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. Last Updated: 07/27/2016

Potanin Tells State: Hands Off Business

MTInterros president Vladimir Potanin
Vladimir Potanin on Tuesday called on the government to scale back its intervention in the economy, saying meddling by state officials was hampering growth.

In unusually forthright remarks, Potanin, president of the Interros holding group which controls metals giant Norilsk Nickel, said barriers to foreign investment and business start-ups were holding Russia back.

"I am not sure the economy needs a strengthening of the state's role -- rather the opposite," Potanin told a conference put on by the Association of Russian Managers. His remarks followed landmark talks last month at which President Vladimir Putin told captains of industry that the state should not investigate privatizations which took place more than three years ago.

Putin's concession lifted a cloud which has hung over "oligarchs" like Potanin -- who acquired vast assets at bargain prices in the chaotic privatizations of the 1990s -- since the Kremlin's attack on oil major Yukos.

Potanin, whose fortune is estimated at $4.4 billion by Forbes magazine, slipped out of view for much of 2004. But he appeared confident on Tuesday that airing his views in public would not provoke a political backlash.

Russia's economy should be as open to foreign investment as possible, he said, criticizing the government's insistence that it controls strategic companies to defend the national interest.

The state is seeking to regain control over gas monopoly Gazprom via a long-delayed merger with state oil firm Rosneft. The deal is a precondition for lifting a bar on foreigners owning shares in Russia's largest listed company.

"A strong state has plenty of other ways to defend its interests besides the right of ownership," Potanin said.

He also criticized moves within the government to restrict foreign ownership in some strategic assets -- such as energy and metals deposits -- to less than 50 percent.

Corruption and administrative barriers to business remain "very high," while tax inspectors were operating in a "not very transparent" way, he said.

Russia must ensure the judicial system upholds the rights of investors and creditors and encourages, not hinders, business start-ups to create new jobs.

"The entrance ticket for business is getting more expensive -- not cheaper," said Potanin.