Vladimir Yakunin - The Treacherous Path - An Insider's Account of Modern Russia

Temp’s full name was TOO NTP TEMP. TOO is broadly equivalent to LLP (Limited Liability Partnership), and NTP stands for Scientific-Technical Enterprise.

At the infamous December 1991 meeting at the CPSU Central Committee’s dacha deep in the forest of Belovezhskaya Pushcha in Belarus at which the dissolution of the Soviet Union was made official, Sobchak told Yeltsin that if he was going to sign the agreement – already by this point three of the Baltic republics had seceded unilaterally – then he should also ensure that he sat down with the leaders of the newly independent countries and discuss exactly what territory should be assigned to which nation, and also the terms that would apply for Russia’s continued use of strategic assets such as the Baltic ports. This never happened. (Though the responsibility was not Yeltsin’s alone – those men who had taken control of the nascent republics of, for instance, Latvia and Estonia avoided this important discussion.)

In addition to establishing Ust-Luga as a significant entrepôt for exports, we would later be charged with the development of a ferry route that would provide a stable connection between mainland Russia and the exclave of Kaliningrad, the home of our Baltic Fleet. There is no way of approaching Kaliningrad by land that would not involve crossing 300km of the territory of at least two other nations – Lithuania and Poland are its immediate neighbours, with Latvia, Belarus and Ukraine forming a belt around them.

Because the exclave’s residents live under the constant threat of isolation, the quality of its sea connections is thus paramount. The gravity of this situation was underlined in 2001 when the Lithuanian government revoked the overflight rights of the region’s sole carrier, Kaliningrad Air, which could afford to neither pay the fees it owed to Lithuania’s air-traffic control organisation, nor modernise its fleet to comply with EU safety standards. If the region were cut off, for whatever reason, it would not only have a substantial personal and economic impact, but there would also be severe consequences for its security. How else, other than by ferry, would we be able to transport men and munitions to defend our territory?

No purely commercial entity was ever likely to be persuaded to take this project on – its value lay in its strategic importance. There was never any suggestion it would be a money-spinner, and so, following the initial instructions from the president, the service began running in 2006.

If you are interested in how these people operated, and the principles of the world they inhabited, the transcripts of the case Berezovsky tried to bring against Abramovich in the London courts several years later make highly informative reading.

The Soviet Union had been made up of fifteen national republics (Russia, Ukraine, Belarus, Estonia, Latvia, Lithuania, Uzbekistan, Kazakhstan, Moldova, Tajikistan, Georgia, Armenia, Turkmenistan, Azerbaijan and Kyrgyzstan). In theory, each republic had equal status within the arrangement, but in practice it was dominated by Moscow (interestingly, the only republic without its own Communist Party was Russia). For most of its existence Russia (formally, the Russian Socialist Federative Republic) itself contained seventeen autonomous republics, some of which, after the dissolution of the Soviet Union and the formation of the Russian Federation, could not understand why they too had not been given independence. Republics like Tatarstan, for instance, pointed to territory the size of Texas and the fact that it contributed as much as 20 per cent of the country’s GDP.

Despite its viciousness, perhaps because of it, this violence eventually petered out. This was partly because many of those criminals involved slipped into business suits and involved themselves in legitimate activity, but mostly because after five years there was nobody left to kill. The most prominent protagonists were either dead or had fled abroad. It was a tragic state of affairs that eventually consumed itself.

A hard-currency prostitute, or interdevochka in Russian (literally international girl), is a prostitute who works for convertible foreign currency, selling sex mostly to foreigners.

They would also have to fly the flag of another country – the Marshall Islands were always popular.

This took place before legislation that regulated the procurement of state-owned companies was introduced. Now they must buy goods and services in an open tender and auction process.

Mr Siluanov replaced Mr Kudrin in 2011, after the latter was asked to resign by the then President Dmitry Medvedev.

This is I think a useful illustration of how far things had changed since I myself had been a deputy minister who sat on a number of corporate boards. At that time, when concepts such as best practice had not really entered the lexicon of Russia’s business world, nobody, including myself, thought that there was anything contentious about a minister also occupying influential positions in a private company.

I remember having an argument in Moscow with Alexey Kudrin about the extent to which state intervention in the economy should be limited or not (an argument that remains as vital as ever). Later on, after he became Minister of Finance, he told me, ‘stop arguing with me, I am a professor and I give lectures on this subject’. This did not end the argument; far from it. Rather, it was a spur for me to acquire a PhD in Political Science and take up a number of academic positions, including as Head of the State Policy Department at Lomonosov Moscow State University, and as a visiting professor at Peking University and the Stockholm School of Economics. So I am grateful for those words, which I imagine he has not given a moment’s consideration since, because they have opened up another rewarding dimension in my life (and in the process provided yet another example of the law of unintended consequences in action). We are still no closer to reaching an agreement about the role the state should play in civil society, but it is worth remembering that after he was ousted from his position in 2011, I was the first to extend a hand of support to him.

The president’s wife was a highly cultured, cosmopolitan woman, and in retrospect perhaps I should not have been surprised by the elegant and daring solution she devised. In Korea, she owned a successful animation studio that translated American cartoons, and her husband had been a dissident under the country’s former dictator, Park Chung-hee. In fact, his opposition had earned him a death sentence, and only the revelation that a number of years earlier, when he had been a teacher, he had saved Park’s boy from a beating at the hands of other children, ensured he would be spared a grim visit to the executioner.

The Russian people have, generally speaking at least, supported their government’s engagement in Syria because they believe it will make them safer (it is not for them a question, as is sometimes suggested, of Russia flexing its muscles on the world stage once more). The idea of Russian citizens, hardened by experience on Syria’s battlefields, returning to wreak havoc in the cities of their own country, fills them, quite understandably, with fear, and they find it difficult to comprehend why Western nations have left the job of policing this failed state to Putin’s administration.