Authoritarian Russia

Nick Cohen has a nice piece on the rise of authoritarianism in Russia. Most especially, on the way in which big business doesn\’t seem to mind:

Just before Tony Blair resigned, a telling scene illuminated the new world. At the June G8 summit, Blair warned Putin that unless Russia shared Western democratic values and tolerated dissent, there would be a business backlash. No, there won\’t, replied appalled business leaders. Hans-Jorg Rudloff, the chairman of Barclays Capital, said Blair\’s approach was \’unbalanced\’. Peter Hambro, executive chairman of Peter Hambro Mining, an Aim-listed company with extensive interests in Russia, said that Blair\’s comments \’ran the risk of being damaging\’ for British business interests in Russia. The outgoing PM\’s position was \’very different to that business\’.

And so it went on and few noticed that a regime filled with ex-KGB men was now being defended by the beneficiaries of global capitalism.

He also gets in a marvellous series of digs at the founders of the university I went to, the LSE.

There is one point I\’d like to make though. I\’ve not been particularly worried by morals in my business life (I\’ve done a deal with North Korea for example, I\’ve paid douceurs as another) but I have been concerned over the ease of doing business. A lot of that business life has taken place in Russia so I\’m well aware of the trends which Cohen is talking about: but I\’d like to insist that it is Big Business that thinks this way, not the small fry like me. Not, as above, for any moral reasons, but because that imposition of State power is making it ever more difficult to actually conduct business. Our last three shipments have all been delayed for weeks at customs, as those running the system attempt to extract their rents (we do in fact pay all of the applicable export taxes, as we have done for more than a decade). So much so that I spent part of this week thousands of miles away looking into the possibility of recreating the extraction and purification system outside the borders of Russia. Not because it would be cheaper (it wouldn\’t) but because it would be more reliable, less subject to the exercise of the power of the Russian State.

Big business might make peace with authoritarians, but small business never will: because we can\’t. We never have enough power to infuence the decisions, we are the prey that is picked over. The tragedy for Russia, indeed for all those who suffer such political systems, is that small business is the future, the driver of economic growth and the creator of the golden uplands of the future.

I know that as a good liberal I\’m supposed to be concerned about freedom of the press in Russia (which I used to write for actually and there\’s no way that the same house would publish those pieces now, owned as it is by Usmanov) and indeed I am. This is from the other side of the mind, from my self-interest, not my enlightened one.

Another way of putting this is that if someone as unscrupulous as myself is ready to give up on the place as a place to make money then they\’re right royally screwed.

3 thoughts on “Authoritarian Russia”

  1. Jeez, Tim, you’re a pretty shady character in parts or in the past.

    Tim adds: Indeed. I even once paid a douceur to a North Korean. Actually inside their Embassy, under the mural of Kim Il Sung.

  2. Rise of authoritarianism in Russia? Has anyone proof that it was ever anything but the dominant feature of Russian life for, say, all of history?

    As to your point about small business, large businesses can bribe wholesale. Petty tyrants have to beware the wrath of the ruling mob members should they attempt the type of niggling extortion they engage in with small businesses.

  3. As one of Tim’s longtime compatriots I have to agree with him completely. Not only am I doing my Russian business from a safe distance, but I am aware of only one of my old circle of Westerners still active in Russia.

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