юкос

2/8/07 12:49 PM

alexis russian cafeThe state was in control and then the state stopped being in control Gorbechev and the end of thecentralized economy under the soviet system, state led ministries determined enterprise development in this way the industries will not be able to abuse their workers centralized planning proved inflexible instad the profits from the companies were put in areas where they shouldn’t be ike defense eachof these ministries was run by a minister who were powerfiul men wo were communist party members “The Red Directors” they were the leaders of the cadres, had access to all the things normal people didn’t in 1987 gorbechev passed the law on state enterprise but privitization gives birth to a new The oligarchs are born who believed un the free market and were very zealous of the loans for shares programs, which gave them a large ownership over territories •by the early 90s there were the red directors believed that the nation had little economic success under the new system oand the oligarchs the sought to gain control over whatever business they could get their hands on •these two groups came into direct conflict when yeltsin stared his shock therapy program •the cadres of the red directors rose up against yeltsin and held votes of confidence •the new reformers are all basically out by 95 replaced by there were those who rallied behingd yeltsin because the oligarchs owned most of the media networks in 1998 the oligarchs jined th group that was previously RUIE the Russian union of industrialists and entrepreneurs •it becomes a organization hat the oligarchs were completely reliant on state support in order to get tax breaks and p aperwork tpushed through to pivatize industries •the govt was ver poor thus oligarchs could dictate tax policy Putin and the falling power of the oligarchs the first crackdown of putin happens in 1992 someone makes a hostile bid for TV6 one of the largest media networks in Russia Primakov and Volsky make a bid and the bid goes through •Volsky ad Primakov were not broadcasters they made a hostile takeover Barishovsky runs to London and Primakov shutsdown channel 6 because it had been an outspoken critic of Putin

othese were men in putin’s cabinet and shutdown this critic of the president •2003 putin goes after Yukos •yukos is a part of a larger trend that is happening today a state that is increasingly hostile o businisses’ interest •what khadorokovsky did whas create this company Menatep which is a massive international bank, and then the menative bank falls in 1998 when the rubles fails •they sold of their shares of menatep (te foreign investors) because they are scared that Khdorkovsky is going to sell even more shares •it took like until 2004 until foreign investors start looking at menatep/yukos again oat this time things are starting to look good for yukos and khdorkovsky starts becoming a philanthropist •Yukos merger with Sibneft halts obut putin snagged yukos on tax evasion and although there was a lot of evidence to support tax evasion (but everyone was doing it this way) ohat put it over the edge for putin was khodorkovsky’s poitcial affiliations and hi anti putn attitude oat 5 am 2003 a horde of masked FSB agents arres khodorkovsky

o юкос is now completely under control of the Russian government The enfd of big business? Results of the юкос affair , only six oligarchs spoke out against Khodorkovsky arrest th state has gained six main reasons why the state has the upper hand •business was involved in a lot of shady privitization •privitization was very unpopular •the economy itself is heavily dependent on natural resources •there is lack of unabigious lines between the state and private sector •the most obvious problem is thatthere is no check on the executive s decisions wha hope is there fr the future?

2/8/07 12:49 PM

2/8/07 12:49 PM

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