| The arrest of Yukos CEO Mikhail Khodorkovsky has hastened
serious changes in the balance of power within the Russian political establishment
-- perhaps the most profound changes since Vladimir Putin became president.
And although the contours of the new configuration of forces remain blurred,
generally speaking the balance has tipped in favor of the St. Petersburg
siloviki.
However, it seems we have not passed the "point of no return."
At least Putin's rather tough statement on Oct. 27, responding to the
elite's reaction to Khodorkovsky's arrest, contained certain hints that
the situation could develop in more ways than one. The president stated:
"There will not be any meetings or bargaining over the activities
of the law enforcement agencies, as long as these agencies stay within
Russian law. Whether the person is guilty or not, that remains to be proven
by those who think he is." This can be interpreted as meaning that
if the prosecutors are unable to prove Khodorkovsky's guilt, then they
will be held to account. But the chances of the situation developing in
this direction are remote.
The main issue, therefore, relates to the consequences of the shift
in the balance of forces caused by the ratcheting-up of the Khodorkovsky
affair.
Only three factors can lead to some degree of political balance being
restored.
First is a consolidated and pro-active position on the part of the business
community. At the moment, only the oligarchs are self-sufficient players
(in terms of resources) in the political process. The resource potential
of political parties, certain bureaucratic groupings and the mass media
are limited.
However, even the owners and top managers of major corporations are
barely capable of actively resisting the course that has been set. For
one thing, big business is divided. A substantial section of the business
elite is not interested in the creation of a strong institutional basis
for interacting with the authorities, underpinned by a system of legal
guarantees, but in reaching individual agreements with those that hold
power. Furthermore, business does not have a clear leader, such as Boris
Berezovsky was in the run-up to the 1996 presidential election.
In this situation, it is not only hard for businessmen to build constructive
dialogue with one another, but also to act in concert with those state
institutions that are closest in outlook to the business community. As
the arrest of Khodorkovsky was unfolding, the RSPP, then presidential
chief of staff Alexander Voloshin and Prime Minister Mikhail Kasyanov
could not agree on how to act. Voloshin's desperate attempt to up the
ante by tendering his resignation, without the support of the government
or the country's leading corporations, only emphasized the defeat of the
"old Kremlin" clans and those who were trying to support Khodorkovsky.
The second factor is the reaction of the economy to Khodorkovsky's arrest.
According to experts, in the short term an outflow of capital from the
country is inevitable. However, it is far from obvious that it will lead
to an appreciable worsening of economic indicators or to a drying up of
investment in the medium to long-term. Major transnational corporations
are only likely to stay away if similar actions (to those against Yukos)
are undertaken by law enforcement agencies against other companies. In
short, Khodorkovsky's arrest on its own is unlikely to have a serious
impact on the Russian economy.
The third factor is linked to the reaction of the international community,
first and foremost the United States and the EU. Compared to the "Gusinsky
affair," the official reaction will most likely be sluggish and more
formal than substantive. For the U.S. administration and the EU, the main
priority in their relations with Russia is to preserve stability in a
country occupying a key position in northern Eurasia.
Irrespective of the twists and turns in the battle at the top, it is
already obvious that the old Kremlin clans will soon suffer complete defeat
in the struggle for resources and access to decision-making. In particular,
the fate of Kasyanov's government can be considered a foregone conclusion
-- it will not survive beyond the presidential election. To a large extent,
this was predetermined by their political line, focused on preserving
their prior monopoly on political decision-making. Feeling increasing
pressure from the "new Petersburgers," the old Kremlin clans
accepted the rules of the game proposed to them and tried to prove themselves
as the most effective operators among the president's favorites. The chance
to use democratic procedures and an expansion of the competitive playing
field as an effective instrument for protecting their position was passed
up by the old leadership of the presidential administration, which enthusiastically
set about building a system in which a single party -- United Russia --
dominated.
Second, the problems faced by the Union of Right Forces and Yabloko
in achieving representation in the next State Duma have grown considerably,
in light of their critical stance toward the actions of the law enforcement
agencies in the Khodorkovsky affair. The decision may be taken in the
Kremlin not "to allow" such "overly independent" parties
into the next Duma.
If this happens, the Duma's potential for promoting further democratization
of the country and for adopting competent economic reform legislation
will be seriously impaired. It is worth bearing in mind, however, that
for the further development of ties with the West, which Putin and his
team aspire to, the presence of liberal parties in the parliament is important
both as an additional channel of communication and as evidence of the
country having achieved certain democratic standards. It should not be
ruled out that this latter consideration will get the upper hand in determining
the fate of SPS and Yabloko.
Third, it seems likely that there will be an increase in opposition
sentiment among the middle classes -- people who fear that the activities
of the law enforcement agencies will get out of control and lead to a
wave of mass repressions. However, this is unlikely to have much impact
on policy, as these classes are not particularly well organized and are
not capable of promoting their own interests independently.
What are the possible scenarios?
Preservation of the status quo is the most likely political scenario
and the one which seems to best suit the president. It is no coincidence
that Putin, in his remarks vis-È-vis Khodorkovsky's arrest, underlined
that "no generalized inferences should be made" from the case,
particularly in regard to the results of privatization.
Under this scenario, despite a substantial influx of new blood into
the political elite, the nature of the political process and the elite's
interaction with big business will not fundamentally change. Relations
between the authorities and big business will return to the informal agreement
reached in 2000, under which businessmen were to refrain from meddling
in politics and the authorities were to refrain from interfering in the
affairs of big business. And the attempts of certain interest groups and
law enforcement agencies to initiate large-scale redistribution of property
will be blocked by the president. This scenario best ensures the preservation
of stability, which Putin continues to view as one of the top priorities
in his presidency; and, in general, should be conducive to the continuation
of market reforms.
The second scenario envisages the president losing control of the situation
and the groups that are now in the ascendent initiating large-scale redistribution
of property, attacking one by one all major corporations tied with the
old elite. This would clearly have a destabilizing effect.
However, the probability of large-scale property redistribution and
pinpoint repressions against those political and business players who
aspire to independence, undertaken by a centralized presidential power,
seems unlikely. This is both because it does not appear to be part of
Putin's plans and because even if this scenario were attempted, there
is a high probability that it would result in uncontrollable clashes between
interest groups for property and access to the decision-making process
-- with all the destabilizing consequences that that entails.
Andrei Ryabov is scholar-in-residence at the Carnegie Moscow Center.
This comment first appeared in Vedomosti.
See also:
the original at
www.themoscowtimes.com
Elections to the State Duma,
2003
YUKOS Case
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