Posted by
whoyg1729 on Sunday, November 01, 2009 9:30:33 PM
Among courtiers, the courage of conviction is rarely a qualification
for the job, although it can help deal with insults, the occupational
hazard that comes with paying court to most sovereigns.
By this
standard, Dmitry Kozak, deputy head of President Vladimir Putin's
administration, is no Vauban Le Prestre, Marshal of France at the
beginning of the 18th century. The difference between them I'll come to
later. Their similarity is that both tried to pearl jewelry wholesale change the way in which
land and the resources beneath it are taxed in a state reduced to
poverty by the folly and greed of its leadership.
Vauban was a
siege engineer, a military profession that was crucial in the wars of
King Louis XIV. Vauban was so good at this, that the king decided to
promote him to marshal in 1703. What Vauban didn't reveal until four
years later was that, while he had been laying sieges against France's
enemies, he had also been conducting secret research into every form of
taxation in the country. From this, Vauban produced a book in which he
explained how the system had impoverished France's producers, enriched
the privileged few, weakened the army and cheated the king and treasury
of whatever an uncorrupt and equitable system could still provide. The
book then recommended a new, simpler tax regime, based on encouraging
higher yields from production in land and industry.
It isn't
known for certain that Louis read Vauban's book, but he left no doubt
what he thought of it. He told Vauban to his face that he was a lunatic
and scoundrel. Historians of the time recorded that lobbying by
everyone who derived wealth from the system of tax farming and
privileges Louis had created was so intense and the king's reaction so
implacable that it led to Vauban's premature death after a few months.
That was in 1707.
At the end of July this year, Kozak made a brief announcement of a proposal as radical and almost as comprehensive as Vauban's.
At
present, Russian law provides that subsoil resources belong to freshwater pearl earrings the
state, which grants licenses for their exploitation by competitive
tenders. The federal and regional governments share control of the
licensing system, while they, and local governments, tax the proceeds
of mining. Once licensed, the resources extracted – oil, gas, minerals,
precious metals, gemstones – are the property of the companies that
produce them. As everyone realizes, since the collapse of the Soviet
system, Russia's economy and trade have depended inordinately on this
type of primary production, while the burden of government revenue
collection falls elsewhere. The vast profit of mining and oil and gas
extraction is stripped from the country and deposited in safe havens
beyond reach.
Kozak's proposal calls for amending Russian
legislation so that the resources in land remain the property of the
state until sold, with mining and producing companies granted
concessions by the state on a cost-plus basis. Plainly, this proposal
threatens not the new private and corporate ownership of Russian
capital, but the flow of income from that capital that the corporate
oligarchs consider their preserve.
The idea didn't come from
Kozak. One of the strongest critics of the existing license system for
miners and oil and gas producers is Vladimir Litvinenko, Rector of the
St. Petersburg Mining Institute. He is an advisor to President Vladimir
Putin; he supervised Putin's doctoral thesis on resource policy in
Russia. Litvinenko has said in the past that he favors bringing Russian
resource policy into closer alignment with South African, Australian,
and Canadian standards, and tougher implementation of their use-or-lose
requirements. Litvinenko and a group of like-minded academics were
behind the proposal Kozak released. They know it isn't more radical
than South Africa's new mining legislation. Recently enacted, this
orders an unprecedented transfer of assets to the black population of
the country in compensation for their exclusion from the benefits of
ownership under exclusive white rule.
Notwithstanding this and
other foreign precedents, and apparent backing from Putin's circle,
Kozak came under an attack no less withering than the one Vauban
encountered. The oilmen declared his proposal ridiculous, with no
chance of acceptance. The miners said it was unconstitutional. They
chorused that, if implemented, the proposal would destroy the Russian
stock market. There were even hints that the proposal was nothing more
than Kremlin blackmail to extract financial contributions for the
upcoming national election campaigns.
Kozak didn't defend the
proposal, and the government ministries responsible for
natural-resources policy and taxation declined to announce their
interest in evaluating, let alone supporting it.
Encouraged by
the Kremlin's silence, the Russian business press opened its pages to coral necklace
manifestos from a handful of oil and banking executives who visited
Kozak and then announced on his behalf that he had changed his mind.
Within days Kozak's proposal seemed as dead as Vauban's.
Never in the brief history of modern Russia has such a matter been banished from a court with such swiftness.