The Foreign Service Journal, October 2004

first heavyweight U.S. politician to call attention to what is actually happening in Russia. Said Dole, in a June 16 Financial Times op-ed: “The return to authoritarian poli- cies and unconstitutional processes has already begun to undermine the historic leap that Russia took when the Soviet system was pushed aside 13 years ago. Russia is at a crucial crossroads and must make a historic decision about its future path.” Dole was reacting to the situation with the Russian oil giant Yukos, and the crisis within the business community in Russia provoked by the arrest of its founder, Mikhail Khodorkovsky. This situation has taken several further turns, as of this writing. On July 28 the Russian court ordered Yukos to stop production in Russia, sending oil prices on the New York Stock Exchange to a 21-year record of $43 per barrel (until the Kremlin called off the stop order 24 hours later). On the same day, Igor Sechin, President Putin’s close friend, adviser and first deputy head of the presidential administration, was made chairman of the board of Rosneft, currently the sixth-largest oil producer in Russia. As my newspaper, Kommersant , reported, “The first steps of Rosneft in its new capacity are expected to be linked with solving of the main political and economic problem at present: the final disposal of Yukos.” Kremlin sources do not deny that Putin’s administration is trying to create a monster state oil and gas company, and that its acquisition of the Yukos producing subdivisions may be a good start. “We do not know what will happen with any of us tomor- row,” one Russian tycoon toldme. “We should carry on and hope for the best.” America Too Busy to Notice But America is too busy with wars in Iraq and Afghanistan to notice those changes. And the Kremlin believes that its problems in the war against terror will keep the U.S. busy for years. Russia feels it is one of the few beneficiaries of this war: the bigger the mess in the Middle East, the higher oil prices will go. Thus, with Bush in the White House, the Kremlin feels safe enough to reshuffle the bureaucratic deck, merely F O C U S 28 F O R E I G N S E R V I C E J O U R N A L / O C T O B E R 2 0 0 4