Old habits die hard. These should be the best of times for oil-rich Russia, with prices remaining above $50 per barrel. Instead, foreign investors are fleeing, and with them skills, technology, and capital. Amazing how that happens when the state seizes private property and puts businessmen in jail for supposed tax-evasion. Net capital outflow has quadrupled, from $2b to $9b, in one year.
But it’s not just Yukos. Many other companies have been harassed as well. Putin is promising changes for the better, but given his track record, he lacks credibility.
As one businessman notes: “The harm was done. Also, the hunting dogs of law enforcement and tax collection are out. Once they’ve tasted blood, it’s very hard to get them back on the leash.”
