Wednesday, December 01, 2004

Meanwhile, Putin and the Russian oligarchs

According to Putin, the oligarchs still control the state in Russia.

Russian President Vladimir Putin conceded that oligarchs who made their billions in the first hectic days of post-Soviet reform still held a grip over the state despite his efforts to sideline them from power.Asked by a judge at a judicial conference if "the state itself depends on oligarchic groups which use the state in their self-interest," Putin replied this was still the case."Unfortunately this is still true," Putin said. "We are fighting this and will continue to fight this."Putin said he would seek the justice system's help in separating the country's richest men from power -- a promise he has repeated on several occasions, although critics say that Russia's justice system is weak and not entirely independent. (There's no link available for this.)

(Notice the word "conceded." Someone has a preconception Putin is confirming.)

To this I have only one response: Yukos. If the oligarchs controlled Russia, how is it then that the head of Yukos (a Russian oil company), who is an oligarch, was arrested—pulled off his plane by balaclava clad FSB, the successor of the KGB—jailed and is now on trial. That doesn’t sound like someone who is in control of the government or even portions of it.

Of course, Putin may be saying that he and a loyal group (a ragtag rebel force?) around him had loyal people in the FSB arrest him and loyal people in the prison hold him. Then he was arraigned in court by a loyal prosecutor in front of a loyal judge. (You might call this “small-islands-of-justice-in-a-large-sea-of-oligarch-domination position.) But I don’t think anyone seriously believes this.

Putin has to say this to justify his continuing persecution and dismantling of Yukos (literal both)and of Khordokovsky (literal persecution, figurative dismantling.) It also keeps pressure on the remaining oligarchs to keep their heads down and not cross the Kremlin. There is evidence that Putin put pressure on Russian oil companies to funnel money to Yanukovych’s campaign. Who is driver here and who horse? (See here, for example.) But it also might be a signal of something more. He might be creating a justification in public for a new round of oligarch hunting.

And Putin is either not to be believed or is not as powerful as most think. A few months back, he looked into the camera and told the world he wouldn’t bankrupt Yukos. Guess what? Yukos is being bankrupted, partitioned and sold off by the government. Either he was not telling the truth or he cannot control the government. (I personally think it is some of both.)

If he had said the oligarchs controlled parts of the economy, that would be believable. They still do and still limit competition in Russia just as they do in Ukraine. But they do not control power like the oligarchs do in the Ukraine which is what the revolution is really about. Oligarchic control over parts of the economy in Russia is not control over the institutions of government and the levers of power.

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