President Vladimir Putin sought to reassure Russia's jittery business barons at a Kremlin meeting Thursday, promising to guarantee property rights and not to review the murky 1990s privatizations.
The talks, the first this year between the Russian leader and the group of so-called oligarchs who control a large chunk of the Russian economy, came amid growing concerns about a worsening investment climate because of widespread corruption and incessant tax demands.
"The government must provide transparent, predictable working conditions for business," Putin said according to the Interfax news agency.
"This means safeguarding against administrative arbitrariness and fully guaranteeing property rights," he said.
Putin said he supported reducing the statute of limitations for contesting privatizations from 10 years to 3 years _ which would safeguard the business empires of Russia's select club of billionaires who snapped up vast state assets at bargain prices in the chaos of the post-Soviet era.
And he said the government was working on proposals for a tax amnesty, conceding that business figures had "quite a few justified complaints about fiscal organs."
Arkady Volsky, the head of the Russian Union of Industrialists and Entrepreneurs, the main lobbying group for the country's top businesses, warned ahead of the meeting that conditions were becoming intolerable.
"One cannot continue to live with such a state of affairs any longer," said Volsky, who said an improvement in the business climate will be possible only "when there will be order in this country, without daily assassination attempts and continuous changes of the law."
Last week, Russia's electricity chief and liberal opposition leader Anatoly Chubais survived a roadside assassination attempt that was blamed on his business enemies or on political motives.
Capital flight from Russia more than tripled to US$7.9 billion dollars (Ђ6.1 billion) last year, according to official statistics, in what analysts said was a panicked response to the state's politically driven assault on oil company Yukos.
Yukos, once the No. 1 oil producer in Russia and investors' favored blue chip stock, has been dismantled and partly renationalized to pay off a staggering US$28 billion (Ђ21.5 billion) tax bill for 2000-2003, which in certain years exceeded its total revenues. Its founder and former chief executive Mikhail Khodorkovsky is on trial facing a 10-year jail sentence for tax evasion and fraud.
Observers say Khodorkovsky _ once Russia's richest man with a personal fortune estimated at US$15 billion (Ђ11.5 billion) _ was targeted because he had financed opposition parties that threatened the Kremlin's grip on power.
Since the "Yukos affair," which the government has defended as a pursuit against tax cheats, fiscal authorities have gone after other companies in what some domestic and foreign businesses contend has steamrolled into uncontrolled extortion.
Despite Putin's reassurances, Kremlin aides have indicated privately that for domestic political reasons _ parliamentary and presidential elections are looming in 2007 and 2008 _ Putin cannot grant a tax amnesty to major corporations largely controlled by tycoons who are deeply unpopular among the impoverished masses in Russia.
HENRY MEYER Associated Press
Representatives of the Israeli Defence Ministry responded to recent reports about the possible delivery of S-300 SAM systems from Russia to Syria. Israeli Defence Minister Avigdor Lieberman said that Israel would destroy those systems
Russia is to start supplying S-300 air defence systems to Syria in the near future. The shipments will be conducted free of charge