Khodorkovsky Sees 1917-Like Crisis Nearing Under Putin

Mikhail Khodorkovsky, the one-time oil tycoon who spent a decade in President Vladimir Putin’s prisons, said Russia is nearing an economic crisis that could fuel an uprising similar to the country’s 1917 revolution.

“I fear that Putin is going to bring the country to a crisis much more quickly than many would like,” Khodorkovsky, 51, said in an interview with Charlie Rose in New York. Russia could end up seeing “a repeat of 1917 when a person brings the country to an economic crisis, and we are certainly moving right in that direction.”

Deteriorating economic conditions may spark the sort of discontent that helped put an end to Russia’s Czarist autocracy a century ago, he said, referring to the turmoil that swept the Bolsheviks into power under Vladimir Lenin and led to the creation of the Soviet Union. Russia’s economy is teetering on the brink of recession as international sanctions linked to the conflict in Ukraine stunt growth.

Khodorkovsky, once Russia’s richest man with a fortune of $15 billion, funded opposition parties before his arrest and campaigned from prison for Russia to develop a civil society. He was freed after receiving a presidential pardon in December. Khodorkovsky maintained his innocence after being convicted for tax evasion, money-laundering and oil embezzlement, saying the cases against him were retribution for financing political parties that opposed Putin. The Kremlin has denied that.

“All authoritarian regimes, especially ones like this that aren’t based on an ideology but on an individual person, are highly unstable,” Khodorkovsky said. “In order to retain power, such authoritarian leaders are forced to burn the field all around themselves, which is what Putin is doing.”

European Ties

Closer integration with Europe is essential for Russia’s development, he said.

“We are part of Europe,” Khodorkovsky said in the interview at Bloomberg headquarters in New York. “All of our culture is European. All of our traditions are European.”

Putin’s annexation of Crimea in March and subsequent fighting between pro-Russian rebels and Ukrainian forces has prompted investors to pull money out of the country. Russia has denied involvement in the conflict.

The ruble has lost 14 percent against the dollar over the past three months alone, more than any other currency tracked by Bloomberg. Net outflows from Russian assets totaled $75 billion in the first half of 2014, compared with $61 billion in all of last year, data from the country’s central bank show. The ruble fell 0.4 percent to 39.7310 as of 11:33 a.m. in Moscow.

Russia’s economy will expand 0.5 percent next year, the International Monetary Fund said this week, cutting its previous growth forecast in half amid fallout from the conflict in Ukraine and the weaker currency.

Swiss Exile

Khodorkovsky, who has been living in exile in Switzerland since his release, said last month’s house arrest of Russian billionaire Vladimir Evtushenkov is the result of shifting political influence within the Kremlin.

Yukos Oil Co., Khodorkovsky’s company, was dismantled and sold at auction, mostly to state-run OAO Rosneft, to cover $27 billion in back taxes after his imprisonment. Yukos’s market value peaked at $35.7 billion in October 2003. Khodorkovsky had a fortune of $15 billion in 2004, according to Forbes magazine.

Putin, who served eight years as president before becoming prime minister, is likely to be re-elected in a ballot planned for 2017, Khodorkovsky said.

“The method by which he will get this victory will depend on how events develop,” he said. “He could get the victory relatively honestly, because right now, this national chauvinism is supporting his popularity rating.”

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