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On the other hand Putin’s stated declarations to liquidate the
oligarchs fell short when the practicalities of leading Russia
presented themselves. Criticism has been levelled at the selective
attacks on certain oligarchs, for example Mikhail Khordokovskii,
where the charges laid against him of embezzlement and tax evasion
were politically motivated due to Khodorkovskii’s intention to sell
the controlling stake of Yukos to US firm Chevron as well as
independent plans to build a pipeline to China – in effect
undercutting the Russian state.
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"Welcome to
Marlboro Country!" (1997 poster) |
This charge may carry weight, but in the context of other policies
it does show consistency, as the Kremlin has in other areas been
seeking to maintain its monopoly on energy distribution. For
example Putin has been making continuous attempts to dissuade a southern
gas pipeline being built to supply Western Europe, bypassing Russia
and thus undermining the Russian monopoly on natural gas
distribution (Goldman; 2008, p161). Since energy remains a crucial
part of the Russian economy, it is perhaps a logical step to ensure
strict central control over its distribution. Additionally, while
the sale of Yukos assets to state owned Rosneft is criticised for
increasing the oil monopoly, by contemporary Western economic theory
inhibiting economic development, this is found elsewhere in the
world; for example, Norway has at most two major oil companies, and
both are state owned (Rutland; 2008, p1061).
Furthermore, the siloviki have emerged as a class in fulfilling a role formerly
played by the oligarchs, which has led to criticism of Putin’s
reforming efforts by placing men with a background in the security
services in critical positions. However this can be seen as an
attempt to form stable government, where due to Putin’s background
in the KGB they form his stable political base (Sakwa; 2008, p101).
In effect this replaces business interests as primary with those of
the state, keeping more in line with Putin’s own ideas about the
relationship between business and politics.
The correlation between liberalisation and the rise of crony
capitalism can be seen at the regional level as well. The collapse
of the Soviet Union as a coherent political unit caused strife
economically because of the disruption to trade and enterprise links
that linked the Soviet republics; the ending of the political unit
extended into the economic sphere as well (Blum; 1994, p91). When
coupled with the disruption of financial support from the federal
centre, regionalism is an understandable phenomena, as was the
practise of seeking funding from any source. Primarily this came
about through turning the areas into
tax havens for
big business. While this had the effect of bringing capital into
small regions, not only did it prevent wider economic development
across the state and within the regions, most of the capital going
to local elites, but it also further fractured political authority.
Freeland highlights the weakness of the Russian state when
Yel’tsin’s decision in 1995 to close down these tax havens proved
impossible to enforce in practice. Countering this led to the
establishment of the seven administrative districts, mostly based
around centers of law enforcement, with the increased supervisory
role of presidential envoys to ensure federal law is followed.
Success in this area can be clearly seen, with 94% of the
conflicting regional laws being changed to obey federal law (Sakwa;
2008, p271).
The nature of the federation is highly asymmetrical, and has taken
some time to see a change in inter-federation relations from the
Yel’tsin era. This links partially with the need for economic
development; a general consensus can be seen to have emerged between
the centre and the regions that the form of the federation at the
start of 2000 was politically and economically inefficient (White;
2005, p162). A high degree of hostility between the non-ethnic
oblasts and ethnic republics dogged Russian domestic politics, with
the republics having been able to negotiate with Yel’tsin for
considerable economic and political autonomy in exchange for their
participation in the new Russia. Yet the anarchy of the system led
to Putin’s attempts to reduce the official asymmetry between the
constituent units of the federation, with some success. We can see
that within two years of his first term thirty out of the fourty two
bilateral treaties were made redundant (White; 2005, p161). Further
to this strengthening of federal control, following the Beslan
school siege in 2004 Putin passed legislation to make the
appointment of regional governors the prerogative of the executive.
While this has lately been modified to allow the regional Duma’s the
right to veto, it still represents a major move towards further
advancement of centralising power relations throughout the national
state.
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