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Author Topic: Russia Inc.'s Love-Hate Thing for Putin  (Read 1064 times)

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Online 2tallbill

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Russia Inc.'s Love-Hate Thing for Putin
« on: December 15, 2011, 04:31:24 PM »
Russia Inc.'s Love-Hate Thing for Putin
Russian businesses are ambivalent about the once and future President.
They like the stability he brings. The corruption? Not so much


Sergey Petrov, founder of Russian auto dealer ROLF Group, was among tens of thousands of Muscovites who braved police lines and near-freezing temperatures on Dec. 10 to denounce election fraud and keep alive the anger that led to a major reverse for Vladimir V. Putin’s ruling party in parliamentary elections a week before. “When you get waves of protests, of course markets are unstable and stock prices fall, and business suffers most of all,” says Petrov. “But in the long term, business benefits from change and reform.”

Prime Minister Putin’s decision to reclaim the Presidency, and allegations of vote-rigging in the Dec. 4 elections, have galvanized some in the business community—though not exactly to action. Billionaire Alexander Lebedev, who owns the London Evening Standard and Independent newspapers, warns that in 10 years Russia will become an economic backwater like Zimbabwe and Putin will be another Robert Mugabe, Zimbabwe’s isolated leader. Russia needs an independent court system, prosecutors who fight corruption, and a genuine Parliament to keep control of government and ensure that elections are free of fraud, argues Lebedev. Still, he’s not calling for revolution. “I’m a believer in evolutionary change,” explains Lebedev. And he says he can’t see progress without Putin in charge, at least for a while longer.

Fellow billionaire Mikhail Prokhorov, who clashed with the Kremlin in September over his leadership of a pro-business party, said in a blog post on Dec. 8 that “like it or not,” he still sees Putin as the only person who can effectively govern the country. Then, on Dec. 12, Prokhorov announced plans to run against Putin for the Presidency. Many Russian commentators including Sergei Markov, a former lawmaker in Putin’s party who heads the Institute of Political Studies in Moscow, described Prokhorov’s move as a ploy by Putin to lend the election legitimacy. Prokhorov says he’s in it for real.

The attitudes of Russian business toward Putin are, to put it mildly, confused. Business is far less conflicted in its feelings about the Communists, who want to nationalize natural resources and companies in strategic sectors. The same can be said for the Just Russia party, whose calls for more social spending would lead to higher taxes. The Communists got 92 seats in the 450-member lower house, while Just Russia received 64, vs. 238 for Putin’s United Russia party, down from 315. In another blog post, Prokhorov said the Communists and Just Russia have such populist policies they make Putin’s party a model of conservatism. The tycoon added that if the country adopted the policies of both Just Russia and Putin’s party, “We are consigning business in Russia to the grave.”

Faced with these unappetizing choices, business has been voting with its feet. Capital flight is expected to reach $80 billion this year, Deputy Economy Minister Andrei Klepach said on Nov. 30. That would be the second-biggest outflow since the central bank began keeping records in 1994. Russian companies, including the country’s largest gold miner, Polyus Gold International (PLZLY), which Prokhorov co-owns, are moving their primary listings to London. “It’s hard to see what would turn that around,” says Charles Robertson, global chief economist at Renaissance Capital in London.

A common practice in Russia is raiderstvo, or raiding, in which state officials prosecute businessmen to seize their companies, says Yana Yakovleva, head of Business Solidarity, a Moscow lobbying group. She estimates that more than 100,000 businesspeople are in Russian jails, and one in six entrepreneurs have faced criminal proceedings. The co-owner of Moscow chemical distributor Sofex, she spent seven months in jail awaiting trial in 2006 and 2007 before her acquittal of trafficking in dangerous substances. She’s back in business.

Boris Titov, head of the main lobbying group for small and medium-size businesses, has been a public critic of raiderstvo. Still, at the Nov. 27 United Russia congress, he endorsed Putin as the party’s candidate for the presidential election. “Like many businessmen, I am a person of liberal inclinations,” he said, criticizing the bureaucracy, the corruption, and the dominance of “often ineffective, large state companies.” Still, Titov’s association had decided to support Putin because he is a “strong, high-class, and effective manager.”

Petrov, a lawmaker in the Just Russia party, says continued rule by Putin’s party will lead to a worsening of the business climate. “It’s not a party but a trade union of bureaucrats who listen to their leader, who has the brains of a former secret service officer and will pile more and more pressure on business,” he says. (Putin served in the Soviet-era KGB.)

Even if Russia embraced the social spending goals of the Just Russia and Communist parties, the financial burden on business would be lighter than the burden of corruption, which adds 40 percent to the price of goods and services, says Petrov. “As long as business takes one step forward and two steps back, the business climate will deteriorate until a major collapse.”

The bottom line: As capital flight from Russia approaches $80 billion this year, Russian business remains conflicted about Putin.

read the article here
http://www.businessweek.com/magazine/russia-incs-lovehate-thing-for-putin-12152011.html
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Online 2tallbill

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Political Uncertainty In Russia Has Investors Nervous
« Reply #1 on: December 15, 2011, 04:39:46 PM »
Political Uncertainty In Russia Has Investors Nervous

MOSCOW -- In normal times, there is nothing better for a Russian business than to have Prime Minister Vladimir Putin as an ally. But these are far from normal times.
 
In the wake of the disputed December 4 parliamentary elections and the ensuing street protests, investors are balking at the political instability and uncertainty by pulling stakes out of Russian companies. And the hardest hit companies are those with the closest ties to Putin.
 
One of the hardest hit has been the gas company Novatek, which is partially owned by the prime minister's close friend and trusted ally, Gennady Timchenko. The company has lost 10 percent of its value since the elections, emerging the biggest victim in a sell-off of shares in companies close to the Kremlin.
 
Igor Nikolayev, director of the strategic analysis department for the consultancy firm FBK, says investors have been alarmed by the specter of political instability.
 
“Investors took it as an extremely negative signal when they saw that people do not agree with the falsification of elections on that scale," Nikolayev said.
 
Putin's Perceived Weakness
 
Such investor nervousness has reverberated through Russian stock markets since the elections.
 
Analysts say Putin's perceived weakness, which could lead the country in unpredictable directions, is troubling to investors who have viewed the prime minister as a guarantor of political stability.
 
Many investors fear that destabilizing political infighting could break out among the political elite and are trying to minimize their exposure. As a result, the ruble-based MICEX stock index has fallen by more than 10 percent and the dollar-based MSCI Russia Index has fallen by 13 percent since the election.

Tom Mundy, the chief strategist at Otkritie Capital, says the state-run natural gas monopoly Gazprom, as well as utilities companies, were hit hard amid fears that Putin's plans to aggressively liberalize tariffs could come under threat. Likewise, oil firms Surgutneft and Transneft have also suffered due to concerns over how the political uncertainty will affect corporate governance.
 
Mundy adds that shares will continue to perform badly as long as instability persists.
 
“I think in the short term there is going to be a huge amount of news flow for the next two weeks at least, up until after Christmas, until December 27. I don’t think in that kind of environment you’re going to get capital inflows into Russia and I think it will put added pressure on outflows," Mundy says.
 
"It’s not the kind of environment where you commit long term capital to work in Russia. I think we have to get through this period of uncertainty in Russia before we do that.”
 
Investors do not expect the postelection protests to topple the regime. But Nikolayev says investor confidence largely hinges on how the authorities respond to them.
 
“If investors see that all this fizzles out and that the tactic of the authorities works -- the authorities are offering the public various projects such as having a supposed independent presidential candidate," Nikolayev said.
 
"They’ve again started talking about a new liberal-right party. The organization for 'Free elections' is being created partly by the authorities. If this manages to satisfy the protesters, then shares won’t fall like this.”
 
The opposition, which managed to bring tens of thousands onto the streets on December 10, are demanding that the State Duma elections be annulled and new ones scheduled. They are also calling for unregistered opposition parties to be allowed to compete.

Tom Mundy, the chief strategist at Otkritie Capital, says the state-run natural gas monopoly Gazprom, as well as utilities companies, were hit hard amid fears that Putin's plans to aggressively liberalize tariffs could come under threat. Likewise, oil firms Surgutneft and Transneft have also suffered due to concerns over how the political uncertainty will affect corporate governance.
 
Mundy adds that shares will continue to perform badly as long as instability persists.
 
“I think in the short term there is going to be a huge amount of news flow for the next two weeks at least, up until after Christmas, until December 27. I don’t think in that kind of environment you’re going to get capital inflows into Russia and I think it will put added pressure on outflows," Mundy says.
 
"It’s not the kind of environment where you commit long term capital to work in Russia. I think we have to get through this period of uncertainty in Russia before we do that.”
 
Investors do not expect the postelection protests to topple the regime. But Nikolayev says investor confidence largely hinges on how the authorities respond to them.
 
“If investors see that all this fizzles out and that the tactic of the authorities works -- the authorities are offering the public various projects such as having a supposed independent presidential candidate," Nikolayev said.
 
"They’ve again started talking about a new liberal-right party. The organization for 'Free elections' is being created partly by the authorities. If this manages to satisfy the protesters, then shares won’t fall like this.”
 
The opposition, which managed to bring tens of thousands onto the streets on December 10, are demanding that the State Duma elections be annulled and new ones scheduled. They are also calling for unregistered opposition parties to be allowed to compete.

Concessions
 
The authorities dismissed these calls, but made a series of symbolic concessions earlier this week. For example, former Finance Minister Aleksei Kudrin, a close Putin ally, said that he would participate in creating a liberal party to appeal to the disgruntled young urban middle class.

Billionaire tycoon Mikhail Prokhorov, meanwhile, announced he would run against Putin for the presidency. Opinion is divided over whether Prokhorov's move is an honest attempt to challenge Putin or a Kremlin foil to divide and confuse the opposition.
 
More opposition rallies are scheduled in Moscow for December 24.
 
Mundy says that given the uncertainty, Putin -- who is required by law to abdicate his duties as prime minister after being formally registered as a candidate for president -- may try something dramatic.
 
“The other alternative is that Putin, looking at the instability in Russia, may not be willing to leave his hands off the reins [of power] for the four month period leading up to the March ballot," Mundy said.
 
"There is a neat trick -- Medvedev could stand down as president and Putin could come in as caretaker president. Then you would have a very neat, smooth transition through to the presidential ballot.”
 
Mundy and Vladimir Tikhomirov, chief economist at Otkritie Capital, published a widely circulated research note suggesting this possibility on December 14, prompting a curt denial from Putin's spokesman, Dmitry Peskov.
 
"The situation on the financial markets is a difficult one. Not all financial analysts manage to maintain mental sobriety," Peskov said.
 
"Putin continues to work as chairman of the government. If any events have an entirely campaign-related nature, he will take a vacation," he said. "But on the whole he will carry out his day-to-day duties as prime minister. He does not have to take any vacation."

read all about it here
http://www.rferl.org/content/political_uncertainty_in_russia_has_investors_nervous/24423102.html
FSUW are not for entry level daters. FSUW don't do vague FSUW like a man of action so be a man of action  If you find a promising girl, get your butt on a plane. There are a hundred ways to be successful and a thousand ways to f#ck it up
Kiss the girl, don't ask her first.
Get an apartment not a hotel. DON'T recycle girls


 

 

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