"Oil and privatization:
the High Stakes of Imperialism's War Against Yugoslavia"
A sense of déjà vu creeps up when considering the recently concluded war against Yugoslavia. We had an American president declaring that the war was necessary to defeat a cruel opponent who had refused to join the ranks of normal law-abiding and peaceful states. One of the primary justifications for the war was the need to defend the national aspirations of an oppressed people under attack from said enemy. Accompanying the war we find a steady barrage of propagandistic editorials from journalists sympathetic to Washington's goals who virtually function as an arm of the government. Finally, the United States breaks international laws to prosecute the war, which even upon a superficial analysis is revealed to be based on the need to defend capitalist prerogatives in a region that has traditionally been dominated by imperialism.
I of course am referring to Reagan's war against Nicaragua in the 1980s when the Miskitu Indians served as the earlier "human rights" excuse for an intervention. One of the most disappointing failures of the left internationally has been its inability to connect Reagan's adventure with the war against Serbia. The only explanation is that the two antagonists, Clinton and Milosevic, lack the repellent and charismatic qualities of Ronald Reagan and Daniel Ortega respectively.
Yet it presents the left with a heightened challenge in light of exactly such changed public images. If we tie our anti-imperialist response to a litmus test the victim of aggression's must pass in order to earn creditworthiness, we will prove useless. After all, it is in the very nature of the period that we are in that nearly all governments coming under brutal attack would fail such a litmus test. Yet, by the same token, every such victory against these uninspiring targets of imperialism strengthens imperialism's ability to defeat more exemplary models.
This article will explore the economic motivations for imperialist intervention in Yugoslavia and their consequences for other theaters of engagement now that it has achieved victory. While debate on the left has tended to revolve around the merit of the Kosovo separatist struggle, it is urgent to shift the emphasis to the underlying class conflict between imperialism and the Yugoslav state. This does not address the question of whether Milosevic's Yugoslavia was "socialist" or not, but rather precisely why imperialism felt the need to go to war. What were its stakes?
By analogy, the Reagan administration broke numerous laws in its crusade against the Sandinistas, when by all accounts Nicaragua was not socialist. Imperialism understood that a revolutionary democratic government in Nicaragua could interfere with plans to turn Central America into a vast maquiladora zone. After we examine some of the documentation surrounding Washington's decision to make war against the Serbs, we will discover that many of the same considerations applied, except with higher stakes.
"Trouble in Paradise? Europe in the 21st Century," a 1997 paper by Steven Philip Kramer and Irene Kyriakopoulos of the Institute for National Strategic Studies--an imperialist think-tank--is a useful introduction to NATO's ambitions in Europe following the collapse of the Soviet Union. They proposed that the European Union (EU) must expand eastward in order to help resolve economic contradictions in Western Europe. Virtually anticipating the "neoliberal" shift of the German social democrats, the authors point out, "Unlike the welfare system in the United States, Europe's welfare state has not been faulted for perpetuating poverty or for contributing to social ills. Rather, the viability of Europe's welfare state has been called into question in recent years as the extent and intensity of demographic change and population movements across Europe increased."
The strains on the European social system can be relieved in one of two ways. It can cut costs as the German and British "third way" governments have done, or it can displace its economic woes onto Eastern Europe. As it turns out, both processes are taking place simultaneously.
But the authors indicate that expansion eastward might not be a smooth ride: "Beyond the political dimension, expansion to the east involves equally serious problems of economic integration. Both in terms of industrial development and income levels, a large gap exists between Western Europe and countries that stayed behind the Iron Curtain for decades."
Even if a rapid onslaught on the Eastern European economies is mounted, there are political difficulties that might interfere with the transition. They warn that "The above conclusions are based on relatively optimistic assumptions about the future: namely, that no political and security problems emerge that significantly threaten European interests and the European economy. Such threats might include revival of the conflict in Bosnia and spillover to other areas, such as the former Yugoslav Republic of Macedonia or Kosovo. . ."
More to the point, the Serb republic in Yugoslavia was one of the main bastions of resistance to the very economic changes that Kramer and Kyriakopoulos were recommending to their EU, NATO and State Department patrons. If Eastern Europe was to be assimilated into the EU, it would be necessary to break this resistance. Serb hostility to neoliberalism was discussed openly in the bourgeois press throughout the 1990s, but seemed to have been shunted off into the sidelines when the crisis over Kosovo unfolded.
On June 6, 1996 the Christian Science Monitor (Scott Peterson, "At Home, Milosevic Uses Iron Fist While Acting as West's 'Peacemaker'") commented, "Milosevic is harking back to the political control promised by that old Communist star on his presidency building. He is ensuring that his grip on the country is more absolute than Tito's ever was, and is revoking some privatization and free-market measures." The New York Times concurred in a July 18, 1996 article (Jane Perlez, "Serb Stands Firm in Face of U.S. Effort to Oust Karadzic") which reported, "Since the suspension of sanctions last December, there has been little improvement in the Serbian economy, largely because of the determination of Mr. Milosevic, a former Communist, to keep state controls and his refusal to allow privatization."
On January 19, 1997, the Toronto Sun (Eric Margolis, "German Industry Conquers East Europe") echoed the recommendations of Kramer and Kyriakopoulos: "Chancellor Helmut Kohl and Germany's other politicians were extremely foolish to allow big unions, and their allies in the left-wing press, to price Germany out of world markets. Germany's businessmen, however, are no fools. They are rushing to move plants and jobs en masse across the border into free-market, low wage East Europe, where workers still know how to work." And what would be an obstacle to such moves? As always, the stubborn Serbs who did not understand the benefits of privatization.
The Toronto Sun endorsed the anti-Milosevic resistance: "Angry Serbs, both democrats and nationalists, are determined to politically cleanse Slobodan Milosevic, the communist despot who. . .wrecked its economy." These are the very same demonstrators who have shown up in the streets in Belgrade recently, whose only goal seems to be to turn Serbia into a friend of the West, so that democracy and free enterprise can move forward.
These are the kinds of demonstrators who rallied in support of Danko Djunic, dismissed as Milosevic's deputy prime minister in 1997. According to the December 16, 1997 Financial Times (Guy Dinmore, "Threat to Serb reformer"), Djunic was removed because he was too friendly with western bankers who were attempting to force the Serbs into a painful debt rescheduling. The Financial Times followed this report with one on December 22nd (Laura Silber, "Clinton to urge action over Bosnia") that quoted Robert Gelbard, chief US envoy to Bosnia, as being "very concerned about the lack of movement on fundamental reforms, such as privatisation and the property law" on the part of Milosevic and the Serbs.
Bad enough for the stubborn Serbs to resist privatization, their misfortunes were compounded when they decided to locate their nation inconveniently within a trade route that was seen as essential to the delivery of oil from newly accessible fields adjacent to east of the Caspian Sea. The collapse of the Soviet Union had made private investment in these fields by western oil corporations feasible. Discovering oil was one thing, transporting it was another. If the Balkans, a key link in the chain, was not "stabilized" beforehand, then billions of dollars in investments might go to naught. Stabilization of the Balkans had everything to do with supplying energy to the West, a key element of imperialist strategies in both of the twentieth century's world wars.
For a comprehensive analysis of the role of Caspian oil and the Balkans war, I would recommend Gregory Nowell's article in the latest Left Business Observer. Nowell, an associate professor of political science at SUNY-Albany, is the author of "Mercantile States and the World Oil Cartel" (Cornell, 1994). In the article titled "The Caspian energy game," Nowell makes the case that if Yugoslavia was a key link in the chain connecting oil supplies in the former Soviet Union to their lucrative western markets:
"The
remaining imponderable at this time is the development of southeastern Europe.
Romania and Bulgaria clearly have hopes that they might take Caspian crude oil
shipments from Supsa, refine them, load them on a barge, and ship them up to
Europe, all the way to Rotterdam even (thanks to newly completed canal work) on
the Danube. Before the current war on Serbia, the President of Romania was
advocating that construction of a pipeline from Romania to Trieste via
Yugoslavia. This would tie into the whole western European market. In any case,
Danubian barge shipments could establish an energy distribution pattern that
could eventually be supplanted by pipelines, perhaps overland via the Danubian
basin or across Yugoslavia to Trieste. Another pipeline project under active
development would run from Burgos, Bulgaria’s Black Sea port, to an Albanian
port on the Adriatic."
Even as the bombs were falling on Belgrade, a capitalist think-tank discussed plans for such oil transportation routes in anticipation of a Serb defeat. The Centre for European Policy Studies recommended "A System for Post-War South-East Europe (Plan for Reconstruction, Openness, Development and Integration" that would include the following provision as part of rebuilding the infrastructure of the devastated region:
"Important decisions on the location of new oil and gas pipelines from CIS countries, which would pass through the region, can only be taken in the post-war context of increasing integration with the EU. Financing would be obtained from the EIB (Export-Import Bank) and IFI's (International Funding Institutions). Safe and cheap supplies of hydrocarbons would in turn facilitate investment in new and efficient non-nuclear power stations."
Oil supplies were not just critical in western imperialist calculations, they are very likely a possible source of China's objection to NATO aggression. In a May 6, 1999 Financial Times article (James Kynge, "Beijing anxious to ensure oil supplies are more secure"), China, the second largest energy consumer in the world, is depicted as requiring forty percent of its oil through import by 2010, up from less than 20 percent now. Because of this, China is seeking to diversify its supplies and the Caspian oilfields reckon highly in their strategic plans. Since oil-rich Kazakhstan borders China's Moslem-dominated northwest region, it is not far-fetched to conclude that the bid of the KLA to create an effectively Moslem state might appear as a threat. As one Chinese official put it in a May 10 FT article (Kynge, "Walking the Tightrope"), "Where will NATO stop? Will they next intervene in Azerbaijan or maybe in Tajikstan on China's border?"
Clearly the Chinese and the Russians had cause for alarm, since within three months following imperialism's victory in Yugoslavia, a new war has broken out with a number of the same elements: ethnic rebels fighting to wrest control of strategically placed oil assets from the tarnished rump of a workers state. I speak here of the Dagestan rebellion, which pits Moslem guerrillas against Yeltsin's regular army and air force. The Dagestans are being supported by the Chechen republic, which won its Kosovo type independence without any support from the West.
While the Chechen and Dagestan rebels did not require the kind of massive aid that the KLA received from the west, there is little doubt that key element of the government sensitive to the needs of the petroleum sector of heavy industry saw their fight as consistent with their own goals. These goals, according to a report in the June 25, 1998 Journal of Commerce (Michael S. Lelyveld, "Trade bill embroils Senate in the Caucasus' problems; Measure would authorize funds to all 8 former Soviet republics") effectively wed "national liberation" aspirations with the economic interests of the world's most powerful corporations:
"A bitter ethnic battle in the Caucasus spilled over into Congress this week as U.S. corporate and oil interests won a key vote on aid to the region in the Senate Foreign Relations Committee.
"The panel approved the Silk Road Strategy Act, sponsored by Sen. Sam Brownback, R-Kan., after an amendment by Sen. Paul Sarbanes, D-Md., lost on a 10-8 party-line vote late Tuesday.
"The Silk Road legislation would 'target assistance to support the economic and political independence of the countries of the South Caucasus and Central Asia.'' But behind the measure's bland title is a widening web of international and U.S. business alliances with stakes in the outcome of a 10-year-old war. . .'
"The congressional action comes during a new flurry of contract signings with Azerbaijan, despite continuing reports of disappointing returns from the Caspian at a time of falling oil prices. Although the country has signed some $30 billion worth of deals with foreign oil companies, analysts are becoming increasingly concerned about recent drilling results."
So oil and "human rights" interventions dovetail with each other neatly.
The Yeltsin government has its hands filled with the Dagestan rebellion, a province that is twice the size of Chechnya. An August 13, 1999 NY Times article (Carlotta Gall, "Dagestan Skirmish Is Big Russian Risk") outlines the high stakes in the fight:
"For Russia, Dagestan retains an important strategic value. Dagestan commands 70 percent of Russia's shoreline to the oil-producing Caspian Sea and its only all-weather Caspian port at Makhachkala. It provides the crucial pipeline links from Azerbaijan, where Russia maintains important oil interests. Geographically placed between Chechnya and the Caspian and Azerbaijan, it has served as a containing buffer, controlling the Chechens' access to the outside world."
As this war unfolds, it would not be surprising if western human rights organizations funded by people like George Soros will begin to publicize atrocities against Dagestan freedom fighters. In this event, it will be important for the left to retain a sense of proportion and solid class instincts. If the recent war against Yugoslavia would indicate, imperialist aggressions in the name of "human rights" are nothing new. They are, after all, what accounted for the horrible slaughter of World War One and which also precipitated the Zimmerwald Conference resistance. In the face of such open bellicosity in pursuit of oil and privatization, it is incumbent upon us in the international left to reinvigorate the Zimmerwaldist traditions.
REFERENCES:
1) "Trouble in Paradise? Europe in the 21st Century," by Steven Philip Kramer and Irene Kyriakopoulos, is at http://www.ndu.edu/ndu/inss/macnair/mcnair49/m49cont.html
2) Left Business Observer is online at http://www.panix.com/~dhenwood/LBO_home.html
3) "A System for Post-War South-East Europe (Plan for Reconstruction, Openness, Development and Integration" is available in Acrobat format from http://www.ceps.be/SEEKOS4B.PDF.
(Louis Proyect is the moderator of an Marxism mailing list on the Internet, where much of the research found in this article was originally posted. For information on the list, go to http://www.panix.com/~lnp3/marxism.html.)
(This article originally appeared in New Interventions.)