Russia turns away from ‘Wild Capitalism’

By Tim Wheeler, People's Weekly World, 19 September 1998

The Russian Duma voted overwhelmingly to confirm Yevgeny Primakov as Prime Minister Sept. 11 and the former Soviet intelligence chief immediately announced policies that shifted the country away from the forced march to capitalism.

The Duma vote was 315 for Primakov, 63 against, mostly members of the ultranationalist Zhirinovsky bloc, and 15 abstentions. The Communists, were by far the largest bloc favoring Primakov joined by agrarian parties, centrists and others, underlining that Primakov's is a left-center coalition government.

President Boris Yeltsin named Primakov, who has served as Russian Foreign Minister, after the Duma, under Communist leadership, twice rejected Yeltsin's first choice, Viktor Chernomyrdin.

Primakov's election represented a stunning defeat for Yeltsin who is now seen as a lame duck blamed for Russia's disastrous descent into “crony capitalism.” It was seen as a victory for the Communist Party of the Russian Federation which has emerged as the strongest, most consistent defender of the interests of the suffering Russian people.

Primakov appointed a Communist, Yuri Maslyukov, as his first deputy in charge of the economy. Maslyukov was the last minister in charge of the Soviet ministry of economic planning, Gosplan. Primakov also named Viktor Geraschenko, former chief of the Soviet Gosbank, to head of the Russian Central Bank. Geraschenko rejected as a “stupid idea” a scheme to peg the value of the ruble to the U.S. dollar. Three other Gorbachev-era officials, Leonid Abalkin, Nikolai Petrokov and Oleg Bogomolov were also named.

Primakov told a meeting of the cabinet that his first priority must be meeting “social obligations,” meaning payment of wages and pensions owed the Russian working people. The Interfax New Agency quoted Maslyukov that the new government's first priority must be “payment of wage and pension arrears. . .” It showed an understanding of the imperative need to win allegiance and confidence of the people whose anger is reflected in the coal miners camped outside the Duma, pounding their helmets on the payment to demand payment of years of unpaid wages.

They also stressed the need to get Russian factories, mines and farms back into production, what Primakov called the “real economy” rather than the “wild capitalism” of bank and stock market speculators who have fleeced the Russian people while factories and mined ground to a halt.

In his first Duma speech, Primakov rejected Wall Street prescriptions of permitting a the banks and privatized enterprises to govern themselves.

“The state must interfere in and regulate many processes in the economy,” he said, while denying that this means a return to the “command system.”

Primakov voiced his strong opposition to NATO expansion and assailed separatists who seek to dismember Russia. “The government which will be formed should pay special attention to the unity of Russia,” Primakov said.

“It is a far from theoretical question. We are facing a serious danger of our country fragmenting.” Primakov urged the Duma to ratify the START II nuclear treaty, already ratified by the United States.

Maslyukov, a former member of the Soviet Politburo, helped draft the Communist Party's draft economic program that calls for price controls, re-nationalization of “strategic” enterprises including the banks and oil and gas industries. In 1996, he told the Washington Post that “Gosplan was a great achievement in the principles of planning.”

Gennadi Zyuganov, leader of the Communist Party of the Russian Federation, praised Primakov for setting out on a “qualitatively different” economic program.

Zyuganov urged immediate steps to pay the wages owed millions of workers, price controls, increased salaries, and reductions in the cost of electricity and transportation. He warned that Russia faces its most “dangerous situation since World War II.” The Party, he said, favors a “peaceful and democratic solution” for Russia. “What is needed is a broad coalition, a center-left one that can stabilize the situation and stop price increases.”