#9 - JRL 7258
THE FRAY NEAR THE BOROVITSKY GATES
Some want to convert money into power; others want the opposite
Author: Boris Kagarlitsky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE CURRENT EVENTS SURROUNDING YUKOS INDICATE THAT THE RUSSIAN GOVERNMENT DOES NOT WANT TO CHANGE THE EXISTING SYSTEM OF OLIGARCHY IN RUSSIA. OLIGARCHY MAY BE FOUGHT BY MEANS OF STRUCTURAL REFORMS, AND THE CURRENT FRAY MEANS THAT THE POWERS-THAT-BE JUST WANT TO TAKE OVER SOME LUCRATIVE POSITIONS.
Since the start of the 1990s, there has been a tradition in Russia of expecting dramatic events in August. It is not known yet what the upcoming August will bring us, but it is clear already that July is not an empty month in terms of news.
The main thing that worries the Russian elite today is the current enhancement of the fight of groups at the top of the government. The first signal indicating this enhancement was the arrest of Platon Lebedev and summons to the General Prosecutor's Office of head of the oil company YUKOS Mikhail Khodorkovsky and his deputy Leonid Nevzlin. Some more unpleasant things may happen to tycoons in the near future.
Khodorkovsky has commented on what has happened as follows, "As far as I understand, the actual position is forming now. But this concerns only certain individuals."
That's the thing! Interests of "certain individuals" make up the essence of the Russian politics. And we don't even know most of these "certain individuals" by name.
"Certain individuals" gather into groups. However, these groups are becoming less and less stable. We are used to dividing the Russian elite into new people who have arrived together with Putin, the notorious team of "St. Petersburg special agents", and "old tycoons", who grew up back under Yeltsin and now are called "the family". Meanwhile, this division is becoming too rough. On the one hand, not all of those who have managed to make their political career had managed to work in security agencies. On the other hand, Yeltsin's "biological family" does not play its consolidating role anymore. Each of the tycoons that have been nourished by it is standing their own grounds. Abramovich does not support Khodorkovsky, Alexander Voloshin have become an independent figure for the years of his work in the Presidential Administration. Prime Minister Mikhail Kasianov is gradually becoming such a figure as well.
While the Prosecutor General's Office is handling the tycoons, the government is having its own internal conflicts. Another protege of the family, Cabinet staff PR manager House Alexei Volin, has resigned. Now this position will belong to Alexei Gorshkov, who used to cooperate with YUKOS.
Each group has its own plans and goals. Each of them is trying to construct its own relations with the president and the St. Petersburg crew, which has lost its integrity too.
Nobody wants a war of clans. Unfortunately, plans of one group usually come into conflict with plans of others. The pre-election season is enhancing the conflicts. Currently, future positions in the Duma are being divided. Those who participate in this division are trying to guarantee opportunities for lobbyism for themselves. In 2004, the rates will become higher: the stake will be influence over the Kremlin, and this is a serious issue, since the matter concerns power and property in Russia.
It seems that the president has finally started to fight tycoons. Most of Russians, who became paupers over the 1990s, are to approve of this news theoretically. People view tycoons as those who are guilty of their troubles or those who have benefited from them. Alas, the fight against tycoons does not imply the end of oligarchy, and conflicts of the president's team with the leaders of the largest companies does not indicate a change in state policy. On the contrary, this conflict means that everything remains the same in Russia.
The Kremlin does not propose any structural reforms limiting the economic power of oligarchs. Nationalization is out of the question. The Russian authorities do not even discuss such moderate issues as compensations for the property bought by some companies at the start of the 1990s at 1-2% of its market price, or introduction of the natural rent proposed by opposition economist Sergei Glazyev. Steps in this direction really could indicate the start of a fight against oligarchy. However, these steps are not taken, since the matter concerns not the system but separate people, as Khodorkovsky has put it. If the matter concerned nationalization, it would be necessary to elaborate draft laws and submit them into the Duma, where the majority supports the Kremlin. The tactics of attacks has different goals. The decline of rates of shares, and maybe subsequent escapes of some tycoons from the country are ideal conditions for people who want to become new hosts of some companies.
The group of "St. Petersburg special agents" is eager to take over positions of "the family", but it is not interested in changing the system. They just want to get the key positions in this system. Besides, attacking some tycoons, they are gaining support of others. These alliances are not stable, roles are changing every day, and agreements are violated.
The "special agents" are using their political positions in order to gain the economic command top. In the early 1990s, this process was called "converting power into property". The dream of the St. Petersburg clan is to repeat this operation, since they were late for the initial shareout.
The war of all against all is beginning. The president is above the fray, formally. No one dares to attack him, since this makes anyone a target convenient for attack from all sides at once. However, unlike Yeltsin, who was an expert on "checks and balances", Putin likes order and is too reluctant to improvise to manage such a chaotic process. The president in this situation is neither a participant in the battle nor the umpire: he is the prize. The main strategic goal of all the conflicting teams is to gain control of the Kremlin in 2004 - without replacing the president.
For the ordinary citizen, this "battle of the Titans" will remain just a picture on television at best - provided the conflicting sides do not destroy the very system they want so much to preserve.
(Translated by Kirill Frolov)