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RUSSIA: OLIGARCHS: Oil chief seized



Christopher Jones disputed Cameron Sawyer's assertion that Russia was happily booming: " So quiet things are not. Yukos oil chief Khodorkovsky was seized by police forces, beaten and arrested. The Guardian article continues to hammer home the point that the majority of Russians have not benefited from the current economic boom, and the messy arrest could be a way to placate the restless masses". See
http://www.guardian.co.uk/print/0,3858,4782786-103610,00.html

Cameron Sawyer replies: "This weekend, the news in Russia was full of the arrest of Khodorkovsky. I just listened to two hours of a fascinating call in talk show on the radio station Echo of Moscow on the subject while driving back to Moscow in the snow after a weekend in the country. There are several points of view on the meaning of the event, but as usual (in matters concerning Russia) the Guardian is far off the mark. No one here believes that it is a way to placate the restless masses . First of all, there is very little resentment of the wealthy in Russia, at least at this particular moment in history. Secondly, the masses are anything but restless . Good grief. In Russia there seem to be two main points of view on Khodorkovsky s arrest: 1. Putin is finally strong enough to reign in the robber barons, and is finally going to make them pay for their crimes; 2. Putin is simply consolidating power. I have not heard ANYONE express any pleasure at the event; even those who believe 1. seem by and large to believe that it is bad for business, that we should put the 90 s behind us and let Khodorkovsky alone.

The overwhelming point of view expressed on Echo of Moscow (a Muscovite intellectual radio station; somewhat similar to our National Public Radio except rather more outspoken and much more critical of the state than the rather tame NPR) was 2. One point much debated was the extent to which Russia can be governed without a strong leader. The Nietzschean term slave mentality was mentioned. One caller mentioned that a strong president might be all right as long as there continues to be a real parliamentary counterbalance. He likened the current situation to a constitutional monarchy . He said that if Putin is able to cow the Duma and neutralize strong figures in the economy, this will be an absolute monarchy which will be very harmful for the nation, since power corrupts, but absolute power corrupts absolutely . He also said, railing about the police state that Russians have lived under for centuries, that the case proves not that finally Russians are all equal under the law, but that Russians are equal under lawlessness, referring to misuse of power. Another caller said that the case boils down to this question: did Khodorkovsky steal the national treasure, or perhaps he is the national treasure. A common theme was a deep distrust of the state and of state power, and a desire to protect the sanctity of private property and other institutions which are counterbalances to state power, an attitude which I find entirely healthy. Russians like to say about themselves that they are a people ridden by a peasant mentality, hardly ready for democracy, but I have to say that on the contrary, the level of political awareness here is actually much higher than it is in the West, perhaps from necessity, but still impressive. This is illustrated by the fact that Putin is popular, but that doesn't mean that people trust him. On the contrary, he is widely and constantly criticized, and closely watched. In a less politically sophisticated society, after such remarkable accomplishments, Putin would have been made into some kind of god: look at what the Turks made of Ataturk.

That Khodorkovsky might actually be a national treasure is a view commonly held: Khodorkovsky, more than perhaps any of the other oligarch, is world-class manager and towering business leader, and it is widely believed that without such people Russia has little chance of achieving the ambitious economic goals it has set for itself. His oil company Yukos, the second biggest in Russia and the world s fourth biggest, is considered the most transparent and best run of Russia s oil giants, to such an extent that it is being courted by Exon-Mobil and Sibneft in a merger which would create the world s biggest private oil company.

Which is not to say that Khodorkovsky acquired his initial fortune in an honest way (see http://www.engology.com/eng5khodorkovsky.htm for an excellent account of how those initial fortunes were amassed). But that s not the point. Hardly anyone believes that 90 s privatization, as dirty a business as it was, can or ought to be reversed on any wide scale. The point is what is Khodorkovsky doing now for the Russian economy? Most Russians believe: quite a lot. They point out that the Vanderbilts and Carnegies amassed their initial fortunes in much more brutal and primitive fashions, and nevertheless went on to pay key roles in the development of the American economic miracle of the early 20th century. Khodorkovsky turned 40 years old this year, and has a net worth of $7.8 billion. Forbes ranks him seventh on its list of the World s 10 Most Powerful Billionaires http://www.forbes.com/global/2003/0317/050.html, just ahead of the current Walmart chairman.

Time will tell what Putin is up to. Nobody here likes it very much.

RH:
This is an extremely important discussion. Who is right, Cameron or Christopher and the Guardian? The Echo of Moscow call-in show is important, but political life is full of surprises. Is the world controlled by "most powerful billionaires"? The arrest of one just 40 suggests that such success does not breed public trust.

Ronald Hilton - 10.25.03


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