Worried About Yukos

Moscow Times
July 22 2004

Worried About Yukos

By Alexei Bayer

I recently approached a number of Jewish businessmen in Russia about
contributing money to an American charity, the Hebrew Immigrant Aid

HIAS was founded by Russian Jews in New York in the 1880s to assist
those fleeing the pogroms in the Pale of Settlement. Over the years,
it helped generations of Jewish refugees, including thousands of
Holocaust survivors, to resettle in a safer diaspora. Half a million
Soviet Jews have come to the United States under its auspices since
1967. But now, the flow of refugees has slowed to a trickle, and HIAS
is facing an uncertain future.

I was initially skeptical about discussing HIAS with successful
Russian Jews. I had interviewed some of them for an article in 2002
and found them uninterested, even hostile, to the idea of leaving
Russia. They were putting their money and effort into strengthening
the Jewish community in Russia, and they supported local charities
and organizations that helped Russian Jews stay put, not emigrate.

Most of them still say they do not want to leave. But all of a sudden
they feel that a Jewish refugee organization is worth preserving, and
are willing to fund it. This response will no doubt hearten HIAS, but
it left me extremely uneasy. What has happened over the past two
years to change their minds?

Although many of the disgraced oligarchs running afoul of President
Vladimir Putin — notably Boris Berezovsky, Vladimir Gusinsky and
Mikhail Khodorkovsky — are either wholly or partially Jewish, even
the president’s harshest critics have not accused him of singling out
Jews in his attack on private business. Many things in Putin’s Russia
are reverting to the Soviet model, but official anti-Semitism is not
one of them. The bad old days when Jews were barred from prestigious
universities, denied employment and promotion and vilified for
wanting to go to Israel are no more. Anti-Semitism may be more in the
open in post-Soviet Russia, and some prominent members of the State
Duma are given to making nasty, bigoted statements, but it is
definitely not the policy of the Russian government.

Nevertheless, the state’s campaign against Yukos is the main reason
why Russian Jews, especially those in business, are starting to feel
nervous. Since time immemorial, Jews have been blamed for economic
failures. The Russian government may not currently pursue
anti-Semitic policies, but Russian society remains intolerant of
foreigners. For now, its prejudice is directed predominately against
immigrants from Central Asia and the Caucasus. Persecution of such
“blacks” has a semi-official flavor: the government often closes its
eyes when they are harassed by the police and government officials.

At the height of the anti-Jewish campaign in the Soviet Union, the
following joke used to make the rounds in Moscow. An old Armenian is
dying. His family is waiting for some parting words of wisdom, but
all he keeps telling them instead is that they will have to protect
the Jews.

“Why should we bother with the Jews, grandpa?” they ask him. “Because
once they’re done with the Jews, they’ll start on the Armenians.”

Now this joke has been turned on its head. The hardships of everyday
life, such as rising consumer prices, are being blamed on “blacks,”
who are seen as street vendors and petty merchants. But the Jews may
once more become scapegoats if Russia suffers another economic
crisis. Because the Jews, as is well known, control big business and
the financial markets.

With its attack on Yukos, and the systematic return of large-scale
private enterprise to bureaucratic control, the Putin administration
is making sure that Russia’s economy will eventually go down the
drain. The Kremlin has been determined to squander the opportunities
that high oil prices and the weak ruble have thrown its way in the
early years of the millennium. Instead of promoting foreign
investment, strengthening market mechanisms and modernizing the legal
and physical infrastructure of the country, it is steadily
re-Sovietizing the economy.

The era of high oil prices will not last forever. But even if Russia
continues to derive strong earnings from oil, gas and other commodity
exports, the money is certain to be wasted. Places like Nigeria and
Venezuela have shown how a rapacious, incompetent bureaucracy can
make hundreds of billions of dollars disappear without a trace. The
Soviet-Russian bureaucracy, still very much in charge of the country,
has a remarkable track record of turning a fabulously resource-rich
country into an economic, environmental and social basket case.

The post-Yukos Russian economy will be a precarious construct. It
will combine inefficiency, rigidity and corruption characteristic of
a state-run system with half-baked financial markets and a
rudimentary banking system. It will be an environment ripe for a
major economic crisis and, ultimately, for another surge of
anti-Semitism. It will be tempting, of course, for the government to
blame an economic debacle on the rapaciousness of the Jews, rather
than admit its own ineptitude.

It would be a good thing for HIAS if wealthy Russian Jews came to its
support. But this might also presage another wave of Jewish
immigration. Russian Jews are the last significant Jewish community
in Eastern Europe. Moscow, with its extensive and varied Jewish
cultural and religious life, its Jews prominent in the arts,
sciences, commerce and the white-collar professions, is the heir to
such brilliant early 20th-century cities as Vienna, Prague, Budapest,
Berlin and Warsaw. It would be a tragedy for Jews, Russia and,
ultimately, Europe, if this community were to follow the others into

Alexei Bayer, a New York-based economist, writes the Globalist column
for Vedomosti on alternate weeks. He contributed this comment to The
Moscow Times.

From: Emil Lazarian | Ararat NewsPress