Posted on 01/31/2004 12:05:50 AM PST by RussianConservative
The Russian Union of Industrialists and Entrepreneurs, or RSPP, commonly known as "the oligarchs' union," has announced that it wants to merge with two associations devoted to small and medium-sized businesses.
"The ideology of the business community must be built on the understanding that Russian business is a united, national force," Vladimir Potanin, owner of the Interros holding and an RSPP board member, wrote in a letter to the union's president Arkady Volsky, suggesting a merger.
The RSPP quoted Volsky as supporting a merger with Opora Russia, which represents small and medium-sized firms, and Business Russia (Delovaya Rossia), which pools together medium-sized businesses.
The announcement caught the two less powerful business groups off guard.
"For now, we won't comment ... We are approaching this pretty carefully," said Svetlana Nogumanova, an Opora spokeswoman. The group's president, Sergei Borisov, is in Switzerland leading an Opora delegation, she said. "That's where he first heard of this."
Business Russia heard rumors about the proposed merger but only found out about Potanin's letter Thursday morning, said spokesman Vadim Vorobyov.
Business Russia issued a statement saying that it will form a working group to consider the merger "seriously."
But it also remained cautious on details, saying it would take an "initiative in offering the boards of RSPP and Opora a concrete, gradual mechanism for the creation of a united organization."
Both groups demanded that the interests of small and medium-sized businesses be represented foremost in any merger.
The news left outside observers speculating on the reasons behind Potanin's proposal.
Some said a union with the smaller business associations would bring RSPP some legitimacy in popular eyes.
"The prestige of being designated an oligarch is no longer what it used to be in Russia," said William Browder, CEO of Hermitage Capital Management.
The move is probably not guided from the Kremlin, said Sergei Markov, a Kremlin-connected analyst.
"Opora was created through the Kremlin's efforts and it has been effective. So the Kremlin should see the Opora project as successful, and its liquidation would hardly be considered productive."
The presidential administration might still undermine the merger plans, Markov said.
Ironically, the proposed integration might have been designed to avert criticism from the Kremlin.
Potanin, in particular, is in an "uncomfortable" position as far as popular opinion is concerned, Markov suggested.
Two weeks ago, NTV's "Namedni" program ran a lengthy report on the posh holiday celebrations of Potanin and other oligarchs at a French ski resort.
"Since one of the main accusations is that the oligarchs are not putting money into their own country, it's become an apt time for Potanin to think about the fate of his country," said Markov.
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