Tuesday, December 28, 2010

Putin Khodorkovsky Feud continues...

Politics and business are inseparable across globe and they are even more coupled in Russia, because they combine to create power. Khodorkovsky, prior to his arrest in 2003, had moved to merge his company Yukos with another energy company, Sibneft, which would have made Yukos the fourth-largest privately-held oil producer in the world, with one-fifth of the reserves of Kuwait. Also Khodorkovsky was involved in talks with Exxon Mobil and Chevron-Texaco to buy up to 40 percent shares in the new company for billions. For the in-power siloviki faction lead by Putin — men from the "power ministries" such as the armed forces, police and intelligence services, all this was too much to digest. First the power of the new corporation and, second the proposed sell-off of a major portion of Russia's oil industries to Western countries.

It has been a battle for power over Russia's riches and its futures. In the far away West, Khodorkovsky and others successful industrialist like him are looked up and perceived as the guys in the white hats, modern liberals committed to free-market ideals. No matter how questionable the means and circumstances were in which they accumulated this wealth, they have now cleaned themselves and are working for the virtues of shareholder rights, transparency and corporate governance. Now oligarchs such as Khodorkovsky were ready to cut deals with the best in the West. Ranged against these oligarchs, in the "black hats," were the reactionary political forces (Lead by Past president and now prime minister-Putin) that were and are against the West. These are Russian nationalists who favour the preservation of their past ideologies over the National economic interest.

The re-arrest of Khodorkovsky ultimately points to the weakness of Putin's rule: Putin has not denied from the possibilities of contesting 2012 president elections. Putin, like a master Russian chess player has been brilliant at negotiating between different factions, playing them off, against one another. But this mark a watershed, Putin has taken the most dramatic action possible against the leading oligarch (The way he has intervened the legal proceedings).

Putin has pushed fragile Russian economy back by numerous years as this will badly hurt sentiments of the future FDI investors.


Anonymous said...

excuse me, who has done the verdict? Putin or the judge?

Anonymous said...

@Anonimus: this is the dumbest question one could ever ask :)))

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