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Khodorkovsky Release Is Nice, But Not Enough

Published: January 20, 2014 (Issue # 1793)


It does not matter what real crimes former Yukos CEO Mikhail Khodorkovsky may have committed as he rose to become the richest man in Russia at the end of the 1990s. The highly selective case against him remained an open wound in the country's investment reputation for an entire decade. Now that he has finally been released, can Russia expect a sharp change in global investor sentiment?

Unfortunately, for the country's business community, the short answer is no. Khodorkovksy's release is great news. It lifts a huge dark cloud from Russia's financial reputation. But in the end, his imprisonment was only a symptom of a much larger and pervasive economic disease. Russia has spent the last 10 years marching down an economically debilitating path, at odds with the values and ideals of the 21st century globalized environment. Although his release was positive news, it does not reverse the destructive path that it symbolized.

Not all is bad, though.

While President Vladimir Putin's announcement ending 10 years of personal acrimony was a complete surprise, it appears to mark a change toward realpolitik. The signs are increasingly hopeful that Russia is moving back toward a more pro-market phase. It has been clear for several years already that Russia's pre-crisis growth model is broken and that the missing component of gross domestic product growth is investment. Sure enough, the government, led largely by Prime Minister Dmitry Medvedev, has made improving the investment climate a top priority.

How Khodorkovsky's Arrest Ruined Russia

The catch is that what investors despise more than anything else is being duped. Many agree that the government is today committed — at least for now — to its efforts to begin a new era, but investors will take a long time to forgive, forget and trust once more. Fresh in their memories are repeated instances of state-owned enterprises abusing their privileged positions to seize assets and market share, the rewriting of rules that define investment returns for long-term projects and arbitrary application of regulations and taxes — all of which are underwritten by a pervasive environment of systemic corruption.

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ALL ABOUT TOWN

Saturday, Nov. 29


Cats, dogs, birds, rodents and reptiles are just some of the things that will walk and crawl at Lenexpo convention center this weekend as part of Zooshow, a two-day exhibition featuring not only man’s best friends but a four-legged fashion show, as well as a food fair that will help pet owners find out more about which kibbles are best for their hungry pets.



Sunday, Nov. 30


Remember the 75th anniversary of the beginning of the Russo-Finnish war in 1939 during today’s reenactment titled “Winter War: How it Was.” More than 200 people will take part in recreating the opening salvoes of the battle for the north in Kamenka, a small village situated between Vyborg and St. Petersburg, using authentic equipment and vintage vehicles from the era. The faux battle begins at 2 p.m.



Monday, Dec. 1


Serbia filmmaker Emir Kusturica is the featured guest this evening at the Lensovet Palace of Culture the Petrograd Side. Fans of the director will get the chance to watch his movie “Black Cat, White Cat,” as well as ask questions about his award-winning filmography. Tickets for the event, which starts at 7 p.m., start at 2,000 rubles ($42.50).



Tuesday, Dec. 2


Today is the final day of “Takoy Festival,” a three-week program of plays based on the works of Dostoevsky, Remarque and other famed European writers, whose work is transcribed for theatrical performances. Tonight’s festival finale is “Fathers and Sons,” a two-act drama staged by the Novosibirsk Academic Drama Theater based on Turgenev’s classic about familial relations.



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