A wave of patriotism is sweeping Russia following the annexation of Crimea. But will the euphoria last long enough to have Russians invest in the Black Sea peninsula and support the local economy by holidaying there? Dmitry Medvedev, Russia’s prime minister, chaired a government meeting on Monday to discuss how to make Crimea a going concern.
It sounds like a daunting task. The Kremlin took a huge risk when it redrew the map of Ukraine last week and took possession of Crimea. Western powers have condemned the move as a land grab and are threatening Russia with painful sanctions and decades of international isolation. Continue reading »
By Christopher Granville, Director of Russia Research, Trusted Sources
For investors exposed to Russia and the wider market fall-out from Russia’s military move in the Crimea, it may be helpful to recall the lessons of a previous shock that threatened to undermine the investment case for Russia. The analogy I have in mind is the Yukos affair.
Then, as now, President Putin perceived a paramount interest that he decided to pursue regardless of the high costs to business and financial market confidence. Continue reading »
The 5th in our series of guest posts on the outlook for 2014 is by Chris Weafer of Macro-Advisory
In economic terms 2013 was Russia’s Annus Horribilis. From growth of 3.4 per cent in 2012, and early expectations of a repeat performance this year, the economy is much more likely to report growth of only 1.3 per cent. That is still a good number in global terms but a long way off the 4 to 5 per cent growth that the country actually needs. A second consecutive year of poor growth will feel like stagnation and lead to a raft of earnings forecast downgrades in companies exposed to the domestic economy.
The good news is that the President and his Kremlin advisors are finally starting to pay attention. Continue reading »
Onishchenko: he say no
Yet another conflict is brewing between Russia and one of its post-Soviet neighbours.
On Monday Russia’s consumer protection agency announced it had halted dairy imports from Lithuania, citing excessive quantities of yeast and mould in certain Lithuanian dairy products after weeks of holding up Lithuanian transport trucks for longer than normal periods at border control. Continue reading »
By Chris Weafer
The outcome of Sunday’s election for mayor of Moscow, and similar elections held in several other Russian cities, shows that the political landscape in Russia is changing. The protests of late 2011 and early 2012 are finally starting to deliver a positive legacy. The critics will of course say that the outcome in Moscow was predictable and nothing has changed. But they are wrong. Continue reading »
Businessmen in Russia tend to steer clear of politics fearing reprisals from the Kremlin. But in a landmark event more than thirty top managers from Russian internet companies have declared their support for Alexei Navalny’s campaign to become mayor of Moscow.
Navalny (pictured), the opposition blogger and activist famous for crusading against high level corruption in Russia, is running for mayor of Moscow at an election next month where he aims to unseat the incumbent Sergei Sobyanin. Continue reading »
Russia’s president Vladimir Putin has been clamping down on dissent more decisively than before. FT comment and analysis editor Frederick Studemann, James Nixey of Chatham House’s Russia and Eurasia Programme and the FT’s Eastern Europe editor Neil Buckley discuss the future of Putinism.
By Timothy Ash of Standard Bank
Russia’s finance ministry has claimed that net private capital outflows may stop in 2014. It is interesting that the ministry should be pushing this idea just as a guilty verdict has been handed down to Alexei Navalny.
I would hazard a guess that negative global headlines on this kind of case will likely subdue foreign inflows and encourage Russians to stash more of their money overseas. Continue reading »
A Russian court has found Sergei Magnitsky, the deceased lawyer, guilty of tax evasion in a posthumous trial that has garnered widespread criticism in the west. Eastern Europe editor Neil Buckley discusses the verdict with Daniel Garrahan.
Billionaire Roman Abramovich has resigned as chairman of the legislature of the remote Russian region of Chukotka, to comply with a new law banning officials from owning foreign securities and bank accounts.
But that won’t be the end of his long-standing commitment to the frozen wastes of Chukotka and their population of 50,000. As the state website reported on Tuesday, Abramovich “will continue to participate in the life of the Chukotka Autonomous District. In particular, he will continue to implement a number of major regional business projects that will significantly increase the region’s future tax base.” Having got their oligarch, the good citizens of Chukotka aren’t letting him go. Continue reading »
Vladimir Putin was in typically punchy form at the St Petersburg International Economic Forum on Friday promising to invest billions in infrastructure projects, massively expand Russia’s energy trade with China, and instruct every state official from the lowest police officer to the highest minister to devote themselves to improving Russia’s business climate. Continue reading »
It was in 1974 that Yuri Mamleev, a Moscow dissident author, finally decided he had had enough of being banned from publishing. He and his wife took a decision that was then increasingly common for Soviet intellectuals – they emigrated.
Mamleev was part of the so called “third wave” of USSR emigration – the first wave left in the 1920s fleeing the Bolshevik takeover, the second escaped from World War II, while the third, Mamleev’s generation, was driven out mainly by censorship.
And today there may be the beginning of a fourth wave. Economist Sergei Guriev’s flight to France last month may revive the controversial tradition of political exile. Continue reading »
By Marcus Svedberg of East Capital
One should be careful in drawing parallels between seemingly similar events in different countries. But there are a number of striking similarities between the protests in Turkey and the recent events in Russia.
These are two radically different emerging markets but there are common denominators among the protestors, the regimes, and in the triggers for the unrest. One conclusion is that the protests are not about economics: but economic development does help to explain why these tensions have emerged now. And that raises the old question – does economic development foster democracy? Continue reading »
By Ben Aris of bne
There was high drama at Sberbank‘s AGM on Friday when celebrity economist Sergei Guriev was voted back on the board of the big Russian state-controlled bank despite having fled the country at the weekend in fear of arrest.
Guriev said earlier that he had withdrawn his name from the list of candidates, but the head of Sberbank’s legal department told journalists ahead of the vote that it was too late the remove Guriev’s name from the ballot. The result is an embarrassment for the authorities even if Guriev doesn’t return to Russia any time soon. Continue reading »
As Russia’s economy slows, one name comes up more and more in conversations – that of Alexei Kudrin, the former finance minister who either resigned or was sacked, depending on whom you talk to, in September 2011.
Kudrin has an unrivalled reputation for economic management, earned in more than a decade in office, before he fell foul of a rivalry with Dmitry Medvedev. Medvedev, who was president at the time and is now prime minister, accepted Kudrin’s resignation after Kudrin publicly said he wouldn’t work with Medvedev. Continue reading »