No Country for Young Oligarchs

Although Mikhail Prokhorov claims he will not leave politics completely, he now looks like just another oligarch who must choose between capitulation, emigration and imprisonment. Alexei Kudrin's future is no less obscure.

Alexander Etkind
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Alexander Etkind

Mikhail Prokhorov, the owner of gold mines in Siberia and a professional basketball team in the United States, is one of Russia's richest men, with a net worth of $18 billion. This past June, he agreed to lead a center-right political party in December's parliamentary elections. Prokhorov, who is 46, seemed to believe that his business experience would boost his political prospects.

Prokhorov was wrong, and resigned in September from the party he had led. But, whatever embarrassment he may now be feeling is certainly a better fate than that meted out to Mikhail Khodorkovsky, another Russian oligarch with political ambitions, who is now languishing in his eighth year of imprisonment since boldly challenging Vladimir Putin's ideas about how Russia should be run.

Prokhorov's withdrawal preceded by just a few days the announcement by United Russia, the country's ruling party, that Putin will seek a third presidential term in 2012, swapping jobs with the incumbent, President Dmitry Medvedev, who will become prime minister. That may have been too much for Alexei Kudrin, the finance minister since 2000, whose disagreement with Medvedev's increased spending led to his resignation.

In the absence of new faces or ideas, the only prospect for the coming election year will be to pump more petrodollars into a struggling and grossly inefficient economy. That spending binge will feed corruption, inflation and natural-resource dependency - the three evils with which Kudrin has contended throughout his tenure.

While Prokhorov is one of several respected Russian oligarchs, Kudrin was the most respected member of the government. Their departure from political life is becoming widely viewed as a symptom of deepening divisions among the Putin-era governing elite, even a harbinger of political crisis.

To be sure, there are many subtle signs of panic at the top about the state of the country's economy. However, there is no hint that United Russia has a new program to meet these challenges in Putin's next administration, apart from more censorship of the Internet. But all signs of conflict within Russia's supreme leadership of two - Putin and Medvedev - have disappeared.

Until September, Medvedev made great efforts to encourage hopes for change. But Putin never lost control over the governmental apparatus, and the prospects of his regaining the presidency never dimmed. So those hopes were always false. Indeed, most of Russia's rulers have been in office for the better part of a decade. Some, like Kudrin, had become visibly impatient for change; most remained very content with the status quo.

As happened during the Cold War, a bureaucratic crisis suddenly exposed the mechanisms by which this elite has wielded power. When resigning from his party, Prokhorov publicly accused a Kremlin insider, Vladislav Surkov, of foul play, calling him "the puppet-master" who had "privatized politics in Russia."

Surkov, the deputy chief of the presidential administration since 1999, co-chairs the Civil Society Working Group - one of several bodies created in 2009 to "reset" Russian-American relations - with Michael McFaul, U.S. President Barack Obama's adviser on Russia. The working group may have contributed to ending the war of words, at least on the American side, and McFaul has now been nominated to become U.S. ambassador to Russia. But members of the U.S. Senate, which must confirm McFaul's nomination, would do well to ask him about Surkov, a man who has overseen the destruction of Russian democratic politics.

In taking on Surkov, Prokhorov demonstrated his refusal to be a puppet. In fact, Prokhorov has much to offer his country: His articulate speech and self-made success are unusual among Russian politicians. And, with housing, health care and education less accessible now than at the end of the 1980s, his political program focuses on what should be done to improve Russia's human capital - the key problem holding back that country's economy.

According to Prokhorov, productivity in Russia is just 6-10 percent of that in the United States, which is why the economy struggles even when the price of oil, its main export, is peaking. Two million educated professionals have recently emigrated from Russia. During the last 20 years, social inequality has grown threefold. Russia, Prokhorov concludes, is a feudal society, with Putin's political monopoly and economic mismanagement exacerbating the so-called natural-resource curse that afflicts many oil-exporting countries.

Such a bleak diagnosis of Russia's ills could never be the basis for a Kremlin-sponsored political party. Nevertheless, for a while Prokhorov tried to play politics according to the Byzantine rules that govern Russian elections. But playing politics by Putin's rules requires scores of hired professionals, the so-called political technologists. Despite his acumen, Prokhorov surrounded himself with such people - pretentious wizards who have turned Russian politics into the revolting spectacle that it is. He hoped to break up Putin's monopoly by using its own tools.

Today, Prokhorov's plan remains the only tangible result of the $26 million that he and his friends invested in his campaign. Although he claims that he will not leave politics completely, he now looks like just another oligarch who must choose between capitulation, emigration and imprisonment. Kudrin's future is no less obscure.

Alexander Etkind teaches Russian cultural history at Cambridge University. His most recent book is "Internal Colonization: Russia's Imperial Experience." Copyright: Project Syndicate, 2011.



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