After a long spell of mutual fault-finding, relations between the government and the business community seem to be improving. This thaw appears to have been initiated by the government, which has been under fire from all sides lately and has reached out to business for support with carrying out economic reform.
At the White House, Prime Minister Mikhail Kasyanov on Wednesday presided over the second meeting of the Council of Entrepreneurs, where participants discussed tax and customs laws. For the most part, domestic political issues were left out of the discussion, except when talk touched on the oil sector, which is disgruntled by attempts on the part of the Cabinet to increase tax pressure on it.
The tangled customs regime between Russia and Ukraine was a target for criticism once the council turned to the topic of the government's plan to unify tariffs (the part of the plan concerning imported equipment and agricultural products will begin next month). The council's members complained that Ukrainian businessmen have an advantage over their Russian peers, as they pay roughly 20 percent less on customs duties.
Oleg Deripaska, head of Russky Aluminum, asserted that Russian business loses billions of dollars every year due to the lack of a level playing field with respect to customs duties. The overall feeling among council members was that, while Ukrainian producers have easy access to the Russian market, Russians are forced to overpay in order to get into the Ukrainian market. It became clear that the businessmen at the meeting want to see the government use political pressure to resolve this economic problem.
Certain ministers are in agreement with businessmen, and have more than once expressed dismay that Ukrainian goods enjoy a favored customs regime, especially since Ukraine does not have the status of, say, Belarus. The problem of unequal customs duties has remained unsolved, however, shoved out of the spotlight by other issues between the two countries, such as Ukraine's failure to pay for the natural gas it consumes. At the moment, Russia does not want to complicate its talks with Ukraine any more than necessary. Nonetheless, if the government hopes to receive support from business, it is only natural that business expects to see some justice in return.
Russian businessmen are well aware of their position, and do not intend to lend their support for free. "Why are you beating us up and trying to take our money, rather than seeing to it that we can do business profitably," is the tone entrepreneurs are taking with the government these days. Since metals producers alone lose $3 million each day due to unequal customs duties, perhaps this tone is justified.
Despite the complaints, leading businessmen such as Mikhail Khodorkovsky from YUKOS, Deripaska at Russky Aluminum, and Vladimir Bogdanov from Surgutneftegaz seem glad that the government is trying to make business its ally. At the meeting of entrepreneurs, Kasyanov created a work group combining Cabinet members and business leaders, whose task is to comment on proposed changes to the corporate tax law.
The work group has only until Dec. 13 to formulate its opinion and present it to the State Duma lower house, so teamwork will be a necessity. Both sides have a vested interest in working together since the government lacks the energy to pull through reform by itself, and business is desperate to lobby its position.
Despite their focus on economic questions, many members of the entrepreneurs' council are taking a more active interest in politics, perhaps because they fear unpredictable changes in the government. President Vladimir Putin, with his contradictory strategy of talking liberal economics and playing up to the armed forces at the same time, comes across as dangerously unintelligible and more than any one oligarch can handle.
Thus, business leaders were not satisfied with membership in a mere council, but rather opened their own bureau (for now under the auspices of the Russian Union of Industrialists and Businessmen). A few days ago, this same bureau sent a letter to Putin asking him to address several economic questions, among them taxes and the oil sector, as well as political problems, namely legal reform.
According to sources inside the bureau, the letter contained specific proposals for reform of the courts. The president's administration is less than enthusiastic about the proposals, and Putin is unlikely to have time to meet on these topics until the end of the year.
Sources say that he has, however, promised to do so. They also disclose that the Kremlin would use any such meeting as an opportunity to whip up support for a fund to aid soldiers wounded in Chechnya. Business is likely to be just as cool toward the idea of this fund as the Kremlin is toward business' proposals for tax and legal reform. After all, support for such a fund looks more like forced payment of protection money rather than a humanitarian gesture. And to be honest, businessmen probably see their membership in all sorts of councils and boards as less than voluntary.