What Divides Khodorkovsky From Russia's Current Opposition

Much has changed in the past 10 years. Oligarchs have been replaced by networks as the real challenge to Vladimir Putin's power.

In Berlin, after his release
In Berlin, after his release
Julian Hans

Mikhail Khodorkovsky is giving up everything that once defined his power. He is relinquishing the right to his shares in Yukos, which have been in the hands of the state-owned Rosneft since his imprisonment. He will also stay out of Russian politics. This is what he wrote in the letter that was sent to Vladimir Putin along with his appeal for pardon.

This was not a condition for his release, but it certainly made the decision easier for the Russian president. It remains to be seen whether the man who up until four days ago was the most famous prisoner in his country will return to Russia or whether the Hotel Adlon in Berlin will be the first stop on a long journey of exile.

Russia is a very different country than it was ten years ago. Nothing could make that clearer than the reappearance of this ghost from the past. Until the early 2000s, the power balance in Moscow was highly complex, with oligarchs competing for influence over politics and the media. Nowadays these oligarchs still exist, but they leave politics to the Kremlin and diligently get on with their business. The one exception is Boris Berezovsky, who had been a vocal critic of the Russian government from exile in Britain – he was found hanged at his home in March.

It is as though Khodorkovsky is reappearing after spending 10 years frozen in time. The expectations being placed on him have more to do with his status as the most famous political prisoner in Russia than his achievements before being imprisoned. The only thing that links him to what we will simplistically refer to as “the Russian opposition” is that both have been opposed to and the victims of the Kremlin’s arbitrary wielding of power. Aside from that shared experience, their environments and methods could not be more different.

From the outset, Khodorkovsky’s influence came from a mixture of his proximity to those in power and his economic strength. Now he has lost both. The new generation of government critics come from the middle classes, and their power is based on networks. Many had the opportunity to travel abroad as young adults and observe functioning democracies, something that would have been unheard of for oligarchs who came up under Soviet rule.

Putin more powerful than ever

Germany may well congratulate itself on the effectiveness of its diplomatic attempts to secure Khodorkovsky’s release, but the truth is that these negotiations would have gotten nowhere if Putin himself had not decided that now is the opportune moment. Two months before the Winter Olympics in Sochi, Russia could do with a few positive headlines.

And yet Putin’s recent successes in the management of the Edward Snowden affair, the Syrian chemical weapons dossier and influence in Ukraine also mean that the Russian president feels his position is now strong enough to free himself of this burden.

The reasons for Khodorkovsky’s renunciation of Yukos and politics are twofold. He knows that he cannot win in a direct confrontation with Putin. A new attack would not only damage him, but also numerous colleagues who risk facing trial for alleged gang crime. Khodorkovsky signed the clemency plea for their sake too. And he understands that as a man with Jewish roots and a supposed beneficiary of “predatory privatization,” he cannot hope for much support from Russian voters. He is planning for the long term and hoping that society will change. After all, the last ten years show that it can.

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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