…from the quill of Antisthenes the Younger
President Putin was inaugurated only on 7th May this year, but as he was always in charge he can hardly blame the previous incumbent for the predicament.
The stock market and the ruble have slipped to their lowest levels in more than a year. Since the elections the ruble has shed most of its 2012 gains and is down more than 6% against the U.S. dollar. The stock market is down almost 20% from its March highs. Vladimir Tsuprov, chief investment officer at BNP-Paribas in St. Petersburg said, “There were inflated expectations for a new Putin, who would introduce fresh policies, and this drove markets higher than they should have gone, investors see that this isn’t happening, and they are taking their money out.”$42 billion has left the country in the first four months of the year.
Chris Weafer, chief strategist at Troika Dialog, an investment bank in Moscow, said, “Such is the level of risk-phobia in the world right now, and Russia, despite the generally positive domestic backdrop and very cheap asset base, is viewed as being the most at-risk economy in the world.”
President Putin is in fact introducing “fresh” policies left, tight and centre, mostly left, but the problem seems to be that nobody believes that ex-KGB officer with abysmal economic record would manage the Russia’s plight except by reverting to the Marxist, command economy. NEP was there before him. For starters, Putin increased the extraction tax for independent gas producers. Within his six-year presidential term Putin plans, amongst many things, to cut corruption, to raise life expectancy and to take Russia from last year’s 120th-place finish in the World Bank’s Doing Business rankings to 50th place by 2015 and 20th place by 2018. WBDB measures the effectiveness of a country’s corporate legislation and respect for property rights. United States are there ranked No. 4. Australia is 15th, between Sweden and Georgia. Russia (120) is between Costa Rica and Cape Verde.
All that is to be achieved by decrees issued by Mr. Putin. Natalia Akindinova of the Higher School of Economics in Moscow wrote, “Goals which, under present conditions, could realistically be accomplished in 10 to 15 years are packed into a mere six, trampling the laws of economic development and nature.”