Oleg Deripaska’s fortunes have plummeted.  Controlling dozens of factories in Russia he was worth an estimated almost 30 billion dollars in 2008.  This year he’s worth  2 billion according to another estimate, because most of his industry is copnnected to sectors hit the hardest by the Worlds financial crisis, ie auto manufacturing, aluminum and steel and construction. His advisors say he was worth almost 40 billion and didn’t lose quite as much as some say, but admit the plunge in his fortunes are dizzying.   I met Deripaska a couple of weeks after this normally low profile Oligarch had been publicly lambasted by Prime Minister Vladimir Putin for failing to keep Russians employed at a cement factory near St. Petersburg .

The Kremlin is frightened of civil unrest in Russia because of the economic crisis and it’s easy to blame businessmen instead of shouldering  political responsibility.

Putin called Deripaska and others at the meeting guilty of holding ordinary people hostage to their ambitions and greed.

When I asked Deripaska if he was in turn angry with Putin he smiled but carefully answered no.  The last rich Russian to criticize Putin went to jail.

He told me “it was not of course 100% my fault but I felt responsible, maybe we can do more to change and modernize this facility quickly, but unfortunately the crisis hit demand in construction, in cement.”

Deripska may be many things, he is certainly not any ones fool.   He is a nuclear physicist by education.   He built a huge empire in Russia and knows the innermost workings of the Country.  He is frankly likable and reflective on his Countries past and future and  he makes a few stunning observations;

Unemployment in Russia ?  The Kremlin says its stopped growing and is somewhere around 7%.  Deripaska says it’s really 10% and predicts it could grow saying “we are still on the way down, it will be a very hard time. Unemployment could hit 15 million people, which is 20% and it’s just reality. Demand very weak and economy still needs to find a bottom.”

On Government expecting private business to act as a social net?

Deripaska says “That’s Russia . If you want to benefit on a  20% return on your investment every year you need to be prepared to deal with this issue.  In developed Countries where processes established for the last 100 years you can rely on municipal services, on police, on education system. In Russia where we hade everything restarted 18 years ago, original principles and original system couldn’t be effective now.”  IN other words the State hasn’t put in place a sufficient social net after the collapse of communism and wealthy business has to take up the slack.

On American Russian relations and President Obama’s visit to Moscow ;

Deripaska agrees with American experts,  “I can’t really feel”a so-called reset in relations. He says resets are not about high level meetings it has to be reflected in investment, science co-operation, education exchange, tourism.”

He says its not just about rebuilding trust but that “we didn’t have time to actually learn each other.”  Our kids he believes need to share history and science and literature, attend business schools In America.  “It has to be about people” he adds.

And finally Deripaska talks frankly about the Russian booms times when oil was good and the  fact many Russian politicians are  is still waiting for high oil prices again.

“it’s stupid, it’s a mistake, it’s the biggest mistake. We can feel maybe half the Russian Government still believes that it would be the case, and this is a huge mistake”.

Deripaska believes his Government needs to start helping the creation of small and medium business enterprise instead of focusing on taxing big oil and gas companies for revenue.

To wait for oil prices to rise he says “this may create that the Russian transition through this crisis would be longer, it should be done in 3 years and we may end up, it will be 5 maybe 7 years.”

The headline is a new arms treaty out of the American Russian meetings in Moscow.  Russian President Obama and U.S. President Obama signed a framework treaty to lower existing agreements on nuclear warheads by a third to as low as 1500 each.

But did you know that our arms agreements with the Russians only involve nukes that reach the U.S. on ballistic missiles instead of so called tactical nukes that can be fired by artillery or cruise missile, for example at an American aircraft carrier from a Russian sub.  There are several thousand held by both sides. Smaller and much more easily sold or stolen by terrorists.  And … in Europe the U.S. still has about 200 tactical nukes at a handful of NATO bases.  They were originally there in case of war with the Soviet Union and still 20 years after the Cold war remain there.

Wisely the Obama administration is attempting to include tactical nukes in a new arms agreement to replace START which expires in Dec.

An insider on the American arms negotiating team tells me what was very important in these meetings with the Russians – the Russians agreed to have discussions to develop co-operation on missile defenses – huge because the Russians agreed to that directly with the President.They had been refusing until American got rid of the 3rd site (Radar in the Czerch Republic and Missile launchers in Poland)  to even discuss co-operation.

So now there are two tracks – The follow on agreement to Start and then discussions departmentally on how to solve the missile defense shield issue.

It all has to be done by December when Start expires.  And the Russians will never approve a new arms deal unless the ABM issue is solved.