The Telegraph
Since 1st March, 1999
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Fresh crackdown feared as Putin backs hawks

Moscow, Oct. 28 (Reuters): Russian liberal commentators said today they feared a new wave of authoritarianism after President Vladimir Putin slapped down big business leaders over the arrest of Russia’s richest entrepreneur.

The commentators, reflecting the thinking of liberal politicians who were reluctant to speak publicly, said Putin’s truculent justification of the arrest of oil magnate Mikhail Khodorkovsky showed the KGB spy-turned-President had come down on the side of Kremlin hawks.

“Society has undergone a shift. There are now more elements of totalitarianism than under (former President Boris) Yeltsin and under the earlier Putin,” said Igor Bunin, general director of the Centre for Political Technologies think-tank.

Russian markets found some respite after tumbling on news of the weekend arrest of Khodorkovsky who heads oil giant YUKOS. The rouble recovered almost all of the about half per cent it lost yesterday, but dealers said the market was still nervous.

Prime Minister Mikhail Kasyanov urged investors not to panic over the arrest and called for measures to stabilise markets. “Yesterday, the situation was tense. But there is no need to panic and we must not panic,” Kasyanov said. “We must adopt measures to stabilise Russian financial markets.”

Analysts said the case will add to doubts about the already uncertain rule of law in Russia and whether it was a safe place to do business despite being awarded a crucial investment grade.

There was no fresh word on Khodorkovsky who is being held in a part of the Matrosskaya Tishina prison. Putin yesterday refused to get involved in the legal case against 40-year-old Khodorkovsky who is being investigated for fraud.

And in a bleak message to Khodorkovsky’s fellow “oligarchs” — the super-rich elite who made huge wealth overnight in the post-Soviet sell-off of state assets — Putin said he had no intention of meeting them to discuss the case.

Putin’s critics say his new hard line climaxes a gradual tightening of control inside Russia by the 51-year-old Kremlin leader who sets great store by discipline and loyalty, and riles quickly at public criticism on sensitive issues.Since he came to power in 2000, press freedoms have been increasingly restricted while more and more state security and military officials have been given top posts.

All these moves have done nothing to dent the popularity of Putin among a post-Soviet electorate which sees the oligarchs as little more than thieving opportunists. Liberal commentators said it was now clear he backed the hardliners in his camp — often, like him, with a background in state security. Many expected changes inside the Kremlin — possibly the sacking of his powerful head of administration, Alexander Voloshin, who sympathised with Khodorkovsky.

The dapper tycoon, with a fortune of $8 billion according to Forbes magazine, analysts said may have been targeted by Putin’s hawkish aides because of his undisguised political ambitions. The oil magnate backs two liberal parties competing against Putin's allies in a parliamentary election in six weeks.

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