"ENTREPRENEURS, UNITE!"

Mikhail Khodorkovsky, chairman of the board of Rosprom (earlier he was chairman of Menatep Bank) has added his voice to that of Gazprom chairman Rem Vyakhirev, who earlier this week called on Russian entrepreneurs to unite in search of solutions to the country’s financial problems. (Interfax, November 6) Khodorkovsky said that Russia’s twenty largest firms currently produce 55 percent of industrial output and employ over 20 percent of the industrial workforce. He said that since these companies are supporting economic and social stability in Russia and "underwriting the competitiveness of Russian products on world markets," the government should adopt "flexible" and "supportive" policies toward them. Stripped of rhetoric, this seems to be yet another call for tax breaks. It comes at a time when the government’s emergency tax commission is cracking down (very selectively) on enterprises with large tax arrears. Khodorkovsky predicted that in a decade’s time the Russian economy will be dominated by 50 or so industrial conglomerates such as Gazprom, LUKoil and Yukos (the oil giant of which Menatep acquired control in last year’s controversial loans for shares scheme).

Smoke and Mirrors In Russia’s Military Budget.