What the arrest of Mikhail Khodorkovsky says to the world

Today’s EU-Russia summit in Rome will certainly broach the subject of the arrest and imprisonment of Mikhail Khodorkovsky. President Putin will say that the law is taking its course, that he cannot interfere. EU leaders will not believe him, but will probably be too polite to say so. The arrest of Yukos’ chairman and the freezing of his assets has already been universally criticised abroad. The Times leader of 31 October wrote: ‘A whiff of Stalinism is now polluting the Moscow air’. The Financial Times editorial of same day talked of the ‘abuse of state power’.

In Russia, the arrest seems popular. Few Russians understand the devastating signal it sends out to the rest of the world. Or perhaps they don’t care. This is what it tells foreigners about Russia.

The first thing is that Russian affairs are in the hands of ignorant and panicky people. There are many more intelligent ways of dealing with the abuses of Russian capitalism than swinging the axe.

If the Russian state considers that it sold its major assets far too cheaply in the notorious ‘loans-for-shares’ deal in 1995, it could have imposed a windfall tax on the main privatised utilities –as was done in Britain. This could have been coupled with an official amnesty for economic crimes committed in the Yeltsin era. This would have been a far cleaner solution than the so-called ‘gentlemen’s agreement’ Putin is supposed to have made with the oligarchs in 2000 that they could keep their wealth if they didn’t meddle in politics. As Khodorkovsky says, every citizen has the right to take part in politics.

Some say the arrest of Khodorkovsky was to prevent Yukos being sold to Exxon. But if the government wants to prevent ‘national assets’ falling into foreign hands it could pass a law forbidding majority foreign ownership of specified industries. Britain did this with North Sea oil.

Ironically, it was the one oligarch who was intelligent enough to understand that Russian capitalism needed to rid itself of the smell of its origins who has now been put in jail.

The second message of the Khodorkovsky crackdown is that Russia is still very far from the rule of law. If it were true that this is just the law taking its normal course, half of Russia’s business tycoons would be in jail or under investigation.

One prominent Russian businessman said to me a few days ago: ‘There is rule of law in Russia, but it is selectively applied’. I don’t know whether he understood that if the law is ‘selectively applied’, you do not have a rule of law. Law should be used to protect the citizen against abuses of power. In Russia, the law is part of the system of power. It is used to ensure politically acceptable behaviour. I am reminded of what Gerald Brennan wrote of the Franco regime in Spain: ‘The General’s method of allowing his key men to enrich themselves by corrupt practices and then keeping a dossier of their misdemeanours is an excellent security against revolt in high places’.

The third signal is the most fundamental. It is that, in its internal affairs, Russia is still far from being a ‘normal’ Western country. Perhaps the President believes that if Russia is a ‘good ally’ of the West, then the West will turn a ‘blind eye’ to abuses of power at home. If so, this is very short-sighted.

For better or worse, the leaders and peoples of our globalising society believe in freedom, secure property rights, democracy, and the rule of law. You are either part of this world, or part of some different world –one which leads to isolation, repression, and stagnation. This is still Russia’s choice, as it has been since 1991.

To a foreigner Russia is full of mystery, fascination, and promise. But those who fall in love with her should be warned: she is a fickle mistress. She flatters to deceive. As the Russian philosopher Vassily Razonov put it: ‘U Rossii babia dousha’.