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Russian imperialism emerges from the wings?

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    June 16 2007

    Vladimir Putin's speech June 10 at the St. Petersburg International Economic Forum provided some substance to a vision of Russia as a separate imperialist power.

    Since the dissolution of the Soviet Union in 1991, it has been unclear how imperialist blocs would reshape. In MIM's 1997 book on imperialist class structure, we characterized Russian imperialism as "waiting in the wings."

    In 2007, we again find Russia in its traditional historical position of looking both East and West. The June 10 speech is a hint to the West that Russia can go elsewhere if not treated better. There is speculation that still no one in Russia knows where Russia will end up.

    Reflecting its geopolitical position, Russia is the imperialist country with the smallest portion of labor aristocracy. It is a place where there is a "split in the working class." The plurality or majority may be labor aristocracy--bought-off people from working-class roots, but the parasitism is not as widespread or deep as in the NATO imperialist countries.

    In racial terms, Russia is also largely white. Along with whites of Eastern Europe, Russians constitute a minority of whites with unusual class and national properties. Russia's characteristics came to be summed up as being the "weak link" in the capitalist system. Today, economically, it is still the "weak link" economically compared with the rest of the major imperialist countries.

    In his June 10 speech, Putin noted the wind blowing East, "Fifty years ago, the G7 countries accounted for 60 percent of the world’s GDP, but today this situation has been reversed and 60 percent of the world’s GDP is now produced outside the G7 countries."(1) At the same time, his message for Russia is Liberalization--the removal of restrictions on dividends on some foreign investments for instance.

    Toward the end of his speech, Putin gave us his insights into imperialism:

    "Total accumulated foreign investment in Russia now comes to around $150 billion, but, according to data from international economic organisations, Russian investment abroad has now reached a figure of $138 billion, and our own data puts it at not less than $140 billion. We want to continue to expand Russian investment abroad and we are interested in exchanging assets with international partners under mutually beneficial conditions. This is the road Russian companies are now taking. We have positive experience of such partnerships with our colleagues from Germany and other European countries. Our projects with Italian companies are the latest example in this area.

    "It is my conviction that Russia could become home to financial centres and the decision-making centres of new global corporations. We passed a law this year completely freeing from taxation dividends received from strategic investment inside the country and abroad. I hope that both Russian and foreign investors will make use of this exemption we are offering. We hope to see just as favourable, understanding and liberal an attitude from our partners. In cases where problems do arise, the balance between national interests and the need for foreign investment should be found exclusively by working together in a spirit of constructive dialogue.

    "The new architecture of economic relations implies a principally new approach to the work of international organisations. It has become increasingly apparent of late that the existing organisations are not always up to the measure in regulating global international relations and the global market. Organisations originally designed with only a small number of active players in mind sometimes look archaic, undemocratic and unwieldy in today’s conditions. They are far from taking into consideration the balance of force that has emerged in the world today. This means that the old decision-making methods do not always work. The World Trade Organisation and the Doha round of trade negotiations, which are proceeding with great difficulty, to put it mildly, provide a clear example in this respect.

    "Today, the protectionism the WTO was set up to combat is often implemented by the developed economies that founded the organisation. It is in these economies that we see the greatest concentration of state support for business. It is not coincidence that a parallel system of regional alliances and agreements is taking shape, essentially giving the global market a new structure. And the trade liberalisation process is now taking place more and more through these new agreements. It is worth thinking about creating regional Eurasian free trade institutions in order to encourage trade and investment. These institutions could of course draw on and use the positive experience of the World Trade Organisation.

    "The international financial organisations are also in need of serious restructuring and modernisation. They were established at a time when the world looked very different and are having difficulty adapting to the new situation of stable economic growth in the majority of developing countries and growing markets. An international financial system based around just one or two currencies and a limited number of financial centres no longer reflects the global economy’s strategic demands. Fluctuations in these currencies’ exchange rates have a negative impact on the financial reserves of entire countries and on the development of different economic sectors around the entire world.

    "There can be only one answer to this challenge and that is the emergence of several reserve currencies and several financial centres. This is why we need to start work today to create the conditions for diversifying the world financial system’s assets.

    "Russia will continue carrying out its policy aimed at making its national currency, the rouble, and its financial market and banking system more attractive. The issue of settling payments for goods exports from Russia in roubles will also be a question we will need to look at, but this of course should apply to cases when it would be in both the suppliers’ and the buyers’ advantage."(1)

    German negotiators interpreted the remarks as pressure on the World Trade Organization (WTO) to take in Russia this year.(2) China has already joined and Russia is the most significant imperialist not belonging yet.

    Since Putin does not yet belong to the imperialists' attempt at one global imperialism, there is speculation that he will form his own imperialist bloc, this time with openness to outside investment.

    Various countries trade in the dollar and Euro, because the holders of these currencies imagine they can obtain a wide variety of commodities for their currency. Discussion of the rouble means that Putin would like to see countries accept the rouble in return for their exports. Since Russia has oil and gas and the military power to prevent their being taken over by outsiders, the rouble has some characteristics of stability that investors seek.

    The U.$. embargo on Palestine and now the Macau bank fiasco with northern Korea have underscored Russia's financial system difficulties. When the united $tates put an embargo on Hamas, Russia had to send aid physically instead of wiring money. Likewise, there were media reports that when northern Korea received its money in Russia the transaction did not go smoothly and may not have worked as of this date June 16.(3)

    Russia is the better candidate for the confrontations involved with setting up a separate financial center, because China relies heavily on exports to the united $tates and EU. Oil and natural gas convert to hard power.

    Nonetheless, China made its most splashy criticism of the united $tates in recent history in response to George W. Bush's dedication of a memorial to the "victims of communism."(4) The Chinese social-fascists denounced U.$. attempts to return to the "Cold War" conflict between imperialism and the genuine communist countries of the Stalin and Mao era.

    The ex-communist countries do have some commonalities in interest, being the "lagging" economies playing by U.$.-dictated rules. Recently Kim Jong Il added to the mix by pointing to the U.$. missile shield for Czechoslovakia and Poland as another reason it would have to build more nuclear weapons.(5)

    Putin objected to Bush's missile shield idea for Poland and Czechoslovakia, because it aims more weapons Russia's way. As a counter-proposal, Putin said that the united $tates could put missiles to intercept projected Iranian missiles in Azerbaijan, where the U.$. weapons would not aim at Russia.

    Czech opposition to the missile shield idea climbed from 61% in February to 68% in a more recent poll.(6) Russia has said it will aim more missiles toward eastern Europe if the Bush plan goes through.

    On his side, Bush also finds advantage in lumping together ex-communist countries. For example, when chastising Russia, the West claims that it has not really reformed for "freedom," despite the fact that Putin has three times Bush's approval rating and an imprisonment rate second to Bush's.

    Imperialist rivalry has serious drawbacks, because colonial trade blocs were the underlying causes of World War I and World War II. On the other hand, for the Third World, imperialist rivalry offers opportunities to improve their situation marginally by increasing competition for Third World business on terms not dictated by the old imperialists.

    Notes:
    1. http://www.kremlin.ru/eng/speeches/2007/06/10/1823_type84779_133685.shtml
    2. "Putin calls for revolution in world economic relations," by Stephen Boykewich (AFP),
    http://www.metimes.com/storyview.php?StoryID=20070610-111240-5441r
    3. http://www.msnbc.msn.com/id/19257086/
    4. http://www.guardian.co.uk/worldlatest/story/0,,-6707922,00.html
    5. http://www.bloomberg.com/apps/news?pid=20601087&sid=aSDK_vCZFTYU&refer=home
    6. http://www.iht.com/articles/2007/04/24/news/gates.php