Russia has surged ahead since the end of the Cold War by accepting post-Soviet international borders, finally joining the modern world economy and joining in many European integration processes. But those gains require commitment to ever more sophisticated rules and transparency that set limits on policy options. Under Putin’s leadership Russia in 2014 has given the strong impression that it sees any such limits as weakness, and no longer wants that basic deal.
Unfortunately for the Kremlin, its assertive stance has collided this year with the fast-accumulating consequences of Russia’s own bad policies: systemic corruption, weak property rights and unwise over-reliance on high energy prices. Prospects for medium-term growth were already uncertain before the oil price started to tumble, wrecking Russia’s state budget calculations.
Western leaders may shrink from confronting Vladimir Putin in person. But the Kremlin can’t intimidate the planet’s anonymous, restless international financial markets: they are voting down Russia’s credibility. Sharp-toothed Western financial sanctions prompted by the Kremlin’s illegal foreign territory-grabs earlier this year have reinforced a sense of crisis.
Hre is a PDF version of The Telegraph article.
People say the Russian stock market is cheap. Yes it is, and it is also rallying from a short-term oversold condition. However, dictators have never been reliable long-term assets for stock markets, for one very good reason; they only survive by managing kleptocracies. Europe had hoped that Russia was turning into a democracy, but Putin shattered that illusion because he wanted to stay in power. His dictatorial regime limited the considerable entrepreneurial skills of its population and Russia fell behind.
When Russia replaces Putin with someone intelligent, entrepreneurial and inclined to turn the country from a pariah state into a meritocracy, everything will change for the better. Russia will flower into a successful, peaceful and more democratic member of the European community. Governance Is Everything!Back to top