Analysis: Russian billionaire sets sights on being PM

Reuters News
Posted: Sep 02, 2011 7:13 AM
Analysis: Russian billionaire sets sights on being PM

By Timothy Heritage

MOSCOW (Reuters) - Billionaire businessman Mikhail Prokhorov is not satisfied with being one of Russia's richest people and its most eligible bachelor. He also wants to be its prime minister.

The playboy industrialist has almost no experience in politics and the small Right Cause party he took over in June is polling at only 3 percent support three months before a parliamentary election.

But that is no obstacle to a man who started out selling jeans and by the age of 46 has made a fortune in nickel, owns the New Jersey Nets basketball team and, many political analysts say, has the tacit approval of Prime Minister Vladimir Putin.

"Like all the oligarchs, Prokhorov has achieved all he possibly can in business and has been an enormous success very quickly. He's still quite young so why not try a different career?" said Boris Makarenko, an analyst at the Center for Political Technologies think tank in Moscow.

Prokhorov, ranked by Forbes magazine this year as Russia's third richest man with an estimated fortune of $18 billion, makes no secret of his ambitions.

"I think I could handle the prime minister's job," he told a news conference on August 11.

He said almost nothing about his plans at the news conference, declining even to say whether he wanted his party to be to the left, to the right, or centrist.

His one policy proposal, that Russia should abandon the ruble in favor of the euro, was widely ridiculed.

But since then Prokhorov has produced an election manifesto, made dozens of public appearances and shown his determination to prove more than just the joker in the pack as one of the few unpredictable factors in the December 4 election.

Other parties are hardly out of the starting blocks in the campaign to the State Duma lower house but he has already pasted posters across Moscow showing his face and the slogan: "Strength lies in power. The one who is right is stronger."


Putin's United Russia party dominates the Duma with 315 of the 450 seats and is sure to be the strongest party in the next parliament, setting the stage for Putin to return to the Kremlin if he decides to run in a presidential election in March.

But opinion polls show United Russia's popularity has slipped and Putin is looking for new faces in politics, partly to prove his reformist credentials and to hit back at critics who say democracy is lagging in Russia.

The political entry of Prokhorov, a whiz kid of Russian finance who earned a fortune by selling a one-quarter stake in mining behemoth Norilsk Nickel just before the 2008 economic crisis, is widely thought to be backed by Putin.

As an oligarch, he is unpopular with many Russians and therefore unlikely to become a threat to the Kremlin.

His image was also damaged by an incident in 2007 when French police detained him on suspicion of arranging prostitutes for guests at the Alpine ski resort of Courchevel but he denied any wrongdoing and was later cleared of the charge.

Even so, Prokhorov could have a role as a safety valve for limited criticism and he has already shown he is not afraid to take the government and the Kremlin to task.

"No Russian parties are independent political actors and all are manipulated by the executive. The party (Right Cause) is definitely a Kremlin project," Makarenko said.

"But if Russia modernizes, if Prokhorov's party takes an active part in that and wins support among broader sectors of the population, who will care how it was created in five years?"

Although Right Cause may struggle to secure seven percent of votes in the election, the minimum required to take up seats in the Duma, Prokhorov could still build the foundation of a political future if he wins liberals' votes in the big cities.

"I think it's possible that even if Prokhorov does not get into parliament in this election, he could go on to have a career in politics," said Nikolai Petrov, an analyst at the Carnegie Moscow Center.


Plenty of pitfalls lie ahead for Prokhorov. In his two terms as president, from 2000 to 2008, Putin reduced the political influence the oligarchs gained in the 1990s under President Boris Yeltsin and told them to stay out of politics.

He will be particularly anxious to avoid the fate of Mikhail Khodorkovsky, an oligarch who fell out of favor with Putin after showing political ambitions. He is still in jail after having his business empire carved up and sold.

Prokhorov has a lot to lose as he has a 17 percent stake in RUSAL, the world's largest aluminum producer, and a 30 percent stake in Russia's top gold producer, Polyus Gold.

Could he become prime minister? Petrov said Prokhorov could be a fall guy for Putin if he returns as president in March and wants a prime minister to carry out economic and social reforms.

"If he comes back as president, and I am almost certain he will, Putin will definitely need a prime minister who will undertake very painful and unpopular reforms," Petrov said.

"It's a job for one year to undertake these reforms and then become a scapegoat ... Prokhorov is an ideal candidate for this as an oligarch who can never count on mass support."

This might please investors who regard Prokhorov as an energetic liberal and a good manager.

"If he is the next prime minister, I think this will be viewed very positively, at least initially," Dmitry Kryukov of Moscow-based Verno Capital told Reuters Insider television.

Prokhorov is still something of an enigma but Right Cause's manifesto, published in late August, gives some indication of what Prokhorov would do if he makes it into the Duma.

The manifesto accuses the presidency of being an all-powerful monarchy, sets out to woo disgruntled middle-class voters and warns of an economic crisis if reforms are not carried out. It calls for free education and medicine and proposes price fixing of state monopolies.