Leon Aron
AEI

The arrests of Platon Lebedev in July and of Mikhail Khodorkovsky in late October have severely undermined the rule of law in Russia. By contrast, the traditional Russian afflictions-fear, cynicism, passivity, secretiveness, conformity-have all been exacerbated. The post-industrial Russian economy, which cannot be sustained without transparency, innovation, and risk-taking, has been dealt a severe blow.

Nonetheless, it is heartening to see strong criticism of the government's actions across the political spectrum, from the Communists to the Union of Rightist Forces. The press, which had been given up as near-dead by many Russia watchers, has been reinvigorated with some strident and raucous criticism unseen since the Yeltsin years. Putin, it appears, may already be hedging his bets, if the appointment of the liberal Dmitry Medvedev to replace outgoing Kremlin chief-of-staff Alexander Voloshin is any indication.

Although the situation there is grim, Russia has not yet become Chile in 1973 or Poland in 1981. It is especially important not to repeat the mistakes of many Russia watchers during the 1990s, who confidently predicted that privatization was a colossal mistake, that Russian capitalism would never progress beyond mere banditry, and that theft, capital flight, and asset-stripping were endemic and untreatable symptoms of the post-Soviet economy. Indeed, the YUKOS affair has demonstrated that Russian capitalism has changed. YUKOS has adopted good business practices, pays dividends to its shareholders, donates tens of millions of dollars to charity, and invests billions in capital infrastructure.

It is precisely because YUKOS epitomizes liberal capitalism that it has been targeted.

In this sense, the YUKOS affair fits rather neatly into a classic Marxist paradigm. YUKOS represents the developing and modernizing forces of production, which have come into conflict with the obsolete and restrictive superstructure. In the long run, Marx thought, the forces of production always win. The question, then, is how long exactly is "the long run," and how destructive will the YUKOS affair prove to be?

Radek Sikorski
New Atlantic Initiative

According to a recent poll, 73 percent of Russians would like their country to join the European Union. This is a reflection of a broader desire by Russians for their country to become "normal." This aspiration is a useful thing, insofar as it provides benchmarks for Russia's conduct. For a country to join the European Union, it must conduct itself in a certain manner.

For instance, a country needs to live at peace with its neighbors in order to join the European Union. There may be territorial disputes, but they cannot be settled with military force. Similarly, post-imperial nostalgia is unacceptable in the European Union. There is no mausoleum in Germany to Hitler, nor is it imaginable that a German chancellor would try to reestablish the swastika as a national symbol. In Russia, by contrast, Putin has honored the former head of the KGB; Lenin still lies in state outside the Kremlin, and numerous statues to him remain standing across the country; and Russia is pursuing a militaristic and aggressive foreign policy toward the former Soviet republics and, of course, Chechnya.

An aspirant to the EU must also respect the rights of its ethnic minorities. It must cultivate a climate of liberty. Journalists are not murdered for offending political authorities in such a society. In all these regards, however, Russia is not faring very well.

Russia poses a more serious problem for Europe as well. If David Satter is correct that the Russian secret police (the FSB) was responsible for the apartment bombings in 1999 that reignited the Chechen war, these acts of terrorism were carried out under Putin's watch-and he likely is haunted by them. Men often commit their gravest errors when they are attempting to cover up the sins of their past.

Putin craves the validation of the West, and this provides American and European policymakers with leverage. As long as Russia continues down its current path, there should be no more summits in Crawford; no more tea with the Queen of England; no more hobnobbing for Putin at the G-7 summits. The West should also cultivate closer contacts with Ukraine, as a bulwark against a resurgent Soviet Empire.

Anders Aslund
Carnegie Endowment for International Peace

Regarding the YUKOS affair, President Putin has with a single stroke demolished many of the accomplishments of his presidency. It is now up to him to prove that he is not a "KGB president." Unfortunately, the evidence against him is quite damning. Three oligarchs have been taken down; there is strong evidence of corruption in almost all the regional elections; and it appears there is a systematic drive toward authoritarianism in Russia.

At the same time, the decision to jail Khodorkovsky may prove a miscalculation for Putin. While the oligarchs, like nouveau riche everywhere, are disliked by the general public, the government's attacks on Khodorkovsky have made him into a more appealing political figure. Law enforcement has flaunted its extralegal powers, which has unnerved Russians and foreign investors alike, making them exceedingly aware of how insecure their property rights actually are.

The YUKOS affair may also prove costly to the Russian economy-in particular, the prosecutor general's decision to freeze YUKOS stocks. This looks strikingly like the confiscation of private property by the government, and there is nothing that scares away the international business community more than confiscation.

Harley Balzer
Georgetown University

George Kennan once said that, when confronted by two irreconcilable data points about Russia, both are likely to be true. In the case of the YUKOS affair, too, understanding Kremlin politics in terms of "black and white" dualities-while useful on the op-ed pages-is ultimately misleading. It is important to recognize that there are a great number of crosscutting interests at work.

There was no good political reason for the YUKOS affair to take place. The two parties that Khodorkovsky was assisting financially-the Union of Rightist Forces (SPS) and Yabloko-were both polling at near the 5 percent barrier. In the December parliamentary elections, they were unlikely to get more than 12-14 percent of the vote. Therefore, domestic political considerations alone cannot explain the Kremlin's behavior.

Rather, the YUKOS affair should be understood as part of a broader attempt by Putin and those around him to gain control of Russia's natural resources in a reconstituted Commonwealth of Independent States (CIS). Putin believes that oil and gas are Russia's comparative advantage in the global economy; by controlling them, the state has the opportunity to reassert itself as a great power. For this reason, Gazprom will remain a state monopoly; power generation and distribution systems are being bought up by Russia in the Caucasus and Central Asia; and Western companies were discouraged from last year's auction of the Slavneft oil company.

YUKOS is the one company that would make a statist monopoly on energy impossible. This is the reason it was targeted.

Bruce Jackson
Project on Transitional Democracies

The prosecution of Khodorkovsky is a selective, politicized, and baseless attack. Furthermore, it fits into a broader pattern of conduct by the Kremlin, which has shut down independent media, purged individuals associated with Yeltsin, and waged an aggressive foreign policy aimed at reestablishing an imperial near abroad. Under the Putin doctrine, Russia reserves the right to intervene militarily anywhere in the CIS. Furthermore, it asserts Russia's de facto ownership of the oil and gas pipelines running throughout the former Soviet Union.

The deterioration of the situation in Russia demands a reappraisal of policy by the Bush administration. President Bush should recognize that Putin has not lived up to his minimal responsibilities as a democratic leader. Russia should be suspended from participation in elite institutions such as the G-8; furthermore, relief from the Jackson-Vanik amendment is now insupportable. If Putin is determined to act like a Central Asian despot, the United States should treat him as such.

Angela Stent
Georgetown University

The predominant mood in Moscow is that the era in which Putin arbitrated between two factions has ended. He has finally succeeded in putting in power those people he wanted right from the start of his presidency.

The Soviet liberal intelligentsia are the most pessimistic. These are people who opposed privatization and are unsympathetic to the oligarchs. Nonetheless, Khodorkovsky-by giving money to universities and supporting civil society-has come to be a symbol for them of a kind of liberal capitalism that might take root in Russia. His arrest suggests that it may be another fifteen years before democracy succeeds.

The most optimistic believe that Khodorkovsky will leave the country and a more statist reality will assert itself. But even these people are deeply concerned about how the second Putin administration will redefine the boundary between the private and public sphere, as well as what Putin will do with his increased regulatory power over both economics and politics.

The YUKOS affair also has an international component. The Kremlin acted, in part, because there was a calculation, which appears to be correct, that it would not provoke much of a Western response. The United States is busy in Iraq, and Europe is looking inward.

This summary was prepared by AEI research assistant Vance Serchuk.