President Yar Adua and the Making of Nigeria’s “Yukos”ByDan Azumi Kofarmatadanazumikofarmata@yahoo.com
The “Yukos” affair is no longer news in the Western European capitals and other developed capitalist market economies. However, for the rest of the developing world, particularly Africa, the name Yukos may sound rather strange and probably unheard of by the majority of the educated elites that care about world political economy and current affairs. Nevertheless, a brief introduction about Yukos affair is in order. Unlike the widely known and most talked about ENRON affair that happened in the United States of America (USA), Yukos was also a tragedy of economic reform management in the aftermath of the breakdown of the former Soviet Union in the late 1980s.
It all started during the sudden and unexpected wind of change blowing across the political, economic and social landscapes of the Russian Republic in the early 1990s. With late President Boris Yeltsin as the new undisputed post-communist leader of Russia following the sudden and unexpected dissolution of the behemoth Soviet Union, President Yeltsin embarked upon dismantling the 70 year-old political, economic and social order established under the banner of Soviet authorities. He received massive financial, technical and human resources assistance from the United States of America (USA), European Union and countries belonging to the Organisation for Economic Cooperation and Development (OECD) in order to accomplish this. Russia began its transition to western-styled democracy and free market economy under the courageous leadership of Boris Yeltsin.
Privatization of State-owned enterprises (SOEs) in the natural resources sector was one of the far-reaching economic reforms that took place during the early times of Russia’s transition to free market economy during President Yeltsin’s administration. Yukos was one of the State-owned oil and gas companies that were privatised from the ashes of the dissolved Soviet era Communist system. It emerged as Russia’s biggest Oil and Gas Company through a series of mostly rigged public auctions of the natural resources SOEs in the 1990s. As a privately owned and managed oil and gas company, it epitomised Russia’s transition from a command-and-controlled economy to a free market capitalist economy in the post-Soviet Communist era.
Smart, young and upcoming better western-educated Russians with connections in the corridors of power were quick to corner juicy oil and gas fields; assets of privatized oil companies and made large profits in the privatizations process. Therefore, the privatizations successfully produced new group of oligarchs well connected to the corridors of political power and authority and commanding heights (oil and gas, minerals, banking etc) of the Russian economy. Mr Mikhail Khodorkovsky is one of these oligarchs and prime beneficiaries. Mr Khodorkovsky owned the controlling shares of the privatized Yukos.
There were similarities between the late 1980s and 21st century Russia and Nigeria in terms of embracing the World Bank and International Monetary Fund (IMF) inspired structural adjustment program and economic reforms wind of change blowing across the developing and transition economies of the world then. Moreover, the similarities between Russia and Nigeria can be seen from how the respective leaders of these two countries (late President Boris Yeltsin and Military President General Ibrahim Badamasi Babangida (IBB); late Military President General Sani Abacha and Civilian President General Olusegun Obasanjo - until May 29, 2007) handled economic reform management in their respective countries. For example, while Yeltsin allowed most of Russia’s State-owned enterprises simply transferred to his cronies through a series of rigged auctions, former Nigerian presidents from IBB to Obasanjo similarly passed the ownership and control Nigeria’s state-owned enterprises to their friends, family relations and themselves in the name of privatization and deregulation of the Nigerian space economy.
For example, some of the most celebrated Nigeria’s privatized public assets during Obasanjo’s regime (1999-2007) include Ajaokuta Steel Mill; Delta Steel Complex; Jos Steel Rolling Mill; Oshogbo Machine Tools and Itakpe Iron Ore Company. Others include Nigeria Airways; Nigeria Telecommunication Company (Nitel) and its Mobile Phone subsidiary company – M-Tel, Nicon Hilton Hotel (Now Transcorp Hilton Hotel); African Petroleum Limited (AP); National Oil and Petrol Chemical Company; National Fertilizer Company (NAFCON); Cement Companies; oil blocks and Banks, just to mention but a few. The way and manner in which these assets changed hands and the selection of who owns what and at what price are still generating many unanswered questions and concerns in Nigeria. These concerns and questions are some of the challenges President Yar Adua confronts as he equally battles his election blues.
In the case of Russia, political change brought in Vladimir Putin as successor to Yeltsin in 1999. President Putin in his quest to correct the wrongs of late President Boris Yeltsin embarked upon reversing the privatizations of the crown jewels and commanding heights of the Russian economy that were earlier done by his predecessor. For example, the re-nationalization of Yukos was one of such policy reversals. Through a very shrewd legal-cum-tax policy manoeuvres and political arms twisting, Yukos was taken over by Russia’s largest state-owned oil company – Rosneft. However, other Russia’s public assets changed hands from Yeltsin’s cronies to Putin’s cronies – this time, a group closely tied to the former Soviet security service – the KGB, where President Putin was a former senior operative before becoming the President of Russia.
In Nigeria, there are calls by the Nigerian public on President Yar Adua to reverse the auctioning of those public assets hurriedly done by former President Obasanjo to his business associates, family relations and other cronies. However, the issue is whether President Yar Adua has the courage and guts to do just that. Some of the reason why the Nigerian public is not happy with Obasanjo’s privatization policy and programs are largely that they were done in bad faith and were out of tune with the principles of transparency, accountability and due process. Moreover, they widened the existing gap between the "haves" and "have-nots" instead of reducing it. In addition, the much touted expected improvements of service and products delivery did not happen. The scheme created lasting sense of injustice, parochialism and nepotism in the polity. Furthermore, it discredited the anti-corruption stance of the administration. The political economy implications of the affair are many. For example, the scheme created a new crop of oligarchs in the mould of Transcorp and other similar outfits with concentrated economic and political powers in their hands. These concentrated economic and political powers are dangerous to sustainability of democratic institutions, rule of law and good governance in Nigeria.
Nevertheless, some question agitating the minds of Nigerians are: will President Yar Adua spring some surprises by tinkering with what his predecessor-godfather had done? Will there be any political seismic event in the making? Would that amount to biting the finger that fed him and installed him as the anointed successor-generation? These are the fundamental questions agitating the minds of many public affairs commentators in Nigeria today. However, Yar Adua’s commitment to continue with Obasanjo’s talismanic policies and reform agenda makes the situation to look very bleak, to say the least. For example, the decision by Yar Adua to retain many of the core political office holders and administrative staff of Obasanjo does not go down well with most Nigerians and his actions and inactions since taking over from Obasanjo spoke volumes.
President Yar Adua is still enjoying a honeymoon period granted him by Nigerians. Surprisingly, he has not matched this gratuitous honeymoon period with any soothing policy pronoucenment expected from a President whose ascendancy to office received strong local and international condemnations. More importantly, the election results are also presently being contested at the election petition tribunal. All these should make Yar Adua loose sleep and initiate some populist policies and actions that may win him the souls and minds of Nigerians and endear him in their minds. This is the time to start looking into those highly questionable last minutes departure dirty and shoddy deals made by former president Obasanjo. However, if he fails to do that, his chances of exciting the country with brave pro-people oriented economic and social policies and programs will be tragically missed.
To conclude, the longer he delays taking positive actions to reverse some of the anti-people policies and actions bequethed by former president Obasanjo; he will soon find it hard and difficult to map out policy grounds that are distinctive and attractive to Nigerians, who have already waited too long to for his “dividends of electoral victory.” The honeymoon will soon be over and support from Nigerians have already begun to slide away as the economic hardships facing them from the continuation of the failed reforms of former president Obasanjo are increasing by the day and by the hour. A stitch in time saves many lives, so they say. |