Fear, uncertainty cast pall over Russian business

Sun Jan 31, 2010 8:23am EST
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By Gleb Bryanski

DAVOS, Switzerland (Reuters) - Russian businessmen at the World Economic Forum in Davos struck a gloomy note this week, with many uncertain about the country's direction and others warning a climate of corporate fear could hamper growth.

The wealthy businessmen who ran Russia 10 years ago under President Boris Yeltsin lost their political influence during Vladimir Putin's presidency in 2000-08.

During the global economic crisis, many have gorged on state bailouts.

The state now controls about 60 percent of the economy and President Dmitry Medvedev's call for modernization to lessen the dependency on oil is falling on deaf ears as entrepreneurs are too scared to show initiative after years of what they see as state bullying.

German Gref, CEO of Russia's largest lender Sberbank SBER03.MM, was the only Russian in Davos who spoke openly about the mood of fear gripping the private sector since the state takeover of oil major YUKOS several years ago.

Gref, who also sits on the board of Russia's largest private oil firm LUKOIL (LKOH.MM: Quote), said that since the YUKOS affair, "the main issue on LUKOIL's agenda has been not development, but self-preservation."

"For me, it was a shock to learn that," Gref told an audience of investors, as LUKOIL's head and shareholder Vagit Alekperov looked on. Gref then called for a push to privatize state assets, suggesting a start with the bank he heads.

YUKOS assets were nationalized and former CEO Mikhail Khodorkovsky jailed for tax evasion after a protracted legal battle that has become a symbol of the fear and uncertainty governing business is Russia.   Continued...