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Russia Profile
www.russiaprofile.org
June 16, 2005
Through an Insider's Eyes
A Senior Railway Official's Take on the Kremlin's Route

Interview by Ilya Arkhipov

Vladimir Yakunin, 56, is not one of the faces that shows up on television often in news reports or is at the center of public discussions about policy. All the same, he is generally considered to be one of the members of President Vladimir Putin's inner circle. He was recently named President and CEO of the giant Russian Railway Company (RZhD), one of the country's "natural monopolies," which posted total revenues in 2004 of about $21.5 billion.

Yakunin, one of the many major figures close to the federal government in Moscow that are, like Putin, from St. Petersburg, has had a career path that would indicate some kind of involvement with the country's security services. He steps around this question, however, when asked. His career in the late Soviet era took him from a chemistry research center to the army, and from the Leningrad foreign economic relations committee to the city's top physics research center. He then ended up landing in New York, where he served for six years in the Soviet Union's mission to the UN.

In the 1990s, he returned to St. Petersburg to serve as the chairman of the board at a company called the "International Center of Business Cooperation." This was around the time when Putin was responsible for external relations for the administration of then-mayor Anatoly Sobchak, for whom Putin also served as first deputy. He then headed the Northwestern inspectorate of the Presidential Control Department, a post in which his path again crossed that of the future president, who ultimately ended up running the dapartment at the federal level. After Putin became prime minister in 1999, and then president one year later Yakunin followed him to the capital, first as deputy transportation minister, then as deputy railway minister - a position he maintained while the railway empire became a fully state-owned business in 2003.

According to Sergei Belyaev, the former chairman of the State Property Committee, Yakunin is "one of the president's most ardent supporters, who has his completely trust. He has been a close acquaintance of Putin ever since he worked in the St. Petersburg mayor's office."

In recent years, Yakunin has also ventured into public life as a chairman of the Board of Trustees of the St. Andrew's Foundation and Center for National Glory of Russia, which awards prizes to politicians, businessmen, church leaders and cultural figures and funds Orthodox Church-related projects. He also launched an international outreach program as a co-chairman of the Dialogue of Civilizations forum, an intellectual discussion platform that supports traditional cultures and looks for alternatives to U.S.-centered globalism.

On the sidelines of the forum's recent conference in Havana, Cuba, BBC correspondent Ilya Arkhipov interviewed Yakunin for Russia Profile.

I.A. President Putin recently said Russia had its own form of democracy. How does it differ from the commonly recognized European form of democracy? What are the Russian authorities trying to develop in Russia?

V.Y. It's inaccurate to interpret this as meaning that Russia has its own form of democracy. Putin said that we had selected a democratic path of development for our country and our people, and that we will not deviate from it. But, just like in any other country, the stage-by-stage nature of this development should correspond - and I'll add my own words here - to historical traditions and national traits. It should also correspond to the circumstances, including political and economic that accompany the development. That is more accurate.

I.A. How do these traits differ?

V.Y. Someone who is used to living in a certain environment, with a certain world view, cannot be turned into a totally different person in a year. In my opinion, this is what the president wanted the West to understand. The principles of a democratic society exist. They exist and develop as part of global civilization.

I.A. Russian authorities like to talk about things like democracy, an open society, trust, investment and business opportunity. How does all this fit in with the history of the Yukos saga?

V.Y. This is another one of those situations that [former] Prime Minister Viktor Chernomyrdin once described very well: "Our aim was to do better, but everything turned out as usual." On the one hand, the authorities allowed a group of people, both Russians and foreigners, to seize the majority of the nation's wealth. But, as this was accompanied by the appropriation of property and wealth that society had created, a sense of impunity emerged. They thought they could do anything. This cannot be permitted. I think this is what happened with Yukos' management. It's another matter how our law enforcement system and our state system reacted and how effective the responses were, how they did or did not clamp down, how much information society was given. It's clear that, once again, everything ended up as usual.

I.A. Why Yukos? Why not Sibneft or any of the others?

V.Y. I can't answer that question, but what I can say about the Yukos affair is what I know of the history prior to the opening of the criminal case concerning the illegal acquisition of shares in the firm that became part of the Yukos system. It all started with fairly banal questions, but legal violations in the course of the major share purchase became the focus of further police investigation.

If you are going to ask about Sibneft or any of others, then you have to have some reason to believe that they have also broken the law.

I.A. Of course not, but it seems strange to see a single company targeted for abuse and all the rest left untouched.

V.Y. But why? Take a look at what has been happening at the Tax Ministry. Other banks and corporations have also been facing "tax pressure."

I.A. But they haven't been treated as harshly...

V.Y. I'll say once more that I'm not talking about the forms that the pressure takes. But, at the same time, what would happen if you took the same approach to the others as you did to Yukos? No one is interested in seeing this happen. Why Yukos? I think because there was a critical mass of evidence that turned up in the investigation into Yukos. And not only results from this inquiry, but also from others that came from civil organizations and structures. Why they handed this information over to the police is a different question. This critical mass became the foundation for a criminal case against Yukos. It began with the tax case and then grew into what we have today. I'm not happy with how this looks to the outside world. I think that the work should have been conducted more professionally and that society should have been kept better informed. At the end of the day, Western public opinion should have been provided with more consistent information.

I.A. What were the aims of the regulation - the idea of establishing a strong 'power vertical,' the appointment of governors, the tough administrative reform, the unification of regions?

V.Y. The aim has already been identified as strengthening the power vertical. Problems that were inherited from the transitional period - corruption, governors who were out of control, rising crime rates, attempts to foster disintegration - obviously mean that there have to be strong state authorities, a strong, legitimate machinery - a machinery of coercion, if necessary - to ensure that the proper laws are enacted and that they are obeyed.

I.A. And how far are the authorities ready to go in strengthening the power vertical? Are there are any limits?

V.Y. The constitution and our laws. These are the constraints, because the authorities have to act appropriately within the boundaries that govern the state.

I.A. Is it fair to describe the increase in the number of former security service members in federal ministries and other organizations as one way of strengthening the state? V.Y. You know, for obvious reasons, I have mixed feelings about this. What does the term "large number of people" mean? The number is only large because this was always done on an individual basis. These are people who were selected and trained on an individual basis, so there is always a kind of agitated response when one of them joins the power structure. In fact, their share in power is negligible when you look at the whole country.

I.A. But there is an example in every branch of the government, in every company, in almost every enterprise. V.Y. I think that everything is a result of professionalism and ability. It's not important where someone served in the past. Everything depends on the person's education, acquired experience and talent for administration. Government administration calls for as much professionalism as anything else, it's just that the level here is far higher.

I.A. But it means that the influence of the Federal Security Service [FSB] has increased significantly.

V.Y. I wouldn't put it that way. [Finance Minister Alexei] Kudrin and [Economic Development and Trade Minister German] Gref are the most influential people in the government, and they have never had any ties with the FSB or the KGB. By the same token, we could talk about concerns over the multitude of former military officers who are now working in the public sector, and here we have to be particularly concerned about people who have left certain branches of the military. But I believe that, if they are capable people, then that is all right. It's a different matter if they are incompetent. But I would like to point out that nepotism has always existed in Russia and no one can be completely safe from it.

I.A. Even the president?

V.Y. The president has a fairly limited circle of close colleagues, but there is not one person among them who got his job through nepotism. I can say that for sure.

I.A. Can nepotism in the broader sense be called corruption?

V.Y. No, they are different questions.

I.A. So what is the difference between corruption and nepotism?

V.Y. Nepotism is a kind of lobbying to advance a select group of people in a certain sphere. In fact, systems of patronage exist all over the world. Corruption is illegal activity. It is a kind of activity that is in breach of the principles of the state administration. Unfortunately, it is a problem that affects Russia, as well as other countries. This problem should be combatted by all of the means at our disposal. I believe that there is one method that has not been used enough in Russia.

I.A. Which one?

V.Y. It's the influence of public opinion on the fate of an official. Imagine what would happen in a Western country if an article was published compromising a state official. Even if he managed to make it to his office, he would have his letter of resignation ready. In our country, unfortunately, this doesn't happen.

I.A. But people say that the population in general doesn't trust the authorities in Russia.

V.Y. It's not just that. It's also a sign that society has yet to mature.

I.A. Maybe no one believes that anything will happen to this official.

V.Y. No, they don't believe it because one day the papers print something about one official, the next day about someone else. This shows that our society is not well-enough developed. Further, people have always taken the law with a pinch of salt. Un-for-tunately, this has always been the case.