Accessibility links

Russia: Berezovsky Emerges As Defender Of Economic Interests

  • Stephanie Baker

Moscow, 18 November 1996 (RFE/RL) - Boris Berezovsky, a powerful businessman who was recently appointed deputy secretary of Russia's Security Council, is rapidly emerging as principal defender of Moscow's economic interests abroad.

This is the impression prompted by a dizzying series of his recent diplomatic visits. In the past two weeks, Berezovsky has traveled to Georgia twice, along with paying visits to Kazakhstan, Azerbaijan, and Armenia. Few details of his talks have been released.

Officially, the visits were to discuss regional problems, in particular the situation in Chechnya; Berezovsky is responsible for Chechnya on the council. But in reality, many observers say, Berezovsky may have been involved in high level diplomacy designed to ensure Russia's control over the transport of oil from the Caspian Sea.

All the countries he visited are involved in one way or another in potential pipelines to export Caspian Sea oil. At each stop, Berezovsky met with presidents, not with his counterparts.

The Russian media have speculated that the main purpose of his trips was to make sure that Caspian Sea oil flows through a pipeline connecting Azerbaijan to Russia's Black Sea port of Novorossisk. Part of that pipeline runs through war-torn Chechnya.

Last week Olga Romanova wrote in the daily "Segodnya" that Berezovsky's real aim was to convince Georgia, Azerbaijan, Kazakhstan and Armenia of what she called "the advantages of economic cooperation with Russia" and the "dangers of oil confrontations" with Moscow. Alternative pipeline routes via Georgia and Armenia have been proposed as a way of bypassing Russia.

Romanova argued that Berezovsky's talks with Chechen separatist leaders were designed to show them the economic benefits of stability. She reported that an agreement was reached under which the Chechen separatists would receive a portion of the revenue raised from tariffs on the transport of Caspian Sea oil in exchange for promising not to interfere with the pipeline.

During the conflict in Chechnya, there were unconfirmed reports that renegade groups of separatists were tapping into the pipeline, siphoning off crude oil, and selling it to buy weapons. The Chechen separatist government has pledged to crack down on black market oil sales.

Romanova also suggested that plans to build a Caspian Pipeline connecting Kazakhstan's Tengiz oil field with Novorossisk was a focus of his visits. She said Berezovsky, who allegedly holds a controlling interest in Russia's sixth largest oil company Sibneft, may be thinking of buying shares in the giant pipeline company Transneft, which is expected to operate the Caspian Pipeline.

Interviewed last night on Russia's NTV television, Berezovsky denied that oil was the main subject of his talks in the Caucasus and Kazakhstan. But the geography of his visits and his private business interests in the oil industry have led many to speculate that Berezovsky may have had a much broader agenda than the confines of his security council post.

Last month Berezovsky told the "Financial Times" that a group of top bankers and businessmen, including himself, had consolidated forces ahead of Russia's presidential elections in order to protect their interests and prevent communists and nationalists from coming to power. Berezovsky claimed that the group controls 50 percent of the Russian economy.

Berezovsky's appointment to the Security Council last month was sharply criticized by deputies in the communist-dominated Duma, who said his business background alone did not qualify him to serve on the security council. Before his appointment Berezovsky controlled Russia's main television channel ORT and headed Logovaz, one of the country's biggest private car dealerships. He says he has given up all his private business activities upon entering the government, but many doubt that he has in fact done so.

The Russian media have reported that Berezovsky is holding Israeli citizenship alongside the Russian one. Berezovsky's initially denied this, but later admitted having dual citizenship. This flip-flop has done little to improve his image.

For many observers, Berezovsky's role in the government and his recent diplomatic activities are part of a new and disturbing trend in Russian politics. Sergei Markov, a Moscow-based analyst with the Carnegie Endowment for International Peace, told RFE/RL that Berezovsky's appointment may be part of what he called the "the privatization of the Russian government" by specific financial groups. He says Berezovsky's function now is to "organize the defense of Russia's economic interests in the near abroad."