Business-State Relations in Russia

Author(s): Robert Orttung
Editor(s): Matthias Neumann, Robert Orttung, Jeronim Perovic, Heiko Pleines, Hans-Henning Schröder
Series: Russian Analytical Digest (RAD)
Issue: 8
Pages: 2-5
Publisher(s): Center for Security Studies (CSS), ETH Zurich; Research Centre for East European Studies, University of Bremen
Publication Year: 2006

The Russian state exercises considerable power over Russian business, often acting in a predatory fashion. The state is expanding its holdings in the lucrative energy sector as well as other strategic sectors, such as aircraft and automobile manufacturing. Unstable property rights give the bureaucrats powerful levers over business owners. At the same time, the ability of the Russian state to control the business community is severely limited by the extensive corruption in the country and the unreformed banking sector. Business plays an important role in center-periphery relations, binding regions together, and in Russia's foreign policy, helping Russia pursue Kremlin-defi ned state interests abroad. However, the expansion of the state into the business sphere is reducing Russia's ability to compete globally.

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