Paul Legato

The Russian Bear Awakens: A Global Macro View

Hello all,

Thanks for sharing your thoughts.

I'd like to clarify one thing. It doesn't seem to be clear to some posters that I was not conducting a moral analysis of whether the Russian government and Putin's actions are good or bad; I was conducting an investment analysis of whether they will produce favorable investment conditions. This is not a political philosophy website, and a full exploration of the moral dimensions of the current Russian system would require many, many pages of work. While that may be worthwhile, it is beyond the scope of this article. The focus here is whether it is a good idea to invest money in Russia, not whether you personally like Putin or the Russian government.

For the benefit of all the jingoists who are still fighting the Cold War, and the Russian expatriates eager to demonstrate their devotion to their new homeland by publicly renouncing Russia, this view is not, and is not intended as, a threat to other countries, just as an observation about the economy of one country. I believe that Russia's economic success will only increase global economic activity for all, by providing new trading opportunities and researching new technologies that will benefit all.

While the Russian government is perhaps no less corrupt than before (and the article does not claim that it is), it is certainly far more stable than during the 1990s, and conditions now exist to allow profitable investment. I have tried to elucidate them. I would love to hear any comments on that topic.

Russia's long-term prospects indeed depend highly on how the current windfall from commodities is invested; specifically, on whether it is invested in modernizing infrastructure and expanding higher education. Putin has said he will do these things, and as of now, I believe him. I could be wrong; time will tell. If they do invest wisely in these kinds of improvements, the long-term prospects for the Russian economy are excellent.

Paul (neither a Communist nor a Pavel)