Russia Shaping up to Revisit its Political Past

From Prince Rurik, who ruled from 862 to 879, to the last Tsar of Russia, Nicholas II, forced to abdicate in March 1917 after a series of military defeats and pogroms that left Russia torn, transforming the country from a great world power to a bankrupt and broken nation. And later that year after the second revolution Nicholas II along with his entire family were put to death at the hands of the Lenin-led Bolsheviks.  So it began. The Great Empire of Russia has charmed and bedeviled the west as ally and foe.  From Churchill’s ‘Sinews of Peace’ address on March 5 1946 at Westminster College in Fulton Missouri, when he coined the phrase ‘iron curtain’ to describe Soviet-dominated Eastern Europe, to that of former US President Ronald Reagan’s turn of phrase ‘evil empire’, the west has gone toe to toe with successive Russian leaders in the great struggle of east versus west.  Finally, in Mikhail Gorbachev the west found a leader they could work with and it culminated with the Berlin Wall coming down in the fall of 1989.  The rhetoric worked.  We watched and hoped as it appeared that the long dreaded nuclear threat of mutual annihilation had met its end and we would enter a new period of peace and prosperity.  No more duck and cover. But how long does it take for a newly open country to embrace its economic sovereignty, make billions, convince the rest of the world it is working in solidarity with them while slowly creeping back to the old ways?  About 20 years it seems. In the first week of May 2012 Russians took to the streets to oppose the swearing in of Vladimir Putin for his third term as President following his four year stint as Prime Minister.  Protests were reported to be relatively peaceful, however event watchers made a point to say this was possibly not a good thing.  Observers assumed that the relative quiet suggested there had been a crack down on protesters. Not that long ago, June 1991, the Soviet Union with its command economy and military uniformed parades only a few days dead had Boris Yeltsin at the helm as his new Russia was dramatically shifted to a free-market.  While Russian citizens and former communist block countries were busy exploring the new ‘free’ world – now able to handle banned books and music, immigrating without persecution, opening new businesses or struggling to keep their old ones afloat, the newly-deemed democratic Russia gave birth to a handful of oligarchs or business magnates who dutifully bought up as much as possible amassing grotesque wealth and, they thought, power. Privatization spread with the help of Western-guided Yeltsin, possibly a modern day Peter the Great, who in years that followed manipulated inflation and currency exchange rates, ordered the floodgates of foreign trade to be opened and thrust the country in to what some say was a worse economic depression than that of the American and German depression of the late 1920s and 30s.  Not so great. The year before Yeltsin’s successor Vladimir Putin, and it must be noted a former KGB officer, came to power Russia defaulted on loans that it received from the International Monetary Fund (IMF); reportedly $5 billion was stolen the night before the meltdown, ironically around the same time coal miners went on strike demanding a reported $12 billion in unpaid wages. With this as the back drop when power was handed over to Putin it was the perfect breading ground for deals to be made without much notice or concern.  From that point on Putin has been consolidating; quietly taking back all that was once in private hands, and of course the power.

This past February then Prime Minster Putin, “instructed the country’s No.2 bank VTB to compensate small investors who lost money in its stock market flotation,” as reported by Reuters news agency.  Putin was quick to make it seem that he was doing this for the benefit of small investors so they would not lose out.  Reuters continued, “Minority shareholders who bought into the ‘people’s IPO’, many of them first-time investors, lost out when VTB’s share price was hit by the 2008 crash and again in the ill-fated takeover of Bank of Moscow, which led to a $14 billion bailout.”  The buy back would reportedly cost the bank $500 to $600 million, however in the end most of those shares would then be back in the hands of the bank and the government.  We cannot know what the true plan is, but I believe it is worth speculating and simply being curious as to the happenings. Putin’s consolidation of power seems to follow the same ‘chilling’ effect that all supreme rulers and dictators employ: exile and imprisonment of ones rivals, new rules that suit your needs, strong influence over the media and control of the military.  The government agency Gulag has long been disbanded but there are Correctional Colonies.  Consider these two cases in point: the currently imprisoned Mikhail Khodorkovsky, the one time head of the now defunct oil and gas company Yukos one of Russia’s largest companies to come out of 90s privatization.  Before being convicted of fraud and having his company go bankrupt in 2003 Khodorkovsky was known to oppose Putin while possibly having political ambitions.  Khodorkovsky is currently living out a new jail term that is expected to last until 2016 in the Correctional Colony No. 7 in the north western town of Segezha, along the Finnish border.

Russian oligarch, Alexander Lebedev is a man somewhat similar to pre-2003 Mikhail Khodorkovsky (abundant wealth, political connections and position of power).  In an interview with BBC’s Stephen Sackur on the program Hard Talk he spoke with incredible delicacy when it came to commenting on Vladimir Putin and his politics.  He frequently and with great control managed to sidestep most questions that would in any way make it seem that he was reprimanding Putin, a close acquaintance of his.  Lebedev, who owns a third of the shares in the Russian airline Aeroflot (the Russian government owns 51 percent), is the owner of Russian and UK newspapers and reportedly has an estimated wealth more than $3 billion, and Khodorkovsky are a perfect example of where you can be and where you can end up if you dare make a wrong move in Putin’s Russia. But it would be too harsh at this point to use Stalin as a comparative. My bet is that once 2017 comes around Putin will either change the rules again, granting himself the right to another six year term or he will choose who will succeed him, just as he did with Dmitry Medvedev who replaced him as President while he stood back in the role of Prime Minister from 2008 to 2012 and ran the country.  Or he may even do what Napoleon Bonaparte did on December 30, 1804; crown himself Emperor. It shouldn’t come as a surprise that Russia is finding its way back to its old ways, over 1000 years of rule by Tsars, despots, tyrants and dictators creates a certain mindset in its citizens, which can’t be expected to be erased in 20 years. | Raymond Matt, CFP, CLU, TEP, CHS | The Ontarian, Writer, Editor

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