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. Last Updated: 07/27/2016

Revise Privatization to Please Investors?

The coverage of the Yukos affair in the Russian and foreign press has gradually turned into a discussion of the relations between the state, society and big business that emerged as the result of the privatizations of the 1990s. Let me share with you some of the things that have recently impressed me the most.

Here is a passage from a sports program on Radio Liberty: "Worried by criticism concerning Chelsea, Abramovich decided to build a new stadium with his own money -- relatively his own, of course." Compare this to Roman Abramovich's BBC interview: "The problem is that we don't live in a free country -- we're not used to people spending their own money how they want to."

Western radio stations employ neither Bolshevik levelers nor particularly wretched Russians. The aforementioned subconscious slip gives new meaning to opinion polls showing that the majority of Russians -- almost 80 percent -- do not see the privatization results as fair. It looks as if it is not so much about the envy of the poor toward the rich as it is about the fact that a virtually free transfer of public property into a few private hands is seen, to use an expression from Russian literature of the 19th century, as an "insult to popular sensibilities," or an outrageous injustice.

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Another thing that is constantly being brought up is that a revision of privatization results would shatter investor confidence in Russia and, therefore, what we need is some sort of an amnesty. But Yury Boldyrev, former deputy head of the Audit Chamber, in his recently published two-volume study ("On Flies and Ointments" and "The Rape of Eurasia"), convincingly demonstrates that the results of the so-called loans-for-shares auctions that gave birth to the oligarchy in its current form can be considered invalid under the legislation that existed at the time. And this can be easily proven in court.

Now, let us imagine what this amnesty, or the legitimization of agreements that were invalid from the moment of conclusion, might look like in practical terms. A gentlemen's agreement? A government decree? A presidential edict? They are not worth a brass farthing.

A law? It could be successfully contested in the Constitutional Court the moment that the political landscape changed. A referendum? (After all, it was public property that was handed out.) If it were going to be a fair one, its results would be easy to predict in advance. Of course, one could always use the same media and administrative resources that were used during the constitutional referendum in 1993 and the presidential election in 1996, when a pro-democracy propaganda campaign was used to cover the massive ballot-rigging that was going on. But this would be such a grave insult to the entire nation that the harm done to dozens of oligarchs or even hundreds of foreign investors would look like high humanism by comparison. It would probably make more sense to invite Pinochet.

If we follow Boldyrev's argument, it turns out that it is precisely the revision of privatization results that would create a truly reliable investment climate in Russia. All the other options would only mean instability and outrage and would keep investors in a state of perpetual stress. (By the way, both of his books came out before the Yukos affair.) He gives a number of possible solutions, some of which might even suit the current owners.

Boldyrev's democratic reputation is spotless: He was one of Yabloko's three founding fathers. His professional qualities and his unselfishness have never been questioned by anyone. Does that mean he is absolutely right? Of course not. Yet, the elections, the time for a discussion of the country's strategic problems, are at hand. No one is more interested in a fair and legal resolution of the property problem than the oligarchs, who are set to become honest businessmen. Thankfully, they own the bulk of our country's press. Consequently, we can expect a responsible and meaningful electoral campaign.

Alexei Pankin is the editor of Sreda, a magazine for media professionals (