Interesting Take on Yukos

A very interesting take on the Yukos situation from the Moscow Times. And one which relates directly to some of the privatisation issues we were debating recently. Boris Kagarlitsky, director of the Institute of Globalization Studies, argues basically that given that the Russian economy is dominated by an oligarchic structure of raw materials quasi-monopolies, and given that a majority of the population seem to want these monopolies returning to state ownership, the only ‘democratic’ solution is an authoritarian one. Khodorkovsky had another idea, and hence off he went to prison. Any comparisons with or lessons for Iraq here? Can democracy be introduced like this? Off you go.
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Russia: ‘Managed democracy’ shows its true colors

Well, well. The richest man in Russia got arrested yesterday. Rather unusually brutally too, FSB raid, as demonstartions. What’s going on?

Let’s turn to not mainstream media but rather The Moscow Times who of course are all over this.

First, some kremlinology:

Analysts have said the attack is an attempt to curb Khodorkovsky’s political ambitions. Not only has the nation’s richest man has been openly funding opposition parties ahead of elections, but he also has attempted to push his own policy agenda on key state issues such as pipeline strategy.

The onslaught also comes amid a vicious battle for position between the old elite that came to power and wealth under former President Boris Yeltsin — including Khodorkovsky — and a hard-line faction known as the siloviki that arrived in the Kremlin with President Vladimir Putin.

Analysts said Tuesday that the new burst of activity from prosecutors came amid signs that the Kremlin faction backing the old elite, known as the Family, might be beginning to cave in. The head of the presidential administration, Alexander Voloshin, has been seen as the main protector of that group.

“Rumors of Voloshin’s upcoming resignation are continuing to come from the Kremlin and, judging by their frequency and their consistency, it seems he will not survive the elections. He is gradually losing real control over the Kremlin apparatus,” said Andrei Ryabov, political analyst at the Moscow Carnegie Center. “What’s happening now is a sign of the shift in the balance of power.”

Ryabov added: “Another reason for the recent burst also appears to be Yukos’ increasing activity in trying to sell a stake to a foreign oil major. If such a deal happened, this would not suit the siloviki as YukosSibneft would then fall completely out of their control.”[*]

What will happen?

Kremlin-connected political analyst Sergei Markov said Khodorkovsky’s arrest could usher in new rules of the game for big business and the state.

“After Khodorkovsky’s loss there could be a change in the rules of the game,” he said. “Khodorkovsky will be made an offer he can’t refuse. He can accept the new rules of the game, or he can stay in prison.

“Those who do not agree with the new rules of the game will lose control over their property. That was what happened with [Vladimir] Gusinsky and [Boris] Berezovsky.”

Markov speculated that Khodorkovsky could be forced to give up his stake in Yukos and step down in favor of other managers more ready to cooperate with the state. He could not say exactly what the new rules for business might involve, apart from plans to raise taxes on extraction of raw materials.[*]