Paul
Goble
Staunton, August 27 – Vladimir
Putin’s economy based on theft and the destruction of entrepreneurialism can’t
survive let alone develop, according to Igor Bitkov, a Russian businessman from
whom the Kremlin took his company and ran it into the ground while accusing him
of running a scam and hounding him and his family into jail in Guatemala.
In a commentary on Ekho Moskvy this
week, Bitkov, currently behind bars in Guatemala on trumped up charges of
passport fraud that Moscow appears to have encouraged, says that the inevitable
collapse of Putin’s system reflects the impact on Russia as a whole of the
means the Kremlin used to steal his business (echo.msk.ru/blog/echomsk/1609372-echo/).
After detailing the ways in which he
and his wife built their paper industry between 1993 and 2008, Bitkov describes
the classic “raider” actions of Kremlin-linked banks when he refused to pay
bribes or enter into corrupt schemes to provide money in other ways to Putin
and his people.
“We
preferred,” he writes, “to remain non-party entrepreneurs free from government
obligations.” But precisely because he
and his wife were committed to that, “our business was taken away from us by
the classical application of tested Putin methods” – getting the banks to call
loans, using bankruptcy law to freeze assets, and then charging the victims
with crimes.
“Now,
seven years after this happened,” Bitkov continues, “it is possible to sum up
the results. Our factories are not functioning.” The banks involved are caught
up in fights over the division of property. Much of the new equipment and all
of the resources have been “stolen by the bankers themselves.”
Bitkov
and his wife have been found guilty without trial, and Moscow is seeking their
extradition after they fled abroad when Putin moved against them. (On their
travails there and Moscow’s failure to help, see “The Bitkov Case – a Dangerous
Sign of the Times,” windowoneurasia2.blogspot.com/2015/08/the-bitkov-case-dangerous-sign-of-times.html.)
“In
the course of seven years, no one has been concerned about restoring the work
of the enterprises” that were taken from him, Bitkov says. “Reality turned out
to be more horrific than my most pessimistic expectations. Putin’s oprichniki,
having gained control over the factors, did not even support them at their
previous level of operation.”
Instead,
the imprisoned Russian businessman says, “they preferred to steal all that they
could … If we are scam artists, then why did we increase the income of the
company by seven times over seven years,” while they, the supposed law-abiding
people, have simply run it into the ground?
Now,
Bitkov says, “we can answer this question quite simply: The entire essence of
Putin’s economic policy from the very beginning consists in theft. Businesses
were taken from loyal oligarchs … Then came the turn of mid-level entrepreneurs
including us.” And when the Kremlin ran out of disloyal people to steal from,
it began to focus on loyal ones as well, people like Luzhkov, Baturin,
Pugarchev, and Yevtushenkov.
“I
am certain,” he continues, that as a result, “the circle of loyalists will
gradually shrink,” forcing the regime to look for ever more people to steal
from until there are none left. As long as oil prices were high, this
fundamental problem with the Putin regime was hidden from many; now it cannot
be hidden from any.
“The
main investor of Putin’s Russia is the state and state companies, that is, the
president himself,” Bitkov says. And that is why he invested mostly in
“grandiose” projects that celebrate himself and his greatness rather than in
those sectors which are productive and give promise of improving the country.
All
that ran out when oil prices crashed, and trying to find new money by taking it
from education and health care, as Putin is doing, “will not boost the standard
of living and will have just the same negative, long-term consequences as was
the case in the USSR.” Add to that “the
isolation political and financial” caused by Putin’s aggression and Russia
faces disaster.
To
distract attention, Putin is putting out the idea that import substitution will
lead to economic rebirth; but “where will Putin actually be able to find
domestic entrepreneurs who will risk carrying out new projects? Will he amnesty
those [he’s put in prison or forced to emigrate]? Will he let them out of
prison? Will he return them from abroad?”
Putin
isn’t going to do that: “he is a proud guy unaccustomed to give way before the
slaves,” Bitkov says. Moreover, “the present-day business elite of his closest
circle … have never tried to create a business operating on their own
resources.” They haven’t had to and they can’t.
All
this is fated to end “sadly,” he says. “Having destroyed entrepreneurs like
us,” Bitkov argues, “the Putin system has wiped out the class of entrepreneur
workers, innovators, and investors. Young people now adapting to reality strive
to fill the ranks of corrupt bureaucrats. No one wants to get involved in
entrepreneurial activity.”
And
Bitkov concludes: “The Putin economy, constructed on thefts, extortions, and
high oil prices is not capable not only of developing but even of
surviving.” And he adds that as the
Bible points out, “’by their fruits you will know them.’” The people living around the plants Putin has
shuttered after stealing as much as he could already do.
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