Date: Wed, 28 Jul 1999 14:31:02 -0500 (CDT)
From: “Workers World” <>
Organization: WW Publishers
Subject: Socialist breakup in Eastern Europe devastates workers
Article: 71164
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UN reports grim facts: socialist breakup in Eastern Europe devastates workers

By Brian Becker, Workers World, 29 July 1999

The United Nations Development Program's 1999 Annual Report on Human Development reveals a shocking growth of poverty and gross inequality in the former republics of the Soviet Union and the other former socialist-bloc countries in Eastern Europe.

This report provides hard evidence that living conditions are plummeting for working people in these newly capitalist countries. Except during wartime, it is hard to find a comparable social catastrophe in this century.

The report's findings should give pause to all those who are being swept up in the glib U.S.-inspired campaign to carry out a counter-revolutionary overthrow of the elected government of Slobodan Milosevic in Yugoslavia.

Much more is at stake than the fate of one leader, or even of the Serbian Socialist Party and the Party of the United Left.

The consequences of capitalist counter-revolution are unambiguous. In Russia between 1989 and 1996, the report says, wages fell 48 percent. Income derived from rent, meaning landlords' profits, jumped to 23 percent.

During the days of the Soviet Union, rent was restricted to no more than 5 percent of a worker's wage. The money went into social funds administered by the state. There was no such thing as landlords.

The report goes on: “There are [other] serious human deprivations. Between 1989 and 1996 male life expectancy [in Russia] declined by more than four years, to 60.”

Throughout Eastern Europe and the Soviet Union “the transition from centrally planned to market economies was accompanied by large changes in the distribution of national wealth and income. Data on income inequality indicate that these changes were the fastest ever recorded.”


The streets in the Soviet Union were considered very safe. The crime rate was very low.

The report documents how homicides, illegal drug trafficking, prostitution and organized crime have come to dominate the new capitalist Russia and the other Eastern European countries.

Women are being killed in Russia in record numbers. A report published in 1997 revealed that the murder rate of women had risen sevenfold between 1990 and 1997.

Sexual slavery has returned with a vengeance. “An estimated 500,000 women are trafficked each year from Eastern Europe and the CIS [former republics of the Soviet Union] to Western Europe. An estimated 15,000 Russians and East Europeans work in Germany's red light districts. In the Netherlands 57 percent of the trafficked women are under 21,” according to the report.

The UN report documents that growing inequality, class polarization and poverty are rampant around the globe. Before the counter-revolutionary overthrow of the socialist governments from 1989 to 1991, the countries associated with the USSR and the socialist bloc in Eastern Europe were largely protected from the ravages of world capitalism. State-owned or publicly-owned property, central planning and a state monopoly on foreign trade prevented Western corporations from plundering their land, resources and labor.

So-called globalization, or the unhindered movement of private capital, took on momentum after the collapse of the socialist governments. This was also devastating for the so- called Third World countries. No longer enjoying a trade alternative to the world capitalist economy, many developing countries have been forced to accept the dictates of the International Monetary Fund's Structural Adjustment Programs.

This meant privatizing industry, usually to be bought up by foreign corporations. It also meant slashing social programs for the people and reducing wages.

“The world's 200 richest people more than doubled their net worth in the four years [up] to 1998, to more than $1 trillion,” the report states.

“The assets of the top three billionaires are more than the combined Gross National Product (GNP) of all the least developed countries and their 600 million people.”

This is not a momentary trend of world capitalism. The flow of wealth from the people of the world to a handful of imperialist countries is rapidly increasing as a result of globalization.

“The income gap between the fifth of the world's people living in the richest countries and the fifth in the poorest was 74 to one in 1997,” the report states.

It was 30 to one in 1960.

Of course, the statistics about the “richest countries” don't really tell the whole story. In these countries a small handful of the population controls and benefits from the lion's share of the wealth. In the United States, for instance, just 1 percent of the population owns 40 percent of the wealth; the top 10 percent controls 80 percent of the wealth.

Capitalism has rapidly developed industrial and technological capability. It creates new wealth. One might think such a capability would alleviate or end poverty and hunger.

But because this staggering wealth belongs to the capitalists rather than society, the opposite is true.

“About 840 million people are malnourished _ nearly 1.3 billion live on less than a dollar a day, and close to 1 billion cannot meet their basic consumption requirements,” the report states. “Nearly 160 million children are malnourished and more than 250 million children are working as child laborers.”


During its existence the Soviet Union's economy grew consistently. In spite of Western trade embargoes and sanctions the USSR grew to be the second- or third-biggest economy in the world.

With the exception of 1941 to 1944--the years of the Nazi invasion--the Soviet Union never experienced a period of economic recession, or negative growth, between 1921 and 1985. Recessions and depressions, which are fundamental to capitalist society, were avoided altogether.

Since the counter-revolution in 1991, production in Russia has fallen 50 percent. According to World Bank estimates, if the current trend continues, Russia will slip to 13th in total production by 2010--behind Brazil, Taiwan, Indonesia and Italy.

Unemployment, unheard of until 1990, now includes at least one out of every 10 workers. The real average income of working-class families has dropped to about one-quarter of what it was in 1990.

The International Labor Organization, a United Nations agency, describes what it calls the “appalling growth” of the number of people living in poverty in the USSR and the former socialist camp. The ILO reports that 100 million people in Russia live below the official poverty line.

These shocking statistics are replicated in other former socialist countries in Eastern Europe. In Bulgaria, 73 percent of the people now live in poverty. The rate is 50 percent in Poland.


In Yugoslavia eight years of war and economic sanctions imposed by the United States and the major European countries have already brought significant damage to the workers' living standards.

Considerable damage was also inflicted in 1990 when Yugoslav Prime Minister Ante Markovic launched a program of privatizing or shutting down state-owned industry, cutting back on social programs and freezing wages. The United States backed Markovic in his effort to fully restore capitalism.

Between January and October 1990, Markovic's “market reform” led to a sharp decline in workers' living standards. Within nine months it dropped by 18 percent, while industrial production fell by 10.4 percent and the prices for consumer goods doubled.

But U.S. plans for a cold counter-revolution in Yugoslavia were suddenly stymied when the “reforms” were halted in October 1990. Even more unhappily for the United States, Markovic was ousted.

The current Yugoslav government led by Slobodan Milosevic was widely criticized in the U.S. media in 1996 for reversing the path toward privatization in the economy. As the Washington Post wrote in its Aug. 4, 1996, edition: “Milosevic failed to understand the political message of the fall of the Berlin Wall ... . ... while the other Communist politicians [in Eastern Europe] accepted the Western model ... Milosevic went the other way.”

How is it that Milosevic could change course and reverse the trend to full-scale capitalist restoration? It is because the Yugoslav state apparatus, which was created in the cauldron of a profound socialist revolution during World War II, is not under the domination of a Yugoslav capitalist class.

Milosevic, and Tito before him, made many harmful compromises with imperialism. They promoted economic decentralization as against centralized planning. This spurred the growth of an acquisitive bourgeois class among the various nationalities and republics in the old Yugoslavia. But the class character of the state apparatus has not been fundamentally altered. It has not fallen under the domination of the Yugoslav bourgeoisie.

The Clinton administration's efforts to destabilize and overthrow the Milosevic government are not intended simply to remove one leader and replace him with another. More is at stake.

The imperialist governments want to change the class structure in Yugoslavia to guarantee the full-scale restoration of capitalism. The dire consequences of such a counter-revolution are evidenced by the now evident catastrophe that has befallen the working class in Russia and throughout the region.

Milosevic is the elected leader of Yugoslavia. He still retains a solid base of support among many workers who may not agree with all his policies but fear a takeover of the country by out-and-out capitalist forces of reaction.

How many times has the United States demanded “elections” in other countries so that CIA-supported candidates could stand a chance? How interesting that this is not the case in Yugoslavia today.

“Let's forget about elections. I'm in favor of putschist methods. He's got to go without elections,” said Vesna Pesic, a leader of the anti-Milosevic opposition. Pesic was awarded a medal by President Bill Clinton “for her work for democracy,” according to a recent New York Times article.