Monday, April 11, 2005

On corruption and collapse in Russia

Here an interesting article in the Moscow Times:
A former KGB man, Lebedev was once considered a stalwart backer of Putin's government policies. But recently he has moved into politics, launching an unsuccessful bid for Moscow mayor in 2003. Even though he is a member of the pro-Kremlin Duma faction United Russia, this year he has moved from battling on a regional level to openly criticizing federal policies.

"Before 2004, everything that was being done by the Kremlin was without doubt the right thing," he said. "They were stabilizing the political situation; there was tax reform, [moves toward] administrative reform and pension reform. All this was correct.

"But somewhere along the line a year and a half ago, we reached the point where we needed to stop strengthening the power vertical and get busy with social reforms," he said. "But look what happened: Pension reform collapsed, administrative reforms collapsed, and with tax -- you see for yourself -- now the problem is with tax administration. No one believes the tax authorities anymore. And the monetization of benefits, you see how terrible this was, while the cancellation of elections for governors was the wrong move."

In the meantime, he said, state officials are too busy lining their own pockets, and are starting to challenge the oligarchs who won property in the 1990s for their ability to toss money to the wind.

"Name me just one official of a state corporation who is not a multi- multimillionaire," Lebedev said. "This is a new phenomenon we have to fight. We have already beaten the private oligarchy. They have either run away or they are trembling with fear. But now there are state oligarchs who are spending billions of dollars abroad. ... The residents of European countries see the yachts they are sailing in, they see the hotels they are staying in, which planes they fly in and which jewelry boutiques they frequent and what they buy.

"We are disgracing ourselves all over again," he said, identifying the state officials only involved as the heads of major state-owned corporations but declining to give names. "Of course we will not go far with such state officials. They don't care about the rest of the people who live in this country."

Other businessmen agree that what they see is a new carve-up for control of financial flows. "This reminds me very much of what was happening at the beginning of the 1990s," said the other businessman. "For a number of people working for the state, all the limits have been lifted. These people are trying to redistribute financial flows in their favor and are trying to use the levers of the state for their own gain.

"This is the East. There is a new clan, and for this clan all is forgiven," he said.

But as fears grow over where things are heading, the worsening situation could prove to be a powerful motivation for the Kremlin to wake up and make efforts to rectify the situation, he said.


This is consistent with other reports I have read that corruption has actually gotten worse.

The article suggests that the Kremlin hasn't had a real good view of reality. Mentioning the Orange Revolution, it says:
.
There are signs of panic over future stability from the Kremlin itself, including the Medvedev interview, said Stanislav Belkovsky, the head of the Council for National Strategy, who said he was called just last week by a Kremlin spin doctor in a scrape over what to do next. "They're frightened everything could blow up at any minute," he said. "They still don't understand the Ukrainian revolution. They were 100 percent certain [Kremlin-backed candidate Viktor Yanukovych] would win and the people would leave the streets because it was freezing cold. It was a tragic misunderstanding of the situation. Now they are afraid of everything. They are even afraid of their own shadow. They have lost the key to understanding the political situation.


In the West, Putin is seen by some as creating a new Politburo and taking Russia back to the era of the Soviet bosses. I think though there is abundant evidence that he is not in as much control over things as many think. He has amassed power to himself but it has not been enough. Problem is that that power has\been amassed to the Kremlin and it looks like Putin is not in complete control there.

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