Reform must, and will, come to Russia
I am a member of the last generation of Soviet people — those who were born and came of age in the USSR. In 1990, the final year of the Soviet Union’s existence, I was 27 years old. The next generation — of which the first of my sons, born in 1985, is part — only knows about “those times” from our stories.
Growing up, an ordinary young man from the outskirts of Moscow from a family of engineers who worked at a Soviet factory, I believed the things that were said on television, written in the newspapers and taught in school. I wanted, like my parents, to work at a factory and serve my country. I wanted to go further than my father, to become a factory director. Like a third of my peers, I studied at a technical institute, and like 90% of them, I was a member of the Young Communist League.
It seemed to me, as it did to everyone else, that the USSR would exist forever. Nobody believed that everything could change in an instant, but that is what happened. In the past two decades, it can be said that Russia has been born anew and has finished with the “socialist choice.”
Many trials and tribulations awaited us. Having found freedom, we had to defend our choice in the brutal internal conflicts of 1991-93. Things came no easier in the economic sphere. The USSR, having fallen to pieces, buried all of the country’s production systems under its wreckage. During the interregnum, specialists left and equipment broke down.
As I became the manager and then co-owner of a huge energy company, production volume in the oil industry nationally fell to 300 million metric tons a year from 600 million metric tons. But our company, Yukos, managed to achieve excellent economic results. In fact, from 1996 to 2003, oil production doubled to 80 million metric tons, wages quintupled and debt was repaid.
We met daunting challenges, including those brought on by Russia’s 1998 financial collapse, when the price of oil fell below the cost of production. In addition to 150,000 employees, I was responsible for the populations of more than two dozen cities and settlements. It’s easy to be bold when you’ve got nothing to lose. But I believe that several million people supported the changes that I put through and that changed their lives as a result.
We staked our claim on efficiency. We reduced costs and competed aggressively. In place of the monster we inherited, one that engaged in everything from beer production to construction, we created a professional oil production company. We spun off all of Yukos’ noncore businesses into independent firms, helping employees become owners.
At the same time, we spurred creation of many jobs in what was then a new industry in Russia, Internet services and programming. We retrained thousands of schoolteachers through the Federation of Internet Education, a nonprofit, nongovernment organization.
We emerged from the crisis as the best oil company in Russia, with good public support. It felt as if Russia was irreversibly moving in the direction of a modern democracy and European values. Along with operating businesses, I began to get actively involved in socio-political projects such as education. I established a foundation to support nonprofits and human rights groups, and I also provided funding to opposition parties.
Now, I am in my seventh year in jail.
Vladimir Putin and the former colleagues-in-service brought by him into all the structures of power decided that they had no need for the independent opposition that I supported; they had no need for independent television and no need for real discussions of draft laws in parliament. In short, they opposed everything we were working to achieve all these years.
I could not agree with this, and tried as best I could to resist. What happened next is well known: In 2003, I was arrested on contrived charges of fraud, the perfectly well-working company Yukos was dismembered and annihilated, and its pieces became desirable prizes for the vanquisher’s friends. I was convicted and sentenced to prison.
Throughout my troubles, I have had considerable support from outside Russia, including a Senate resolution co-sponsored by John McCain, Joe Biden and Barack Obama in 2005, which said I had not received “fair, transparent and impartial treatment” from the Russian justice system.
But that has made little difference. As my sentence was drawing to an end, additional charges were brought against me in an attempt to ensure I would not be freed anytime soon. The charges are so absurd that even government ministers have rejected them in court. The second trial is ending with my final statements in about 10 days. But nobody expects that there will be an acquittal when the verdict is handed down later this year. Acquittals don’t happen in the Yukos case.
I understand Russia’s current power elite; they came of age at a time when change was dangerous. If the roof is not leaking today, they don’t worry that it will in the future. They believe that the oil and gas bonanza will go on forever and that no real reforms need to be enacted, just some make-believe for the TV cameras. They accept corruption, embrace archaic ideas and are united in their desire to keep talented, creative people off the public stage. A modern, innovation-driven economic model is the antithesis of their hierarchical approach.
It is precisely these kinds of mistakes that led to the death of the Soviet Union.
There is a new generation of Russian politicians waiting in the wings, people who are ready to accept the world as it really is: rapidly globalizing and dynamic. These people are ready for real political competition; they believe in an open societal discussion of ideas, strive to win the support of fellow citizens who actually have thought through their positions on the issues and drawn conclusions about the proper course. Members of this new political establishment realize the need for working state and civic institutions that include an independent judiciary, parliament and media. They are ready to run a modern, complex mechanism of state, and not to try to simplify it down to a primitive “vertical” of executive power.
This is why the conservative “old” leadership is very much afraid of a real transfer of power to the “new” generation.
Russia is approaching the very same point that the USSR found itself in back in the second half of the 1980s. Then there arose a crisis of the communist ideology as the planned economy of “real socialism” revealed its strategic inefficiency. For Russia, the second decade of the 21st century will become a period of crisis for a system built on corruption and hands-on control. Insightful Russians with initiative, knowing how to look to the future, understand this already.
In my youth, the leaders of the USSR had no desire whatsoever to leave power. But history obliged them to do so just the same. Today’s Russian theoreticians and practitioners of “vertically corrupt management” have no intention of going anywhere.
But they will have to. I know. I’ve seen it before.
Mikhail B. Khodorkovsky, the former head of the Russian oil company Yukos, has been in prison since being arrested in 2003.