[VIEWPOINT]Cleaning up Russia

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[VIEWPOINT]Cleaning up Russia

Russia’s President Vladimir Putin is intensifying his targeted offensive against oligarchs. The purge began as soon as he took office; he did not waste any time in removing the notorious big-shot oligarchs Boris Berezovsky and Vladimir Gusinsky. Most recently, Mikhail Khodorkovsky, the chief executive of Yukos, the second-largest Russian oil company, was arrested on Oct. 25.
Mr. Khodorkovsky had it coming. He emerged from an ordinary citizen to become one of the richest men in Russia in just over a decade. But the timing of the arrest was risky at best, since the business sector warned Mr. Putin that arresting the oligarch would hurt the economy. In the run-up to the Duma election in December and the presidential election in March, Mr. Putin has ample reason to act promptly.
First of all, he wants to keep the oligarchs away from politics. After the dissolution of the Soviet Union, the oligarchs were born and began to monopolize Russia’s key industries, from oil and gas to financial and energy, in the course of the privatization of state-run corporations.
Second, Mr. Putin is trying to get rid of obstacles to market reform. Russian oligarchs illegally accumulated fortunes in a short time through back-door dealing with politicians. They recklessly expanded their businesses; openly dodging taxes and brazenly hoarding wealth abroad, the oligarchs are responsible for the near-bankrupt national finances of Russia. They have been obstacles to the government’s efforts to reform the market, including tax reform, banking sector restructuring and improvement of national competitiveness. In order to launch market reforms, Russia needed to eradicate the evils of oligarchy, and in one way or the other, the troublesome oligarchs should exit the business scene.
Third, Mr. Putin and the ruling party need to secure enough seats in the Duma election to remain a majority. Mr. Khodorkovsky is financing the Russian Democratic Party Yabloko, the Communist Party, and the Union of Rightist Forces. If Mr. Khodorkovsky successfully unites the anti-Kremlin forces, Mr. Putin could end up with a small ruling party. Because he wants to secure a stable ruling base, the last thing Mr. Putin wants is the political pressure from a rival.
Finally, Mr. Putin is breaking away from his predecessor, Boris Yeltsin. The sponsorship of Mr. Yeltsin, his entourage, and oligarchs essentially made a nameless man into a president. That is why Mr. Putin had to live under the same roof with Mr. Yeltsin’s men during his first term. Mr. Khodorkovsky has been one of the oligarchs closest to Mr. Yeltsin and his cronies.
Now that he has been arrested and Alexander Voloshin, head of the presidential administration and a member of Yeltsin’s inner circle, was forced to resign, Mr. Putin has full control over Russian politics.


by Hong Wan-seok

The writer is a professor of Russian Studies at Hankuk University of Foreign Studies. Translation by the JoongAng Daily staff.

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