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The Kremlin, the billionaire and the liberal opposition

Prokhorov(1).jpg

Businessman Mikhail Prokhorov recently became leader of the moribund party “Right Cause.” The Kremlin clearly had a hand in this and billionaires are increasingly expected to take on tasks the government finds difficult, but President Medvedev is also keen to demonstrate that liberal ideas are alive and kicking in Russia, explains Dmitry Travin.

Dmitri Travin
9 June 2011

Parliamentary elections will be held in Russia at the end of 2011. The “Right Cause” party claims to represent liberal interests in the lower chamber of the State Duma, but the question of who is leading it has been a subject of discussion for a very long time. In today’s Duma there are no liberals at all. This only reinforces the West’s negative perception of the Russian leaders Medvedev and Putin, as the extremely harsh and undemocratic measures taken against the democratic opposition have been well publicised.

Medvedev and Putin personally played an active part in the selection of a strong leader for the “Right Cause” party. The reality of Russian political life is that serious financial support from business and a respectful attitude from the regional authorities can only be guaranteed if it’s clear that the party has a good relationship with the Kremlin. The first Deputy Prime Minister Igor Shuvalov and the Finance Minister Alexei Kudrin were possible candidates for the leader’s post, but for various reasons both dropped out. In May it finally became clear that the party’s next leader was to be Mikhail Prokhorov, one of the richest people in Russia.

Prokhorov

Mikhail Prokhorov is the 3rd richest oligarch in Russia

Soon afterwards a survey was carried out to establish how much the electorate knows about the “Right Cause” party. The VTsIOM opinion polls showed that support for Prokhorov’s party stands at no more than 1% (considerably less than the margin of error), though “Right Cause” is essentially the successor to “Russia’s Choice”, the electoral bloc set up by the main Russian reformer Yegor Gaidar, which formed the biggest party in the 1993 State Duma.

In other words, that liberal section of the electorate to whom Gaidar was appealing no longer exists. That generation has gone and the new generation is different. Some young people with liberal views are leaving Russia. Others are satisfied with the pro-Kremlin party “United Russia”, but the majority no longer consider that there is any party worthy of their vote, because the Russian legal system simply does not permit the registration of genuinely independent political forces.

“Though superficially different, the Prokhorov and Abramovich cases are very similar. Both millionaires were instructed by the Kremlin to take on tasks the government couldn’t handle."

Did the Kremlin really have to work so hard to find a rich leader for “Right Cause”? To answer this question one has to understand the logic governing the actions of the authorities, who have successfully tamed the party which inherited Gaidar’s liberal ideas.

Firstly, one should abandon the idea that Prokhorov is any way worthy of the organisation with which he has been entrusted. Previous leaders – Yegor Gaidar, Anatolii Chubais, Boris Nemtsov, Nikita Belikh and Leonid Gozman – had real aspirations to introduce liberal policies in Russia. Prokhorov's main distinction so far has been his uninhibited behaviour in the French ski-ing resort of Courchevel, where he was surrounded by so many girls he had brought over from Russia that he was arrested by the police. This is all most ordinary Russians know about him. He has never been active in the public sphere or belonged to any political party.

A comparison between Prokhorov and another Russian billionaire, Roman Abramovich, helps towards an understanding of Prokhorov as the new boy in politics. Some time ago Putin appointed Abramovich governor of the most distant Siberian region (Chukotka).  For several years he was actually formally in charge there and invested his own money in the region. But he didn’t go there very often, preferring to live in London and look after his football club, Chelsea.

Though superficially different, the Prokhorov and Abramovich cases are very similar. Both millionaires were instructed by the Kremlin to take on tasks the government couldn’t handle. Improving living standards for the Chukchi was as difficult for the Kremlin as creating a liberal party capable of simultaneously satisfying two requirements: entering parliament, while preserving absolute loyalty to the Russian government’s anti-liberal policies.

Both Abramovich and Prokhorov would probably have preferred not to accept these proposals, but the Kremlin can make any billionaire an offer he simply can’t refuse. Big business in Russia is too dependent on decisions taken at the very highest level, so if you choose not to shoulder your share of “voluntary public service”, the losses you subsequently incur will be such that you will sorely regret your refusal. 

If you agree, however, the Kremlin will almost certainly lend a helping hand with the implementation of one of your projects. So both Abramovich and Prokhorov decided that to preserve their businesses and successfully take them forward they had to meet the Kremlin half way.

 “Voluntary public service” has gradually become Russia’s typical way of solving a whole range of problems that the power vertical finds difficult to manage. Prokhorov and Abramovich are just two of the best-known examples. There are others.

“ 'Voluntary public service' has gradually become Russia’s typical way of solving a whole range of problems that the power vertical finds difficult to manage.”

Following on from Abramovich, there was apparently a proposal to give the billionaire Viktor Vekselberg his own region to look after. It was Kamchatka, which is near Chukotka.  Vekselberg managed not to accept. His health would clearly have made it difficult for him to fly so far, even occasionally, so the Kremlin found him something a bit nearer, very near Moscow. He is in charge of Medvedev’s much-advertised science city Skolkovo, which the President sees as Russia’s answer to Silicon Valley. This “beacon of modernisation” is of itself not of much use to anyone. What business actually needs in order to modernise is protected property rights, honest courts, low taxes and the other normal institutions so lacking in today’s Russia. But if Medvedev wants to stun the world with his own Silicon Valley, then someone has to look after the project. As Abramovich looked after Chukotka and Prokhorov is managing his political party.

One more example: the big businessman Alexander Khloponin was appointed government representative in the North Caucasus with the rank of deputy prime minister.  The Kremlin had already lost any hope of using the power vertical to sort out the problems in the Caucasus, particularly the intractable region of Chechnya. Putin has virtually abandoned the idea that all the problems of the North Caucasus stem from the ill will of a handful of militants and international terrorists, financed from abroad. The new prevailing idea is that the problems are purely economic: unemployment figures are very high and the unemployed are fighting each other. Robbery is the only way of making enough money to live.

Khloponin is charged with attracting investment into the North Caucasus, setting up enterprises, ensuring people have enough to eat and in this way defusing a long-standing hotbed of tension. On the “impossibility scale”, these objectives are roughly comparable to turning Chukotka around, using the Skolkovo project to modernise the economy or developing liberalism with the help of “Right Cause”.

In the near future other billionaires will be obliged to finance the construction of stadiums and the infrastructure needed for the World Cup, to be held in Russia in 2018. There will be other projects. So Prokhorov is not the first and will not be the last.

Pravoe delo party

Does the Kremlin need a liberal party in the Duma to
show the West a democratic face?

But why did the Kremlin have to resurrect a moribund party? Recently it has been said that “Right Cause” is set to take over as the “second leg” of government, now that “Just Russia” has been crushed. The “two legs of government” were the theory of the main Kremlin spin-doctor and deputy head of the Presidential Administration, Vladislav Surkov. The “Just Russia” party was created in order to fill the gap that would be created if the pro-Kremlin party “United Russia”, which currently has the upper hand in the Duma, should lose voter support. Then the Kremlin would be able to rely on the other, specially-prepared “leg”, as it were, which would absorb the protest vote.

This idea of the “two legs” has now sunk without trace once and for all. Sergei Mironov, leader of “Just Russia” and until recently one of the Putin favourites, has been removed from his posts as head of the Federation Council (the parliamentary upper chamber) and leader of his party. This was certainly done under pressure from the Kremlin, which has changed its attitude towards Mironov.

The “Just Russia” rhetoric was left-wing and populist, so if things had gone the Kremlin’s way, they should have taken votes away from the Communists. This was the only way the party could have offered the Kremlin a degree of serious support comparable with “United Russia’s”. But it didn’t happen.  “Just Russia” tangled with “United Russia”, rather than the Communists, and was duly punished.

“Right Cause” is targeting a completely different section of the electorate and doesn’t employ left-wing populist rhetoric, so it will not be able to take over from “Just Russia”.  Anyway, the right-wing, conservative and nationalist themes are already part of “United Russia’s” armoury, so liberal ideas will at best allow Prokhorov to get past the barrier of 7% which the law dictates that parties have to achieve in order to enter the State Duma.

“But the Kremlin’s view, naturally, is that “Right Cause” has to toe the line and be predictable. They will be allowed to be half a degree more liberal than the sensible people from “United Russia”, but none of the independent action, which Gaidar and Nemtsov, or even more recent leaders Belikh and Gozman permitted themselves.”

So why has “Right Cause” been resurrected? Most probably just to demonstrate to the West that we do have liberals in our parliament. Unlike Putin, Medvedev is trying to strengthen his relationship with the West (as the current G8 summit showed), so to set about destroying the right, as happened before the last general election in 2007, would be rather awkward.

But the Kremlin’s view, naturally, is that “Right Cause” has to toe the line and be predictable. They will be allowed to be half a degree more liberal than the sensible people from “United Russia”, but none of the independent action, which Gaidar and Nemtsov, or even more recent leaders Belikh and Gozman permitted themselves.

Prokhorov will put all his capital behind guaranteeing that his aspirations are moderate.  He doesn’t want to go the same way as Mikhail Khodorkovsky.

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