I remember the interest rates very well. This "New York Times" article doesn't say it, but it outlines Russia's future. As a nice little Fascist State. Welcome aboard, k8!
Russia Offers Reassurances About Rights to Property
By ERIN E. ARVEDLUND
OSCOW, Nov. 13 - The Russian government went on a charm offensive Thursday, with liberal Kremlin aides and international financial aid officials saying the country was not headed toward a reversal on privatized property after the arrest of the country's wealthiest businessman.
"The president underlined that there would be no deprivatization," Andrei N. Illarionov, a senior Kremlin economic adviser, told the Interfax news agency Thursday. Mr. Illarionov, who is widely viewed as a liberal economic sounding board for President Vladimir V. Putin, said the arrest last month of Mikhail B. Khodorkovsky, the richest of Russia's billionaires, did not reflect selective justice. "There is no basis to suppose that the use of laws is selective or will be selective," Mr. Illarionov said, as reported by Interfax news agency.
Mr. Khodorkovsky was arrested on Oct. 25 on charges of fraud, embezzlement and evasion of $1 billion in taxes, crimes that prosecutors contend were committed in Russia's privatization era in the 1990's. Mr. Khodorkovsky's jailing sent shock waves through financial markets here and unnerved liberal political factions who saw the arrest as the beginning of a broad attack on business.
The leader of the International Monetary Fund voiced concern about possible consequences of the Yukos affair Thursday at a meeting with Mr. Putin. But Mr. Illarionov added that Mr. Putin made clear that Russia's prosecutor "must prove its case in an open and fair trial."
While the Prosecutor General's Office continues to pursue its case against Mr. Khodorkovsky and other large shareholders of Yukos, "Everyone under investigation and tried is innocent until the court pronounces a verdict," Mr. Illarionov added.
Meanwhile, I.M.F. officials said they were satisfied that Mr. Putin would stick to a pro-business course and not reverse Russia's state asset privatizations, which overnight enriched Mr. Khodorkovsky and many other Russian oligarchs, as the handful of billionaire businessmen are called.
"I was satisfied that President Putin assured me that there is no reversal of the strategy here in Russia," Horst Köhler, managing director the fund, said at a news conference.
Russia joined the I.M.F. in May 1992 and borrowed nearly $22 billion from 1992 to 1999. In the past few years, however, Russia has taken no new loans from the I.M.F. and paid back more than $1.5 billion in 2002. The country's budget is now firmly in surplus, and Russia is expected to repay the fund nearly $2.1 billion this year.
Meanwhile, investors and Kremlin watchers said they are not convinced that the government's prosecution of Mr. Khodorkovsky, chief executive of the Yukos oil company until recently, would be its last confrontation with Russia's business elite. Economists also believe that it is unlikely that the I.M.F. would pressure the Russian government over the case.
"The I.M.F. got the answer they wanted to hear. And just as investors are, they're giving the benefit of doubt to the Russian government," said Christopher Weafer, chief strategist at Alfa Bank in Moscow.
Last month, prosecutors froze most of the 44 percent share of the company held by Group Menatep, a holding company of Mr. Khodorkovsky and other large Yukos shareholders. Prosecutors released some of that stock after 4.5 percent was found to belong to shareholders not involved in criminal cases.
"Any uncertainty won't go away until after those shares are unfrozen or disposed of properly," said Mr. Weafer, referring to the large block of Yukos equity.
Mr. Khodorkovsky has denied the charges against him and has called them a Kremlin effort to punish him for political activity before parliamentary and presidential elections.
Mr. Putin might appear at a congress Friday of the Russian
Union of Industrialists and Entrepreneurs to allay concerns about
the Yukos affair, Reuters news agency reported.
Separately, George Soros, the financier and philanthropist, called Russia a "faltering democracy" and said the arrest of Mr. Khodorkovsky "makes Russia ineligible to be a member of G-8."
"President George Bush, who has embraced Putin, now has an obligation to disembrace himself," Mr. Soros said in a telephone interview from Boston. Several events led Mr. Soros to believe that Russia is headed toward state capitalism, including the beating of Otto Latsis, a prominent Russian journalist.
"The decision to keep Mr. Khodorkovsky in jail until after the elections is very definitely a political move" by the Russian government, Mr. Soros said.
And while he said he had no reason to link the prosecution of Mr. Khodorkovsky, Mr. Soros said that it coincided with a raid on Soros Foundation offices in the central downtown district here, part of a long-time property dispute with a "gangster landlord." He said that a group of paramilitary forces pushed their way into the building and emptied its contents. The men in camouflage were hired by a man claiming ownership of the building and back rent owed by the Soros Foundation, which philanthropic projects and has given out roughly $750 million in Russia.
He said he had met Mr. Khodorkovsky only twice. But, he added, "the one thing that connects Khodorkovsky and me is the assault on property rights. It's very detrimental for Russia's economic development."
nytimes.com |
