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#12 - JRL 7040
Moscow News
January 29-February 4, 2003
Business-Class Mandate
Ahead of parliamentary elections the oligarchs have set out to build a democratic coalition. Big-time capitalists are returning to big-time politics
By Valery Vyzhutovich

Until last week it seemed that a pre-election democratic coalition was impossible in principle, and then suddenly the media "leaked" terms of cooperation offered to Yabloko by the Union of Right Forces (SPS): The two parties will run a single ticket. Nemtsov will be in first position, Yavlinsky second, and Khakamada third on the election list. The SPS will expel Chubais and Gaidar, as demanded by Yavlinsky. Furthermore, in the presidential election, Yavlinsky will be a single candidate fielded by the democratic forces. True, Yabloko itself says that the plan is 18 months old and that it has been turned down on more than just one occasion. Yabloko's reaction to the initiative of its potential allies could be seen as predictable. The strange part, however, was that Yavlinsky's associates denied the very fact that the SPS had once again put forward its old proposals: "There is nothing to comment on. We have received no proposals from the SPS leadership." Meanwhile, all the indications are that some "unifying" proposal has been made after all - not, however, by the SPS leadership, but by other people whose participation in the intrigue is not publicized.

According to sources within both parties, it was Russian oligarchs who set out to bring Yabloko and the SPS together. These purportedly include Interros CEO Vladimir Potanin, Yukos President Mikhail Khodorkovsky, and Alfa-Group's Mikhail Fridman. Apparently they invited Yavlinsky for a meeting that took place on January 19. The conversation centered around a VTsIOM (All-Russia Center for the Study of Public Opinion on Social and Economic Issues) poll showing that a Yabloko-SPS bloc could garner more than 20 percent of the vote. Encouraged by this prospect, representatives of the business elite sought to persuade Yavlinsky to "abandon his principles."

According to information in our possession, Grigory Yavlinsky turned down the proposal to run on a single ticket, putting forth his own plan: Nemtsov and Khakamada may enter the Yabloko list while the promised expulsion of Chubais and Gaidar from the SPS generally went down well with Yavlinsky. Later, however, the Yabloko leader apparently toughened his position. The SPS is to publicly admit that the presence of those two persons in their ranks has been a serious mistake.

Unless Yavlinsky's position has changed over the past few days, he is expected to enter into negotiations with Nemtsov with the same array of ideas. This, however, gives one a sense of deja vu: In a Davos 1996 scenario (note also the remarkable calendar coincidence), the oligarchs come to terms on how to secure an appropriate outcome of elections in Russia, in their own interests. Back then, it was a presidential election and now it is parliamentary.

The stakes are of course incomparable. What was at stake in 1996 was whether the country would return to Communist rule. The threat did not materialize. But neither does big business like the idea of a de facto one-party system being put in place. The oligarchs have already been ordered to "voluntarily" donate from $300 million to $500 million to the Unified Russia election campaign. This is an astronomical amount of money. Businessmen are less concerned about the fact that the bulk of it will be stolen - this is only natural. There is something else preying on the minds of the business estate: Its own money will be used to knock together an overwhelming Kremlin majority. This enhances political risks for business, narrowing opportunities for lobbying, and reducing leverage to influence the ruling authority. So the oligarchs decided to work on Yavlinsky and Nemtsov. Should it materialize, a Yabloko-SPS coalition could have the following implications:

For united democrats. They will get generous financial support but will lose freedom of action in election campaigning. It is not ruled out that they will have to draw up election lists to the dictate of their sponsors. Possibly they will also be asked to show restraint in criticizing their common rival - the party of power.

For the oligarchs. They will have to bankroll also the democratic election campaign. But this investment can well pay off. With a large "pro-oligarchic" faction in the Duma, they will get a chance to stage a political comeback. They have been on the sidelines of politics for the past four years.

For the Kremlin. The presence in the lower house of parties representing the whole political spectrum, including liberals, will give the Russian ruling establishment a democratic image in the eyes of the world community. So the oligarchs' plan to unite Yabloko and the SPS has most likely received a Kremlin blessing. Yet should something go wrong, the Kremlin will take the oligarchs to task for the behavior of their proteges. The Kremlin will not spare money - especially someone else's - for such a democratic coalition.

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