Despite Russia’s recent underperformance, the size and potential of its economy has made it an attractive prospect for global companies. From German manufacturers to French and Italian luxury brands and British retailers, businesses have been drawn there to trade and invest. For them Russia has been too big to miss.
But today a different view is taking hold: that unless President Vladimir Putin’s attention shifts urgently from political entanglement in his neighbourhood to prioritising his nation’s economic needs, Russia’s disappointing economic performance will become an established trend.
Future investment will depend on perceptions of political risk as well as expected economic returns – and Mr Putin’s apparent readiness to see Russia isolated in an interdependent world has increased this risk. Continue reading »