Publication: Monitor Volume: 7 Issue: 17

President Vladimir Putin met yesterday in the Kremlin with twenty-one leading oligarchs, his second such with representatives of Russian big business. The first was held last July, in the midst of a series of police raids and criminal cases against a number of powerful businesses, including Media-Most, headed by Vladimir Gusinsky; Interros, the financial-industrial group headed by Vladimir Potanin; Lukoil, headed by Vagit Alekperov; Sibneft, the oil company controlled by Roman Abramovich, the recently elected governor of Chukotka; and businesses connected to Boris Berezovsky. Most of those actions–except for those taken against Gusinsky and Berezovsky–were subsequently dropped. The Kremlin, as a kind of reconciliation gesture, then created a council of entrepreneurs under Prime Minister Mikhail Kasyanov. The oligarchs themselves, however, decided to turn the Russian Union of Industrialists and Entrepreneurs (RSPP)–the group headed by Arkady Volsky which in the early 1990s represented the interests of the Soviet-era industrial managerial class knows as the “Red Directors”–into a kind of lobbying group representing their interests. Along with Alekperov, Potanin and Volsky, among the RSPP members who met with Putin yesterday were Mikhail Fridman, board chairman of Alfa Bank; Mikhail Khodorokovsky, chief of the Yukos oil company; Yevgeny Shvidler, president of Sibneft; Vladimir Bogdanov, head of the Surgutneftegaz oil company; Anatoly Chubais, head of United Energy Systems; Rem Vyakhirev, head of Gazprom; Vladimir Kogan, chairman of the advisory board of Promstroibank-St. Petersburg; and Oleg Deripaska, head of Russian Aluminum. Putin told the tycoons he hoped that things had changed for the better since the last meeting, when “rumors about the destruction of Russian business and a redistribution of property were actively and deliberately being spread.”

It was apparently business, not politics, during the meeting. Discussion centered on various draft laws the Kremlin plans to introduce into the State Duma, including legislation which would expand the number of tax exemptions for businesses while ending price transfer schemes allowing oil companies to avoid taxes. Putin also announced that he was introducing legislation aimed at (1) de-bureaucratizing the economy by simplifying licensing and other procedures, (2) liberalizing currency regulations to make it easier for potential foreign investors to bring money into Russia and use it there and (3) improving the investment climate generally. He again sought to reassure the tycoons that the state had no plans to overturn the controversial privatizations of the last decade and would oversee the economy without interfering in it. He also stressed, however, that the tycoons should have “a feeling of responsibility before the people and the country,” and asked them to donate 1.5 billion rubles (US$2.6 million) to a new US$3 million fund which will assist the families of Russian soldiers wounded or killed in action (RTR,, January 24; Moscow Times, January 25).