#12 - JRL 7286
Vedomosti
August 12, 2003
NEGATIVE SHIFT
Author: Alexei Zaiko
The YUKOS affair and the future of business in Russia
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
KOMPANIYA MAGAZINE POLLED MANAGERS FROM 83 RUSSIAN COMPANIES AND
BANKS, FINDING A SUBSTANTIAL DECLINE IN ECONOMIC EXPECTATIONS. MOST
BUSINESS OWNERS VIEW THE ACTIONS OF THE PROSECUTOR GENERAL'S OFFICE AS
A THREAT TO THE INSTITUTION OF PRIVATE PROPERTY IN RUSSIA.
Virtually all Russia's prominent politicians have already
expressed their views on the conflict between YUKOS and the Prosecutor
General's Office. Some of them have made statements; others have
remained silent, but the silence was quite revealing. All the
statements boil down to two issues: the threat of redistribution of
property, and the effect this conflict will have on the future of
business in Russia.
Those who side with the oil company believe the actions of
security structures pose a clear threat to the institution of private
property in Russia - an institution that is essential for normal
economic development. Those who support the security structures have
their own argument, claiming that stolen property is too fragile a
foundation for development.
Judging by the pace of the investigation, the ideological debate
with legal consequences will last months. It may be added, however,
that medium-sized companies - playing the role of observers in this
conflict - have already formed an opinion. Kompaniya magazine polled
managers from 83 Russian companies and banks (for details see
www.ko.ru), finding a substantial decline in economic expectations.
Over half the respondents believe that the actions of the Prosecutor
General's Office "threaten" or "probably threaten" the
institution of
private property. Despite this gloomy evaluation, most respondents
claim that the latest events have failed to have any effect (53%) or
have had only an insignificant effect (37.3%) on the prospects of
their companies. Only about 10% of these companies have had to amend
their plans because of the YUKOS scandal. But many more companies may
be forced to follow suit in the near future. A spokesman for on
furniture company said that "should the conflict last another month or
two, the office furniture market will certainly feel its effect."
The contrast between emotions and facts is emphasized by
responses to the question on how people's "personal" attitudes to law
enforcement agencies has changed. Almost 90% of the respondents say
their attitudes have not changed at all. Many say that their attitude
is negative. Here is what a director of a prominent insurance company
said: "Nothing is changing radically in these relations. As for an
overall assessment - these events show that the state is expanding its
regulatory and oversight functions. The growth of back-business is one
of the indicators."
A comparison of the level of actual changes in the business
climate and companies' expectations of stability leads to the
conclusion that the business community is extremely pessimistic about
its future, but the threat to economic development posed by security
structures is insignificant for the time being. All the same, the
expectations of most business owners have experienced a definite shift
for the worse. A sense of looming catastrophe, and the influence of
this on the business climate, could become a serious problem -
depending on the latest developments concerning YUKOS.
Aug. 12, 2003:
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