Big Business Asks Medvedev for Help

Ria NovostiPresident-elect Dmitry Medvedev meeting with representatives from the Russian Union of Industrialists and Entrepreneurs at the Kremlin on Tuesday.
Members of the country's leading business lobby appealed to President-elect Dmitry Medvedev on Tuesday for help in safeguarding property rights and protection against the ravages of corrupt state officials.

Medvedev offered them at least some of what they wanted to hear, saying the government should not attempt to right the wrongs of past privatizations by trying to gain property back, especially at discount prices.

His comments came in response to a call from Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, or RSPP, to introduce stronger measures to hold officials accountable for their dealings with business.

"It's an absolutely normal thing. Every entity taking part in social and economic relations should bear responsibility for doing damage to businesses," Medvedev told senior RSPP members in the Kremlin, Interfax reported.

Shokhin took the opportunity presented by the meeting with Medvedev to draw attention again to the pervasive abuse of power by regulatory agencies in extorting bribes from or even taking control of companies.

One grim example mentioned in the meeting concerned difficulties at Domodedovo Airport, Shokhin said while talking to reporters later Tuesday.

East Line, Domodedovo's owner, is currently fighting an attempt by the Federal Property Management Agency to nationalize some of its assets.

On March 20, a Moscow court backed the order to return 16 former pieces of state property to the agency, which says they were illegally privatized in the 1990s and later acquired by East Line.

Domodedovo spokesman Eldar Tuzmukhametov said Tuesday that the properties themselves did not exist anymore and that the agency's real goal was to wrest control of the terminal building from the company. Tuzmukhametov said East Line had invested more than 30 billion rubles, a sum of over $1 billion, over the last 10 years.

A source close to the company, speaking on condition of anonymity because of the sensitivity of the situation, described the move as a "raid," saying competitors jealous of East Line's expansion plans could be behind the agency's attempt to take it over.

Shokhin said Medvedev didn't address the Domodedovo case directly but called his reply "very reassuring."

Shokhin said at the meeting that, in cases where the state wanted to take back property, it had to compensate companies at full market prices. He said that on this point Medvedev's stance was even more "advanced" than that of the businessmen.

Medvedev told the meeting that, even if mistakes were made in the privatizations of the 1990s, the investments made by companies since then in most cases meant that it was unfair simply to take them back, Shokhin said.

Vladimir Yakunin, the head of state-controlled Russian Railways, said the problem wasn't state ownership, but whether the state played by the rules.

"If we look at mature economies like the United States, France or Britain, we see that the volume of state investment has grown in the past five to 10 years," Yakunin told the meeting, Reuters reported. "All we want is no inflation, order, and calm and motivation for our employees to raise their productivity."

Tuzmukhametov, the Domodedovo spokesman, said President Vladimir Putin came out in support of the company when it had to wrestle with a similar case in 2005, but nothing really changed.

Putin ordered then-Economic Development and Trade Minister German Gref to look into the case, and Gref passed the case off to a subordinate, Tuzmukhametov said.

The Federal Property Management Agency could not be reached for comment Tuesday evening.

The RSPP is hoping that a broader dialogue between businesses and the state under Medvedev, whose inauguration is scheduled for May 7, will generate more positive results.

Shokhin said that during Tuesday's meeting he asked Medvedev for a one-on-one meeting to discuss a series of issues. He declined to name all of the issues he wanted to raise but said that since his group was the country's largest employer, its members wanted to develop certain standards and update legislation in that area.

Shokhin did not say when or whether he would meet with Medvedev but said the president-elect had supported the idea of increased dialogue between the government and businesses to address the country's shortage of skilled workers.

Medvedev also addressed the need for a more rational organization of legislative initiatives. Shokhin pointed out, for example, that a decision on the reduction of the value-added tax was not expected until August, whereas the overarching economic development concept for the country through 2020 was to be delivered in May.

Medvedev also confirmed Russia's readiness to join the World Trade Organization this year.

In a change from last year's meeting between Putin and the RSPP members, businessmen who are not part of the group's managing bureau were not present, Shokhin said.

Last year, Shokhin faced a "psychologically complex problem" when the Kremlin wanted state officials from companies like Sberbank and Rosneft to attend and therefore had to withhold invitations from several RSPP members so as not to exceed the numbers allowed at the Kremlin meeting.

This year, the Kremlin agreed to invite only members of the RSPP management board, with 23 out of a total of 27 participating.

Shokhin said Medvedev had been receptive to the businessmen's ideas and encouraged them to speak.

"Only the good manners of the board members prevented the meeting from dragging on too long," he said.

Tuesday's gathering was the second for Medvedev with the big business lobby since Putin named him as his chosen successor in December. The first was in Krasnodar at the end of January.