Khristenko: government ought to maintain dialogue with big business

Russian Minister for Industry and Power Engineering Viktor Khristenko is deeply convinced that investment into the energy-and fuels tandem and metallurgy should boost the entire Russian industry. And the Russian government will help in this process continued Kristenko. He promises that by autumn the oil industry will see clarity as regards the new routes of export pipe-lines and the manufacturers will enjoy reasonable protectionism. This is to be accompanied with dialogue with big business. " If there are people eager to communicate, we are ready to comply," Kristenko said in an interview to the Gazeta newspaper.

The minister disproved reports that his ministry's chief ambition is to double the GDP by efforts of its structures alone. He believes that many other sectors contribute a lot to the GDP and therefore other ministries too have much to do. One has to admit that material production is not a key sector today, he said. Recent tendencies in the industrialised countries indicate that the services, from financial to amenities, occupy the dominating position. Russia is undergoing this change, with this sector having already usurped more than 50 percent of the GDP. Now that the services tend to occupy an ever tangible role in the Russian economy, any exaggeration of the role of the material sector is not desirable, said Khristenko.

In his opinion, it is wrong to draw a clear-cut division between the industries-they are all inter-linked. The energy-and-fuels tandem has most favourable conditions for development: there is what to extract, there are those who want to buy and there is a favourable situation. All the required factors are available.

When on the rise, the energy-and-fuels tandem gives an impetus for the development of all other branches, whether it is the manufacture of pipes, or metal constructions, or conglomerate, or coke. This multiplier cannot but entail engineering boost, to say nothing of more sophisticated equipment- oil-pumping and gas-compressor stations. The process is joined by aircraft plants which, once manufacturing turbines for planes, now make compressor stations. This multiplier's effect, that is the objective, physical, natural order extension from one industry into another provokes a growing demand across the board.

It is most desirable that this shift of natural positions in demand should be accompanied with capital movement as well. It is indispensable that funds flow into the industries to underlie Russian economic growth but not to claim any more significant stand in the general GDP structure. Unfortunately, it is not the case for the time being.

Why? Reasons are different. Firstly, it is rather a longtime and slow process. Secondly, such capital movement is not yet that attractive today. Putting aside the energy-and-fuels tandem, one can single out among traditional Russian industries rapidly developing metallurgy, both ferrous and non-ferrous, which is known for spectacular dynamics, demand and business prosperity. As to other advanced sectors, the minister referred to transport engineering-above all the construction of railways and automobiles. This sector is distinguished today for high investment and quite clear prospects for the widening of domestic demand.

Then Khristenko, whose ministry is in charge of industries prevailingly under control of major companies, was asked about relationships between the government and big business The answer was as follows:

"Relationships with big business are not limited to dialogue with their owners. These are different things, as it is above all managers you deal with when placing orders with big business. It is not quite correct to link everything to a kind of "oligarchs" bar. Though it does often happen that managers and owners represent one entity. I don't see any problem of communication. If there are people who want to cooperate we are always prepared to comply. A scheme of communication is very simple: all matters, irrespective of the name, are referred to the sector of one or another minister. If matters under review have to do with power engineering, big companies concerned submit their proposals and we discuss them. I don't mean only the United Energy Systems of Russia company, but all those who want to take part in the reforms of the energy sector. We can offer a government-endorsed transparent detailed programme of action to translate these ideas into life. This applies to other sectors as well.