April 2022
The great international financial capital of the City of London, Wall Street, Paris and Frankfurt:
Putin's Key Business Partners in Russia
Despite the fact that Stalinism insists on showing Putin as a bastion of anti-imperialism that confronts NATO and the world powers, this affirmation has no basis in reality. Every attack by Putin in Ukraine is aimed directly at the masses and at crushing the oppressed nation in order to occupy and annex it, or a part of it. Several cities in Ukraine are already being left like those in occupied Syria, reduced to rubble.
Putin and his white counterrevolutionary troops have occupied the Ukrainian nation after invading Kazakhstan to crush a general strike of oil workers who were facing the imperialist companies and their government in that country. In Ukraine there is not even a skirmish between Putin and NATO. He has never directly attacked imperialism, which in recent years has advanced in the colonization of all the Eastern European countries surrounding Russia, many of which are former Soviet republics. In these, Putin has military bases to guarantee the business of imperialism associated with the local bourgeoisie.
The Moscow butcher has only used his so-called "military power" against the masses, as we have also seen time ago in Georgia, Chechnya, the Caucasus, Kyrgyzstan, and in Syria supporting the fascist al-Assad. Within "Great Russia", his armed forces are there to defend manu military the businesses of the capitalists intimately associated with international finance capital. He does this by crushing all attempts at mobilization and uprising of the workers and oppressed peoples of the Russian Federation.
Meanwhile, imperialism seeks to encircle Russia. The reason is that, in crisis and bankruptcy, he goes for all businesses, including those of his partners, be them large or small, throughout the planet.
US imperialism, seeking to retake its hegemonic role in Europe, and plunged into a brutal crisis, strategically needs to recolonize Russia and keep the lion's share of its inexhaustible sources of raw materials, even getting its imperialist competitors from Maastricht out of the way. US imperialism seeks gas, oil, minerals such as palladium (used in aircraft manufacturing) of which Russia is the world's largest exporter, as well as titanium, of which Russia is a fundamental supplier on the world market. Much has been said in the press about the paralysis of giant Nord Stream 2, the gas pipeline that Germany built to directly pump Russian gas. Due to the imposition of US imperialism, it was closed when its construction had been completely finished.
The recent new sanctions against Russia show how merged the Great Russian bourgeoisie is and how dependent it is on the big transnationals and imperialist finance capital. This ultimately shows that Russia's huge commodity exports and its rich domestic market could not have developed to the present level without huge investment and penetration by finance capital from the City of London, from Wall Street, from Frankfurt, from Paris, among others, in the last 30 years.
In 1989, the Stalinist scourge finished delivering the USSR to the world economy, while becoming a new bourgeoisie. It is nonsense to believe that this nascent bourgeoisie made Russia emerge as an imperialist country, when it was decapitalized, bankrupt and indebted to imperialism in billions of dollars.
That a backward country in relation to imperialism, subjected by the former Stalinist bureaucracy to the capitalist world market, with its productive forces dynamited from within by the capitalist restoration, could become an imperialist country is a twin position to that of those who theorized that isolated USSR could build socialism in a single country, overcoming imperialism in the world economy or disputing part of it. The fact that Russia is surrounded by NATO and the degree of penetration and colonization that imperialism developed in the former Soviet republics, under the nose of Moscow, demonstrates what we affirm here.
The bankrupt Russia that in 1989 culminated the restoration of capitalism could only re-enter the world division of labor hand in hand and under the dependence of international finance capital. In this combination, it was able to develop a new capitalist class and great oligarchs totally intertwined with imperialism, who made fabulous wealth with the administration and control of the State.
We Trotskyists affirm that "great Russia" still maintains the character of a capitalist country in a state of transition, dependent on the world economy controlled by imperialism, but at the same time, in the midst of crisis and bankruptcy, it is permanently threatened - as is also the "great China" - by new colonizing offensives of the imperialist powers. Ultimately, the dispute over these new markets is what is causing clashes between the imperialist gangs. This can be see it today in the war in Ukraine, with the US stepping on Europe at the expense of the Franco-German axis to march east for their business.
So let's look at the stubborn facts about Russian economy dependent on the capitalist world economy.
In The Energy Sector
For decades, Russia has been a key destination for European companies in a variety of industries, including finance, agriculture and food, energy, automobiles, aerospace and luxury goods.
Some European companies, especially the German ones, have had business ties with Russia for decades. Deutsche Bank, and Siemens, the massive conglomerate that is the parent company of Siemens Energy, have been doing business since '89 in Russia, retracing the steps of late-19th-century Germany.
French and German companies increase their investments in Russia every year by billions of dollars: in 2018 alone, France invested 20,000 million in the Slavic country. For the construction of Nord Stream 2, the companies Uniper and Wintershall and the French company Engie invested lavish sums. Also French Total has been involved in arctic gas projects with Gazprom. The French energy giant controls liquefied natural gas operations on the Yamal Peninsula, above the Arctic Circle. In addition, Total, through its subsidiary in Russia, owns lubricant manufacturing plants with large investments.
Around 700 French subsidiaries operate in Russia in a variety of industries employing more than 200,000 workers.
Though, when talking about Gazprom we must mention that Rosneft, another of the big Russian oil and gas companies, is its subsidiary. British Petroleum owns 20% of Rosneft's shares. Former German Chancellor Schröder holds high positions at Rosneft and Gazprom Boards of Directors. Rosneft contributes about a third of BP's oil and gas production. BP appoints two representatives to the Rosneft Board of Directors: BP CEO Bernard Looney and former BP CEO Robert Dudley. In addition, it currently has interests in three joint ventures in Russia: the Taas-Yuryakh Joint Venture in Eastern Siberia in which it has a 20% shareholding; a 49% stake in Yermak Neftegaz LLC, which is conducting onshore exploration in the West Siberian and Yenisey-Khatanga basins; They also have a deal to form a new Joint Venture for the Kharampur project, in which they have a 49% stake.
Italy is also present with the state public utility company Enel (producer and distributor of gas and electricity).
Anglo-Dutch Shell, meanwhile, has a 27.5% stake in the Gazprom-controlled Sakhalin-2 venture, described as one of the world's largest integrated oil and gas projects. The project includes three offshore platforms, an onshore processing facility, 300 kilometers of offshore and 1,600 kilometers of onshore pipelines, an oil export terminal and a liquefied natural gas (LNG) plant.
Shell claims that Sakhalin-2 supplies about 4% of the current world market for LNG.
Faced with the new rounds of sanctions, Shell announced the withdrawal of its investments from its partnership with Gazprom, while BP plans to divest itself of its stake in Rosneft.
Exxon Neftegas Limited (ENL), a subsidiary of US-owned Exxon Mobil, has a 30% stake in Sakhalin-1, a vast oil and natural gas project off the island of Sakhalin in the Russian Far East. It has been operating the project since 1995 on behalf of a consortium that includes Japanese and Indian partners, as well as two subsidiaries of Russia's largest oil company, Rosneft.
In The Automotive Industry
Companies such as Phillip Morris, Volkswagen, Renault, Auchan (French hypermarket chain), Apple, Toyota, Samsung topped the list of top-earning foreign companies in 2020 at around 300 billion Russian rubles ($3.6 billion). The French Renault not only has its factories installed in Russia: this country is its second market, only behind the French market itself. In addition to this, the Renault Group is also the majority shareholder of the Russian Avtovaz, and as such, it has its control. Avtovaz, in turn, has the Lada firm under its control, which has been the leading firm in the Russian market for years.
The Italian tire company Pirelli is a major company in Russia.
In The Financial Sector
Italy also has its interests in Russia with the Italian bank UniCredit, for example. Austria's Raiffeisen Bank, Italy's UniCredit and France's Société Générale are among the banks with significant ties to Russia. Italian and French banks had about 25 billion euros of pending claims in Russia at the end of last year, according to data from the Bank for International Settlements. Raiffeisen Bank International maintains hundreds of branches in Russia, and has been linked to money laundering. Last year it contributed almost a third of the group's net profit, which was 1.5 billion euros. Raiffesen Bank International has invested €2.4 billion in its Russian subsidiary, which had assets worth €11.96 billion at the end of 2021.
Speaking of banks, it is necessary to mention the activity of HSBC -which has begun to reduce its relations with a number of Russian banks, including VTB, the second largest bank in Russia- but above all Citibank, one of the largest USA banks in Russia, which is part of the foreigners who have not ceased their operations in Russia, despite the restrictions.
In the world of finance, due to sanctions against Russia, Visa, MasterCard and American Express have recently started to prevent Russian banks from using their credit card network. Visa and MasterCard announced that cards issued abroad will not be able to operate in Russia, while cards issued in Russia will not be able to carry out operations abroad. However, all operations within the Slavic country will continue.
From the financial point of view, it is worth noting the existence of the "Russian tax haven", Cyprus. There, through Russian state banks, they launder enormous amounts of black money from imperialist banks and companies. Another business from which the "anti-imperialist" Putin takes a cut.
But in addition to European companies, the largest American consortiums maintain their presence in Russia: 3M Company, Abbott Laboratories, Arconic Inc., International Paper, Mars, Mondelez International, PepsiCo, Coca-Cola, Procter & Gamble, Mc Donalds, Starbucks., Levi's, among others. On average, each North American company has invested in Russia in 2018 alone, about 224 million dollars.
In The Agricultural Sector
The large agribusiness monopolies deserve particular attention in a country called "the wheat granary of Europe", which is -along with Ukraine- the world's leading exporter of wheat, the largest producer of barley, and is among the leading agricultural producer and farmer in the world. Cargill, along with Dreyfus and Bunge to a lesser extent and among others, handle grain and oilseed marketing, oilseed crushing and refining, poultry processing, animal feed formulation, feed and feed ingredient sales, vital wheat gluten, starches and starch derivatives among others. Ports on the nearby Sea of Azov and the Don River, which runs through Rostov-on-Don, account for about 20 percent of Russia's seasonal grain exports. Global commodity traders Cargill, Bunge and Louis Dreyfus operate terminals in the Rostov area.
In this way, imperialism takes a huge portion of Russian agrarian income: by controlling foreign trade through its chain of collection, transportation and shipping at the port.
Russia has about 410 million hectares of agricultural land, of which about 120 million hectares is farmland. Restrictions for foreign possession fall on them. However, 2.5-3 million hectares of land are directly under foreign control, which is about 2-2.5% of the total Russian arable land. For example, we can name the Swedish agro-holding Black Earth Farming (BEF) with a land bank of 256,000 ha of agricultural land; the Econiva company, owned by the German businessman Stefan Duerr, which concentrates a total of around 240,000 hectares of Russian land, and owns many dairy farms, grazing up to 30,000 head of cattle; or the French company Louis Dreyfus, together with the Russian partner AFK Sistema, control more than 87,500 hectares of Russian agricultural land and continue to buy land assets. The latter constitute the 7th place among the largest land holdings in Russian private hands.
It should be noted that there are dozens of mechanisms by which foreign companies circumvent control restrictions on agricultural land. One mechanism is leasing; another mechanism consists of the figure of a company of which less than 50% is foreign property with which they can already acquire land. In addition, the mechanism of using Russian subsidiary companies is used.
We can then affirm that the imperialist powers are decisive, associated with the “Great Russian” bourgeoisie, in the exports of raw materials. Likewise, the banking capital in Russia is penetrated mainly by the imperialist banks, with their credit cards (Visa, American Express, MasterCard, etc.) with which they have a large part of the control of trade and exchange. The imperialist banks have part of the shares of the Russian state and private banks, and are also directly installed there. With this weight, imperialism intervenes in the huge internal market of Russia. It manages and controls entire branches of production of services, consumer goods, etc. It also has a decisive weight in terms of technology in Russia's military industrial apparatus, which is the second largest arms exporter in the world.
We have seen the latter in the first round of sanctions applied by the imperialist powers against Russia when it took over Crimea in 2014. At that time, it became publicly known that France and Germany were supplying it with military technology. France had provided Russia with 2 Mistral helicopter carrier warships with great technology that "great Russia" did not possess. It had agreed to deliver another 2 of these military ships and sell the technology to Russia so that it could begin production, associating itself de facto and de jure with its military industrial apparatus in the sale of said ships. But the US-led economic sanctions gave both the Russian military-industrial apparatus and the French imperialist bandits a hard time.
At that time, it also became known that Germany had to suspend its agreement with Russia for high-tech war simulators, in which 30,000 Russian soldiers per year were trained. As we can see, the previous and also the current offensive against Russia is not only about Ukraine, but about who controls the imperialist businesses in Europe and the Pacific... The Gringos are going all the way, and they know that if they don't, their economy and world politics weight will begin to decline. Trump launched an offensive in the world market with his trade war. Biden, using NATO and the gunboats, is taking this trade war to the next level.
So, to make an X-ray exam of this cowardly and sinister "Great Russian" bourgeoisie, it is enough to observe carefully that imperialism has imposed hundreds of restrictions and direct attacks on its profits and assets accumulated abroad, and a blockade of its accounts in tax havens, while these cowardly nouveaux riches have not touched a single deal, not a dollar or ruble, of the thousands of imperialist companies that support the internal market and control a large part of Russia's exports at the international level. It only blackmails with the conditions to purchase of its gas and wheat production that it exports so that they pay for it in rubles... A blackmail that is nothing more than an attempt to create better conditions for negotiating in the face of the imperialist offensive that is hitting Russia.
The Time of Crisis, Wars and Revolutions Is Intensifying
The occupation war in Ukraine is a foretaste of US imperialism's wanting and need to completely stay with Russia. It must do the same with China, just as it has already managed to do in the countries of the former USSR in Eastern Europe and Eurasia. This is not easy for US imperialism, nor is it a matter of one or two years. As Biden himself says, this is a matter of years and decades. It has been the crises of 2008 and that of 2019-2020 that have accelerated to an extreme degree the needs of imperialism for new markets, to compete for them in trade wars and through wars. Ukraine's is part of it.
In this conflict over Ukraine and "Great Russia", US imperialism demands Beijing's neutrality and silence, while concentrating its forces in Europe. That's because he will go for them. The US goes to Europe for Ukraine and Russia, trying to discipline the Franco-German axis, as the Anglo-American one has already done by stripping France of the business of building 12 submarines for Australia, just like a thief steals a cake from a neighbor that is just about to eat it.
A speed race has opened in Eurasia and in the Pacific wars that are coming, as happened with the wave of revolutionary struggles that in 2011 led the masses of the Middle East. This is the speed race between the development and the victory of the socialist revolution, or else the crushing of the masses and the oppressed peoples by fascism and war.
Socialism or barbarism is what already appears in this 21st century in the massacre and destruction of Ukraine and Syria by imperialism and the watchdogs of their businesses. Destroyed cities, hundreds of thousands of deaths, millions of refugees… it is nothing but Capital showing the whip, punishing the masses, in case they “dare” to stand up for their rights and their demands. The last chapters of the class war in the 21st century have not yet been resolved. As the Transitional Program puts it: “Without a socialist revolution, and this in the next historical period, a catastrophe threatens the entire human civilization. Everything now depends on the proletariat, that is, mainly on its revolutionary vanguard. The historical crisis of humanity is reduced to the crisis of revolutionary leadership."
Eliza Funes and Eva Guerrero |
