“If we find resources for 200-300 billion rubles, it will be good”: how Belousov’s meeting with business ended

Presidential aide Andrei Belousov met with metallurgists and chemists, from whom he had previously proposed seizing 500 billion rubles in surplus income to finance Putin’s May decree. Belousov’s letter to the president, which contained this proposal, was not discussed by the meeting participants, said the head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin. Instead, they agreed to look for other effective ways to increase investment without damaging business.

What is known

• There will be no mandatory involvement of companies in the implementation of the May decree, said Russian Presidential Aide Andrei Belousov ( cited by TASS) following the meeting. According to him, it is wrong to finance the implementation of the May decree through taxes; companies themselves are ready to get on the agenda.
• Belousov added that a working group will be created, and by mid-October, financial models for business participation in the implementation of socially important projects will be determined. In November, the group will determine the main directions for involving business in the government agenda.
• “A working group will be created and we will decide there,” one of the participants told The Bell.
• What exactly businesses will still have to participate in is unclear. But possible investments by companies in important government projects, according to Belousov, could amount to 200-300 billion rubles. In exchange, the state can offer subsidized rates, state guarantees, infrastructure bonds and other instruments, he listed.

Quote: “500 billion rubles is the upper limit, if we find resources for 200-300 billion rubles at the expense of these companies, it will be good,” he said ( quote from Vedomosti).

• We are talking, first of all, about financing projects in the field of infrastructure, ecology, digitalization and technology implementation. “The question of how to ensure financing for these areas is to do this by raising taxes when companies themselves are ready to invest in projects is wrong,” said the presidential aide.
• But an increase in dividends due to market earnings could have a negative impact on the company’s reputation, he warned .

Details

• The meeting, which took place at the Russian Union of Industrialists and Entrepreneurs (RSPP), was attended by First Deputy Prime Minister and Minister of Finance Anton Siluanov, Minister of Industry and Trade Denis Manturov, as well as 12 business representatives: Dmitry Mazepin (owner of Uralchem), Igor Zyuzin ( owner of Mechel), Alexander Frolov (co-owner of Evraz), Andrey Guryev (co-owner of Phosagro), Dmitry Konov (CEO of Sibur), Grigory Fedorishin (president of NLMK), Alexander Shevelev (CEO of Severstal Management), Sergey Ivanov (President of Alrosa), Pavel Shilyaev (CEO of MMK), Pavel Grachev (CEO of Polyus), Dmitry Osipov (CEO of Uralkali) and Vladimir Kunitsky (CEO of Acron).
• The meeting was short - less than an hour. Shokhin confirmed that the parties agreed to look for effective ways to increase investment without harming business.
• The head of Sibur, Dmitry Konov, told reporters before the meeting that the business was invited to discuss the current macroeconomic situation: “This is not as romantic as you are trying to imagine.”

Context

• Belousov proposed to collect an additional 513.7 billion rubles from metallurgists and chemists into the budget in a letter to Vladimir Putin. This is almost the same amount as the upcoming increase in VAT from 18% to 20% (600 billion rubles) will bring to the state. Putin put the resolution “I agree.” The purpose of the seizure is to finance the implementation of Vladimir Putin’s May decree , the letter directly states. The document lists 14 manufacturers - almost all of the largest metallurgical, coal and chemical companies. After the publication of Belousov's proposal, the company's shares predictably fell . Later, Dmitry Peskov explained that the president only approved the development of the idea in the government, and the table with 14 specific companies is just reference material.
• “It would be advisable to create a mechanism that would allow extracting from commodity exporters part of the additional income that they receive from the weakening of the ruble - that is, changes in macroeconomic factors beyond their control - and rising world prices for their products,” Belousov explained his position in an interview with Vedomosti. . “We need to share,” the official summed up.
• The Russian Union of Industrialists and Entrepreneurs and business representatives in general, as expected, criticized Belousov’s proposal. The RSPP even sent a letter of protest to Vladimir Putin, in which it estimated the potential losses of the Russian stock market if the proposal were implemented at 3-4 trillion rubles and reminded that it directly contradicts the promise not to change the tax system until 2024. Fitch noted that effective tax increases for 14 companies would impact their profitability, reduce available cash flows and capital investment, and force dividend cuts.
• At least three of the five relevant ministries - the Ministry of Economic Development, the Ministry of Industry and Trade and the Ministry of Natural Resources - gave negative opinions on Belousov’s initiative. The head of the Ministry of Finance and First Deputy Prime Minister Anton Siluanov spoke about the proposal with skepticism.
• We wrote more about Belousov’s biography and his role in Russian politics here .

Liana Faizova