Killing Growth in Russia

I want Russia to be a boring country – at least for the next few decades. In the twentieth century, Russia set an unquestionable record for all sorts of upheavals and social experiments that attracted the world’s attention. A time-out is essential.

This objective seemed to be entirely within reach – or at least possible – until the first half of 2003. Foreign correspondents accredited in Moscow complained that nothing was happening in Putin’s Russia. Investment in the Russian economy was growing fast. Unfortunately, Russia’s rulers are not accustomed to leaving the country and the rest of the world for long without something surprising to gawk at.

Instilling a feeling of insecurity is the best way to scare your population into submission and frighten away potential investors. How democratic or undemocratic a regime is usually doesn't bother investors. All they need and care about is stable, predictable rules.

Indeed, the watchword among major investors is inertia. It takes time to reach a decision on whether or not to invest in a project, and once an investment decision is made, it becomes rather difficult to stop the process quickly. Russia’s government is now doing its best to prove that, while difficult, it is possible to defy the laws of business physics and kill investments that are already in the pipeline.