Russian Fantasists

Big institutional investors and companies support the Russian gangster state – that’s bizarre.

This is from the normally lefty Financial Times, and I take my hat off to them.

At an investment forum in St Petersburg over the weekend, where dozens of global chief executives paid homage to Russia’s growing economic might, Hans Jörg Rudloff, the chairman of Barclays Capital, said the British government was mistaken when it expressed public concern last week over the growing risks of investing in Russia.

“Their approach looks unbalanced,” Mr Rudloff said. “Russia’s transition to a market economy has been successful and cannot be undone.”

…There were few dissenting voices from the denizens of global business attending the forum over the weekend that included the heads of Deutsche Bank, Citigroup, Chevron Corp, Royal Dutch Shell and BP.

Possibly Rudloff sees Putin’s threats to nuke us and Russian poisoning of Brit residents as non-economic events.

But the Financial Times goes on to describe the behavior of this “successful market economy”?

Royal Dutch Shell was forced last November to sell control of its $20bn (€15bn, £10bn) Sakhalin-2 oil and gas venture to state-controlled Gazprom following a government pressure campaign over alleged environmental violations.

BP’s flagship Russia venture TNK-BP is being threatened with the loss of its licence to develop its east Siberian Kovykta field over licensing violations.

Many observers see the move as part of a wider gambit to force TNK-BP’s Russian shareholders to sell control to a state-controlled energy group, such as Gazprom.

The essential requirement of the professional investor and public corporation is scrupulous objectivity – that’s how they justify us amateurs paying them healthy commissions to look after our cash, or buying their stock.

It’s horrifying so many well known institutions turn out to lack that essential quality.


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