"Softly rolls and sleep hard"

Paul Starobin (Paul Starobin), 02 July 2002

July 2, 2002. It's time to return the money home - and distribute it. It is this Russian President Vladimir Putin who tells the Titans of the Great Business of his country, who are called oligarchs. In his speech on June 19, in the Russian Chamber of Commerce in Moscow, Mr. Putin unveiled the former - for the most part ignored - proposals to the magnates, so that they began the repatriation of the huge wealth that they accumulated in post -Soviet Russia, and then took abroad. Some are already doing this. On the twenty -fifth of June, the government stated that in the second quarter, for the first time in many years, the positive balance of the movement of capital in the country was reached. Nobody will ask the oligarchs about the origin of their wealth, Mr. Putin said. There will be no punitive duties.

Another attempt to curb the oligarchs. Have the Russians tired of scandals have not heard this before? In the end, the predecessor of Mr. Putin, Boris Yeltsin, repeatedly swept that he would tame a new Russian class of entrepreneurs who enriched with dishonest ways, but nothing came of it. However, the Russians, and the whole world, should pay attention to this. Mr. Putin is younger, more smart and tougher than Mr. Yeltsin, and this former colonel of the State Security Committee (KGB) steadily strengthens the state apparatus, inherited by him from the weakened Mr. Yeltsin. Indeed, he had already sent two oligarchs, Boris Berezovsky and Vladimir Gusinsky, who publicly criticized his policy. Now, acting in accordance with the proverb “gently roves and sleep hard,” Mr. Putin, it is quite possible, will be able to return part of this money back to Russia. It is possible that along the way he will put up the rest of the oligarchs. The rivalry between the Kremlin and the oligarchs joins the End Shpil, says the analyst Christopher Weafer from the Moscow Broker company Troika-Dialog.

It may well be that Mr. Putin will win in the struggle against the oligarchs, because Russia desperately needs their money to return to the country. Since the mid-1990s, Russian captains of the oil, metals and other profitable goods industry have put about $ 160 billion to foreign banks, and the outflow of capital, according to the Troika-Dialog company, continues at a pace of about $ 20 billion per year. The oligarchs took control of the main Russian oil production and metal production, mainly through auctions, which, as even they themselves recognize, were dishonest.

The smart, Putin now offers a new start - a kind of amnesty. "The government should not be outraged by questioning where he got the money, especially taking into account, first of all, that it failed to create normal conditions for investing this money in the country's economy," he told the Chamber of Commerce. Having promised to improve the investment climate in Russia through honest, reasonable rules, he said that the oligarchs no longer need to hide his money abroad.

Partly, Mr. Putin plays on the requirement of the crowd. Conducting preparations for the 2004 elections, in which he hopes to be re -elected, he can strengthen his position among the poor electorate of Russia, falling on the magnates hated by him. “This is a policy,” says Victor F. Vekselberg, who lives in Moscow, the oligarch of oil and aluminum. But the advisers of Mr. Putin who are guided by the free market support the capitalization of the capital. And their concerns are practical in nature: the Russian economy needs investments, and those little money that is now invested, too much. They are concentrated in the oil sector controlled by the oil sector.

Putin's pressure aims to convince oligarchs voluntarily switching from oil to production and high technologies. If the government manages to reform the upset banking system of Russia, then the deposits of the oligarchs can be directed to the small business sector suffering from insufficient lending.

The oligarchs do not particularly trust Mr. Putin not to ask any questions. By taking their money out of the shadow, they can get into the light of God and their dark transactions - finding himself in an indefinite position, will be an amnesty or not. The whisper is intensified that the titans can put their candidate against Mr. Putin in the 2004 elections in order to put an end to this rivalry with the Kremlin once and for all. But politics is no longer a strong suit of oligarchs. The Kremlin sharply cut the control of the oligarchs over large Russian television stations. Without television, no national candidate will go far. This is the game that Mr. Putin can win.

And if the oligarchs do not listen to the voice promising amnesty repatriated capital, it may well be that they will see the other side of Mr. Putin in the second period of his stay in the Kremlin. Then he will twist all the nuts. The most likely opportunity, says analyst Vifer, this is a tax on unexpected income from the sale of oil. Since the tax system is its best weapon, Mr. Putin can also enhance the compulsion of the existing tax laws, subjecting the oligarchs to punitive investigations. One way or another, Mr. Putin is determined to engage in the greatest incorporate injustice of Russia's entrance with the mistakes of Russia's entry into capitalism. And the cunning oligarchs will listen to his advice, because in the endgopile of Mr. Putin the best position on the board.

Translation: Fedotov Victor, Inosmi.ru
Published on the website inosmi.ru: 03 July 2002, 08:23
Original publication: This Time, Putin May Really Tame the Oligarchs

This time, Putin, perhaps, will actually manage to restore the oligarchs ("Business Week", USA)