Russia 1995

It is the Mafia that is emerging as the controller of Russia’s troubled economy. It is the military that may have the only capability to control their activities, given what seems to be a continual breaking down of civil and social structures. Could a dictator with grand schemes of empire building satisfy both camps ? Zhirinovsky’s third great opportunity is the unprecedented level of land speculation now taking place within Russia. Such land deals and associated speculation, made possible only after World Bank advice to “privatise” land, have been well documented. Forbes reporter Paul Klebnikov described the “auction” of just one commercial building in downtown Moscow last year. The first stage of the privatisation was closed to outsiders. Here Moscow city sold the rights to auction off the building to five well connected criminal organisations for 1.5 million rubles. In turn, they organised a second auction, open only to those not-so-well connected, bribe paying developers, who paid 250 million rubles for the building. Within the space of two months, the building was then sold on the open market for 1.5 Billion rubles. Similar underhand deals occurred with the 1,777 room Cosmos Hotel, again in Moscow. The hotel, built for the Olympics, nets around ten million dollars a year. After bribing journalists from two influential business papers to publish poor financial details about the Cosmos, a certain Michail Kharsan then bought a 25% interest for $ 2.5 million. Guaranteed money back in just one year. Ordinary Russians are extremely angry at the present state of affairs, especially the land deals, in Russia. Ordinary Russians are tired of seeing organised crime gangs turfing old babushkas out of their long held apartments and then turning the buildings over to foreigners at a stupendous profit. Ordinary Russians know that more than one half of prime Russian real estate is now in the hands of Russian Mafia, former KGB operators or former communist bosses, adept at intimidation, deceit and rough tactics to get what they want. It is rumored that in Russia the Mafia – the new landed aristocracy, now control much of the speculative land deals, acting in unison with the old communist elite and armed forces. It is unlikely the armed forces will lead a revolt. The importance of eliminating land speculation, to bring the Russian economy back to some degree of normality cannot be overstated. It is not likely that much will be done of course. Vlad ZHirinovsky