Few people are more eager for Donald Trump’s arrival in the White House than those who do business in Russia.
Russian magnates and American investors alike are anticipating a Trump administration that removes punishing sanctions, frees up access to capital and encourages U.S. businesses pursuing profits in Russia’s vast market regardless of Russian President Vladimir Putin’s policies.
This may all be wishful thinking. With relations at a post-Cold War low, the Kremlin is cautious about the unpredictable new U.S. president not least because of accusations of Russian hacking of the American election campaign.
But in the business world, there’s a sense that things can’t possibly get any worse, and that relief may finally be around the corner.
Trump inspires me. He’s an entrepreneur who puts economic benefits first and foremost, said Alexei Kuzyaev, a Russian oil tycoon who now heads ER Telecom, a leading broadband provider.
Russian entrepreneurs wooed venture capital and vaunted their programming and engineering expertise at the World Economic Forum this week, with a gusto not seen in Davos in years. Deputy Prime Minister Igor Shuvalov is expected to spell out Russia’s international economic strategy at Davos on Thursday.
While the U.S. sanctions target a relatively narrow group of individuals and state companies and don’t bar Americans from doing business in Russia, they hurt Russian access to international financing and feed uncertainty about long-term investment.
America accounts for a small amount of Russian trade, and doesn’t affect my business directly. But (the sanctions) have an effect on our capital markets, said Dmitry Kostygin, chairman of online retailer Ulmart.
Craig Smith, an American whose Europa Property has operations in Russia and across Eastern Europe, said in Davos that he expects the biggest change to be in the business climate, after years of tensions over Russia’s annexation of Crimea and support for Ukrainian separatists.
Trump adviser Anthony Scarlamucci, visiting Davos, reportedly met with Russian CEOs. And Carter Page, one of Trump’s foreign policy advisers during his election campaign, held talks in Moscow last month with influential businessmen.
Trump openly praises Putin but hasn’t spelled out a clear Russia policy. He has hinted that he could lift sanctions if Moscow works with Washington on battling terrorism, but Congress may resist.
The U.S. and EU argue that their sanctions — which target primarily Putin associates, east Ukraine separatists and state-owned companies can’t be eased without progress on a 2015 peace deal for Ukraine.
Lifting sanctions wouldn’t solve Russia’s deeper economic problems, such as heavy dependence on oil prices, whose slump has wiped out a big chunk of Russia’s cash reserves. Some of the Western retreat from Russia is linked not to geopolitics but its non-diversified economy and lack of reforms.
And not all Russian businesspeople are eager for sanctions to disappear. Kostygin argued that sanctions mobilized us and pushed Russia to produce more of its own goods.
But he too welcomed Trump’s arrival, hoping that it means the world stops demonizing Russia.
Eugene Kaspersky, whose Moscow-based Kaspersky Labs anti-virus programs are used worldwide, said that he didn’t expect massive change but “maybe it will get a little better. I hope so.
Kuzyaev, who said he met repeatedly with Rex Tillerson when he was representing ExxonMobil in Russia, called him a tough negotiator and welcomed his nomination as U.S. secretary of state because of his ability to strike a fair deal.
The Russia House cafe hosting events at Davos demonstrated a possible precursor of a thaw: its headline band this week is American.