Thursday, April 9, 2020

After Pandemic, Russian State will have Tighter Links with Business and Be More Centralized, Billionaire Businessman Says

Paul Goble

            Staunton, April 6 – Even as the pandemic continues, many Russians are speculating about what life will be like after it ends. Billionaire Russian businessman Roman Trotsenko says that in his view, ties between the state and business will be strengthened and the government itself will become “more centralized.”

            Decentralized states are more flexible and do better when the situation is more or less normal, he says; but in times of crisis, those which are highly centralized can respond more quickly and effectively as China has done with the coronavirus. And thus, in the face of it, other countries including Russia will move in that direction.

            According to Trotsenko, “Russia has its own tradition of the interrelationship of the state, the population and business, and it is closer to the centralized model.” That has meant that Moscow has responded well to the current crisis and that its centralization and close relationship with business will only grow (

            Russia like the rest of the world will be moving to greater protectionism, digitalization of economic activities, and a return to the world in which existing firms rather than start ups will have the advantage, the businessman says.  And all this will increase the link between business, on the one hand, and the government, on the other.

            “Mayor investment projects will cease to be the private affair of some company or other,” he says. “The state as regulator which defines the rules and as a side which expects from business social well-being in the form of jobs, taxes, environmental protection and social development of territory will become involved in business planning from the beginning.”

            “In response,” Trotsenko says, “business will be able to count on the support of the state in extreme circumstances.”  The state will assume some of the risks from business and in return will have a larger voice in what business does. Some firms will go bankrupt and others will be nationalized.

            According to the businessman, the pandemic “has given us the opportunity now to build a system of relationships of the state, the population and business, which will make it more contemporary and directed toward development. The coronavirus will pass; mutual understanding will remain.”

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