I want Russia to be a boring country -- at least for the next few decades. In the 20th century, Russia set an unquestionable record for all sorts of upheavals and social experiments that attracted the world's attention. A time-out is essential.
This objective seemed to be entirely within reach -- or at least possible -- until the first half of 2003. Foreign correspondents accredited in Moscow complained that nothing was happening in President Vladimir Putin's Russia. Investment in the Russian economy was growing fast.
Unfortunately, Russia's rulers are not accustomed to leaving the country and the rest of the world for long without something surprising to gawk at.
Instilling a feeling of insecurity is the best way to scare your population into submission and frighten away potential investors. How democratic or undemocratic a regime is usually doesn't bother investors. All they need and care about is stable and predictable rules.
Indeed, the watchword among major investors is inertia. It takes time to reach a decision on whether or not to invest in a project, and once an investment decision is made, it becomes rather difficult to stop the process quickly. Russia's government is now doing its best to prove that, while difficult, it is possible to defy the laws of business physics and kill investments that are already in the pipeline.
When Mikhail Khodorkovsky and other executives of Yukos, his oil company, were arrested last year, corporations investing or interested in investing in Russia were prepared to interpret the crackdown as an isolated incident brought on by the political agenda of the company and its chief executive officer, who should have known better. Never mind that by the second half of 2003, it had become obvious that the government intended to use legal means -- in the form of massive tax claims -- to destroy the company.
When only one company faced legal and financial problems, investors who had made a decision to put their money in Russia were ready to ignore this kind of development. "This must be an exception," they kept repeating, like a mantra or a prayer. I've heard something similar when Russian problems are discussed: "Just finish this Yukos affair. We don't care how it goes, just put an end to it."
Unfortunately, the genie has been let out of the bottle. Throughout last year, it became abundantly clear that Russia's internal security apparatus had gained the upper hand in deciding how to manage economic and political problems. Security structures developed a taste for this kind of work, and welcomed new responsibilities.
In many ways, they began to see fighting big business as akin to fighting terrorists.
And, indeed, they have one thing in common: The fight never ends.
More and more tax claims are being produced, and not only against Yukos. Tax claims against the telecommunications company Vympelkom (one of Russia's leading firms, and the first to be listed on the New York Stock Exchange in 90 years) send an unambiguous signal to investors: No one is safe.
In fact, official documents have now even started questioning the legitimacy of the privatization of the leading Russian companies in the 1990s, which has opened the way for discussions about revising the outcomes of these privatizations.
Similarly, British Petroleum, which has invested more in Russia than any other company to date, has recently discovered that its rights to the Kovytkino gas field are not guaranteed at all. This property, it now seems, could be reclaimed by the state at any given time.
It would be wrong to draw long-term conclusions from short-term economic information, even if this information confirms reality. The alarming tendencies we are seeing today may be short-lived and with no serious consequences. Post-socialist growth is a process that cannot (and should not) be easily stopped.
If, however, the authorities continue their efforts to destabilize the Russian economy, today's disturbing tendencies may actually take root. Russia can then forget about attaining the fast, sustainable growth that China has achieved. Instead, we Russians will find ourselves trying to avert an impending economic crisis.
Of course, no one can predict when such a crisis might occur. But one thing is certain: We will know which path the country's leaders have chosen sooner rather than later. Indeed, this year could turn out to be Russia's most fateful yet.
Yegor Gaidar was Russia's first democratic prime minister and is director of the Institute for the Economy in Transition.
Copyright: Project Syndicate
Eating at a breakfast shop the other day, I turned to an old man sitting at the table next to mine. “Hey, did you hear that the Legislative Yuan passed a bill to give everyone NT$10,000 [US$340]?” I said, pointing to a newspaper headline. The old man cursed, then said: “Yeah, the Chinese Nationalist Party [KMT] canceled the NT$100 billion subsidy for Taiwan Power Co and announced they would give everyone NT$10,000 instead. “Nice. Now they are saying that if electricity prices go up, we can just use that cash to pay for it,” he said. “I have no time for drivel like
A failure by the Chinese Communist Party (CCP) to respond to Israel’s brilliant 12-day (June 12-23) bombing and special operations war against Iran, topped by US President Donald Trump’s ordering the June 21 bombing of Iranian deep underground nuclear weapons fuel processing sites, has been noted by some as demonstrating a profound lack of resolve, even “impotence,” by China. However, this would be a dangerous underestimation of CCP ambitions and its broader and more profound military response to the Trump Administration — a challenge that includes an acceleration of its strategies to assist nuclear proxy states, and developing a wide array
Young supporters of former Taiwan People’s Party (TPP) chairman Ko Wen-je (柯文哲) were detained for posting the names and photographs of judges and prosecutors believed to be overseeing the Core Pacific City redevelopment corruption case. The supporters should be held responsible for their actions. As for Ko’s successor, TPP Chairman Huang Kuo-chang (黃國昌), he should reflect on whether his own comments are provocative and whether his statements might be misunderstood. Huang needs to apologize to the public and the judiciary. In the article, “Why does sorry seem to be the hardest word?” the late political commentator Nan Fang Shuo (南方朔) wrote
Chinese Minister of Foreign Affairs Wang Yi (王毅) reportedly told the EU’s top diplomat that China does not want Russia to lose in Ukraine, because the US could shift its focus to countering Beijing. Wang made the comment while meeting with EU High Representative for Foreign Affairs and Security Policy Kaja Kallas on July 2 at the 13th China-EU High-Level Strategic Dialogue in Brussels, the South China Morning Post and CNN reported. Although contrary to China’s claim of neutrality in the Russia-Ukraine conflict, such a frank remark suggests Beijing might prefer a protracted war to keep the US from focusing on
RSS