Russian oligarchs ask Medvedev for fair play

MOSCOW (Reuters) – Russia’s leading businessmen appealed to president-elect Dmitry Medvedev on Tuesday to respect their property rights and protect them from arbitrary state interference.

Medvedev summoned members of the Russian Union of Industrialists and Entrepreneurs (RSPP), dubbed by the media as a “billionaires’ trade union”, as part of his preparations for taking over from President Vladimir Putin on May 7.

Under Putin, the Russian state has consolidated control over key sectors of the economy and several leading business moguls have been jailed or fled the country. Businesses also complain they are hampered by official corruption.

“There should be clarity about the role of the state and private business in the economy,” said RSPP head Alexander Shokhin.

“Direct participation by the state should be limited to sectors crucial for national security and those where investment is slow to return.”

“Property rights should be guaranteed,” Shokhin said. “Without this the development of business will be limited.”

Medvedev told the business leaders he agreed with them in principle but did not make any firm policy commitments.

Russia has been experiencing a prolonged economic boom, largely driven by energy exports, with annual gross domestic product (GDP) forecast at about 7 percent in 2008.

But economists say Russia is performing below its potential because the regulatory climate is hampering growth, especially outside the energy sector. Neighboring ex-Soviet states with no oil have been delivering higher GDP growth.

Medvedev, who owed his victory in a March 2 presidential election in large part to Putin’s endorsement, has promised to carry on with his mentor’s policies.

But Medvedev’s background, as a former lawyer and the first Russian leader to have worked in the private sector, has led some investors to suggest he will take a more business-friendly approach than Putin.

In a session of his meeting with business leaders that was closed to the press, Medvedev spoke out in favor of a company locked in a dispute with the state for control of one of Moscow’s airports, Shokhin later told reporters.

Some investors have seen the row over Domodedovo airport as symbolic of a broader fight to defend property rights. The State Property Agency has applied to the courts to have the passenger terminal taken away from operator East Line.

Shokhin quoted Medvedev as saying: “Even if mistakes were made (during privatization of the terminal), it is not a fact that the state should take it back.”

Alexander Yakunin, powerful head of the state-controlled Russian Railways, told the session there was nothing wrong with the state holding stakes in industry, as long as officials played by a clear set of rules.

“All we want is no inflation, order and calm and a motivation for our employees to raise their productivity,” Yakunin said.

The oligarchs’ lobby was a major headache for the Kremlin in the 1990s, when the owners of leading companies played a key role in shaping government policy.

The situation has changed under Putin, who has said that excessive political power in the hands of business interests is a threat to the reviving Russian state.

Kremlin-backed legal onslaughts against tycoons Vladimir Gusinsky, Boris Beresovsky and Mikhail Khodorkovsky prompted their fellow magnates to take a lower profile.

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