Socialist Worker

Challenging the Russian transnationals

Boris Kagarlitsky and Simon Zhavoronkov, activists from the Iprog organisation, recently visited Britain to speak at a seminar on the growth of transnationals in Russia. They spoke to Socialist Worker while they were here.

Issue No. 2012

Boris Kagarlitsky said, “The rise of Russian transnationals has created a new stage in Russian capitalism. The left must address this. At an early stage oligarchic groups formed around bank, oil, and gas companies.

“Banks were used for the takeovers of former public companies. There was massive privatisation. These companies were all underpriced.

“The company I am concentrating on is the Alpha Group. It is one of the most advanced of these transnationals and it has a very complex structure. It’s oil subsidiary is called TNK.

“The Soviet oil ministry was broken down into geographic areas, which were known as subdivisions. These became separate companies. TNK is in charge of Tyumin region of Russia, along with other areas.

“Alpha has now moved into other sectors. Until the rouble crashed in 1998, Russian oligarchic companies experienced a shortage of funds. They were buying up oil companies for small amounts.

“Russian companies were a local phenomenon. They were still connected to the state and used it as a source of accumulation. Until the end of the 1990s the state was used to bail out companies.

“There didn’t seem the potential to expand out of Russia. They had no global outreach. But this vision changed dramatically with the rise of oil prices. Because of this, combined with the collapse of the rouble, domestic and labour costs were low.

“There was a tremendous influx of money into Russia, which was accumulated by oil and gas companies. They begun to go global and started to become transnational companies.

“Russia became a G8 member, signifying how Russian capitalism was going global. Russian capitalists started to become part of the global elite and taking over companies in the West.

“Russia lacks investment. There is no money to sustain education, the health service. There is a tremendous need to invest in these things as the living standard is so low - it is still below the level it was at during Soviet times.

“But there is massive capital in Russia. It is not like in the 1990s. Money from Russian companies is now going abroad. Western companies are taking over Russian ones. In places like London and other financial centres more and more Russian companies are going public on the stock exchange.

“The Russian elite wants to merge into the global elite. It needs to be rooted as part of Western capitalism.

“All this is important as Russia comes towards electing a new leader in 2008. Any president will be just like a tsar. Many companies have links to the government.

“One of the main contenders Sergei Ivanov, the Russian defence minister, is connected to Alpha. This is all about influences on the state.

“The Western press is talking a lot about the new Russian confidence or the new Russian imperialism. But it never speaks of the capitalist side of it.

“It is precisely because Russian companies are becoming multinationals that the state is changing its behaviour. It is following the example of Western countries.

“The recent ‘gas crises’ in Ukraine and Belarus is an example of this. There is a different relationship with Ukraine after the ‘Orange’ revolution. Russia has close political relations with Belarus.

“But it did the same to Belarus as it did to Ukraine. Russia wanted to increase the operating costs and force these countries to surrender to the big Russian companies.

“Russia is becoming somewhat imperialist, more aggressive and expansionist. This has its clear roots in the way capitalism is organised.

“The question is what happens in the West when these companies come in? They import the worst aspects of their behaviour. They were formed from accumulation, from a wild east privatisation strategy.

“They are now going global. This is an addition to neo-liberal privatisation, but more blunt and more savage. Western capitalism is already savage, and will get more savage as these people come in.

“They control as much of the market as possible by destroying the competition and taking over companies. This is all accompanied with political corruption.”

Simon Zhavoronkov said, “The transnationals are now trying to stop young and dynamic corporations emerging in Russia.

“Alpha controls 20 percent of the Beeline company. The Megaphone company wanted to bring in a Swedish model of telecommunications to Russia. But Alpha and Beeline argued very strongly against this being allowed.

“One Russian company takes over dynamic companies that are interested in helping society and turns them just into profit-making companies.

“It is very important for the counter-globalisation movement to have control over Russian companies abroad. We started by fighting Alpha’s oil element, and are now moving to its telecommunications element.”

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Sat 5 Aug 2006, 00:00 BST
Issue No. 2012
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