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Businessweek Archives

Three Scenarios For Post Election Russia


International Business: RUSSIA

THREE SCENARIOS FOR POST-ELECTION RUSSIA

THE REDS COME BACK

Communist Party leader Gennady Zyuganov is elected President but is pushed aside by hard-line leftists. Limited renationalization begins, while big state spending hikes inflation. Political reform takes a step backward as economic progress made in 1994-95 is wiped out. Conglomerates survive but are harassed.

YELTSIN WIN SPURS ECONOMY FORWARD

President Boris Yeltsin wins reelection and uses his mandate to renew economic-reform efforts. The economy begins growing by 3% to 4% in 1997. Conglomerates thrive and evolve, sooner than expected, into true transnational corporations with global clout.

RUSSIA MUDDLES THROUGH

Either Zyuganov or Yeltsin wins, but the vote is so split that economic reform is held in check. Progress is made in fits and starts, jerking between state bailouts and monetary discipline. Inflation stays low, but the economy doesn't grow, either. Conglomerates still do well, thanks to their close ties to state bureaucrats.

DATA: RENAISSANCE CAPITAL GROUP, BUSINESS WEEKReturn to top

TABLE

The Key Conglomerates Vying for Russia's Riches

GROUP/CEO INDUSTRIAL HOLDINGS

ONEXIMBANK Most powerful group with 38% of Norilsk

Vladimir Potanin Nickel, 26% of jet-engine maker Perm Motors,

20 26% of auto maker Zil, plus oil, metallurgy,

and real estate interests

POLITICAL PATRONS

Tightly linked to Kremlin

GROUP/CEO INDUSTRIAL HOLDINGS

MENATEP Most diversified conglomerate, with 78%

Mikhail of oil giant Yukos, plus controlling interests

Khodorkovsky in plastics, metallurgy, textiles, chemicals,

and food-processing companies

POLITICAL PATRONS

Close to former Communist apparatchiks

GROUP/CEO INDUSTRIAL HOLDINGS

ALFA Big player in Moscow region, with

Mikhail Friedman interests in real estate, securities trading,

cement, candy, and chemicals industries

POLITICAL PATRONS

Lacks good connections at national level

GROUP/CEO INDUSTRIAL HOLDINGS

ROSSISKAYA Controversial group created by Kremlin decree

METALLURGIA links 14 institutes and troubled plants

No CEO producing steel, alloys, and other metals

POLITICAL PATRONS

Deputy Prime Minister Oleg Soskovets

GROUP/CEO INDUSTRIAL HOLDINGS

MOST GROUP Active in Moscow, its interests spread across

Vladimir banking, real estate, government, construc-

Gussinsky tion, independent television network NTV,

and the influential daily newspaper Today

POLITICAL PATRONS

Close ties with Moscow Mayor Yuri Luzhkov

GROUP/CEO INDUSTRIAL HOLDINGS

GAZPROM Very powerful but loosely tied together,

Rem Vyakhirev this group links Russia's gas monopoly, its

LUKOIL largest oil company, and their jointly

Vagit Alikperov owned bank. It has big export clout, with

IMPERIAL BANK Gazprom supplying gas to Europe and Lukoil

Sergei Rodionov in oil deals in Libya and the Persian Gulf.

POLITICAL PATRONS

Prime Minister Viktor Chernomyrdin

DATA: BUSINESS WEEK

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