Column: Russia moves against the oligarchs

Mother Russia simply cannot help itself. Ever since the years of Peter the Great, it has birthed men who rule with iron fists. The latest autocrat, Vladimir Putin, is taking on imperial tradition in true Russian form. In the last two years, all political opposition coming from the economic sector – former Yeltsin-supporting billionaire magnates – have either been scared from the Motherland’s soil or have stayed out of defiance and have suffered the consequences.

Clearly neither Russia’s economy nor its international creditworthiness were taken into consideration when the country’s most prominent businessman, Mikhail Khordokovsky, head and principal shareholder of Yukos, was arrested at gunpoint in Siberia and hauled cross-continent to a Moscow jail cell. To understand the magnitude of this arrest, we must keep three factors in mind. After suffering from years of economic turbulence, just three weeks ago, Moody’s upgraded the Russian Federation to “investment grade”. To compound matters, the largest portion of the country’s foreign trade revenue comes from the sale of oil. Yukos is Russia’s largest oil company.

So, is this social justice of the “Bonfire of the Vanities” kind? It’s not as though ostentatiously arresting wealthy businessmen of corrupt energy firms is a foreign concept to Americans. Or is this a political house-cleaning that has been carried out at the expense of Russia’s international (and domestic) commercial credibility? It is, in fact, both, and it serves a purpose.

Mr. Putin is in charge of the world’s most voluminous country, one that has known political turmoil and revolution for over two centuries. With the demise of faux-Communism in the early 1990s, the following decade plagued Russia with the establishment of a new oligarchy of shady businessmen. The new Russian “mafia” was said to be taking on global dimensions under the lax Yeltsin Administration and was rapidly acquiring control over formerly state-run industries.

Before Khordokovsky was forcibly removed from his grounded private jet by the Russian authorities, he had refused to acknowledge court orders that charged him with several counts of fraud. Investigations into the corrupt workings of Yukos had in previous weeks led to the arrests of several company shareholders. However legitimate these charges may be, no impartial observer could refute that these arrests are remarkably convenient for the Kremlin.

Khordokovsky was a vocal source of opposition to Mr. Putin’s government. He actively lobbied over 100 members of parliament against initiatives of the executive. Rumors circulated that Khordokovsky was to run against Putin in the 2008 presidential race.

With the Russian ruble down against the dollar and other world currencies last week, these public incarcerations of prominent businessmen have seemed damaging to the state of Russian democracy. Actually, they will in time prove quite the opposite. By establishing that no corrupt enterprise can unsettle the grounds of the Federation’s young government, Putin has dealt a blow to the Russian oligarchy. Even if he does come off looking autocratic, the Russian president is actually serving Russia’s democracy in the long run by allowing for these high-profile trials. In this respect, Putin will not be continuing imperial tradition. And for that, Mother Russia can look forward to a more democratic future.

-The writer is a junior majoring in political science.

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