Friday, May 10, 2013

Window on Eurasia: Ban on Foreign Holdings Gives Kremlin Muscovy-Like Control, Commentator Says

Paul Goble

            Staunton, May 10 – New Russia legislation to prevent officials from having cash or stock accounts abroad, promoted by the regime as a step toward “the nationalization of the elite,” brings Russia into line with countries like Bangladesh rather than the West and gives the Kremlin powers much like those of medieval Muscovy, a Moscow commentator says.

            In an article in “Novaya gazeta,” Mariya Snegovaya says that Russia is set to join “such ‘progressive’ states as Venezuela, Nigeria, Kenya and Bangladesh” by banning politicians and officials from having cash or share accounts abroad, a policy that is being sold by the Kremlin as “’the nationalization of the elites’” (

            Already passed by both houses of the Russian parliament and likely to be signed, the new arrangement, polls suggest, enjoys widespread support among Russians who consider that it constitutes an effective means of combatting corruption and who apparently accept the regime’s argument that that is what the measure is for.

            But in fact, Snegovaya says, this measure is “a reaction to the mass protests of 2011-2012 and the Magnitsky List,” but one that is anything but “in the democratic key.”  Instead, she points out, this is an attempt to give the top leaders the ability to counter any possibility that “the first signs” of a division within the elite will grow into a challenge to their power.

            That is because, by depriving political figures and the bureaucracy of the right to keep some of its resources abroad, the Kremlin deprives them of any independence because the Russian Federation does not genuinely protect property rights. Instead, she says, property there is something that exists only at the pleasure of the regime.

            Moreover, “despite frequent references to ‘Western experience’” in the course of the campaign for this legislation, most Western countries have nothing like this law.  Few ban foreign holdings, although they do require both declarations of holdings and the placement of them in blind trusts in the case of the most senior officials.

            There are laws in Western countries which require more junior officials like policemen and firemen to live in the jurisdiction where they are employed, Snegovaya notes, “but there are no laws specially defining the type of accounts which officials are allowed to own,” because private property in Western countries is “inviolable.”

            The sources of this new Russian law are to be found in Russian history, she says.  Citing the works of Harvard historian Richard Pipes, she notes that Russian tsars in medieval times deprived the nobility of independence by depriving them of any independent property. Instead, the tsar “de facto” owned everything, and others used it only by permission.

            That rendered the nobility “totally dependent” on the tsar. The only way out was flight abroad, but the tsars made it clear that that would not be tolerated either, a history that not only ordinary Russians today but quite clearly their leaders are very familiar, even if the two draw very different conclusions about its applicability now.

            One can be sure, Snegovaya continues, that “the demand to return accounts to Russia will not be limited to the elite and will be extended to ordinary citizens” as well. Indeed, Putin’s press secretary, Dmitry Peskov, has already hinted as much by saying that there should be what he called “’the nationalization of the entire society.’”
            Such an approach, she warns, will mean that property and power will in fact be “completely  dependent on the arbitrariness of the authorities,” thereby depriving Russian citizens of “their basic rights and destroying the foundations of private property which had begun to appear in the country.”

            That will constitute a real conservative revolution, the “Novaya gazeta” writer concludes, because the Kremlin in this way “will successfully return the country to it immemorial radical traditions, right back to those of the Muscovite Tsardom.”

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