Boris Kagarlitsky: Crimea annexes Russia

Russian president Vladimir Putin signs law completing Crimea annexation.

By Boris Kagarlitsky, Moscow, translated by Renfrey Clarke for Links International Journal of Socialist Renewal

March 24, 2014 – editorial, Rabkor (Worker Correspondent) – No, that’s not a mistake. On March 18, Crimea annexed Russia. There were no insidious schemes or imperial ambitions involved. There was, however, a spontaneously developing situation, together with the usual, everyday willingness of the Crimean bosses, who saw a unique chance in the Russian-Ukrainian crisis.

With the Ukrainian state on the brink of collapse after the flight of President Yanukovich from Kiev, the Kremlin authorities were understandably concerned to protect their interests and strengthen their position, but the most they counted on was turning Crimea into a second Trans-Dniestr enclave or Republic of Northern Cyprus – that is, into a de-facto Russian protectorate with formal independence. The presence in Crimea of “polite people” in green camouflage uniforms in no way prevented this scenario from playing out, any more than did the presence of NATO soldiers on the territory of the former Yugoslavia or of Turkish troops in Cyprus.

In Sevastopol and Simferopol, however, the authorities decided differently. Taking advantage of the confusion and disarray in Moscow and Kiev, the Crimean leaders drew up their own agenda. In the course of a few days they took several irreversible steps. The period before the referendum was cut to a minimum, so as to prevent both the Ukrainian and Russian authorities from getting their bearings. The Kremlin was presented with a gift it could not refuse. After having set the propaganda pendulum swinging, and amid a patriotic upsurge within Russia, our rulers were simply unable to say “no” when Crimea officially demanded unification with Russia. And so it happened.

The main difference between informal control over the territory and official unification lay in the fact that Moscow thereafter would bear responsibility for everything that occurred on the peninsula, especially on the material level. The Russian authorities are now obliged to take care of pensions, roads and the wages of state employees, assigning money directly to Crimea from the federal budget.

Not surprisingly, the internet began immediately to feature joking appeals from other Russian provinces, whose residents also wanted to be annexed to Russia on the same conditions as Crimea. The budget deficits of these provinces are constantly increasing, and the federal treasury takes far more money from them than it doles out. The liberal press in turn is predicting general ruin as a result of the costs of fitting out the new territory.

Valuable acquisition

The truth is that Crimea is an extremely valuable acquisition both strategically and economically. For any country, territorial expansion opens up new opportunities – for an expansion of its internal market, of its tax base, skills base and natural resources. It is no accident that so many wars have been fought over this peninsula, and it was not by chance that the ancient Greeks, Byzantines, Genoese and Turks established outposts there. Provided matters are handled competently, there is potential in Crimea for the development of tourism, agriculture, viticulture and many other sectors. But the qualifier is all-important: “provided matters are handled competently”. There are no guarantees that Russian administration, in essence merely a cover for corrupt self-rule by local bureaucrats, will prove more effective than Ukrainian rule. Meanwhile, a key condition for realising Crimea’s potential within the Russian Federation is precisely that relations of solidarity and neighbourly goodwill are maintained with Ukraine.

The Ukrainian state stands to profit from this as well, since it is now able to supply electricity, water and other resources to Crimea at international prices; Ukraine thus has a negotiating lever to compensate for its dependence on Russian raw materials and gas. But for these aces to be employed, there needs to be a stable and flexible government in Kiev – and the wait for this, more than likely, will be very long indeed.

When Nikita Sergeyevich Khrushchev annexed Crimea to Ukraine, he was motivated not in the least by personal “caprice”, but by completely practical economic considerations. From the point of view of transport logistics, energy supplies and even the sale of its products, Crimea was strongly connected to Ukraine. These economic considerations were in contradiction to historico-cultural and ethnic realities, but this did not make them less telling. Further, it was no accident that with all these problems and contradictions Crimea got on fine within the independent Ukraine for more than two decades. The peninsula fell out with Ukraine not so much because Crimeans found life within the framework of the Ukrainian state particularly bad, as because of the progressive collapse of the Ukrainian state itself.

In perfectly rational fashion, the population of the peninsula reasoned that Russian rule, with all its shortcomings – which Crimean residents knew intimately – was nevertheless better than the chaos and collapse that were afflicting Ukraine.

This was especially true since Moscow was now compelled to make the peninsula a sort of shop window for the national economy. It was because they understood this that the Crimean leaders rejected the “Trans-Dniestrian” variant that Moscow was offering them, and confronting the Kremlin with an accomplished fact, forced the leadership of the Russian Federation to adopt the solution the Crimean chiefs wanted. Aksenov and Chaly should be given full credit for their guile; they scored a brilliant victory over both Kiev and Moscow. Now resources will start flowing into Crimea.

Economic methods

Russia has enough money not only for Crimea, but also for many other provinces that are now short of finances. The problem is not one of money, but lies in the economic model and methods of rule that our country has adopted. The annexation of Crimea should remind us once again that all this needs to change. Meanwhile, the sense of triumph that has seized not only the common people in our society, but to a significant degree those on top as well, is making any changes extremely difficult. The authorities view the present situation as the outcome of their own wisdom and as proof of their effectiveness. Why should they make changes, when everything in our country is going fine?

Russia will not be rescued from its crisis by free-market policies, or by unsystematic attempts at state intervention that end in massively redistributing public funds to the benefit of the same large firms that dominate the market. The answer to the crisis can only lie in national and regional planning that can make it possible to optimise the resources of the state sector and orient them directly toward dealing with social challenges, above all on the local level.

The centre, however, will not permit either a redistribution of funds to the regions, or the creation by the regions of their own independent financial base. As a result, the money allotted to the regions will be insufficient. This will have nothing to do with Crimea (the money was also inadequate before), but will result from the fact the system as a whole is dysfunctional. In such a situation, however, decorating the Crimean “shop window” may turn out to have unpleasant psychological consequences for the rest of the country.

Sanctions?

The liberal press is now setting out to frighten the public with the threat of economic sanctions on the part of the West, but the main danger to our economy stems precisely from the fact that there will be no such sanctions. If the West were in fact to impose serious sanctions, this would open up enormous opportunities, creating the preconditions for a growth of employment, for wage increases and for creating new jobs. Suspending Russia’s membership in the World Trade Organization would be a gift to our industry. Placing a blockade on technology transfers would make it necessary to revive Russian enterprises.

We are in acute need of sanctions, since they would provide a chance for us to restore our industry, to diversify production, to wage a struggle against capital flight and to conquer our own internal market. But the ruling layers in the US and European Union have no intention of aiding Russia, so there will be no serious sanctions, merely symbolic acts aimed at calming public opinion in the USA and Europe and at giving moral support to the “patriotic” pretensions of the Russian elite.

The Central Bank will, of course, press ahead with the policy of lowering the ruble exchange rate that it has already been pursuing since last year. On this level, the Ukrainian crisis and Crimea have proved extremely opportune, since they have allowed the bank to accelerate the process. Whether the bank’s hopes of raising the competitiveness of the Russian economy solely through devaluation will prove justified is, of course, a separate question.

Contrary to the ideas of liberals and conservatives (who suffer, surprisingly enough, from the same hallucinations), the policies of the Russian authorities do not stem from any conscious decision to enter into confrontation with the West, but from an attempt to keep this confrontation – which is objectively inevitable, and does not depend on the will of the Kremlin – to a minimum.

Nevertheless, an intensification of the conflict is predetermined by the overall logic of the economic crisis, which inevitably is sharpening the struggle for markets, destabilising international relations and strengthening the rivalry between the West and the BRICS countries (Brazil, Russia, India, China and South Africa). Meanwhile it is obvious that Russia, as well as being central to the BRICS chain, is also its weakest link. While lagging in its economic and especially industrial growth rates, and lacking a functional national elite, Russia nevertheless remains the only European country in this potential bloc, and retains a scientific, diplomatic and military potential that other societies will need decades if not centuries to accumulate. As a result, the policies of the Western elites toward our country are marked by a fundamental duality: while taking every opportunity to weaken Russia, the Western powers simultaneously do not allow Russia to take its distance from them, and in the process, to undergo a definitive rapprochement with the non-Western world.

The Russian elites are themselves allies and hostages of these policies; the whole policy course of our ruling circles can in essence be reduced to a mirror image of the same formula.

Russia’s opposition

But while the situation confronting our elites in this respect is more or less straightforward (they cannot enter actively into confrontation with the West without dealing crushing blows to their own interests, to their own capital holdings and to their own networks, methods of rule and way of life), the position of the Russian opposition is truly catastrophic.

When our oppositionists (including a significant number of people on the left) denounce the policies of the government, they speak and act not in the name of Russian society, but effectively in the name of the West, to which they attach all their hopes. Worse still is the fact that in orienting to the West, our oppositionists disdainfully ignore Western society and the peoples who make it up, just as they ignore and treat with contempt the society and people of Russia itself.

The Russian opposition raises on high the same stars-and-blue European Union flag to which, on countless city squares within Europe itself, people are setting fire. By virtue of their consistent, fundamental, ingrained anti-democratism, our oppositionists are just as hostile to the values of the European Enlightenment as are Putin, Yatsenyuk and Merkel.

A hundred years after the First World War, there is no point in alluding to Lenin, to the Zimmerwald conference or to anti-imperialist “defeatism”. First of all, this is for the reason that, unlike the case in 1914, there is no war, will not be and cannot be. Second, the “defeatism” of the early 20th century was anti-systemic and anti-bourgeois, while we are confronted now with an ideology that is bourgeois to the core, and that is oriented toward advancing the same neoliberal politics that every honest socialist is obliged to combat.

However we now assess the positions of Lenin or Martov in 1914, they did not march in demonstrations beneath German and Austrian flags, and did not write pamphlets appealing to these empires to step up their pressure on the Russian army.

The chauvinist hysteria that has taken hold of Russian society within the context of the Ukrainian events will soon pass. Annulling it will be the everyday trials of the crisis and of a disorderly world, the commonplace social problems from which virtual wars cannot distract people. The lustre of the Crimean triumph will fade, and today’s triumphant leaders will again be seen by society for what they really are – small-time political intriguers who have happened to hold a winning hand. But even after all this, society’s attitude to the liberal oppositionists will not have changed and will not have improved. That is because a more rational view of events will simply allow the population to see more clearly: there is no point in expecting help from those who wish ill to their own country and its people.