Oligarchs should pay for state asset sell-off, says Putin

Fri, Feb 10, 2012, 00:00

PRIME MINISTER Vladimir Putin has suggested making Russia’s “oligarchs” pay for the rigged 1990s privatisations that made them billionaires, in the latest populist move aimed at ensuring his comfortable victory in next month’s presidential election.

He made the proposal at a meeting with tycoons in Moscow, while across the city the last Soviet leader Mikhail Gorbachev was warning Mr Putin that his return to the Kremlin could provoke dangerous street protests in Russia.

Referring to the quick-fire sale of state assets at knockdown prices after the fall of the Soviet Union, Mr Putin told the meeting: “We have to draw a line under this period, so that society accepts the outcome, ending this problem of the 1990s.

“It should either be a one-time payment or something else,” he added.

“We have to think about this together. I think society as a whole and the business class have an interest in this.”

Mr Putin, who after coming to power 12 years ago quickly sidelined several tycoons who opposed him, also suggested a “vanity” tax on the luxury goods beloved of Russia’s wealthy elite.

“It should be something like a publicly recognised payment for refusing to invest in development in favour of unrestrained consumption and vanity,” he told the businessmen.

The event was reminiscent of a meeting Mr Putin held with Russia’s oligarchs during his first term as president, when he made clear that he would allow them to retain their wealth as long as they did not meddle in politics.

Mikhail Khodorkovsky, who was Russia’s richest man before being jailed for financial crimes and seeing his Yukos oil firm dismantled, is widely seen as having paid a heavy price for breaching that “agreement” and questioning Mr Putin’s authority.

Mr Putin’s proposal will please the many Russians who see the oligarchs as the embodiment of the chaotic and corrupt 1990s.

One of Russia’s richest men, Mikhail Prokhorov, is running against Mr Putin in the March 4th election.

Polls suggest Mr Prokhorov will take only about 4 per cent of votes nationally, but more than 10 per cent in Moscow and St Petersburg, the powerhouses of Russian and business and the cities where recent anti-Putin protests have been largest.

Mr Putin is eager to secure in the first round of the election, to bolster the legitimacy of his return to the Kremlin and to discourage opponents from continuing their protests.

His allies plan to stage a 200,000-strong rally later this month, to halt the momentum of opposition rallies in Moscow.

“He did a lot of good, but now he is used up,” Mr Gorbachev said yesterday in his latest stinging assessment of Mr Putin.

“He’ll probably win the presidency, but if he doesn’t overcome himself and deal with things differently, then everyone will end up in the squares,” he said, alluding to the danger of ever-greater protests.

Mr Gorbachev said Mr Putin was “unlikely to be able to change things – we’re talking about changing the system, not just making certain steps and concessions”.