Russia’s Return to Statism

This will not end well.  From CNBC:

Last month’s acquisition of BP’s stake in Russian oil venture TNK- BP by Russia’s Rosneft saw old concerns about a Statist business environment being reignited.

According to reports, the real reason for BP’s sale of hugely lucrative venture was its exhaustion over political interference and bitter disputes with Russian oligarchs which owned part of the TNK-BP venture.

[...] Neil Shearing, chief emerging markets economist at Capital Economics told CNBC that a ‘statist mentality’ permeates Russian business but is particularly acute within the natural resources sector.

“It is clearly a factor with the BP deal, not least because it has been fantastically profitable. There are wider issues about the business environment within Russia and relative to its peers in Eastern Europe its ranking in surveys of places to do business is low.

The change in politics has moved to a more ‘statist’ model especially within the strategic sectors,” Shearing said.

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