Chapter 81 Russia has become a "third-class citizen"

At the G7 summit in Houston, Texas, in July 1990, US Secretary of State James Baker played an important role in the future policy of the Soviet Union.Five years ago, it was the same Baker who brought Japan into the Plaza Accord shortly after his tenure as finance minister, telling his G7 allies that the United States would play a leading role in the Soviet Union's economic reforms implemented by the International Monetary Fund.The final proclamation of the G7 summit stated: "We welcome the great efforts of the Soviet Union to achieve economic freedom and to create a more open, democratic and pluralistic Soviet society and a market-oriented economic system. The manifesto added: "We agree to request the International Monetary Fund ... to conduct a detailed study of the Soviet economy ... with a view to making recommendations for its reform."

On Soviet "market reforms," ​​Washington and the IMF's goal was simple and brutal: to disrupt Moscow's economic ties with every single republic and ally, from Uzbekistan to Kazakhstan, Georgia to Azerbaijan, Estonia to Poland , Bulgaria and Hungary.Although these were never disclosed, the intent of the IMF's shock therapy was to create weak, unstable economies around Russia that could survive only on inflows of Western capital and dollars - which is A new form of colonialism. By placing the US-dominated International Monetary Fund in a major role in setting economic policy, the James Baker and Bush administrations have ensured that all Western investment in the Soviet Union or in support of the Soviet economy is first sanctioned in Washington.Russia gets the standard 3rd world treatment, the same way it is treated in former African colonies or banana republics - IMF constraints and people impoverished.A small elite is allowed to be extremely rich in dollar terms, and they are all manipulated by Wall Street bankers and investors.

Harvard economists like Jeffrey Sachs, armed with their "shock therapy" theories, flew to Moscow to help destroy the old central state apparatus.The IMF's technical experts demanded that Russia sell her oil, gas, aluminum, manganese and other raw materials at world market prices, end state subsidies for food, medical and other essential goods, and advance the "privatization" of industry. In 1992, as part of its "market-oriented" reforms, the IMF asked the Russian ruble to float freely.Within a year, the ruble's float caused consumer prices to rise 99-fold, while real wages plummeted 84%.For the first time since 1917, or at least the first time in peacetime, the majority of the Russian population has fallen into existential poverty.And this is just the beginning of IMF-style capitalism in Russia.

Under the guidance of the International Monetary Fund, Washington has practically at will to decide whether any industrial zone in Russia lives or dies. The "world market" was defined by Washington and IMF technologists trained in Milton Friedman's free market theory.Russia's national interests and general national welfare are out of their consideration. For the people of Russia and the former Soviet Union, the International Monetary Fund replaced the dictatorship of the proletariat in the Stalin era with the "global market".Irrespective of the degree of economic freedom in the United States, this model is ostensibly the complex product of more than 350 years of evolution, and in some cases even as far back as the English Civil War.Under the leadership of the International Monetary Fund, countries like Russia and Ukraine must immediately adopt a US-style market economy, even if they are not sufficiently prepared.The result is predictable.The goal is certainly not to create a stable and prosperous Russia.

Most Russians quickly realized that the IMF's reforms were disastrous.The two-car-per-garage American-style capitalist prosperity they had hoped for did not come, and ordinary Russians were plunged into economic disaster.As inflation passed 200%, industrial production fell to half of its former level.By 1994, life expectancy for men had dropped to 57 years, on a par with Bangladesh and Egypt. The Western world, especially the United States, clearly wanted a Russia without industrial strength, permanently destroying the Soviet Union's economic structure.Such a major region of the global economy, which has been isolated from the U.S. dollar economic zone for more than 70 years, will soon be controlled by the U.S. dollar.Behind the rhetoric of market-oriented reforms, the region is being divided just as the European powers carved up and colonized Africa 100 years ago.

As far as the Clinton administration is concerned, it is not concerned that the privatization of major Russian state industrial assets is controlled by the Russian elite, the so-called oligarchs.Their main concern is that, for the first time since Lenin's time, Russian industry is about to be pegged to the dollar.The new oligarchs are the "dollar oligarchs," and they derive the vast majority of their wealth from oil and gas exports. During the Yeltsin era, the US collaborator and the key figure in the eyes of the IMF was Anatoly Chubais, who was the main person in charge of the privatization process.The IMF approved a $6 billion loan to Russia in 1996, but only if Chubais was in charge of economic policy. In 1997, Peter Redway, a professor at George Washington University, published an article in the Washington Post that Chubais used to "regulate the media, undermine democracy, engage in questionable private dealings, take orders from Washington and establish criminal "forms of capitalism" accusations in Russia.This was apparently backed by Undersecretary of the Treasury Lawrence Summers.Summers paid millions of taxpayer dollars to Jeffrey Sachs, a Harvard economist who was an advocate of "shock therapy" and a consultant to Russia, and in 1997, Summers was very critical of Yeltsin's appointment of Chubais welcomed the First Deputy Prime Minister of Russia.Putting Chubais in charge of the economy created "a revitalized presidency and economic dream team," Summers said.For most Russians, this is a nightmare.

Ukraine, once the main industrial, military and food production center of the Soviet Union, has been treated with the same brutality as Russia. In October 1994, when the "reforms" of the International Monetary Fund began, Ukraine suffered a similar collapse.Ukraine's currency collapsed after the International Monetary Fund ordered Ukraine to end state control of foreign exchange transactions.Subsequently, the IMF called for an end to the state subsidy system.The price of bread has tripled, electricity has risen six-fold, and public transport has risen nine-fold.As a result of the IMF's reforms, local people are forced to buy local goods at dollar prices.With sky-high electricity bills and a lack of bank credit, state-owned industries were forced into bankruptcy.Foreign speculators unhindered picked up the best of it at very cheap prices.Ukraine deregulated agriculture at the behest of the International Monetary Fund and the World Bank.As a result, Ukraine, the granary of Europe, was forced to beg for food aid from the United States. The United States took this opportunity to dump its own grain, causing a further devastating blow to Ukraine's local food production and sales.

Russia and other members of the former Soviet Union are treated like Congo or Nigeria, and they are seen as sources of cheap raw materials, perhaps the largest in the world.With the collapse of the Warsaw Pact, the mineral-rich country has become within reach for Western multinationals for the first time since 1917.Leading the way are the large oil transnational corporations of the United States and the United Kingdom. They first set their sights on the rich oil and natural gas in the former Soviet Union countries.In the eyes of Washington's planners, a modern, prosperous Russian industrial economy was only an obstacle to the West's plundering of its raw material wealth.

In the early 1990s, the Clinton administration maintained its designation for Russia—a "mature strategic partner."Many Russians naively believe that this will mean that US aid and funds will flow into Russia to restructure its shattered economy, and that the United States will treat Russia in some form of "global condominium" partnership, and history Formed in the past, the hegemony in the former Soviet Union will be respected by the United States.But by the time Moscow understood that "partnership" was just an empty slogan designed to deceive, it was too late.To a large extent, Russia's industrial edifice has been dismembered.The reform of the IMF has made the Russian people miserable, and its influence on events in the surrounding region has been severely weakened.This is exactly what Washington wants to see.

After 1991, the shock therapy of the IMF against Russia not only transformed the former superpower into a third world, but also made it possible for the oil companies of the United States and its allies to control the world's largest oil and gas producers.However, it will take time to complete this process. During the Chubais era, under a controlled and rigged privatization process, Russians prized oil and gas profits at cheap prices and pocketed cronies who supported Yeltsin and Chubais.A 1998 IMF report estimated that 17 Russian oil and gas companies with a combined market capitalization of at least $17 billion were sold by Chubais for a total of $1.4 billion.In addition, 60% of the shares of Gazprom, the world's largest natural gas producer and a state-owned natural gas monopoly, were sold to a Russian private group at an ultra-low price of 20 million U.S. dollars, and its real market price should be about for $119 billion.Other companies such as Lukoil, Yukos, Siberia and Sidak were created.Oligarchs such as Mikhail Khodorkovsky, Boris Berezovsky and Viktor Chernomyrdin dominate the Russian economy.In the communist era, no bureaucrat could do that.In a November 1996 interview, Berezovsky, vice chairman of the Russian Federal Security Council, also an oil oligarch, boasted that seven men controlled natural resources in 50 percent of the country's vast landmass.Hard currency profits for these guys are almost all dollars, Berezovsky should probably add that.

By the summer of 1998, dollarization in Russia was almost out of control. In August, the International Monetary Fund provided a $23 billion emergency loan to back the ruble and protect speculative investments by Western banks, leading millions to invest in Russian state bonds.The IMF bailout of the banks came too late. On August 15, Russia announced that it would default on its dollar debt.For New York and other major banks, the unthinkable has happened.Despite IMF assistance, major debtors have decided to default on their debts.The entire dollar edifice has been shaken from its foundations over several tense weeks.Long Term Capital Management, the world's largest hedge fund, has placed big bets on the Russian market and most of the world's bond markets.Its management -- including former Federal Reserve Vice Chairman David Mullins -- are top-notch Wall Street investors and Nobel Prize-winning economists.The sudden debt default put the fund under the threat of bankruptcy, and the financial derivative contracts involving trillions of dollars will have a chain reaction of collapse, which may eventually lead to a series of bankruptcies and bring down the entire global financial building.The Federal Reserve initiated a special closed-door meeting attended by 15 of the world's most powerful bankers and imposed a rescue operation.Russia, so valuable strategically, was forgiven for defaulting on her debts, and the dollarization process quickly resumed, albeit at a slightly slower pace. See Paul McCarthy, "Testimony to the Council for Security and Cooperation in Europe", 10 December 1998.At the time, McCarthy was the head of the National Endowment for Democracy (NED), which since 1998 has provided substantial funding to various anti-government groups, journalists, media and trade unions in the former Yugoslavia, which McCarthy conducted Detailed description.The National Endowment for Democracy was established in 1983 during the Reagan period, when the "privatization of intelligence work" was popular in Washington policy circles, and the National Endowment for Democracy was a part of it. From the 1960s to the 1970s, the Central Intelligence Agency provided funds to anti-government organizations. As the incidents continued to be exposed, the United States learned a lesson and switched to "private" organizations such as the National Endowment for Democracy. Congress also agreed. In an interview with The Washington Post on September 21, 1991, Alan Weinstein, the planner of the National Endowment for Democracy, explained, "A lot of what we do today would have been 25 years ago. Secretly conducted by the CIA." Things went from the insidious and evil CIA to the humanistic 'National Endowment for Democracy'.The activities of the National Endowment for Democracy not only avoid accusations of meddling in the stability of sovereign states, but in turn accuse those in power in Serbia or Bulgaria, or indeed anywhere, of being "corrupt nationalists". In late 2003, the Bush administration asked the National Endowment for Democracy to play a more important role in Iraq's postwar "democracy." The role of the International Monetary Fund in the political upheaval in Yugoslavia in the late 1980s is discussed in detail by Peter Bachmeier.The impact of IMF policy on unrest in Yugoslavia is detailed by Susan Woodward (Tragedies in the Balkans, Brookings Institution, Washington, 1995).A detailed description of NATO's strategy in Yugoslavia can be found in Sean Gervasi's later paper, "On NATO's Strategy in Yugoslavia", January 1996, Portuguese International Nino Bati Foundation Paper. In November 1995, the Defense Information Center in Washington, D.C. published "NATO Expansion: A Disaster-Riddled Move", discussing the military issues of NATO expansion. In 2001, in an open letter to German Chancellor Gerhard Schroeder, former member of the Christian Democratic Union of Germany and defense expert Willy Weimar, in order to justify the new concept of NATO's "outside" strategy, detailed discussed his personal discussions with senior U.S. officials about U.S. and NATO objectives in Yugoslavia.Weimar described the results of the occupation of Yugoslavia in April 1999; the occupation of Yugoslavia would allow NATO members and partners to obtain raw materials and control the Caspian Sea and the Persian Gulf.NATO, led by the United States, has completed its military occupation from the Baltic Sea to Anatolia. "This is a brilliant achievement since the Roman Empire," Weimar commented.