Sunday, February 21, 2021

Kremlin’s Division of Russians into ‘Us’ and ‘Them’ Seen Spreading to Business Community

Paul Goble

            Staunton, February 20 – Since the turn of the year, the Kremlin’s division of Russians into “us” and “them” has displaced the pandemic as the main trend in Russia, Valery Zinchenko, a senior lawyer at Pen & Paper, says. This drive has already hit NGOs and in the near future businesses are going to be forced to make a choice as to which side they are on.

            Already it is clear that the regime views businesses in Russia as being divided between those it considers loyal to the palace and those it thinks are inclined to support liberal protesters. It has enormous power over both, but its demands on each seem likely to increase (

            At present, the “palace” firms, whose existence depends on state contracts, know that they must express their support in various ways to those in power but otherwise will be allowed to work more or less normally. But now they may be enlisted to control their workforce so that its members don’t join the demonstrations, Zinchenko says.

            “Liberal” firms are the ones less dependent on the state in one regard but just as much at risk from the state as the other. The government can always use its power to invent cases against them or even seize them altogether, and given the lack of an independent court system, there is almost nothing these “liberal” firms can do.

            But while “palace” firms are focusing on current arrangements, “liberal” ones are considering the future. The first are in good shape as long as nothing changes, but the latter may be the big winners if the system collapses or changes in fundamental ways. Consequently, the numbers in each camp are a good barometer of how business sees Russia moving.

            The powers that be know that, of course, and they are taking steps to impose a Chinese-style system in which the distinction between current and future advantages will be obliterated and in which those inclined to liberalism will find themselves forced to act like “palace” firms if they are to survive.

            Dividing up Russian firms thus opens the way to an ever more political assessment of business and may have the unintended consequence of further limiting any possibility for economic growth. The only way out is for the government to get out of business rather than to become more deeply involved.

            Business needs to be “just business,” not politics, Zinchenko concludes. But that will require fundamental changes in the way the Kremlin and its minions currently conduct both.


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