President Vladimir Putin has met Russia’s wealthiest people for the first time since February 24. He described the state of the economy with a quote from Mark Twain – “rumors of his death are greatly exaggerated”. Putin again urged businessmen to be patriotic – not to hide money abroad and spend it on overconsumption, but to invest in the country. To Western investors, Putin promised to return frozen dividends, provided they invest in Russia and mention that he still had “real friends” in Germany. How was the congress of the largest trade association – the Russian Union of Industrialists and Entrepreneurs (RSPP) – tells RTVI.
The main plot was the denouement of the story with the company’s “mandatory-voluntary” contribution
The excess income tax rate will be 5%. It will affect 0.1% of enterprises with a profit of 1 billion rubles, with the exception of the oil industry, coal, small and medium-sized enterprises. The Ministry of Finance plans to raise 300 billion rubles in in limited quantity The government estimates that in 2021-2022 part of the company “earns well” and introduces an exceptional tax (literally, “a tax on income brought by the wind”). Finance Minister Anton Siluanov promised that the contribution would be spent on roads, schools and public sector salaries, “for which money should not be spared.” “Of course, the company is above all a business, not a social institution, we all understand that perfectly. But you understand what I’m talking about now, ”recalled the president about social responsibility. Almost a third of budgetary expenditure in 2023 will go to the defense and security forces.
The company succeeded in ensuring that the contribution was precisely fiscal and not voluntary, as was originally intended. Businessmen fear that a “voluntary” payment will “bind them by blood” and one of the businessmen explained the military actions to The Bell*: “But paying taxes is a sacred duty, any lawyer will tell you that.”
The ban on the withdrawal of dividends from Russia by investors from “hostile” countries will be weakened
Now the dividends of these investors are frozen in type “C” accounts in rubles. Putin offered to allow foreigners to receive dividends “provided that such funds are intended, among other things, or primarily, for the development of business in Russia.” He considers that the term “hostile countries” is inaccurate. According to him, there are hostile elites, hostile “leaders”.
Press Service of the President of Russia
The proposal for partial release of dividends due to foreigners has already been supported by the Ministry of Finance and the Central Bank. They will develop a specific mechanism.
The billionaires did not have the floor for the first time
In previous years, at RUIE congresses, the heads of large companies could always express their problems after the president’s speech. This time, for example, the Italian businessman Matteo Valik (Biesse Group) and an entrepreneur from Dagestan Patimat Gamidova took the floor.
At least 16 billionaires and senior executives of public companies came to the meeting:
German Khan (Alfa Group), including, among others, Free remove sanctions Navalny supporters, Oleg Deripaska (RUSAL group, GAZ group), Viktor Vekselberg (Renova group), Vladimir Potanin (Norilsk Nickel), Alexei Mordashov (Severstal), Igor Zyuzin (Mechel), Dmitry Pumpyansky (Pipe Metallurgical Company) , Mikhail Gutseriev (RussNeft), Andrey Melnichenko (EuroChem, SUEK), Dmitry Mazepin (Uralchem), Viktor Rashnikov (PJSC Magnitogorsk Iron and Steel Works), Andrey Guryev- Jr. (Phosagro), Evgeny Ditrikh (GTLK JSC), Mikhail Oseevsky ( Rostelecom PJSC), Alexander Dyukov (Gazprom Neft PJSC), Andrey Kostin (VTB Bank).Many of them were at a meeting with the President on February 24, hours after the outbreak of hostilities in Ukraine, after which they are fallen under US control and EU sanctions. Some of the billionaires then formally got rid of control over the companies. According to Forbes, the richest businessman in Russia, according to Forbes, Vladimir Lisin (NLMK), Roman Abramovich, Leonid Mikhelson (NOVATEK), Vagit Alekperov (LUKOIL), Vladimir Yevtushenkov (AFK Sistema) were not seen among the RUIE participants were 15 RSPP businessmen, including Alisher Usmanov (USM), Leonid Fedun (LUKOIL) and Araz Agalarov (Crocus Group). Usmanov explained the decision as “retirement and withdrawal from active work.”
The leitmotif of the congress was the complaints about the lack of personnel
62% of companies in Russia do not have enough qualified specialists, a survey by the Russian Union of Industrialists and Entrepreneurs showed. The shortage of personnel forces companies to attract women and adolescents to traditionally male specialties, underline Central bank.
“Some employers are cutting wages,” said Mikhail Shmakov, head of the Federation of Independent Trade Unions of Russia (FNPR). Engineers, he says, pay half as much as the pizza delivery people. The fact that about 600,000 Russians left because of the hostilities does not add to optimism, and the mobilization is the biggest wave of emigration since the collapse of the USSR.
The president is convinced that there are “huge opportunities” for business in Russia
“Now there are even more opportunities, prospects for development and business expansion, and Russian companies should not miss them, otherwise it is not even an hour and some companies left will want to return. The situation, without exaggeration, is unique for many of our companies,” the president pointed out.
Minek waits resumption of GDP growth this year. “Those who stayed here and who really work have turned out to be smarter, more energetic, more efficient than those who left and give advice to our criminals,” said the president.
Rosstat estimated the drop in GDP at 2.1% in 2022. The Central Bank allows GDP growth of less than 1% in 2023, but does not rule out a drop of the same amount. International Monetary Fund (IMF) predicted growth of the Russian economy by a symbolic 0.3%
The economy survived because the government kept market principles and did not translate them into mobilization, explained Vasily Astrov, an economist at the Vienna Institute for International Economic Research (WIIW), in an interview with RTVI. “If your experience shows that at any time a brick can fall on your head, then it is better to walk and sleep with a helmet. Suddenly, in 2022, another “brick” flew towards Russian business leaders. However, thanks to the developed habit of surprises, most of them were able to get away with only dents on their helmets”, directed an allegory on the survival of Russian business Andrey Yakovlev, visiting scholar at Harvard University’s Davis Center.
Press Service of the President of Russia
“Inflation will be lower than in Europe”
Putin promised to slow price growth to 4% in March. The decline in the indicator in annual terms is explained by the effect of a high base. A year ago, in March 2022, inflation reached 16.7% in annual terms (the highest since 2015). In March 2022, prices jumped 7.5% (the highest monthly inflation since 1999).
Price growth in the euro zone amounted to 8.5% in February.
Retail turnover expected to grow 5% in April, Putin says
The decline in consumer demand indicates a decline in the standard of living of Russians who have “tightened their belts”. It is one of key economic problems of recent months.
“The standard of living of Russian consumers peaked in 2014 and has not recovered since,” declared economist at Bloomberg Economics for Russia Alexander Isakov. “Last year, sanctions reduced retail turnover by 10.5%, setting it back more than 10 years.”
Trade surplus increased by 8.1% and it’s “good music”, says Putin
A record foreign trade surplus in 2022 (the difference between exports and imports) is the result of falling imports and rising exports due to soaring oil and gas prices during the energy crisis . The most important is a 19% drop in the most important investment imports for the economy (machinery, equipment and electronic components).
Russia’s exports in 2022 increased by 20% to $592 billion, imports fell by 11.7% to $260 billion, resulting in a record balance of $332 billion from $200 billion. dollars in 2021. Top 5 trading partners of Russia in 2022: China, Turkey, Germany, Belarus, Netherlands.
Putin again urged companies to quit offshore
“I have often heard that it is more reliable there (in the West). And now ? the president addressed the businessman in the lobby. The accounts and other assets abroad of many of them are now frozen.
The reason why the sanctions did not cause a massive return of Russian assets and capital flows from Europe to the United Arab Emirates, Qatar, Hong Kong and other countries has already been examined by RTVI.
Putin recalled that there are entrepreneurs who “make life better for everyone” and suggested creating a prize for them. Companies, he said, should regularly publish extra-financial reports on their social projects with “creative work stories”.
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