An unknown low-level bureaucrat, Yuri Luzhkov, became one of the most influential politicians in modern-day Russia . In the wake of the collapse of the Soviet Union he quickly rose through the ranks of Moscow City Hall and in 1992 landed the post of Moscow’s mayor, being endorsed by then-president Boris Yeltsin, and was re-elected in 1996, 1999 and 2003 and later on appointed by then-president Vladimir Putin. Throughout his 18 years in office, Luzhkov has defended his title fiercely until today. President Dmitry Medvedev fired Luzhkov after he refused to resign from his post. The decree on "pre-term cessation of the powers of Moscow Mayor" was published today on the presidential website while Medvedev is on an official tour to China . The decree explains that Yuri Mikhailoylovich Luzhkov has been removed from Moscow Mayor’s post as he lost the trust of the Russian president. To add insult to injury, presidential aide Natalia Timakova said at the press conference in Shanghai that Medvedev is not planning to hold any meeting with the sacked Moscow head. Luzhkov’s first deputy, Vladimir Resin, has been appointed as acting mayor, although given his close ties with Luzhkov, his appointment as permanent Moscow mayor is almost impossible.
Medvedev’s move was predictable. Luzhkov and his billionaire wife Yelena Baturina had been under state-sponsored media attack in recent weeks. In an unusual manner, the government-sponsored NTV television channel aired documentaries about the mayor’s legacy with particular focus on the failure to preserve Moscow ‘s old buildings of architectural value and their widespread demolition to clear the way for the construction of new buildings as well as his mishandling of recent smog crisis in Moscow . Incidentally Baturina, owner of one of Russia ‘s largest construction companies, became the first female billionaire, allegedly owing to her husband’s helping hand in awarding construction contracts. Luzhkov and Baturina have been denying these allegations for some time now. However, with the increase of media criticism Baturina took a step further and in an interview with Forbes magazine she linked the attacks to the presidential election in 2012. She accused Medvedev of trying to neutralise Luzhkov’s political power, fearing that in the upcoming election her husband could support another presidential candidate, Prime Minister Vladimir Putin.
Chequered Legacy
Luzhkov’s name has become synonymous with political survival as he managed to retain his post despite a string of political scandals. The charismatic Luzhkov has certainly had a large number of supporters among Muscovites. With his trademark cap, his ability to connect to ordinary Muscovites, Luzhkov managed to remain in the third most powerful seat in Russia after the presidential and prime ministerial offices. Under his rule Moscow saw a huge transformation with construction sites sprawling in and around the capital. Luzhkov’s decision to reconstruct the famous Church of Christ the Saviour also won him public sympathy. He tried to capitalise on his popularity and in the wake of Yeltsin’s waning power he also ran for the presidential post in 1998 as the leader of the Otechestvo (Fatherland) party, but failed. With the ascent of Putin, Luzhkov’s political ambitions were again limited to the boundaries of Moscow as he withdrew from national-level politics.
The Moscow mayor had an ambition to go down in history as someone who rebuilt the capital. However his drive to reconstruct the city also bore the seeds of his demise. The construction business in Moscow remains very lucrative as accommodation prices rival and in many cases exceed those in London or New York . Luzhkov and his mayoral elite have been repeatedly accused of abuse of power while issuing construction licenses. Part of the allegation is directed at Baturina, whose large construction and real estate company Inteko allegedly benefited from close ties to Moscow City Hall . The fact that Luzhkov’s and Baturina’s income was US$1 billion in 2009 did not sit well with many Muscovites who are struggling with rising living costs. Luzhkov’s drive to give Moscow a facelift has also backfired, as he decided to go against the advice of many art critics and change Moscow ‘s face by dotting the capital with grandiose bronze statutes of his favourite sculptor Zurtab Tsereteli, meanwhile ordering demolition of old listed buildings as well as small villages on the outskirts such as Rechnik neighbourhood.
The stand-off between the Kremlin and Moscow City Hall intensified as Luzhkov this year ordered the construction of highways leading to international Sheremetyevo airport during the peak summer season. This led to disruption of air traffic and diversion of business to another Moscow city airport, Domodedovo, of which Luzhkov is reportedly has vested business interests. The move has increased the Kremlin’s irritation with Luzhkov, whose deputy Alexander Ryabinin was already under investigation for extortion charges. Russia ‘s Investigations Committee had launched a criminal case against Ryabinin, who allegedly illegally acquired land while he was combining his post of deputy mayor with the chairmanship of Moscow City Hall ‘s Controls Committee.
However, the situation worsened in summer 2010 after Luzhkov’s poor handling of the smog crisis in Moscow . During August 2010, peat bog fires and wildfires around Moscow engulfed the capital with toxic smog which according to some health experts had resulted in a 50% increase in deaths and paralysed part of Moscow ‘s business. While the capital was battling with the smog Luzhkov chose to stay out of the city, blaming a sports injury. After criticism from the public and the president, he returned to his office only to leave for a holiday shortly afterwards. Failure to provide leadership when needed, particularly providing appropriate warning and evacuation of children and the elderly, provoked mass anti-Luzhkov protests in the capital.
Outlook and Implications
Luzhkov’s unceremonious removal highlights some interesting aspects of Russian politics. Firstly, the Luzhkov family strategy of divide-and-rule failed. Baturina’s attempt to pitch Medvedev against Putin ahead of the election was a risky step and it obviously did not work. Putin’s ensuing silence signifies that indeed the Russian PM and president work in tandem. Secondly, Medvedev is keen to see a generational change among the Russian governors. This summer he managed to quietly remove the long-standing governor of federal republic of Bashkortostan , Murtaza Rakhimov. Like Luzhkov, he was appointed by Yeltsin and represented the old guard. However, unlike Luzhkov he did not put up a fight but resigned after being asked to do so by the Kremlin. Medvedev is increasingly adopting a modernisation drive as the axis of his political platform ahead of the 2012 presidential race. Modernising political leadership in the regions is certainly part of this policy. As for Moscow itself, the change of authorities means that there will be a reorganisation of businesses linked to the former mayor. The Bank of Moscow stands out in this regard as is controlled by the City of Moscow and the removal of Luzhkov as mayor is thought likely to lead to changes in its management and direction.
The bank receives a large proportion of its earnings and about one-third of its liquid deposits from the city authorities, and has considerable exposure to the heavily indebted and illiquid real estate market in Moscow . Allegedly this has been at least partly at the instigation of Luzhkov himself, although he has strenuously denied any wrongdoing. The close relationship between the city authorities under his leadership and the bank had been regarded as a positive factor supporting the bank’s credit rating, and his removal may threaten the stability of the bank if this relationship is weakened
It is unclear what 74-year-old Luzhkov will do next. Should he decide to venture into opposition and if his wife continues speaking out in support of imprisoned former oil oligarch Mikhail Khodorkovsky’s favour, then the pair risk making powerful enemies in the Kremlin. Given the wealth that Luzhkov and his wife have accumulated in recent years as well as continuing allegations of corruption, the former mayor may well choose to refrain from politics to safeguard his fortune.