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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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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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