Photograph by Vasily Maximov AFP/Getty Images

Exiled oligarch faces an uphill struggle, despite growing signs of discontent at economic hardship.

December 09, 2015

Vladimir Putin’s biggest foe is returning to politics, saying that revolution in Russia is inevitable– and that he’s going to help bring it about.

Mikhail Khodorkovsky, the oligarch who served 10 years in prison after losing a titanic power struggle with Putin in 2003, told a conference in London Wednesday that the overthrow of Putin’s government is “inevitable and necessary” and that “I will certainly do my best to ensure that the rule of law is restored through a revolution.”

His words amount to a tearing-up of the peace deal he made with Putin when the latter pardoned him on the eve of the Sochi Winter Olympics. Khodorkovsky has been living in exile in the Netherlands since then. His comments appear to be a response Russian prosecutors, who summonsed him this week for questioning about the murder, in 1998, of a Siberian mayor who had accused his company of avoiding taxes. Khodorkovsky’s former security chief was convicted of that killing in 2007. Khodorkovsky has always denied ordering it.

In the 1990s, Khodorkovsky had grabbed some of the juiciest bits of the Soviet Union’s oil sector and bundled them into what was at one time one of the world’s largest private oil companies, Yukos, ruthlessly abusing fellow-shareholders in the process. When he orchestrated opposition in parliament to Putin’s plans to squeeze more taxes out of the oil sector, he was arrested and convicted of embezzlement and tax evasion in a trial condemned internationally as rigged. Yukos was gobbled up by Rosneft, a state-controlled company embodying Putin’s strategy of bringing ‘strategic assets’ back under state control after a corrupt privatization process in the 1990s (now 19.75% owned by BP Plc).

The crushing of Khodorkovsky, which tamed the rest of his generation of oligarchs, was the defining moment in Putin’s ascendancy: a moment when the Russian state reasserted itself after a decade of chaos, to huge popular approval. Critics say instead of reducing corruption, it merely ushered in a new corrupt elite, one that has become bolder and more predatory as the easy flow of petrodollars has dried up.

Khodorkovsky still faces huge obstacles to having an impact on his homeland (not least the vast disparity in resources between him and Putin’s regime). Opinion polls suggest a clear majority of Russians support ‘the good Tsar’ Putin. Levada Center’s regular polls have consistently given him approval ratings of around 85% since the annexation of Crimea last year, which prompted a surge in patriotic feelings. Khodorkovsky remains to many a criminal and a western puppet (and a Jew, into the bargain). It also doesn’t help that he isn’t on speaking terms with Alexey Navalny, a more effective anti-corruption campaigner and opposition figure still in Russia. The only thing in his favor is the degree of moral authority that comes from having been a prisoner, then an exile (it worked for Lenin, after all).

But there is a clear groundswell of discontent to tap into. Last month, truckers blocked roads across Russia in an unprecedented protest at a new levy on them–notionally to pay for the construction of new roads (the right to farm the tax was given without tender to Platon, a company part-owned by the son of Putin’s long-time judo partner, the sanctioned billionaire Arkady Rotenberg). The government was forced to back down.

This week, there have been more signs of the disconnect between rulers and ruled, from the chilling to the farcical. Navalny and his collaborators published a long and detailed report (summarised in English here) alleging corruption in the family of Attorney General Yuri Chaika, who was justice minister during Khodorkovsky’s trial.

In lighter vein, social media erupted in scorn as Federal Tourism Agency head Oleg Safonov said Russians didn’t need a beach holiday (in the wake of Putin ruling Turkey and Egypt, the two last affordable options for most Russians, out of bounds for political reasons). Safonov, who last year said he owned two villas in the Seychelles, instead urged people to vacation in Crimea (where the temperature is currently 51ยบ Fahrenheit).

Russians are facing more hardship in 2016, when the economy is set to contract for the second year in a row, with no rebound in sight for the price of oil and gas, its biggest export earners. The ruble is now back near last year’s record low against the dollar. Real wages have fallen nearly 10% this year, as inflation has stuck above 15%. Manufacturing output is down nearly 6% on the year, while new car registrations were down 43% in November. The country’s largest automaker, Avtovaz, is preparing to switch to a 4-day week next month, according to labor officials. After falling for 10 years under Putin’s rule, poverty is set to increase for the fourth year in a row, according to Moscow’s Higher School of Economics.

Khodorkovsky’s talk of a revolution may well be overblown, and he admits he has no chance of leading it. But of the economic woes that usually go before one, the signs are multiplying by the day.

 

 

 

 

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