| The writer heads Russia's liberal democratic party, Yabloko,
other opposition parties, receives support from Russian businesses,
The judicial assault against Yukos, the Russian oil company, has raised
widespread international concern about the arbitrary power of the Russian
state. But this apparently new confrontation between business and the
is only one in a much wider range of problems that have their roots in
reforms of the mid-1990s.
In those years two Marxist dogmas, albeit disguised in liberal phraseology,
still shaped economic policy. The first was that the primary accumulation
of capital is always a crime. The second was that the structure of property
ownership and the market automatically creates adequate political
superstructures. Hence the Kremlin's "loans for shares" deals,
created a group of oligarchs through cut-price privatisations.
The prevailing conviction among the reformers was that it was unimportant
how and to whom property was distributed, as long as it passed from the
state into private hands. The market would readjust everything. They were
wrong: the institutions necessary for the development of an effective
market economy do not evolve by themselves.
Russia lacks an independent judicial system. It has neither an independent
parliament nor independent national mass media. Electoral procedures and
results are heavily influenced by the government machine. The secret
services and law enforcement agencies are exempt from public control.
judicial system is corrupted by oligarchs and serves as an instrument
the authorities to settle scores by selective application of the law.
United Russia, the party at the centre of the Kremlin-engineered majority
coalition in parliament, is not a political party in the true sense of
word. Rather than existing to further a particular set of values, it was
established simply as an instrument for carrying out the Kremlin's orders.
The mid-1990s reforms also produced one of the other peculiarities of
Russian public life: the coalescence of business and government. There
regular payments by companies to officials placed by them in various parts
of the state apparatus.
Cynicism, selfishness and mistakes made by the authors of the reforms
to the formation of a semi-criminal oligarchic capitalist system, which
poisoned Russian business and political life. Business and politics are
intertwined to protect the interests of those in power. If a businessman
tries to become independent or proclaim his own political ambitions, the
authorities use an obedient law enforcement system to fish for wrongdoings
related to the 1990s privatisations.
It is high time to tackle this problem. Dismantling the oligarchic system
is essential. But there are limits to how this should be done.
Government-imposed revision of the results of privatisation is out of
question. That way, only the owners' names would change, not the system
relations between business and government. Besides the oligarchs and the
state, there is a "third force" of people who enjoyed influence
power structures of Soviet days and believe they were deprived of their
share in the 1990s. They are trying to influence President Vladimir Putin
to redistribute property by administrative fiat. Such a move would lead
a clash with the present proprietors and undermine confidence in property
rights in Russia. Dismantling the current system must not destroy
confidence in Mr Putin's reforms and deter international investors.
I suggest a three-part legislative package. First, there should be an
amnesty for offences linked to the privatisation process, with the
exception of murder and other violent crimes. Second, Russia must adopt
regulations to separate business and politics. The financing of political
parties is far from transparent. Companies spare no effort to secure
parliamentary support through blatant corruption. We need laws on
transparent party financing and lobbying.
As a corollary, Russia needs an independent public national television
network, to liberate the mass media from oligarch pressure. It might also
be useful to limit the rights of those who played a leading role in the
mid-1990s privatisations - both businessmen and politicians - to
participate in political life. A period of, say, 10 years from the
enactment of the law might suffice.
Last, Russia needs anti-monopoly regulations if its economy is to flourish.
Implementing these will require a strong and independent government.
None of this will be easy. But some such legislation is the only
alternative to an endless round of Yukos-style scandals, or even more
serious power struggles that risk political and economical instability.
preserve a system in which there is no division of power, civil liberties
are restricted and property rights are not guaranteed is to prevent Russia
from ever becoming a fully-fledged European nation.
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