Slippery prop for democracY
By CONSTANTINE PLESHAKOV
MOSCOW -- The arrest last weekend of Mikhail Khodorkovsky, the
richest man in Russia and the owner of the oil giant Yukos, shocked
the international business community, enraged domestic opposition
groups and sent Russian currency and bonds into a frightful free fall.
Yet the arrest of Khodorkovsky, who had gained power with the
consensus of the financial oligarchs that basically ruled Russia at
the end of President Boris Yeltsin's tenure, was anything but
unexpected. Russian President Vladimir Putin has spent the last three
years purging his initial benefactors. Two of them, Boris Berezovsky
and Vladimir Gusinsky, have fled to Europe, closely chased by
Moscow's demands for extradition, and are now involved in bitter but
fruitless polemics with the Kremlin.
The few moguls in Russia that remain unscathed by the purge keep low
profiles -- while, according to rumor, transferring considerable
portions of their fortunes to overseas bank accounts.
Khodorkovsky's plight is spectacular: the richest man in Russia
behind bars. The official charges filed against the oil magnate focus
on tax evasion and are, in all likelihood, true. When wild capitalism
arrived in the early 1990s, Russia's rich never paid taxes -- and
very few of them bother to donate to the state budget now. An
intricate system of double-entry bookkeeping as well as thriving
corruption make the Russian "haves" practically tax-exempt.
Nowadays, just a handful of haves declare their income truthfully. In
a couple of centuries, historians doing research on the emergence of
the market economy in Russia will spend years wondering how, for
example, a Moscow TV anchor man in 2003 could afford a summer house
in Malta when his annual income was merely $5,000 -- barely enough to
rent a shabby one-bedroom apartment in Moscow.
But tax evasion is not the worst thing one could say about the new
rich. Khodorkovsky and other moguls amassed their fortunes in the
most disreputable way: While the Soviet economy was falling apart
like a house of cards, they quickly and quietly grabbed the valuable
pieces. The so-called privatization process in Russia left the
populace penniless while feeding bullion to the happy few, turning
them into Russia's first generation of Robber Barons.
So Khodorkovsky is not an innocent lamb or an idealistic martyr, but
basically an unscrupulous, tax-evading, big-time swindler. If he gets
a jail term, it will be well-deserved.
Still, Putin, who has obviously orchestrated Khodorkovsky's purge, is
no Robin Hood. Khodorkovsky was arrested not because he was a Robber
Baron, but because he was a Robber Baron on the wrong side of the
Putin is doing very little to bridle all-pervasive corruption, but he
is doing everything to guarantee his re-election in March and, before
that, the victory of his party in December's parliamentary election.
Khodorkovsky was reckless enough to announce his own political
ambitions and to start financing a number of opposition groups. That
was a sure way to incur Putin's wrath.
True, under Putin, Russia has done better economically than under his
predecessor Yeltsin, and Putin enjoys impressive popularity with the
voters. But the overall picture is not rosy enough, particularly
outside bigger cities like Moscow and St. Petersburg, to guarantee
his continued tenure in the Kremlin.
A new law, hastily crafted for the parliamentary election to
accommodate Putin's wishes, significantly limits media coverage of
election campaigns and thus undermines the chances of the opposition
parties and candidates. Khodorkovsky's money could have bought for
the opposition badly needed political advertisement. Putin didn't
want that to happen.
Also, Khodorkovsky owns one of the biggest oil companies in the
world. As Russia's fragile economic growth totally depends on oil and
gas revenues, Putin wants to have better -- if not total -- control
of the industry to fill the state treasury with something more
tangible than his own re-election fliers.
The outcome of the confrontation is far from clear. Will Khodorkovsky
be given a show trial? Will he be allowed to leave the country and
join the club of permanently exiled Robber Barons in the
Mediterranean? Will he strike a deal with the government and linger
in his homeland minding his own business?
And what impact will this have on the upcoming parliamentary
election? Will Khodorkovsky's arrest doom the opposition, or will it
spur some voters to support it? What about the presidential election
next March? Will Putin's vengeance backfire on him and lead to the
emergence of a popular alternative candidate (he has no serious
competitors so far)?
Regardless of the eventual result, the picture looks sad. When
Russian democracy first emerged (around 1986-1989), it was nurtured
by a Nobel Peace Prize winner (Andrei Sakharov), several law and
economics professors, a number of outstanding writers, actors and
newspapermen. Fifteen years later its survival seems to depend on the
outcome of a legal battle between a shady tycoon and a former KGB
Constantine Pleshakov, formerly of the Russian Academy of Sciences,
is a freelance writer in Moscow.
The Japan Times: Nov. 2, 2003
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