Advancing a Free Society

Wikileaks, Gazprom, the Putin Wealth Tax, and the Chinese Counter Example

Wednesday, January 19, 2011

Buried in the Wikileaks releases is an account of a rare meeting of Moscow Embassy officials in September of 2008 with the reclusive management of Russia’s largest company, Gazprom. In the meeting, the Gazprom official stated that Gazprom’s first priority is to provide reliable and affordable gas to the domestic population. The second priority is to "fulfill Gazprom’s social obligations," including charitable projects. The American envoys asked whether the maximization of shareholder value and its market share were also goals? Yes, was the perfunctory answer, but the official added a third priority: to maximize "control over global energy resources." Gazprom, the official said, is “a socialist rent-seeking monopolist."

Despite the fact the Gazprom official was speaking for the official record, his remarks are remarkably candid. Translated into clear language, he was stating that Gazprom is not run as a company that creates shareholder value for its owners (the Russian state and favored billionaire oligarchs). Its job is to exploit its monopoly position to generate “economic rents” for “society” and to act as an instrument of state power, while keeping the people happy with low gas prices and the sponsorship of sports teams.

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