“In 1995, she left the U.S. Embassy to work for the Western NIS Enterprise Fund (WNISEF), an equity fund financed by the U.S. government, where she rose to the position of chief executive officer.
“She established her own fund, Horizon Capital, in 2004.
“During the Orange Revolution, Jaresko made no secret of her sympathies for the pro-Western uprising. She went on [to] serve on then-President Viktor Yushchenko's Foreign Investors Advisory Council.”
—Radio Free Europe, 3 December 2014
With her vulture fund background, Jaresko is seen as well qualified to oversee the sell-off of Ukraine’s farmland and other tangible assets. As backup, another U.S. favorite, Lithuanian banker Aivaras Abromavicius, has been appointed economics minister. Abromavicius was “a partner and fund manager at the East Capital asset management group,” which RFE describes as “a major player in Ukraine, where it invested almost $100 million in 2012.” Abromavicius has “pledged ‘radical measures’ to overhaul the country's battered economy.”
The third foreign appointee is Alexander Kvitashvili, a Georgian who trained in the U.S. prior to becoming minister of health under President Mikheil Saakashvili, an American asset who came to power in Georgia courtesy of the 2003 “Rose Revolution.” Kvitashvili, who does not speak Ukrainian and has never lived in the country, is promising to introduce “sweeping reforms to tackle rampant corruption among health authorities,” according to RFE. In other words, he will be attempting to squeeze more blood out of a health service that has already been gutted according to the World Health Organization:
“‘Universal health care exists only on paper,’ says Dr [Dorit] Nitzan [WHO representative for Ukraine], referring to the general situation in Ukraine. ‘People have to pay for a large portion of health services, procure their own medicines and there are no set prices for these essentials,’ she says. The war and the financial crisis are making the poor even poorer, so they effectively have no access to health care, medicines or vaccines.”
—WHO, 10 December 2014
Imperialist Sanctions: ‘Intended to Cripple the Russian Economy’
Petro Poroshenko, the “chocolate king” oligarch who was elected president in May 2014 on a pledge to peacefully resolve the problems in the east, promptly reneged and redoubled the effort to militarily crush the rebels. This is hardly surprising, as the IMF had made its $17 billion dollar bailout conditional on regaining control in the east. The shelling of civilian areas and use of ultra-rightist shock troops indicate that Kiev is not concerned about winning “hearts and minds” in the Donbass. But the Kremlin is not prepared to see the rebels defeated, and has provided enough semi-covert support to maintain the status quo.
Putin has stated that Russian troops would intervene in the “near abroad” only to prevent massacres of people “who consider themselves part of the broad Russian community.” In Ukraine his objective is to negotiate a settlement that grants the Donbass substantial regional autonomy. Russia and its imperialist European “partners” have a lot to lose from a prolonged military conflict, but the U.S., which has only a tenth of the EU’s trade with Russia, has little at stake and is eager to drive a wedge between Europe and the Kremlin.
In July 2014, EU reluctance to more than symbolic sanctions was overcome, at least temporarily, when Malaysian Air flight MH17 was shot down, killing 298 civilians. Washington immediately blamed the Donbass rebels and Russia, but it may have been a “false flag event” carried out by the Kiev regime in collusion with its imperial mentors. In any case, the downing of MH17 provided Washington with an opportunity to enlist EU support for much harsher sanctions:
“The EU announcement of sweeping measures intended to cripple the Russian economy and convince the Kremlin to abandon its support for separatists in Ukraine was quickly followed by a new round of similar US penalties.”
“Despite intense pressure from the Obama administration, the US and EU had seemed only weeks ago to be far apart on the action they were prepared to take against Russia. Those differences have narrowed sharply since the crash two weeks ago of flight MH17, which the US has blamed on pro-Russian separatists.”
—Financial Times, 29 July 2014
The New York Times (29 July 2014) candidly described the measures as “intended to curb Russia's long-term ability to develop new oil resources, taking aim at the Kremlin's premier source of wealth and power.”
German industrialists, who have significant investments in Russia and exported a total of €36 billion in goods in 2013, have strongly opposed the sanctions. In an 8 August 2014 article, Gabor Steingart, publisher of Handelsblatt, a leading German financial newspaper, acidly contrasted the political calculations in Berlin with those in Washington:
“Threats and posturing are simply part of the election preparations [in the U.S.]. When Hillary Clinton compares Putin with Hitler, she does so only to appeal to the Republican vote, i.e. people who do not own a passport. For many of them, Hitler is the only foreigner they know, which is why Adolf Putin is a very welcome fictitious campaign effigy. In this respect, Clinton and Obama have a realistic goal: to appeal to the people, to win elections, to win another Democratic presidency.
“Angela Merkel can hardly claim these mitigating circumstances for herself. Geography forces every German Chancellor to be a bit more serious. As neighbors of Russia, as part of the European community bound in destiny, as recipient of energy and supplier of this and that, we Germans have a clearly more vital interest in stability and communication. We cannot afford to look at Russia through the eyes of the American Tea Party.”
—Handelsblatt, 8 August 2014
The German bourgeoisie has tended to support Russia in maintaining Ukraine as a buffer with NATO. In 2008 when the U.S. proposed to put Ukraine on a track for NATO membership, Merkel objected. She did so again in November 2014 when Poroshenko announced plans to hold a referendum on the issue:
“German industry is also wary of Poroshenko’s plans. His push toward NATO ‘will lead to further worsening of Russian-Ukrainian relations,’ Rainer Lindner, the head of Germany’s Ost-Ausschuss that fosters business ties with Russia, said in Hamburg. That’s ‘something we don’t want to see.’”
—Bloomberg, 26 November 2014
On 1 December 2014 Putin made a surprise announcement that the South Stream pipeline to supply Russian gas to southern Europe without going through Ukraine was cancelled because of EU attempts to retroactively impose new conditions on a previously negotiated agreement:
“However, observers see a clear correlation between the power struggles over Ukraine and the sudden increase of pressure from Brussels and Washington on Sofia [Bulgaria’s capital] to delay the pipeline construction. Sofia would have greatly profited from South Stream….”
—German-Foreign-Policy.com, 3 December 2014
South Stream was to have routed gas across the Black Sea through Bulgaria, Serbia and Hungary and on to an Austrian hub. Branch lines were planned to Slovenia and Italy as well as to Croatia. The cancellation of the project, long a U.S. objective, gored many EU oxes:
“South Stream has an Italian focus with Italy's ENI holding 20 percent (Gazprom 50 percent). However, the French EDF and the German Wintershall are also shareholders, with 15 percent each. A German (Gerhard Schröder) is North Stream's board chairman and another German (Henning Voscherau) South Stream's. The implementation of this project would therefore have expanded German influence over the European gas supply.”
Russia has already sunk $4.5 billion into constructing the initial leg of the pipeline, which it now plans to use to redirect gas intended for South Stream to Turkey, which depends on Russia for most of its energy. The new plan would quadruple the amount presently going to Turkey and turn it into a major distribution hub for the EU, thus significantly increasing Turkey’s influence in the EU while tightening links between Ankara and Moscow. Although Turkey is a member of NATO and a partner in the U.S. campaign to impose “regime change” on Russia’s Syrian ally, it had sharp differences with the U.S. over the 2013 military coup in Egypt. If the pipeline deal is realized, the Turks stand to collect a big dividend from their refusal to join the U.S./EU sanctions campaign against Russia.
The EU is treating the South Stream cancellation as reversible, and Germany still wants to reach an agreement with Moscow:
“‘For Europe, as a whole, it would be good if the project is not dead,’ German Minister of the Economy, Sigmar Gabriel (SPD) was quoted saying. One must ‘simply hope’ that ‘the situation between Russia, Ukraine and the European Union’ is again stabilized and ‘talks renewed.’”
—German-Foreign-Policy.com, 3 December 2014
Geopolitics of Global Oil Pricing
Russia’s economy, which is projected to contract by five percent in 2015, has been hit much harder by the steep fall in the price of oil than by sanctions. Saudi Arabia, which has the world’s lowest production costs, is blamed for failing to restrict oil production to keep prices up as it used to do:
“The [Saudi] kingdom has two targets in its latest oil war: it is trying to squeeze U.S. shale oil – which requires higher prices to remain competitive with conventional production – out of the market. More broadly, the Saudis are also punishing two rivals, Russia and Iran, for their support of Bashar al-Assad’s regime in the Syrian civil war.”
—Reuters, 15 December 2014
Washington seems to approve of the actions of its Saudi client, despite the objections of America’s powerful oil lobby:
“with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with.
“John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September  under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.”
—Guardian, 9 November 2014
As commentator Mike Whitney observed, this policy is not without serious risk for the highly leveraged American economy:
“Plummeting oil prices are making it harder for energy companies to get the funding they need to roll over their debt or maintain current operations. Companies borrow based on the size of their reserves, but when prices tumble by nearly 50 percent – as they have in the last six months – the value of those reserves falls sharply which cuts off access to the market leaving CEO’s with the dismal prospect of either selling assets at firesale prices or facing default. If the problem could be contained within the sector, there’d be no reason for concern. But what worries Wall Street is that a surge in energy company failures could ripple through the financial system and wallop the banks.”
—Counterpunch, 17 December 2014
Russia’s Asian Pivot: Going Down the New Silk Road
The Chinese bureaucracy shares the Kremlin’s objective of a “multi-polar” global political order in which the U.S. is only one of several great powers. During a visit to Kazakhstan in September 2013, President Xi Jinping announced plans to build a “New Silk Road Economic Belt” from China, across Central Asia into Europe. A month later he sketched a future “Maritime Silk Road” involving the creation of a string of major ports and special economic zones to China, Southeast Asia and the Bay of Bengal. The objective is to massively increase the economic integration of Eurasia through the creation of new networks of roads, high-speed railways, energy pipelines and marine installations.
China has already signed some $50 billion in energy and infrastructure contracts with Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan. Sri Lanka has been allocated $1.4 billion to develop its maritime shipping capacity. Preliminary work has also begun in Eastern Europe:
“A Chinese agreement to finance a high-speed railway from Belgrade to Bucharest was one of around $10bn worth of investments, mainly in the energy and infrastructure sectors, signed during a China-Central and Eastern Europe summit this week.”
—bne IntelliNews, 18 December 2014
Taiwan’s Want China Times (16 September 2014) reports total projected investment to be a staggering $21 trillion:
“If brought to fruition, the Silk Roads would boost China’s trade with effectively the whole Eurasian continent. Meanwhile, with Beijing footing the bill for much of the requisite infrastructure development, the vast trade network would increase the number of regional governments that view China as a patron and benefactor rather than a threat….
“China’s economic powers are riding high, and still growing. Beijing is naturally trying to take advantage of its advantageous financial situation to boost foreign policy influence. It’s no coincidence that some are comparing China’s Silk Road Economic Belt and Maritime Silk Road to the Marshall Plan enacted by the U.S. after World War II. In both situations, a rising global power wants to use its economic strengths to secure foreign policy goals (including the basic goal of sustaining its own domestic economy).”
—The Diplomat, 6 November 2014
Participants at the October 2014 meeting of the Asia-Pacific Economic Cooperation (APEC) endorsed Beijing’s Free Trade Area of the Asia-Pacific (FTAAP). A competing American proposal for a 12-nation Trans-Pacific Partnership (TPP) was received less enthusiastically. Twenty-one countries agreed to participate in a proposed Asian Infrastructure Investment Bank (AIIB) for which China is to provide half the initial capitalization of $50 billion (India will contribute the next largest share). Like the recently launched BRICS Development Bank, the AIIB will be headquartered in China. Both are designed to finance infrastructure projects independently of the IMF, World Bank and the other U.S.-dominated international financial agencies:
“China will use the new bank to expand its influence at the expense of America and Japan, Asia's established powers. China’s decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform. The same motivation lies behind the New Development Bank established by the BRICS (Brazil, Russia, India, China and South Africa).”
—Economist, 11 November 2014
Washington’s attempt to hobble Russia with economic sanctions was countered by the Kremlin with two massive deals, totaling more than $700 billion, to supply gas to China over the next several decades:
“China and Russia deepened their energy ties with a second blockbuster deal that lessens Russian reliance on Europe and would secure almost a fifth of the gas supplies China needs by the end of the decade.
“Russian President Vladimir Putin and Chinese President Xi Jinping signed the preliminary gas-supply agreement in Beijing as U.S. President Barack Obama arrived in the Chinese capital for the Asia-Pacific Economic Cooperation summit. The deal is slightly smaller than the $400 billion pact reached earlier this year, shortly after Russia annexed Crimea.
“Once deliveries begin, China would supplant Germany as Russia’s biggest gas market, even as relations have soured with the U.S. and Europe over the Ukraine crisis.”
—Bloomberg, 10 November 2014
While Russia ended up making concessions on price, the agreement represents the consolidation of a major strategic alliance between the Kremlin and the Chinese bureaucracy. This was demonstrated in December 2014 when Beijing offered to extend economic credits to the Kremlin to counter American attempts to drive down the ruble and panic Russian investors:
“‘Russia is an irreplaceable strategic partner on the international stage,’ according to an editorial today in the Global Times, a Beijing-based daily affiliated with the Communist Party. ‘China must take a proactive attitude in helping Russia walk out of the current crisis.’”
—Bloomberg, 22 December 2014
As Pepe Escobar observed, if the Silk Road project proceeds (and that is a big “if”), its gravitational pull could realign the priorities of German imperialism, the main shareholder in the EU condominium:
“Berlin’s geostrategic interests seem to be slowly diverging from Washington’s. German industrialists, in particular, appear eager to pursue unlimited commercial deals with Russia and China. These might set their country on a path to global power unlimited by the EU’s borders and, in the long term, signal the end of the era in which Germany, however politely dealt with, was essentially an American satellite.
“It will be a long and winding road. The Bundestag, Germany’s parliament, is still addicted to a strong Atlanticist agenda and a preemptive obedience to Washington.”
—TomDispatch.com, 5 October 2014
On 3 October 2014, U.S. Vice President Joe Biden candidly admitted that America’s European allies had not been inclined to “impose costs” on Russia out of fear that the EU would “take economic hits”:
“Throughout we’ve given Putin a simple choice: Respect Ukraine’s sovereignty or face increasing consequences. That has allowed us to rally the world’s major developed countries to impose real cost on Russia.
“It is true they did not want to do that. But again, it was America’s leadership and the President of the United States insisting, oft times almost having to embarrass Europe to stand up and take economic hits to impose costs. And the results have been massive capital flight from Russia, a virtual freeze on foreign direct investment, a ruble at an all-time low against the dollar, and the Russian economy teetering on the brink of recession.”
—Whitehouse press office
The majority of the German ruling class has opted to continue accepting U.S. “leadership” for the time being, but the sun is setting on the “American Century”:
“According to the latest edition of a German military journal, the current intra-Western tensions have primarily arisen from the fact that in the course of its development the EU has ‘inevitably become a competitor to NATO.’ It cannot be excluded that this could cause a serious ‘rupture in transatlantic relations’ and that NATO could even disintegrate into conflicts. However, as long as the EU does not have strong military power, it should ‘grit its teeth and continue to flexibly attempt to benefit from US capabilities.’ This must also be seen in the context of the fact that western hegemony no longer seems assured. Moscow has announced its intentions to carry out joint maneuvers with China in the Mediterranean, thus breaching another western hegemonic privilege.”
—German-Foreign-Policy.com, 1 December 2014
On ‘Russian Imperialism’
Many leftists, viewing events in Ukraine, started from the false premise that the axis of the conflict was between upstart “Russian imperialism” and the well-established EU/U.S imperial powers. The chronic impressionists of the League for the Fifth International (L5I) are typical of those who characterize Russia as “imperialist” on the basis of its military strength:
“To that extent, the strategy of the Russian government is also clear; what Russian imperialism lacks in economic strength, which threatens it with a crash, will be made up for by military strength.”
—fifthinternational.org, 9 April 2014
The L5I has yet to explain why it supports the reintegration of Crimea into “imperialist” Russia, or why it backs the Russian-backed Donbass rebels against Kiev.
Russia’s rulers may have imperial ambitions, but Russia hardly qualifies as one of “a small number of financially 'powerful' states [that] stand out among all the rest,” Lenin’s thumbnail description in Imperialism – The Highest Stage of Capitalism. Russia's financial sector is comparable to Brazil’s, not Britain, the U.S. or Germany.
A New York Times article entitled “Moscow Tries to Reinvent Itself as Financial Hub” (3 April 2013) described the difficulties Moscow has in competing with Warsaw as a regional financial center:
“The midsize companies in neighboring Ukraine or other former Soviet republics are choosing to go public in Warsaw. They are hardly bothering to look at the carefully laid out welcome mat in Russia.”
The article continued:
“Mr. Medvedev had named senior Western bank executives to an advisory council for transforming Moscow’s financial sector. They included Jamie Dimon, the chief executive of JPMorgan Chase; Vikram S. Pandit, the former chief executive of Citigroup; and Lloyd C. Blankfein, the chief executive of Goldman Sachs.
“But the Global Financial Center Index, published in March by Z/Yen, a consulting agency, placed Moscow 65th out of 79 cities studied. London was first, followed by New York and Hong Kong. The ranking placed Moscow between Bahrain and Mumbai.”
Russia today plays little or no role in the global institutions established after World War II through which imperialist policy (e.g., the “Washington Consensus”) is implemented in the neocolonies. Russian banks and corporations have derived no benefit from the give-away privatizations imposed by IMF “structural adjustment” policies. Nor does the Russian bourgeoisie operate a separate, or parallel, state system, through which it dominates and oppresses weaker countries. There are no mechanisms, beyond the sale of oil and gas at world market prices, by which Russia extracts wealth from less developed countries on any significant scale. Indeed in recent years Russia, despite a near-monopoly position as an energy supplier in neighboring former Soviet republics, has provided subsidies rather than pursuing superprofits.
Nouriel Roubini, one of the handful of analysts to predict the 2008 financial crash, described Russia’s economic situation in its aftermath:
“The weakness of the Russian economy and its highly leveraged banks and corporations, in particular, which was masked in recent years by the windfall brought by spiking oil and gas prices, burst into full view as the global economy tumbled. Saddled with a rust-belt infrastructure, Russia further disqualifies itself with dysfunctional and revanchist politics and a demographic trend in near-terminal decline.”
—“Another BRIC in the Wall?,” 15 October 2009
Russia’s formidable military, inherited from the Soviet Union, allows it to play a major role in global politics. It also possesses enormously valuable natural resources. Yet, with few exceptions, Russian products are not competitive on the world market and the corrupt, parvenu Russian bourgeoisie shows no sign of being able to narrow the gap separating it from its more advanced capitalist rivals. In a report on “The state of Russia,” the Economist wrote:
“By 2005 the bribes market, according to INDEM, a think-tank, had risen to $300 billion, or 20% of GDP. As Mr Khodorkovsky said in a recent interview, most of this was not the bribes paid to traffic police or doctors, but contracts awarded by bureaucrats to their affiliated companies.
“Unlike private businessmen, who started to invest in their core businesses (Yukos among them) in the late 1990s, bureaucrat-entrepreneurs have little incentive to do so. Their wealth is dependent on their administrative power, rather than newfangled property rights. The profits are often stashed away in foreign bank accounts or quickly spent: on luxury property in European capitals, or on their children's education in British private schools. All this is inevitably accompanied by anti-Western rhetoric and claims of Russia's resurgence.
“Unsurprisingly, surveys now show that the young would rather have a job in the government or a state firm than in a private business. Over the past ten years the number of bureaucrats has gone up by 66%, from 527,000 to 878,000, and the cost of maintaining such a state machine has risen from 15% to 20% of GDP. At the same time, Russia's standing in indices of corruption, property rights and business freedom has deteriorated.”
—Economist, 9 December 2010
The Russian economy is integrated into the world market and overwhelmingly dependent on resource extraction. Despite repeated exhortations from the Kremlin to diversify production, Russia's economy remains centered on the export of fossil fuels. And even in this sector the relative technological backwardness of Russian corporations, much of whose equipment dates back to Soviet times, often forces them to rely on joint ventures with U.S., French, Italian, British or Dutch firms in developing new fields. When Lukoil (a major Russian producer) won a contract to develop a portion of Iraq’s oil fields, it had to subcontract most of the work to U.S. companies with more advanced technology, which stood to reap most of the benefits.
Ukraine & the Crisis of Revolutionary Leadership
The situation in Ukraine today remains extremely unstable. The ruling clique is well aware that it lacks significant popular support and that its austerity program is likely to spark serious resistance. The historic party of the working class – the Communist Party of Ukraine (CPU) – is discredited by a history of craven class collaboration and passivity in the face of capitalist attacks. The rest of the Ukrainian left is relatively small and without significant social weight. Yet the enormous catastrophe being orchestrated by the new regime would seem to guarantee a mass constituency for any formation that appears capable of initiating resistance to the IMF and its Kiev stooges. As the “reforms” begin to bite, even the traditionally conservative sections of the population are likely to be driven to resist, thus opening the possibility of joint class struggle across the linguistic and cultural divide.
The most important formation to the left of the CPU is the Union Borotba (Struggle), founded in 2012 by several small groups, mostly left splits from the CPU. Before being driven underground by the coupsters, Borotba distinguished itself by attempting to revive pro-socialist sentiment within the working class, calling for renationalizing the ill-gotten gains of the oligarchs and organizing resistance to the rise of the far right.
In late 2014, Workers World published a lengthy interview (serialized over five issues) with Victor Shapinov, a Borotba leader who described the conditions Ukrainian leftists have faced since the coup: “If you are a communist or leftist, you cannot speak freely – not in the media, not in the street, not anywhere. It is an underground situation.” Shapinov compared the situation to that in Spain under Franco or various Latin American countries under rightwing dictatorships in the 1970s and 80s. He pointed to parallels between Ukraine and Greece:
“Some European countries are already close to this situation. For example, in Greece there is the Golden Dawn, which is something like the Right Sector. I’m sure they have armed militarist squads. When the political struggle develops, it will have a military aspect. We should learn from this situation and see what political blocs are forming.”
Shapinov described the abject prostration of the CPU as a key factor in the emergence of Borotba:
“It’s important to explain about the Communist Party of Ukraine. At that time, its leadership was always seeking alliances in parliament with whichever capitalist party was strongest. Not many people in the West know this, but before allying with the Party of Regions of (deposed President Victor) Yanukovich, they were partners with the party of Yulia Timoshenko (far-right politician associated with the 2004 ‘Orange Revolution’ and today part of the Kiev junta).
“It was an unprincipled position by the KPU leadership, and for us, it meant we couldn’t just be the left wing of the Communist Party. Besides, comrades who wanted to be the left wing of the party were always swept out. Every year groups of good communists were expelled.”
Shapinov aptly characterized the rightward trajectory of the European left:
“I’ve been in Europe many times. I’ve observed that in a situation where the world system is dissolving and crashing, much of the European left is not trying to go forward, but only to save some social guarantees they had in 1970s or 1980s.
“People start to see some of the left as a conservative force. It’s a weak position because their base will only get smaller and smaller.”
He linked the rise of fascist groups to the reformist left’s passive accommodation to the status quo:
“And we see some far-right and right-populist organizations, which see that the system is dissolving, present themselves to the people as agents of destroying the system, while the left is portrayed as pro-system. So in France, for example, we see that parts of the working class, which voted for communists for years, are now voting for the National Front.”
Borotba at least recognizes the necessity to fight, rather than curry favor with the exploiters. But, while a willingness to struggle is essential, it is not sufficient. Any organization capable of providing revolutionary leadership in a struggle to defeat the oligarchs and their imperial patrons can only be forged through assimilating the essential lessons of the history of the international workers’ movement – particularly those of the Bolshevik Revolution.
Borotba’s political break with the CPU is both limited and empirical. It naively imagines it can sidestep essential historical and programmatic issues by embracing any forces claiming to be revolutionary and which agree on immediate practical tasks:
“We see that the splits that were part of the communist movement in the past are not so important now, or we see them in a very different way. We saw that there were some groups that are like reconstructors (this term refers to people who re-enact historic military battles, like Civil War re-enactors in the U.S.). They want to refight the old battles.
“We don’t want to be like this. We want to make real politics for the working class and oppressed peoples, and not play at being Stalin, or Trotsky, or Mao Zedong, or whatever.”
The politics of Lenin and Trotsky are counterposed to those of Kautsky, Stalin and Mao. To embrace the heritage of the October Revolution – the first and only time a politically-conscious working class took power and successfully held it – is to reject the politics of parliamentary reformism and popular-frontist unity with a hypothetical “progressive” wing of the capitalists, as well as the strategy of peasant-based guerilla warfare.
After Lenin’s death in 1924, only the Trotskyists upheld the internationalist traditions of the early Communist International against the narrow Russian nationalism of “socialism in one country” promoted by the parasitic bureaucratic caste headed by Stalin, who ultimately liquidated most members of Lenin’s Central Committee in the grotesque purge trials of the 1930s before having Trotsky assassinated in Mexico.
Lenin’s party was defined above all by its willingness to draw “lines of demarcation” with opportunists. By contrast, Shapinov and his comrades imagine that avoiding clear political differentiation from other leftist will make it easier to appeal directly to the masses:
“From the organizational side, when we started to create Borotba, we decided to try and look upon ourselves and what we were doing through the eyes of the people, not through the eyes of competing leftist groups.
“How do the common people see us? That is a practical criterion for our work, not the opinions of some publications that spend all their time critiquing other leftists. If you don’t waste a lot of time on that, you have more time to observe how the people see you and how to reach them.”
The attempt to ignore vital historical questions faced by previous generations of socialist fighters is doomed to fail. Lenin’s party was only forged by combining practical mass work and continuous political struggle against the purveyors of false consciousness within the working class – particularly those claiming to provide revolutionary leadership. Lenin's most important political contribution was to reject the social-democratic model of a broad, all-inclusive party in favor of a disciplined vanguard comprised solely of the most advanced workers. The democratic-centralist discipline that cohered the Bolsheviks as an effective combat party was based on a high level of political understanding and clear programmatic agreement. This relationship cannot be inverted – i.e., discipline cannot precede political consciousness – if a genuinely Marxist organization is to be built.
Trotsky's prediction that if the Soviet workers did not rise in a proletarian political revolution and overthrow the Kremlin oligarchy the Soviet Union would ultimately fall to capitalist restoration was, unfortunately, confirmed. The combination of Stalinist police-state oppression and bureaucratic incompetence led many working people in the former Soviet bloc to mistakenly conclude that the socialist project itself was bankrupt. But there is not, and cannot be, any solution to the fundamental problems of humanity – racism, sexism, hunger, ecological destruction and war – except socialism. Collectivizing the means of transport, production and communication and introducing a system of rational planning in which economic activity is geared to meeting human need, not maximizing private profit is the only alternative to capitalist barbarism.
There is nothing inevitable about the victory of the working class. To carry out its historic task of getting rid of capitalist exploitation and its associated pathologies, the advanced layers of the working class must be won to a consistently revolutionary program. The indispensable political arsenal from which a new generation of class-conscious fighters can obtain the weapons for revolutionary combat is that of the October Revolution of 1917. The International Bolshevik Tendency, committed to the struggle to politically rearm the workers’ movement politically, seeks to engage with all who share the goal of forging an internationalist political party capable of leading the proletarian revolutions of the future.
1 A Washington, D.C. think-tank recounted how Yanukovych, who was later to renege on the deal, initially steamrollered all opposition to the EU:
“Yanukovych told national TV on August 29  that Ukraine would meet all the EU conditions to sign the association agreement. The EU, for its part, visibly warmed to Ukraine after the customs spat [when Moscow had tried to pressure Kiev to distance itself from the EU]. After a meeting between Ukraine’s opposition leaders and EU Enlargement Commissioner Stefan Fule, the business daily Kommersant-Ukraine reported on August 30  that the EU no longer insisted on the adoption of new election laws. The EU wants Ukraine to release [Yanukovych rival Yulia] Tymoshenko from prison, but this is not a must-do. Brussels also warned Moscow against threatening Ukraine (UNIAN, August 23 ).
“On September 4 , Yanukovych gathered lawmakers from his Party of Regions (PRU), who control a comfortable majority in Ukraine’s unicameral parliament, and instructed them to approve all the bills that the EU deemed necessary for the signing of the agreement in November. He reportedly made it clear that dissenters would be expelled (Ukrainska Pravda, September 5, 6 ; Zerkalo Nedeli, September 7 ). On September 5 , parliament approved all five bills needed for EU integration that were on the agenda.”
—The Jamestown Foundation, 11 September 2013,
2 A banner honoring Stepan Bandera adorned the stage from which John McCain proclaimed his support to the Maidan protests.
3 Western apologists for Svoboda and Right Sector tend to depict Bandera and his organization as anti-Soviet resistance fighters rather than Nazi collaborators. In fact they were both:
“At a congress of the Organization of Ukrainian Nationalists (OUN) which met in Krakow in April 1941, a resolution was adopted calling the Jews in the USSR ‘the most faithful support of the ruling Bolshevik regime,’ the ‘principal foe’ of the Ukrainians. Some factions had dreams of an independent Ukrainian state and were disposed of by the Nazis. But the Ukrainian auxiliary police and the Bandera units (paramilitary anti-Soviet units led by Stepan Bandera), as well as thousands of Ukrainian pro-Nazi collaborators, contributed heavily to the torture and killing of Jews. ‘Pogroms,’ wrote Philip Friedman, foremost Holocaust scholar, ‘took place in the very first weeks of the occupation. They were mainly wild, spontaneous outbursts of the urban or rural population.’ In several places, on their own, Ukrainians set up concentration camps for Jews. The principal collaboration with the Germans was through the Ukrainian semimilitary and police formations which convoyed transports to death camps, seized Jews, and massacred them. The first SS Ukrainian division was organized in the spring of 1943 and by July numbered 28,000 volunteers. In 1944 it is estimated that 220,000 Ukrainians were fighting on the German side.”
—Nora Levin, The Jews In The Early Soviet Union Since 1917, 1988
4 The 19 December 2014 issue of the Russian publication Sputnik reported that George Friedman, head of the CIA-connected intelligence provider Stratfor, told an interviewer from Kommersant that the U.S. was “behind the February coup in Kiev, which came in response to Russia’s stance on Syria.” Friedman described the overturn in Ukraine as “the most overt coup in history,” launched “following Russia’s successes in the Middle East, a key region for the US.”
5 An April 2014 Gallup Poll reported that 82.8 percent of Crimeans agreed that the referendum results “likely reflect the views of most people there” as opposed to 6.7 percent who disagreed. As might be expected, this view had more support among ethnic Russians (93.6 percent) than among ethnic Ukrainians, but they too agreed (by a margin of 68.4 to 14.5 percent). Similar levels of agreement (59.3 percent among ethnic Ukrainians and 83.5 percent among ethnic Russians) were reported in response to the statement that “Crimea's becoming part of Russia will make life better for me and my family.”
8 A 2012 report by the conservative American Heritage Foundation noted:
“The average price of crude oil exported by Russia has consistently been considerably lower for the former Soviet states than for the rest of the world. In 2010 CIS states bought the Russian crude at a 35 percent discount, paying an average of $56.20 per barrel, while the rest of the world paid $76.24. This figure does include the prices charged to Belarus and Kazakhstan, members of the Customs Union. In the past, the discount was even deeper. The largest discount – 44 percent – was extended in 2008. In the year when oil prices spiked to over $100 a barrel for a time, CIS countries paid $66.11 per barrel of crude from Russia while the rest of the world paid $95.27 on average. This is the cost of doing business, or more accurately, of keeping the sphere of influence – excuse the pun – oiled.
“The average price per barrel of crude was $20.04 less for countries of the former Soviet Union than the rest of the world. This amounts to $1,090.9 million worth of oil sold at a discounted rate. To put it another way, if Russia charged CIS countries the same price as the rest of the world in 2010 for crude, it would have made an additional $3.891 billion in revenue from exports. Not a paltry sum by any means.”
—Ariel Cohen, Politicized Oil Trade: Russia and its Neighbors
9 The Fourth World Congress of the Communist International in 1922 unanimously adopted the “Theses on the Eastern Question” which described “the essence of imperialism” as the “exploitation of the different levels of development of the productive forces in the different sectors of the world economy, in order to extract monopoly super-profits”(John Riddell, Towards the United Front, Proceedings of the Fourth Congress of the Communist International, 1922). This distinction was evident in the reconstruction of Iraq’s oil sector:
“The [oil contract] auction’s outcome helped defuse criticism in the Arab world that the United States had invaded Iraq for its oil. ‘No one, even the United States, can steal the oil,’ the Iraqi government spokesman, Ali al-Dabbagh, said at the time.
“But American companies can, apparently, drill for the oil.
“In fact, American drilling companies stand to make tens of billions of dollars from the new petroleum activity in Iraq long before any of the oil producers start seeing any returns on their investments.
“Lukoil and many of the other international oil companies that won fields in the auction are now subcontracting mostly with the four largely American oil services companies that are global leaders in their field: Halliburton, Baker Hughes, Weatherford International and Schlumberger. Those four have won the largest portion of the subcontracts to drill for oil, build wells and refurbish old equipment.”
“Michael Klare, professor of peace and world security studies at Hampshire College and an authority on oil and conflict, said that American oil services companies were generally dominant both in the Middle East and globally because of their advanced drilling technology. So it is no surprise, he said, they came out on top in Iraq, too – whatever the initial diplomatic appearances.”
“By the time Lukoil was eventually compelled to bid again for the field at the 2009 auction, sentiment in both the United States and Iraqi governments seemed to have shifted to favoring non-American companies in awarding the main contracts. But one of Lukoil’s first steps after securing the West Qurna 2 deal was to subcontract the oil well refurbishment work to Baker Hughes.
“While Baker and its American peers are poised to make significant profits from such work in Iraq, wafer-thin margins seem to await Lukoil.…”
—New York Times, 16 June 2011