“The Situation with YUKOS has Ruined Russia's Reputation”
President Bush preferred not to comment on the situation with YUKOS. The US State Department did it for him. State Department spokesman Richard Boucher dwelt in detail on the situation around the Yuganskneftegaz auction at his daily press briefing, which took place before President Putin admitted in Germany that the buyers of this company were known to him. This is why Mr. Boucher added to the comments of a number of Russian officials who said they knew nothing of Baikal Finance Group's existence before the auction. “We read a lot of funny stories about Baikal Finance Group,” Mr. Boucher told journalists, “but we have absolutely no information about this company.” Following these comments, the State Department spokesman departed considerably from the friendly statement with regard to Russia that President Bush made on Monday at the last White House press conference of the year.
“It seems to me that we clearly stated our attitude towards the sale of YUKOS and the tax claims against this company,” Richard Boucher said. “We looked for a solution to this problem that would observe tax laws and would not infringe on the rights of the company's shareholders, creditors, and employees. We don't believe that the auction was a step in this direction. The entire course of this affair has raised questions about the independence and transparency of Russian courts and investment and tax laws and is a cause for serious concern.” In Mr. Boucher's opinion, “the situation with YUKOS has ruined Russia's reputation as a place to do business”.
“What began as a tragedy has turned into a farce,” a former high-ranking State Department employee told Kommersant. “Even if YUKOS broke some laws in the past, the Kremlin by its actions has done everything possible to make this company look like a victim. The Kremlin's latest actions are clear to everyone, including American businessmen. Russia is becoming an even more difficult country for investments than before.”
Robert Ibel, the director of the energy program at the John F. Kennedy Center for Strategic and International Studies in Washington, thinks that the Yuganskneftegaz auction was a big disappointment for the West. “However you explain its results,” he told Kommersant, “everyone realizes that behind the scenes of this sale stands the Russian government, which is pulling the puppets' strings. This reminds me of Alice in Wonderland, where everyone just shakes his head and asks: “What is going on here?” The results of the Yuganskneftegaz sale are unlikely to change the investment situation in Russia, Mr. Ibel added; and foreign companies currently working in Russia will be “quiet as mice” and pay taxes. Those who are thinking about business in Russia will probably try again to understand the risks involved in this. In Mr. Ibel's opinion, the business with Yuganskneftegaz is far from over. “The big question,” he told Kommersant, “is whose hands Yuganskneftegaz will end up in as a result, not whose friends bought this YUKOS company at the auction. As soon as we get accurate information on the final owner, it will become clear how this will affect the level of oil production in Russia.”
David Rivkin, the US ambassador to the UN Commission on Human Rights in Geneva and former advisor to presidents Ronald Reagan and George Bush, Sr., also believes that, “the Kremlin did what it wanted (with YUKOS – Kommersant)”. In Mr. Rivkin's opinion, a discussion of who is behind the buyer of Yuganskneftegaz is not so important: “The law and democracy in Russia today do not protect people from seizure of their property and its redistribution in favor of others. If I were part of the group that bought Yuganskneftegaz, I doubt I'd be happy. There's no guarantee that later on the Kremlin won't do the same as it did with YUKOS”. “Being close to President Putin today,” David Rivkin continued,” doesn't mean his benevolence won't change tomorrow. I find it hard to believe that a large Western company would agree to direct investments in Russia today.”
In answer to Kommersant's question why President Bush did not mention the situation with Yuganskneftegaz in his statement on American-Russian relations on Monday, David Rivkin noted that for the White House, President Putin's conduct with respect to Ukraine is more important today. The sale of Yuganskneftegaz, he added, does damage to Russia, not the United States. The absence or outflow of Western investments, together with falling oil prices and a slowdown in China's economic growth rates, will have unpleasant consequences for the Russian economy.
Dmitry Sidorov, Washington
All the Article in Russian as of Dec. 22, 2004
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