x Abu Dhabi, UAE Friday 21 July 2017

Alliance rather than enmity can guide Russia to freedom

Russia's cycle of disposing one system of tyrrany only to drift back to towards despotism should be remembered in the coming weeks as the country prepares for an election, writes Frank Kane.

Vladimir Putin is trying to secure a presidential victory that could keep him in the Kremlin until 2024. Alexander Demianchuk / Reuters
Vladimir Putin is trying to secure a presidential victory that could keep him in the Kremlin until 2024. Alexander Demianchuk / Reuters

Ronald Reagan, the former US president and so-called "great communicator", was expert at delivering one-liners, but often at the expense of accuracy.

At the height of the Cold War, he said that the problem with the Russians was that their language "contains no word for freedom". He was dead wrong. The noble word svoboda is ingrained in the Russian psyche.

Three times in the past 100 years - against the tsars, the Nazis and finally the communists - the Russians have shown, at the price of unimaginable and heroic sacrifice, that freedom is a guiding light.

The problem has always been that once the Russian people overthrew one system of tyranny, they failed to find anything worthwhile to put in its place, and eventually drifted back towards despotism.

That cycle of history is worth remembering in the coming weeks as Russians prepare for a presidential election that could reinforce the historical pattern, or, perhaps, break the cycle.

The outcome of the Russian election, in which Vladimir Putin, the prime minister, is attempting to secure a presidential victory that could keep him in the Kremlin until 2024, is of vital interest to politicians, economists and businessmen, not least in the Gulf region.

This part of the world has been steadily recognising the similarities in the Russian and Gulf economies, both energy-rich and infrastructure-poor, and the steady exchange of technology, construction expertise and capital between the two has been one of the remarkable trends of the past decade.

In Dubai, the outward signs are obvious to anybody walking around a mall or a five-star hotel, but Russian consumer tourists are only the tip of an iceberg of widening business relationships and billion-dollar capital flows. So what happens when Russia goes to the polls is of crucial significance.

If you believe free-market principles and open political systems are the best ways of organising the global economy, the signs are not good. Mr Putin's apparently inevitable re-election to the presidency threatens to end in social and economic chaos, or a repressive Syrian-style clampdown on the opposition. Neither outcome is desirable for the world's economic health.

In Russia, politics is economic, and economics is political. Mr Putin's power is founded on an alliance between the state apparatus of which he is the patron, the oligarchs he befriends, and, it must be recognised, many ordinary citizens who fear anarchy.

The demonstrators who have come out in Moscow and other Russian cities are laudable and impressive, exactly as the street heroes of the Arab Spring. But when Russians go to the polls, they are likely to vote for Mr Putin, or for the communists.

They have few viable alternatives. The liberal parties are either ruled out of the contest by the Kremlin's electoral laws or are negligible in terms of broad political appeal.

In this scheme of things, the power of big business becomes politically crucial. It will be represented in the election by Mikhail Prokhorov, a multibillionaire who also owns an American basketball team. Some analysts think he is a stooge of Mr Putin, put up to give the semblance of a choice of candidates but in fact happy to go along with the existing power structure.

There are signs that other business leaders are becoming increasingly unhappy with the charade. Their fears were reinforced by a recent suggestion by Mr Putin that the present generation of oligarchs should pay a one-off, multibillion-dollar levy to legitimise the assets they acquired in the 1990s, commonly thought to be the biggest misappropriation of the nation's wealth since, well, the Russian Revolution of 1917.

Through a mixture of kleptocratic patronage and repression, Mr Putin has so far kept big business onside. But the suggested levy could destabilise that key relationship. The new president surely could not imprison all the oligarchs, as he did with Mikhail Khordokovsky, the former oil magnate still languishing in a Siberian jail.

The demonstrators calling for freedom on the streets have been suspicious of the oligarchs, believing them to be part of the problem, and that suspicion is mutual. But if a pragmatic alliance of interests between middle-class protesters and multibillionaire businessmen were to appear, it could change the Russian political equation, and break the historical cycle.