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#6 - JRL 7211
Moscow Tribune
June 6, 2003
Fantasy or real danger?
By Stanislav Menshikov

Last weekend Vladimir Putin was the centre of international attention as host to an unprecedented summit of world leaders who descended on Saint Petersburg to mark its 300th birthday. In the "north capital" Putin talked about Russias imperial legacy as if he was the rightful heir of Peter the Great. That occasion combined with the Evian G8 meeting gave him another chance to demonstrate his position as an accepted member of the exclusive club of the few who presumably determine world affairs. It was a cause for personal jubilation and an extravagant kick-off for the new election campaign.

In the wide world the view was more sceptical. As one observer put it, it looked as though George W. Bush after weeks of Iraq caused tension was "letting Putin out of the dog-house". By coming to Russias festivities for less than a day and leaving Evian before the summit ended the US president showed the world who was who and reduced Putins status to that of a Washington client.

Even more symptomatic was the fact that a group of Russian politologists called the National Strategy Council chose Putins days of glory to issue a public warning that the president was facing an imminent coup detat from the Russian oligarchs. The main point of their report leading tycoons Mikhail Khodorkovsky and Roman Abramovich (oil), Mikhail Fridman (banks and oil), Oleg Deripaska (aluminium), Vladimir Potanin (nickel) and Andrei Melnichenko (MDM banking and industry) were preparing to transform their tremendous economic influence into top political power.

The oligarchs, according to the report, were no longer satisfied with the Putin-Kasyanov government even though it was acting as "a committee for tycoons affairs". It was too slow in reducing taxes on business, too indecisive in pushing through the final stages of economic privatisation, was too populist to the billionaires taste.

Vladimir Putin concentrated too much power in his own hands and opposed direct participation of big business in political affairs. Parliament had become subservient to the president and could not be relied upon to protect finance and industry. Putin was in favour of taxing superprofits earned in exporting industries and using the money to promote manufacturing.

The oligarchs saw all this as a danger to their interests. They favoured another constitutional model under which the role of the president would be minimised and all power transferred to the cabinet of ministers accountable to a parliament dominated by parties loyal to big business. In this set-up one of the oligarchs could serve as prime minister and be the countrys de facto top leader.

Presumably, soon after the 2003-2004 elections the government would be formed on the new basis but Putin would retain some powers until the end of his second term in 2008. After that the presidential position would be disposed off.

The report had the effect of a political bomb explosion. It caused heated debate. Some discounted it as fantasy of its authors who were intentionally intensifying hatred towards big business with no actual basis for such allegations. Others saw it as a provocation intended to poison relations between Putin and the oligarchs on whose support the president relied in the coming elections. Vladimir Potanin was quoted as seeing no alternative to Putin for president in 2004 and being generally satisfied with his performance. But Khodorkovsky, Fridman and Abramovich were ominously silent.

So is there an oligarchic coup detat in the making? We rather share the view that while there is a genuine conflict of interest between the president and some big business groups, the imminence of a sudden change in the political regime is exaggerated. Export industry tycoons would no doubt like their own man at the helm of government and in the Kremlin. It is a fact that Putin has spoken in favour of promoting domestic oriented industries by partly redistributing oil and metals rent in their favour. This is not to the liking of the tycoons named in the report.

But they will hardly succeed in disposing of Vladimir Putin in 2004 or gaining a clear majority in the Duma this coming December. While the president recently spoke in support of a new cabinet accountable to parliament he is apparently planning for a majority led by his own party United Russia. But if the tycoons press hard they might still succeed in having their own man for prime-minister after the elections.

If that happens, it will be the start of transformation to an oligarchic political rule. It will not be good for the economy which needs to eliminate its energy and raw materials hump in order to grow fast and modernise. Russia will remain a lagging and dependent periphery in the world system. Progress in improving living standards will be hampered.

Our hope is that Putin will decide otherwise. But that is by no means guaranteed. And even if the National Strategy Councils report exaggerates the danger, its warning is timely. The country needs a strong government that is able to correct imbalances and stand up to vested interested of the few. Top   Next