Boris Berezovsky’s name is once again being mentioned in the media.
According to media reports, the ex-oligarch is holding talks with the aim of buying out Media-Most’s $262 million debt to Credit Suisse First Boston, a loan for which Gazprom was the guarantor. Berezovsky announced this intention in his open letter to the Russian Union of Industrialists and Entrepreneurs (RUIE), which was published in full by Kommersant. Berezovsky said he was “responding to the call from Yelena Bonner, the Union of Journalists, and the Glasnost Protection Foundation for a joint effort to raise money in support of the NTV network”. As a first step, Berezovsky intends to immediately offer Media-Most a working loan of up to $50 million to ensure that NTV stays on the air.
Nezavisimaya Gazeta commented on Berezovsky’s behalf: “The tycoon who has just said goodbye to his ORT network is trying to help his fellow media magnate to ‘eliminate the state’s financial and legal pressure on Media-Most’. So that only the political motives for the state’s battle against NTV will remain.”
In his rather pathos-filled open letter, Berezovsky appealed not only to Russian business leaders, but also to “strategic thinkers in the West.” The new political emigre urged them not to make a blunder similar to that made at the start of the 20th century, by neglecting Russia – so that the world would not get another “Stalin or Hitler”.
As the newspaper Segodnya reports, Media-Most responded positively to Berezovsky’s proposal: “Given the government’s all-out war on Media-Most, we appreciate any support which is not accompanied by political demands.”
However, some Media-Most executives suspect that Berezovsky was behind the recent action taken by the General Prosecutor’s Office against Image Bank, which services Media-Most. As a result of searches, bank operations have been paralysed and Media-Most accounts have been frozen.
The newspaper Vremya Novostei reports that off the record, top Media-Most executives have said they “don’t understand what Berezovsky’s statements actually mean”, given that in recent times Berezovsky’s relations with Vladimir Gusinsky’s media empire have been “complicated and problematic”.
Vremya Novostei also says Berezovsky has had financial problems with the TV-6 network for over a year, although its debts are only just over $10 million. Bailing out Media-Most will cost much more. The newspaper concludes that “Boris Berezovsky values the glorious image of a defender of free speech more than his reputation as a careful manager of his media resources.”
Andrei Fedorov, Director of the Political Analysis and Consulting Center, writes in Nezavisimaya Gazeta about the essence of Berezovsky’s proposal. The article is titled “Second Wind”, with the subtitle “Does Boris Berezovsky Have a Political Future?” This article contains a rather intricate analysis of Berezovsky’s current situation. According to Fedorov, “Berezovsky is aware that being in opposition to Putin – as publicly as possible – is his best and only chance of remaining a politician and staying in politics.”
Nezavisimaya Gazeta adds that there are many political figures who call themselves the opposition. However, there are no influential people among them. The newspaper admits that Berezovsky may have some political future under a certain set of circumstances. Among these circumstances are a likely fall in oil prices (in late March or early April), and the economic crisis that will inevitably follow. The newspaper says: “In this case, political and socio-economic reforms will be out of the question, and the state’s policy will be aimed at preserving Vladimir Putin’s image as the leader of the nation.” Then Berezovsky the “political emigre” would publicly propose that Russia’s political direction should be changed; another change of regime would be required – with Berezovsky’s direct participation, of course. Berezovsky likes crises. “It is through crises that he has always gained his objectives and increased his influence.” The newspaper warns that Berezovsky is already thinking about “Russia after Putin”, and he may well find some place for himself in the future.
The government isn’t losing sight of Berezovsky either. Alexander Filin, an investigator from the General Prosecutor’s Office, recently announced that Berezovsky may summoned for questioning in relation to the Aeroflot case. According to sources of Vremya Novostei, in 1996-99 about $1 billion was illegally funneled out of Russia through the Forus and Andava companies, registered in Switzerland. Investigators believe that part of this money came from fraudulent activities. Charges have already been laid against former directors and managers of these companies. Berezovsky also faced accusations in relation to this case, but the charges were later dropped. However, it turns out that the General Prosecutor’s Office has not lost interest in him.
Berezovsky is unlikely to be deterred by this prospect – he is quite capable of retaliation. Nezavisimaya Gazeta says Berezovsky has some influence in the West. “The broad network of contacts he has set up over the past five or seven years among Western political and business leaders” helps him take advantage of his current position, “especially since the new US administration is taking a tougher line in its relations with Russia.”
Fortunately for Berezovsky, the West still doesn’t fully understand who Mr. Putin is. Berezovsky, as an experienced Kremlinologist, is trying to persuade the West that however pleasant Putin may appear on occasion, in a crisis situation he will be very different from what he is when things in Russia are going well. Berezovsky also argues that rising authoritarianism is inevitable in Russia if a crisis develops. Therefore, many of Putin’s moves, e.g. the scandal surrounding NTV, are considered in the West to be steps toward authoritarianism. This gives Berezovsky a great opportunity to claim he is right, especially since the Kremlin still hasn’t learned to present and explain its own plans and actions in a convincing and appealing manner.
Even the most fervent supporters of the president in Russia are constantly left guessing what some of his decisions mean – is he starting to put some kind of complex plan into action, or just reflexively patching up Russia’s old wounds?
The most dramatic recent measures have been the dismissals of Governor Evgenii Nazdratenko of Primorye and Fuel and Energy Minister Alexander Gavrin, as a result of the energy crisis in Primorye (Maritime territory, Russian Far East). Some analysts, says the Vek weekly, are sure this is just the start of a wave of dismissals. The fuel crisis that developed at a time when Russia was gaining enormous profits from oil and gas sales required urgent measures. Vek says that if the president hadn’t acted, “it would have been a signal to the elite that they could still do anything they liked, if they were not held accountable for the fact that many citizens were suffering from the cold.”
Other analysts are sure that Nazdratenko will regain the post of governor within months. As for Gavrin’s dismissal, it can’t really be viewed as a major event. So all of this has just been a PR stunt.
Vek says both views are correct, to some extent – at any rate, the federal government has succeeded in demonstrating its displeasure.
But Vek also says there are only two significant factors in the current situation. The first one is that Russia’s economic resources are exhausted, and the economy cannot be revived without significant investment. However, there is no prospect of this at present. Capital flight continues, and the problem of foreign debt remains unresolved. This highlights the poor quality of Putin’s team – which is the second important factor. None of the factions currently battling for power is capable of handling the situation.
Some of these groups are influential within the state system, but lack popular support. Others have good media support but no clear plan of action. There are also some groups which have good contacts with international financial organizations, but they have neither state influence nor popular support.
Vek concludes that we shouldn’t expect any single faction with a definite program to come to power. The federal government will continue taking things one step at a time, in accordance with the old method: decision, assessment of consequences, another decision.
It is clear that in this situation personnel changes can only be sporadic. They may also look like complete chaos. However, Vek says that if there is a definite strategy, the results of these personnel changes may well be constructive.
But there is still the danger that this maneuvering may become an end in itself for the Kremlin. The outcomes of this policy could be disastrous for Russia. “A similar situation was observed before the disintegration of the Soviet Union. The difference between these two eras is that now the government doesn’t have the resources it had over a decade ago, and therefore it can’t afford to make mistakes.”
It is worth noting that Vek has always been among the newspapers most loyal to the state. This makes its current position even more interesting.
Vitaly Portnikov, a Radio Liberty journalist, writes in Vedomosti that Putin’s term “structural crisis” may become the symbol of the start of Putin’s presidency. Although Putin was talking about public utilities services, Portnikov says the present situation reveals a structural crisis in the entire fuel and energy sector.
As for the special operation in the Caucasus, it is also a crisis. Not only a crisis in Russia’s security structures, but in interethnic relations within the Russian Federation, and perhaps even a crisis in the foundations of the Russian state. Portnikov predicts another crisis: “a crisis in the people’s trust in the government, in which they had placed their hopes.”
Portnikov says the fact that the president has recognized the existence of the structural crisis is a step toward improvement, provided there is also a thoroughly-developed program of action. However, Portnikov says the government cannot boast of any such program thus far. Its response is that of an enraged bureaucrat and therefore is noted for token actions, which can be called cynical. The most cynical bureaucratic decisions are transferring control over the Chechnya campaign from the Defense Ministry to the Federal Security Service (FSB), the dismissal of a minor fuel and energy minister, and the ongoing battle with a television network. However, the government is aware of the fact that it wasn’t really Gavrin who led Russia into this winter’s nightmare, and the media are only guilty of reflecting the actual situation in Russia.
Portnikov considers that Putin’s actions are not cynical, and he has a sincere, naive conviction that it is possible to improve the situation in Russia by replacing security ministers and dismissing and publicly reprimanding state officials.
Yevgenia Albats, a prominent journalist, writes in Nezavisimaya Gazeta that the cause of the current crisis are flaws in the present government system.
In the opinion of Albats, the state administration is dysfunctional because there are two constantly conflicting institutions: “the Kremlin, which really makes all important decisions, de facto and de jure punishes the guilty, and is not accountable for its actions; and the Cabinet, which is held accountable for all decisions of the executive branch, even those made by the Kremlin.”
Albats asks, “What is the Kremlin responsible for?” She says it is not responsible for the crisis in Primorye, nor for the foolish federal budget. The only thing it answers for is reelection of the president once every four years.
Every four years the president accounts for his actions to the nation. Therefore, our presidents are versed in making populist decisions and shifting the blame for them onto the Cabinet. As for the prime minister, he risks his job every day and cannot account for his decisions by the fact that he was supported by voters in elections.
Thus, Albats says the Russian Constitution has given the president some functions of a czar and some functions of a prime minister. He is entitled to make decisions and not be accountable for them. It is clear that this government structure was adopted from Soviet times, specially for Boris Yeltsin. However, the journalist says times are changing and if the situation is not altered it will be impossible to overcome the current systemic crisis. The president should either give over all his powers to Parliament and the Cabinet, and only retain the status of the guarantor of the Constitution; or become the full-fledged head of the executive branch and be held accountable for his decisions.
Along with the crisis of the administrative system, the media are also discussing a likely economic crisis. Analysts in various periodicals are predicting a slump on world markets.
Novaya Gazeta says an economic decline is inevitable. The newspaper comes to this conclusion not only referring to analyses of statistics, but also because the market economy is cyclic, and any economic growth is inevitably followed by an economic decline. The newspaper considers that the crisis of 1997-98 was only the first signal, the warning. Russia has lost its chance and no structural reforms have been done to overcome Russia’s technological backwardness.
The revenues from the unexpected economic boom have been simply embezzled. Russia’s corruption has made Russia notorious. The FBI has devoted a special report to this topic. Novaya Gazeta says figures cited in this report are startling. For instance, 56% of Russian businessmen entering the US for business purposes are backed by Russian criminal groups. The FBI has registered 317 meetings between representatives of the “Russian mafia” and senior officials from Boris Yeltsin’s team.
The report also contains recommendations to the US Administration to detain a number of senior Russian officials in order “to investigate their links with organized crime.” Thus, the story of poor Pavel Pavlovich Borodin may not be unique.
Lev Timofeev, a well-known expert on illegal business dealings, doubts in his article in Moskovskie Novosti that corruption in Russia can be expressed in specific figures. The entire lives of Russian citizens are permeated with relationships of this kind, from their dealing with traffic police to some medical problems. Of course, it is impossible to register all cases when a Russian citizen has to bribe an official. Timofeev says Russian officials have set up a business of selling rights that citizens should receive free of charge.
At the same time Lev Timofeev says the shadow economy “is a product of common sense.” People are forces to agree to illegal relations because they cannot get what they need legally. The author concludes, “If the government continues to avoid seeking the truth about this country, this could lead to worse problems.”
However, the government intends to restore its old methods of working with people. The newspaper Segodnya says the government has canceled the ban on using anonymous criminal accusations as the basis for criminal charges. The use of anonymous tips was banned in 1988 – one of the most important achievements of Gorbachev’s perestroika. According to the new instruction on procedures for considering tips and proposals by the FSB, anonymous tips will be considered along with official complaints provided with a signature and the personal data of the author. Furthermore, tips sent in by e-mail will be considered too.
It is clear that the new instruction opens new opportunities for restrictive practices. For instance, if a businessman decides to scuttle a profitable deal by his rival, he need only pick up the phone, dial the FSB’s number, and report on some infraction which is allegedly being prepared by the competitor. Even if no crime is disclosed after this tip, the poor competitor is sure to have quite an experience.
In 2000, some 65,000 tips were submitted to the FSB. After the new instruction this figure will increase greatly.
Leading pollster Boris Grushin recently noted in his interview with Nezavisimaya Gazeta that in Russia “there has always been a desire to lean on the state.” Grushin doubts the argument that over the 70 years of Soviet power “the nation’s mentality considerably degraded.” Grushin says, “I don’t think the Soviet regime was maintained solely by propaganda and activities of the KGB. It was supported by the people, a fact which our liberals do not want to take into account.” The pollster believes that the revolution of 1917 did not disrupt the the course of Russia’s history. “This was a natural link in the chain of events of Russia’s history.”
Given this viewpoint, along with predictions by other political analysts, including Boris Berezovsky, we can draw the conclusion that some of their forecasts may come true in the near future. In the most unexpected ways.