Blog: Russia and risk
Dave Leggett | 11 November 2003
But what about recent events? Putin seems to be taking on the oligarchs who were made obscenely rich during the Yeltsin privatisations period. Mr Khodorkovsky, a very rich man and oil company Yukos's ex-boss, apparently has political ambitions and has upset the Kremlin. He's in jail and the stock market has dived. There are legitimate worries and concerns that Russia's economic reform still has a long way to go and that current developments are a backward step. Maybe even a return to a more state-run and authoritarian way of running things is possible.
What are potential investors to think? Have the Russia risks just got bigger? Well, one school of thought is that Putin is actually more interested in foreign investment to Russia than may seen obvious. He has already made a big deal of Russia's need to progress economically and inward investment from abroad would actually reduce the influence of some of the domestic oligarchs that Putin is not happy with. Also, foreign interests would not have the sort of political agendas now or in the future that these oligarchs sometimes appear to have (Khodorkovsky has even been talked about as a possible future President).
Would you like to know what Christopher Granville, Chief Strategist, United Financial Group, an independent Russian investment bank, thinks on the matter? There's a website called cantos that is worth a look for interviews with various bods from international business. Some stuff is general, some is industry-specific. On autos, there's a good interview with Global Insight's (I still call it DRI) Colin Couchman on the industry in Asia that is worth a look. Registration is simple and you can watch streaming video, listen to audio or read interview transcripts.
Back to Russia, Granville's views are - as might be expected from an investment banker - broadly soothing to foreign investors and promoting business as usual. Interesting though. Someone at Wolfsburg should find it useful right now.
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