“As long as this government is in power, I don’t think any lifting of sanctions will immediately revive the economy.”

July 1, 2016

FT: Is Brexit good for Putin’s Russia?

MBK: I think that Putin is not upset at what has happened.

FT: If you were an investor in the Russian economy, which opportunities would you look for?

MBK: We should understand that the Russian economy has had, and still has, many opportunities. But there are two things that need to be borne in mind. First of all, the Russian economy under the current regime is not stable, including the question of property rights. Secondly, under the current regime, you are unprotected in law. If you understand these two risks, and know how to manage them, you can still make money in Russia. As to whether you want to do business in such circumstances, everyone has to decide that for himself.

FT: Are there any particular sectors? Beer, spirits?

MBK: I think that as always in Russia there’s a big demand for European goods and services, particularly financial services. Again, there is a question if you would like to supply these services.

FT: No advertising for Stolichnaya?

MBK: I’m not sure who owns the brand now, but a previous manufacturer of vodka is currently in jail.

FT: What is the future of the Russian economy given that sanctions are still in place?

MBK: Sanctions have a largely symbolic influence. It’s not very pleasant for those who are targeted by these sanctions, and I’m happy for them. But the Russian economy is quite autarkic and in general sanctions do not significantly affect it. The biggest sanction that has been imposed on the Russian economy is the one imposed by our own government. But for as long as this government is in power, I don’t that any lifting of sanctions will immediately revive the economy.

Some people think that bringing in a reformer like Alexey Kudrin will revive the economy, but think about it: can Putin really bring in an independent judicial system? Can Putin stop his circle, the circle he relies upon, from grabbing whatever they like from other people? Can he allow local power structures to make their own decisions aimed at developing the economy in their region? The answer of course is no, no, no. The reason is that the moment he allows this, his power will be questioned, and at the next election he will be risking his position.

FT: What is Putin like?

MBK: Putin is very good at recruiting people. But like those plants that attract flies, at the moment of contact the fly is gone. At the beginning of his career, he seemed to many, including me, to be the man to lead the country in the right direction. But it was only in 2002 that he made the decision that his aim was to remain in power. This decision dictated all the other decisions that he later took.

FT: Mr Putin offered you and the other oligarchs a deal: keep your money, pay your taxes, stay out of politics, and I’ll leave you alone. Is that correct?

MBK: It would have been strange to have heard such a thing from him. He’s always been less interested in taxes than other incomes.

FT: In the West many people say that Vladimir Putin is a supreme strategist. But you have said that he sacrificed his relationship with the West for the sake of Crimea and Ukraine. Why?

MBK: I can only talk about what reasons he gave to his circle. He said that if we don’t take Crimea, NATO troops would be there in two years time. That is what really concerned him.

FT: You have plenty of money, what are you doing with it?

MBK: The main aim of my Open Russia movement is to find a new generation of people who have the potential to change the future direction of the country.

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