Are court hearings a precedent?

Russia

In 2012, Putin set the task of improving the business climate. Of course, the level of taxation and the bureaucratic procedures for registering companies, among other things, have an effect. on the entrepreneurial activity. Another component of the investment climate that is difficult to measure, however, is the guarantee of property rights and personal safety for entrepreneurs.

Former owner of the Russian oil company JUKOS Group Mikhail Khodorkovsky. (& copy picture-alliance / dpa)

There are considerable problems here, but also initial approaches to change, such as the project of an amnesty for entrepreneurs. But there will be no real guarantees that property rights will be protected without serious institutional reforms. Unlike many experts, we do not believe that the answer to this question lies in the notorious "political will". Much more important is the understanding that the economic development model that emerged in the 2000s and based on raw material rents is exhausted and that at the same time the "ruling coalition" dramatically needs sustainable economic growth to maintain social and political stability. Today, however, economic growth can only be regained on the basis of private investment.

Doing business

The end of 2013 was determined by two events related to working conditions for companies in Russia. On December 16 and 17, the conference "100 steps to a favorable investment climate. Successes and new challenges" took place in Moscow, organized by the "Agency for Strategic Initiatives" (ASI) and the newspaper "Vedomosti". The overall tone of the contributions there was as follows: in the improvement of the business climate, which Putin set as a task in February 2012, entrepreneurship together with progressive technocrats in the government is, despite the many problems, more than on schedule. This statement is illustrated by the rise of Russia on the Doing Business ranking from 120th to 92nd place (http://russian.doingbusi ness.org/). Then, on December 20, the former owner of the JUKOS group, Mikhail Khodorkovsky, was purposefully released from the penal colony on the basis of a decree by President Putin. The composition and "format" of these two events clearly illustrate two sides of the economic climate in Russia. It is evident that the level of taxation and the ease with which the administrative procedures involved in registering businesses, connecting to electricity or obtaining permits have an impact on the cost of doing business. Another component of the investment climate that is difficult to measure, however, is the guarantee of property rights and personal security for entrepreneurs. In this respect, the JUKOS case, which is now coming to an end, has set an example as a precedent. The trial against JUKOS was undoubtedly politically motivated. It should make it clear that the balance of forces in the "ruling coalition" has shifted: the large companies had become "junior partners" to the federal bureaucracy elite. For the middle and lower ranks of the vertical of power, however, the openly selective application of the law against owners and managers of Russia's largest corporation was a powerful informal signal that attitudes toward entrepreneurs as a whole have changed. Many experts are well founded of the opinion that the JUKOS case opened the door to the mass practice in which "raid-like hostile takeovers" of companies are carried out with the participation of representatives of the security authorities and the judiciary. Figuratively speaking, in 2003 and 2004 - with a view to the events at the top - every self-respecting major or colonel wanted to get "his little JUKOS". The media have reported several times over the past few years about the practical consequences of this turnaround - from the "Jewroset-Motorola Case" (http://www.kommersant.ru/doc/662801) and the "Case of the Chemists" (http: // www.forbes.ru/forbes/issue/2008-03/11899-biznes-pod-pressom) in the pre-crisis period until recently the "poppy case" (http://www.newsru.com/russia/27sep2012/shilov. html). Has anything changed about this dark component of the economic climate in Russia? And: Can the release of Khodorkovsky in combination with the activities of the ASI influence this process?