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. Last Updated: 07/27/2016

'Government' by the Swan, Crab & Pike

Gazprom-Media withdrew its lawsuit against Media-MOST, and the government announced that it had issued a warrant with Interpol for the arrest of Media-MOST owner Vladimir Gusinsky. Doctors would probably label such behavior "schizophrenic," a sign of a split consciousness. One half of the government doesn?t seem to know what the other half is doing. This is that nature of the "division of power" in the Russian government.

The classic system of dividing state power among the executive, legislative and judicial branches does not work in Russia. However, it is not possible to function without some way of controlling power and so Russia has developed another system. This system is not democratic, but authoritarian in the traditional "divide and conquer" style. Three distinct groups ? the security organs (chekisty), the oligarchs and the liberals ? are all struggling for access to power.

The most interesting thing is that these three groups seem to be living together just fine. Each one has been allowed to go its own way. The liberals are working to increase the transparency of markets. The chekisty are lobbying the restoration of state monopolies, and the oligarchs are divvying up state-owned enterprises.

The past year has been characterized by the continuing process of redistributing property. The aluminum empire of Lev Chyorny has been swallowed up by Roman Abramovich and Oleg Deripaska. The same fate awaited the empire of the Zhilovo brothers, the Kuznetsk Metallurgy Combine and the Novokuznetsk Aluminum Factory.

LUKoil declined to purchase ONAKO after the tax police paid a visit, and last week the tax police announced the opening of a criminal case against Norilsk Nickel and the Magnitogorsk Metallurgy Plant. Traditionally, the tax police carry out "financial reconnaissance" before a company is taken over. Therefore, expect Norilsk and Magnitogorsk to be the next sites of the battle of the titans.

One of the first orders that President Vladimir Putin gave after his inauguration created Rosspirtprom, a state enterprise with controlling shares in the main vodka-producing factories. This was a victory for the chekisty. Another was the creation of Rosoboronexport, which reestablished a state monopoly over arms exports. Former spy Sergei Belyaninov was named head of Rosoboronexport.

One other area of interest for the chekisty is telecommunications. Leonid Reiman and Valery Yashin, two of Putin?s pals from St. Petersburg, have been given key posts in this sector: Reiman is communications minister and Yashin is head of the state holding company Svyazinvest. Since these appointments, the Petersburg company Telecominvest, where both Reiman and Yashin worked before coming to Moscow, has undertaken an unprecedented expansion plan.

All the disaster scenarios for Russia center on the idea that the country will follow one path to the extreme. Either the oligarchs or the chekisty will dominate. In reality, though, we are seeing no movement at all. As the fable goes, the swan, the crab and the pike cannot pull a cart anywhere. This is not a system of movement, but an anti-democratic system of control.

This system guarantees the unlimited personal power of the president. He is relieved of the need to make any strategic decisions because any such decision in favor of one group will be immediately countermanded by the actions of another. Unfortunately, though, if we don?t make decisions about the economy, the economy will make these decisions for us. We?ve already seen this scenario in August 1998.

Yulia Latynina is creator and host of "The Ruble Zone" on NTV television.