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Is Putin Russia's Next Dictator?

By Angelique van Engelen     Oct 5, 2007 in Politics
The Russian President Vladimir Putin isn’t anywhere near as funny as his predecessor Boris Yeltsin, yet his actions are far more outrageous. His dictatorial streak is in dire need of assessing.
Only a few days ago, Putin shocked both domestic onlookers and the international community by stating his plans to hold onto power at the end of an address of the country’s United Russia party. Even the most informed of analysts was surprised.
Apart from President Putin’s controversial way of dealing with imprisoned oil magnates, there is hardly anything else that makes a potential dictatorial streak in Mr Putin’s psyche in any way predictable.
Fyodor Lukyanov, editor of Russia in Global Affairs, hit the nail on the head when he told Moscow News "When a person insists on doing things in a way so that no one can understand anything until the last minute - why spend time on imitating analysis?"
That certainly sums up the background to the surprise over Mr Putin’s latest move. Outrageous and all, Putin seems to just get away with it. To give him his due, he enjoys a popularity that is unprecedented for a semi-democratic Russian leader. This was illustrated by a rally of the Young Guards, who are described in the Western press as youngsters similar to the Hitler Jugend, which is a slight exaggeration, even though there is evidence that they attract skinhead elements. A day after Putin’s announcement, some 7,000 Young Guards gathered together on Moscow’s Manezh Square, armed with life size cardboard Putin dolls. It was not clear who organized the rally, but it’s not unthinkable that the Kremlin sponsored them. It is common knowledge that the Kremlin in recent years founded a few younster organizations to create Soviet style buzz meetings.
Putin’s popularity seems to be by and large the only measure justifying his extended stay. During the conference, several people called for Putin to find a way to remain President. Observers branded it scripted action. Putin made a public gesture indicating that he would not immediately facilitate that wish, but that he’d do his best to honor the constitution and still serve Russia’s people as best he can. By via-via becoming Prime Minister. "To head the government is a realistic proposal, but it is too early to think about it, because two conditions first have to be met”, Putin was heard saying. “The first is that United Russia must win the State Duma elections on Dec. 2. Second, the elected President should be a decent, effective, modern-thinking person who I could work with. But what we can and must talk about today is that your party can and must become an instrument of social stability. That is why I gratefully accept your proposal that I head the federal list of United Russia,” he told his audience.
Putin’s popularity can be attributed to his handling of the crisis in Chechnya, but what is more directly impacting on the Russian mindset is his involvement with Russia’s largest gas provider Gazprom. He has put the Kremlin pretty much directly in charge of this company. And it stands him in good stead among the average Russian. “No matter what the world thinks, the 800-pound gorilla of gas is central to Putin's popularity and Russia's new swagger on the world stage”, Business Week wrote a while back.
People working for Gazprom are considered lucky. Wages paid Gazprom staffers are significantly higher what other companies pay their personnel. Gazprom is believed to be Putin's main ploy to conduct power plays both at home and abroad. “Putin [...] relies on Gazprom to solidify his broad popular support, even as he stifles opposition. His subordinates determine which small towns get connected to Gazprom's pipelines and then court voters based on this largesse”, according to Business Week. The magazine contends that Gazprom generates 8% of national tax revenue.
As news of Mr Putin’s bid for remaining in power broke, attention will go out to Putin’s oil industry dealings. One delicate issue is Putin’s recent arrest order for a private Russian oil magnate, Mikhail S. Gutseriev, a former owner of Russneft.
This issue shows a darker side to Putin and is reminiscent of his controversial 2003 imprisonment of one of Russia's richest men, Mikhail Khodorkovsky, then President of Yukos oil. Khodorkovsky was an outspoken critic of Putin’s government and was sent to a Siberian jail for eight years. Gutseriev, fearing he might also be sentenced for a multiple year prison term, has either gone into hiding or has been successful at leaving the country. Sources say he has deliberately maintained a low profile since the Summer, but that since the warrant was issued at the end of August, it is not certain where Mr Gutseriev is.
Just like Khodorkovsky, Gutseriev is accused of tax evasion and fraud. Gutseriev published a letter in a Russian business newspaper and on his corporate website, defending himself. He wrote the letter a few months ago, after he was told by Moscow police to stay within city limits. He said that the police and Russia’s tax officials had forced him to sell out to rival companies and singled out a close ally of President Putin, the Russian Oleg Deripaska as a buyer. In the not so distant past Gutseriev himself was also a close confidant of Putin.
To date, Russian opinion leaders are still very subdued when it comes to speaking their mind about public figures or supporting Putin’s opposition financially in an open manner. The cases of Khodorkovsky and Gutseriev highlight why. The former's hopes for an early release faded with Putin’s decision to hold on to a high profile political role.
Despite the general belief in Russia that Mr Putin is the bringer of good fortunes to Russia, real freedom is not necessarily materializing. “[Gutseriev’s] predicament sheds light on the capriciousness of the judicial system here, as well as the imperative for business executives to show loyalty to the leadership of President Vladimir V. Putin,” the New York Times, writes, quoting Russian analysts.
Investors in Russia have long pointed at Russia’s shaky judicial setup as the country’s biggest downside. The imprisonment of Khodorkovsky and the arrest warrant for Gutseriev show a degree of lawlessness that is extreme. Foreign frequently are suffering often too, due to preferential treatment by the Russian authorities of Gazprom. But in contrast to Russia’s private oil magnats, at least foreigners can leave the country.
Two examples of cases that have virtually gone by unnoticed by the world community are last June’s departure of BP's local joint venture, TNK-BP. The company’s fortunes turned sour when Moscow regulators nudged it to give up main portions of their rights. TNK-BP ended up selling its controlling stake in a natural gas project it had explored to Gazprom at a price that was well below the going rate for such targets.
A similar thing happened to Shell, the Anglo Dutch oil giant. Its chairman Jeroen van der Veer found himself thanking Putin publicly during a Kremlin Ceremony for ‘resolving’ a dispute in which the company had lost out majorly. "As everybody in the world knows, you don't fight city hall, and in Russia you don't fight the Kremlin," Chris Weafer, the chief analyst at Alfa Bank, commented in the International Herald Tribune. "When the Kremlin comes calling and says 'we want to buy your business,' the only talk is about price and terms."
Russneft which was incorporated in 2002 became one of Russia’s largest privately held oil companies in a very short space of time. It is valued at $6 billion, and was fully owned by Gutseriev. The New York Times quotes a political analyst, saying that “People are fighting over assets with no limits or rules, not within the law or within reason but just out of greed,” said Yulia L. Latynina, a commentator on a Moscow radio station.
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