Arrests and Development

Nov 042003
Authors: Meg Burd


Arrests and Development

Russian Oil Tycoon Khodorkovsky as a symbol for the ongoing

struggle in development for Russia

Meg Burd

“The instinct for political survival forces the authorities to

select their own oligarchs… Their blatant goal is to move their

own people close to the source of wealth…The old ones are sitting

near this wealth and won’t budge to make space. So they should be

pushed!” declared the Russian weekly paper Novaya Gazeta in

reference to the government’s actions in the recent arrest of oil

tycoon (and supposedly richest man in the former Soviet nation)

Mikhail B. Khodorkovsky. Arrested on charges of fraud, forgery and

tax evasion, Khodorkovsky (the head of the Yukos oil company) was

apprehended at gunpoint on Oct. 25 as his jet landed to refuel in

Siberia, according to a recent New York Times report by Erin E.

Arvedlund. Others at Yukos have also been arrested, and 44 percent

of the company’s shares have been frozen by the Kremlin, causing a

downturn in the Russian stock prices and evoking an outcry from

many who saw the act as a symbolic persecution of the new market

system in Russia.

The outcry, as seen in the quote from Novaya Gazeta, centers

around the perception by the more liberal media in the nation, many

of its citizens, and even some in the U.S. government that this is

not simply a case of prosecuting a corrupt business man, but rather

a case of political persecution and cronyism on the part of Russian

president Vladimir Putin.

Whether the accusations against Khodorkovsky are true or not,

the central issue in this whole scandal seems to be not so much the

charges themselves but rather the long-fermenting political,

economic and cultural clashes found in Russia in their

postcommunist state.

With the 1989 fall of the Berlin wall, characterized by Leslie

Sklair in “Capitalist Globalization in Communist and Postcommunist

Societies” as “the symbolic end of the Stalinist form of communism

that dominated” Russia and the other Soviet Bloc nations, trends of

the adoption of a more market-style economy expanded. The

transition, however, was and is not easy. In the early 1990s

especially, former Communist party officials still held most of the

power in factories and business, and those with party connections

were usually the only ones able to succeed as entrepreneurs. With

distrust of general market entrepreneurs still present as a

hangover from the recently departed communist system, many

small-business starters were arrested and jailed on accusations of

price gouging or missing the correct documents for business.

Of course, some of these so-called entrepreneurs indeed were

robbing the public at the time. At the “free markets” that sprung

up around Russia during this time, product sellers inflated the

prices for basic goods to incredible sums that most couldn’t

afford. Many of the new entrepreneurs during this time were also

either part of or in league with the growing Russian mafia powers.

This adoption of a more capitalist market economy, far from being

the positive step so eagerly anticipated by many, is clearly also

full of problems, Sklair argues.

With Russia situated between the two troubled socio-economic

systems, it is no wonder that this arrest has sparked feelings on

both sides.

The arrest of Khodorkovsky seems to be yet another example of

this difficult transitioning process. A backer of two minor liberal

parties for the much-anticipated 2008 elections according to

Newsday and perhaps a presidential candidate himself, Khodorkovsky

represents the new more capitalist powers outside the Yeltsin-era

business cronies and Putin-run government. Attempting to hold onto

power politically and economically, the current Putin government

may have arrested Khodorkovsky for posing a threat rather than for

the charges levied against him.

With the recent descent found all over the country, and the

resignations within Putin’s own government in protest over the

issue, the suggestion of Dr. Lilia Shevtsova (as stated in a

meeting held by the Carnegie Endowment for International Peace)

that Khodorkovsky’s arrest is more a representation of troubles

between “the relationship between power and big business in Russia”

than anything else seems to be true.

Legitimate or not, this arrest of this big business man in

Russia has become a symbol of the political, economic and cultural

crises Russia is still facing today.

Meg is a graduate student at CSU. Her column runs every





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