[Marxism] The Soviet "empire" was a drain on Moscow

Louis Proyect lnp3 at panix.com
Mon Aug 2 07:40:25 MDT 2004

It is difficult to understand Putin's organization without understanding 
its reliance on oil. In the 1980's, the Soviet Union was the world's 
largest producer of crude, ahead of Saudi Arabia. The bulk of the 12 
million barrels produced each day fueled the Soviet economy and its 
anemic satellites in Eastern Europe, Cuba and North Korea. Yet there was 
enough left over -- about two million barrels a day -- for customers 
outside the Soviet bloc who would pay hard currency. This was an 
Achilles' heel for the Soviets. According to ''Reagan's War,'' a book by 
Peter Schweizer, ''C.I.A. analysts had concluded that for every 
one-dollar drop in the price of a barrel of oil, Moscow would lose 
between $500million and $1 billion per year in critical hard currency.''

The Soviet empire was not extortionary, in the sense of providing a 
bounty of riches to the imperial center, as India and other colonial 
holdings had done for Britain in the 19th and 20th centuries; instead, 
it was a drain on Moscow. Without oil, the heirs of Lenin would have had 
great difficulty subsidizing their needy allies, their globe-spanning 
navy, their 45,000 nuclear weapons, their four-million-man army, their 
record-setting Olympians and their space stations. Oil was, in many 
ways, more crucial to the Kremlin than ideology.

Russian production dropped by nearly half following the Soviet collapse 
in 1991. The industry's recovery has been a key goal of Putin's 
government; just as the Soviet Union needed oil to finance its empire, 
Putin needs oil for his more modest task, to get Russia back on its 
feet. Since 1999, production has risen by 50 percent, thanks to an 
influx of investment and the incentive of rising oil prices. Russia is 
now the second-largest exporter of oil after Saudi Arabia. According to 
a World Bank report this year, energy revenues account for 20 percent of 
Russia's economy and the bulk of its exports. In other words, Russia has 
become something of an oil state.

full: http://www.nytimes.com/2004/08/01/magazine/01RUSSIAN.html


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