Kommersant: “Putin Discusses Financial Issues at Sochi Economic Forum”
Andrei Kolesnikov
Russian Prime Minister receives foreign businessmen in Sochi
On September 18, Prime Minister Vladimir Putin received foreign businessmen who had come to the Russian Black Sea resort city of Sochi to take part in the Sochi Economic Forum.
Andrei Kolesnikov, a Kommersant special correspondent, regarded this meeting as the presentation of the Government's economic mobilisation plan.
Gerhard Schroeder was the first foreign businessman to be received by Vladimir Putin on that day. Mr Putin met with him and Gazprom CEO Alexei Miller at his Riviera residence in Sochi. This house in downtown Sochi looks newly repaired, though it is in fact newly built; only two years ago, there was a garage of Sochi's Interior Ministry department on the site. There is no splendour or grandeur in this residence, like in the Bocharov Ruchei residence (which even has a railway track running across it), but this is not the point. Journalists were given the whole lower storey of the residence, and the only inconvenience they experienced was the absence of a mobile communication signal.
On the other hand, the upper storey's residents, i.e., Vladimir Putin, Gerhard Schroeder and Alexei Miller, had no problems of the sort. Mr Schroeder was the only person at the meeting who needed an interpreter, and only when the other participants spoke Russian.
Vladimir Putin wanted to know when the Nord Stream pipeline would be commissioned. Alexei Miller named the year 2011, though they initially planned to put it into operation in 2010.
The Russian Prime Minister's next direct question was addressed to Mr Schroeder and concerned the ecological safety of the [Nord Stream] project. Mr Schroeder assured him that he would not have accepted the post of head of the project's shareholders committee had he harboured any doubts about that. He said the project had been drafted and would be presented in October. It will include the results of investigations showing the safety of the project, which aims to lay the pipeline along the seabed, and also a solution to the problem of weapons buried in the sea after WWII.
At this point, Mr Schroeder shocked his interlocutors by mentioning the cost of the project - 100 million euros. The figure impressed Mr Putin, though it was not clear in what way.
Late in the evening, other foreign guests were waiting for a meeting with Vladimir Putin at the same Riviera residence. These included heads of Deutsche Bank, Royal Dutch Shell, IKEA, Siemens, ConocoPhillips, Total, Mitsubishi, Chevron, and BP, people who know only too well what a world financial crisis means, since they may be both its generators and victims. I would not be surprised if, being in good spirits after a meeting with Mr Putin, one of them were to return back to his room at Radisson-Lazurnaya Hotel, pick up the newspaper, see the latest headlines and... throw himself out the window.
At that moment, captains of the global economy gathered at a small hall and waited for Mr Putin, who had retired to his room after his meeting with Bulgarian Prime Minister Sergei Stanishev.
Mr Putin stayed in his room for nearly an hour. The businessmen were getting nervous; it was growing dark when a thunderstorm began and bolts of lightning lit up the sky. Mr Putin entered the hall when the thunderstorm and the shower ended.
The Prime Minister's speech was meant to calm the visitors and assure them that Russia was the only island of stability in this crazy world.
"After the events in the Caucasus, there was much talk about a possible crackdown and a change in the economic model of the country's development... Nothing of the sort will happen," Mr Putin said.
He stopped looking at the text of his speech lying in front of him and picked up some paper sheets filled up with his own notes. There were quite a few of them; he had written them while the guests were waiting for him, and clearly had been seriously preparing for this meeting.
What the Russian Prime Minister said was, in fact, the presentation of the Government's economic mobilisation plan. He repeated some things said by other people before and voiced some new ideas.
"There will be no politically motivated decisions," Mr Putin said. "Of course, we will seek to further reduce the tax burden on the economy. This is our strategic choice. The people who have gathered here are competent professionals who know what is going on in the world economy. We will pause before our next possible VAT cuts."
Mr Putin thinks the unified social tax may be reduced "after determining the parameters of the pension scheme."
"We intend to raise the amortisation costs, which is an important step," he added.
In the near future, the procedure for allowing foreigners to invest in strategic sectors of the Russian economy will be made public.
"Our intention is not to close these sectors [to foreign investors], but [to introduce] a permit procedure. No additional permits will be needed for investment in other economic sectors. This procedure will be introduced in the near future," Mr Putin said.
"We see the tension on our trading floors, but we do not connect this with our country's problems: we do not have system-based problems. All the basic indicators of the Russian economy are at a normal level," he continued.
However, what Mr Putin said later showed that there were problems and he intended to tackle them.
"This Friday [September 19], stock markets will hold special trading sessions. On Monday [September 22], the Finance Ministry will hold an auction to place its [temporarily] free funds for three months. We have never placed these funds for such a period," Mr Putin said.
He also said that the Government would gradually attempt to create so-called "long money" on the market. It will support participants in the mortgage market and the housing construction market, and increase the authorised fund of the Housing Mortgage Loan Lending Agency by 60 billion roubles.
"The Government's next measure will look attractive to some participants in this meeting; it makes it possible to change the procedure for calculating oil export duties, adjusting them downward," Mr Putin said. "Thus far, we have analysed [the companies'] two-month performance, and now we will use their 17-day performance for our estimates. Instead of paying $485.8 per metric ton, the exporters will pay $372, thus keeping $5.5 billion for themselves. This sum will be divided in the following way: $4.5 billion will go to oil producers and $1 billion to oil processing companies."
True, some of the participants could find this information interesting.
"The Government deems it possible to use reserve funds in order to maintain macroeconomic indicators. I do not think the time has come to spend our oil and gas revenues. We do have them now, but yesterday the Central Bank announced the reduction of the mandatory reserve fund as its key measure," Mr Putin said.
In conclusion, he said that the current world oil prices were most convenient for Russia, in its unique position of both the largest producer and a major consumer of energy resources.
All this sounded convincing, but perhaps not to his audience.
