Blog: Dave LeggettRussian tensions

Dave Leggett | 6 June 2007

I was talking to someone about the current political tensions surrounding the G8 summit and Putin's recent comments earlier today. The prevailing viewpoint that emerged from our conversation was that Putin's comments are mainly designed to demonstrate his 'hard' credentials to the Russian people. Russia isn't going to be pushed around by the West etc.

The tone might be reminiscent of the days of the Cold War, but Russia now is very far removed from what the Soviet Union was. That said, it's not exactly a liberal democracy either.

Will car companies and suppliers investing there be worried? I doubt it. As long as the economy grows (no sign of an energy price collapse) and consumers become more affluent, demand for cars should continue to rise.

It's unlikely that the authorities in Russia would want to jeopardise the boost that the Russian economy has enjoyed recently - it's popular. And now Russia is flexing its muscles more on the international stage - also popular at home. Russia is effectively defining a new brand of no holds barred capitalism that coexists with powerful state forces - often locally based, an almost instinctively autocratic culture and only limited democracy (in the Western sense, anyway).

But the transition of power from Putin to his successor might be something that foreign investors will want to keep an eye on.

Funny to hear George Bush talking about his mate 'Vlad' on the TV news last night. You have to wonder what the conversations between world leaders must be like (hopefully not all of them are like that hilarious Bush-Blair clip on You Tube). Mind you, I can't imagine that Tony Blair will come on all that heavy with Putin. People getting bumped off in London isn't good, obviously, but we are going to be heavily reliant on Russia's gas soon.

All interesting background stuff ahead of a Frost & Sullivan seminar I'm going to in London next week (below link).

Strategic Growth Workshop - Automotive Market Opportunities & Supplier Sourcing Strategies in Russia


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