23 Jan 2023 13:58

Russia shouldn't repeat West's illegal asset seizures, this destructive for business climate - Potanin

MOSCOW. Jan 23 (Interfax) - Russia should not repeat the West's illegal practice of confiscating assets, especially since there is every opportunity to replace Western investment with local investment and investment from friendly countries, Vladimir Potanin, owner of Interros and CEO of Norilsk Nickel said in an interview with RBC TV.

He also said the idea of seizing the assets of Western countries and the property of Russian citizens who left the country was at odds with the government's policy to improve the investment climate. Calls to do so disincentive Russian entrepreneurs, giving rise to uncertainty in property rights, Potanin said.

"The confiscation [of assets] is a covert or overt form of theft. It destroys the investment climate of the jurisdiction in which it takes place. The countries of the 'collective West', which have built their society on certain values, a cornerstone of which was respect for private property, are destroying this in vain, and it will hurt them. And we don't need to do the same. Why repeat the mistakes of others?" he said.

Potanin drew attention to the bad experience with property confiscations that Russia had after 1917. "We went through all that in 1917. And everybody remembers what this led to. Disrespect for personal freedoms and ownership rights has all had bad consequences. So you just need to be able to abstain from this," he stressed.

"Entrepreneurial activity is built on respect for ownership rights, people's incentives are born. And depriving them of this kind of incentive is very damaging," Potanin said.

In addition, nationalization would exacerbate problems with excessive state ownership and limited investment activity, Potanin said. The state's task is to take up only those areas that business cannot due, for example, to a lack of commercial prospects.

"In principle, our economy is more likely to suffer from excessive state participation, so new nationalization, in my opinion, is at odds with the entire financial and economic policy of our government and our country. We do not need to propagate an excess of state property, especially in areas such as trade, high-tech, etc. There's no need for confiscations, no need for nationalization. We need to develop the investment climate and replace some investments with others - local and from friendly countries," he said.

"I believe this process should continue, be incentivized, including by replacing foreign investment. If some companies leave our country, then instead of imposing confiscatory and other stringent measures to them, it would be much easier to give the investment community the opportunity to solve this problem on its own. It has every opportunity to replace foreign investments with local investment in order to do this," Potanin said.

Talk about nationalization and confiscation is a distraction from a topic that has deservedly been mainstream since the spring of 2022, namely strengthening the domestic investment climate, Potanin said.

Potanin strongly opposes the seizure of property from Russians who have left the country: "Our country is very committed to communal, orthodox traditions. We do not for example have a penchant for newfangled trends marriage and family matters. And we stand firmly by this. Why do we think such fundamental institutions as property or respect for the individual should be treated any differently?" he said

"Programmers have left, now we're debating whether to let them back in. People left, they probably had some reason for this. But most of them continue to work for our country, our economy, our companies. Some of them will return, some will not. Why push them away, drive them away? They'll be hired by other companies. This is our strength, not weakness - their brains, their ability to produce a product, which, by the way, we are in desperate need of," Potanin said. He said Russia was only 20% self-sufficient in software, and in the new conditions it needs the intellectual potential of local specialists to bridge this gap.

"How will we repair the damage that sanctions have done to our economy? We will repair it first of all with help from those people who are able to do this, so we must respect their beliefs, which, are not perhaps entirely to the liking of more patriotic people. We must show tolerance," Potanin said.

Potanin people who work for the country's economy from abroad or remotely should not be punished. "In general, we need to put an end to this demagogy. People who harm and damage our country here or there must be judged, proven guilty and punished accordingly, by law. And those who think differently must be judged by their contribution to the common cause. Those who left, they make a contribution, they make their own product, one that we very much need. I would not discriminate against them at all, at least for a rather long period of time. The situation is acute, unusual. The perceptions of these young people about the world order are being broken," he said.

The Russians who left the country should be given the opportunity "to feel, to understand, to try things," he said.

"It seems to me that taking away property and stigmatizing people too soon is a sign of weakness. And we are a strong country, a strong nation, at least we dream of being perceived this way. So we must make strong moves, not weak ones. Violating the right of ownership is an impulsive, weak move. And punishing people for working, say, from Yerevan or even from somewhere like Germany for our economy, is also an impulsive, populist move," Potanin said.