Developing Transparency

The other day, a Western reporter was talking to me about Kremlin efforts to take over the nonstate television network NTV, and he asked me, "What do you think the West will do in the face of [President Vladimir] Putins latest crackdown?"

"Not much," I answered. "The West is generally more interested in short-term issues like nuclear security, combating terrorism and a secure investment climate than in really building democracy and an open society."

The reporter reacted as if I had said something particularly stupid. "Surely a nonstate media is necessary for a secure investment climate?"

You would think so, but one rarely sees evidence that Western businesses or economic-development agencies really feel this way. A good example on the local level is the automobile factory opened last fall by the Ford Motor Co. in the town of Vsevolozhsk, outside St. Petersburg. Some readers may recall that I wrote last summer about how the mayor of this town had waged a relentless campaign against the only independent newspaper there, Nevskaya Zarya. Using the usual tactics of intimidating printers, distributors, advertisers and the editor herself, the mayor managed to kill off this inconvenient paper only a few months before he himself was arrested on corruption charges. Meanwhile, Ford was proceeding with a $150 million investment in the town.

The neat combination of local corruption, the death of the nonstate press and foreign investment in this one little town seemed a perfect illustration of what is wrong with the Russian media system and how the West is ignoring this serious problem. When Ford began advertising for employees using the slogan, "We care about our environment and community," I wrote to the company to explain the history of Nevskaya Zarya and urged them to pay attention to this problem in this community. Ford didnt even give me the courtesy of a polite response, much less a constructive one.

Now we have a similarly clear example on the national level.

For the last six months or so, we have all been holding our breath and waiting to find out whether the government, under the guise of the natural-gas monopoly Gazprom, would succeed in taking over NTV. Just in the last week, the Kremlin has issued statements saying that the takeover was virtually complete, and there have even been reports that Putins staff had offered the position of director of the new company to various figures. Boris Timoshenko, an expert with the Glasnost Defense Foundation, told The Russia Journal last week, "If this comes through, it will reinforce state control over TV news coverage ."

That is why I was shocked by a European Bank for Reconstruction and Development announcement Tuesday saying the bank had approved a $250 million loan to Gazprom. Undoubtedly, this generous credit will free up considerable resources to enable the Kremlin and Gazprom to swallow up NTV. And just last week, the new EBRD president, Jean Lemierre, wrote in this paper that "a strong investment climate reflects a commitment to transparency."

While the EBRD was handing the Kremlin the resources it needs to reestablish a Soviet-style monopoly over national television, Boris Berezovsky who had previously said he would sell his shares in ORT to the Kremlin announced he would not sell if Gazprom took over NTV. He piously declared that he could not allow a state television monopoly to undermine democracy here. Thus, we have a situation where the EBRD is financing the destruction of open society in Russia, while Berezovsky is able to pose as a principled liberal democrat and a hero of the free press. And I thought Id seen it all.

But imagine a different scenario. Imagine that the EBRD decided to postpone its $250 million loan for, say, six months to wait and see how strong Gazproms "commitment to transparency" is. Imagine that the money is invested at a conservative 8 percent during this period, generating a tidy $10 million in interest. That money is roughly equal to three times USAIDs annual media-assistance budget for all of Russia. Among other things, we could bring back a nonstate press to the people of Vsevolozhsk.

And if it Gazprom does not share the EBRDs "commitment to transparency," maybe the bank would decide to bring the whole $250 million to bear on this problem. Imagine that.

Robert Coalson is a program director for the National Press Institute. The views expressed here are not necessarily those of NPI.