The end of Russia’s economy



Analysis & Opinion

Article by: Vitaliy Portnikov

The Russian economy has ended even without any sanctions.

News about the possible seizure of Russian state property in Belgium was learned exactly one day before the opening of the St. Petersburg Economic Forum. The Russian leadership had hoped to turn this event into another “Potemkin village” with Vladimir Putin in the role of the village elder. The self-assured ruler was to give an account to the forum participants about how all will be well with the Russian economy and that they should invest in Russia. And, if the West did not wish to invest, well, then China would.

Now even the Russian experts admit regretfully that the news from Brussels will dominate and the news from St. Petersburg will become secondary. What possible investments can a country attract whose property could go under the hammer any day. Besides, it is not even fully known which particular lawsuit drove the decision in Belgium.

First it was thought that the decision was based on the claim of former shareholders of the Yukos company, which the Russian state stole from its shareholders. But the European Court of Human Rights said that the seizure of Russian assets in Belgium has nothing to do with this decision. Therefore, seizures in the Yukos case are yet to come. And not just the Yukos case.  The biggest problem Russia will face is when international justice begins to consider claims for Crimea.

In Russia they simply fail to understand that courts in the civilized world do not submit to Vladimir Putin nor to Dmitry Kisilev (Russian “journalist” appointed by Putin to head the Russian government-owned  news agency Rossiya Segondya doing business worldwide as Russia Today or simply RT — Ed.). Furthermore, they do not even submit to Angela Merkel or François Hollande. In Russia, it is possible to issue clear orders not only to ordinary judges but even to the judges of the Constitutional Court. And they will happily rush to violate their own Constitution — because they are the same kind of dishonorable crooks as the political leaders of the country. In the West, everything is different. Stealing means stealing. And no political expediency is able to influence judicial decisions.

In practice, this only means that the end has come for Russia’s economy even without any sanctions. Much like any economy, Russia cannot exist without assets and investments in the West, since it is no longer the  Soviet Union with its hermetically sealed system and its State Planning Commission. And, if assets are seized, then it becomes necessary to “shut down.” And “shutting down” means suffering inevitable economic losses. And not only for state companies — for everyone.

Of course there is a very simple way out. Do not turn into a North Korea. Return what is owed to the Yukos shareholders. Get out of Crimea and the Donbas. Bring to justice those who stole businesses and territories. But the current political leadership of  Russia is unlikely to do that. Rather, it  will be a new government that emerges after the economic collapse of Russia that will have to correct the mistakes of its predecessors. And in that case, Russians will have to pay much more than court damages.

Translated by: Anna Mostovych
Source: Espreso TV

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  • Oknemfrod

    Thanks, Vitaly. A nice addition to your daily video blog on the same topic.
    Stepan Demura was predicting the same thing about a year ago. Talking to an audience (as I recall, also about Yukos), he said something to the effect “Fancy that you’ve booked an Aeroflot round trip flight to some place in Europe only to find out upon arriving there that the return flight is cancelled because the plane is seized.” As some people in the audience looked at him incredulously, Demura said “Yes, I’m serious, it can indeed happen”.

    • Nomid

      Russian buisnessmen doing coach? Cheaper than an impounded Lear… There is a treatise in there somewhere, “the influence of luxury goods and the role of their denial in overturning governments”…

      • Oknemfrod

        Depends on the kind of businessmen, of course. The ones whom people started calling “new Russians” in the 90s (those you appear to have in mind) would rather die that fly coach. Heck, they would not survive not wearing (so that everyone can see) anything less than $1m timepiece on their wrist. A few years ago I wandered into a Vertu store in Vegas and asked a salesperson there who would purchase a plain (functionality-wise) Nokia cell phone for $15k because it’s case is made out of platinum inlaid with diamonds. Do I have to tell you what was the answer? I guess not.

        • Nomid

          I would be descreet… I wouldn’t even ask you why it was a Nokia? Besides oh so many questions… Is this really so ordinaire? I know the bling, and what I imagine is it’s effect upon the heirs of communism… But, is it so simple? It propably is… Alas, that leaves us with even fewer options…

          • Oknemfrod

            I don’t think it matter to the buyers whether it was functionally Nokia or anything else as long as it could make and receive calls. What mattered (just as in the case of wrist watches – who even needs one these days?) was the appearance, “Vertu” label slapped onto it, and the ability to display a $15k cell phone in front of their fellow mafiosi. Methinks in many ways this propensity for silly ostentatiousness has trickled down from the oligarchs to the entire Russian society. It’s not just watches, cell phones, and toys like that. With motor vehicles, it’s even worse. I’ve noticed that somehow the most expensive car, even if one can barely it and it’s not really needed, has become another obsessive fetish in Russia. I guess societal acceptance (somehow linked to a car as a status symbol) matters a big deal to them. For example, my Moscovite relatives flatly refuse to accept either my explanation that my 16 year old Acura is truly everything I need to move my body from A to B and that I’m hence not going to buy anything else till it kicks the bucket (which, given its history, probably will not happen in another 10 years), or that nobody here gives a hoot about what you drive – or indeed whether you drive at all. Strange minds there, shaped by their social environment – and of course the other way around.

          • Dagwood Bumstead

            Not only in Russia. My Ukrainian ex-gf wanted to buy a new car several years ago. Fair enough, her old one was approaching end-of-life. But she wanted to buy a new SUV, which would cost an arm and a leg, and also guzzles fuel at an alarming rate. I pointed this out to her, but she wouldn’t listen. She could afford it, but it’s totally impractical- her old Alto met her needs more than adequately.
            Something else she never understood was me hanging on to my 1973 Kawasaki 750 Triple. Quite apart from the styling leaving any other bike for dead, it gives a thrill no modern bike can even approach, let alone match.

  • puttypants

    Good article. It’s about time someone in the world started acting against this insatiable bully. It amazes me that Putin has been able to steal so many peoples businesses in Russia and get away with it all this time. He’s been doing it for years. The idiots that do business in Russia deserve what they get. I remember a fellow from my neck of the woods who owned a very successful Radisson in Moscow. The other partner a Russia wanted the business and when he wouldn’t turn it over to him he was found floating in a river. No one did a thing about that?

    • Nomid

      It seems that only those who allready considers doing buisness entails doing crime are the ones investing in Russia…

  • Dean Venture

    Worse yet, the Kremlin threatened to retaliate and seize Belgian assets in Russia. If you invest in Russia, you may lose your investment as soon as Putin decides he doesn’t like your government.

    • Dagwood Bumstead

      I think Russian state assets in Belgium (or anywhere else for that matter) will amount to far more than Belgian state assets in Russia, so the dwarf can seize as much as he likes, he will be the loser.
      The Belgians and French have only seized Russian state property, remember. Once the dwarf starts seizing private Belgian or French property, the Belgians and French will do the same and his cronies will start losing French and Belgian mansions, bank accounts etc etc- and that may even include the dwarf’s property. Will the likes of Alexei Miller, Igor Setchin and Co. like that? Hardly.

    • Jens A

      Yes, that fact is better than almost any sanction against Putinism that could be imagined for the time being!

  • Brent

    Not only is the Yukos judgment pending, don’t forget Russia seized Bashneft from Vladimir Yevtushenkov last summer under similar odious circumstances like the Yukos theft, and there will likely be some compensation ordered to the families of the victims aboard MH17.

    There may not be much left for Ukraine’s war reparations by the time everyone else gets what they are owed. Good thing Putin has $200 billion stolen from the Russian people stashed away…

    • Dagwood Bumstead

      Certainly a good thing, as that is all stashed abroad and can be frozen so he can’t reach his ill-gotten gains. I’m pretty sure that unknown to us the CIA and other agencies are tracking down the loot stolen by the dwarf and his cronies so that, even if it can’t actually be seized, its movement can be prevented. And what’s the use of 200 billion in Bahamas bank accounts if you can’t touch a single cent of it?

    • Dagwood Bumstead

      There’s also the judgement of the European Court of Human Rights, which in a separate action awarded the Yukos shareholders 2.5 billion. The dwarf also refuses to pay this amount so he’s looking at seizures to the tune of $52.5 billion. That’s a nice dent in Dwarfstan’s financial reserves.

  • Dagwood Bumstead

    It’s getting better and better……. or worse, if you support the dwarf and Dwarfstan. Legal applications have been filed in the UK and US to seize Dwarfstan state property in these two countries.
    The chickens are coming home to roost……

    • gmab

      Yes it is. I’m just gonna sit back and enjoy the show!

      • Dagwood Bumstead

        According to Russian commentator Anya Dorn, Austria has followed France and Belgium in seizing Russian state property; the Netherlands will probably be next with the US, UK and Germany to follow.
        Another punch on the dwarf’s nose. May more punches follow.

  • Kruton

    Surrender Bolshevik savages or we will impound your fancy cars and condos!

  • Jens A

    Problem is, that the Russians are used to be filled up with so many lies from the officials, that even the most lunatic conspiracy can be thought of as real in their minds. I Easter Siberia, people ALL THE TIME told me, that here and there and everywhere, the water was radioactive. Should I believe that 80% of all Siberia is radioactive?

    So, I think it is true, that the ordinary Russian to some extend believe that Russia is under siege from the West and we want to “steal all their resources”, as both Medvedev told them in 2007 and Putin has repeated a lot of times ever since. True it is, that some private Western businesses want to do just that, but they are the types that also want to pay bribes to Medvedev and Putin and their fellow thugs, so the problem there, even where there is some kind of marginal truth in it, is the Russian leadership.

    It is therefore important to explain, that the top 3 wanted guys for all the miseries, are Putin, Putin and Putin. He is the one to blame! Now the West is fed up with Putin and we confiscate his money where ever we can to compensate the ones who has suffered losses because of him! As for Putin returning the money to the ordinary Russians he has stolen from, I suggest that exact part should be dealt with Russian style and then it is time to reform!

  • Czech Friend

    So latest news Belgium has cancelled the seizure. Nice cowardice in the face of undisputed terrorist and criminal from Kremlin.

    You wanna do business with RuSSia? Go ahead but don’t cry when the thugs rob you blind.

    • Dagwood Bumstead

      Don’t despair. The Yukos lawsuits are just the beginning. The dwarf can look forward to a host of lawsuits re the Crimea for instance. See Ania Dorn’s article in the German section of According to Dorn the lawsuits could amount to not billions, but trillions of $$$. And the beauty is that the dwarf doesn’t control the courts that will be dealing with these lawsuits as they won’t be Russian courts. Even if he loses only 25% of the lawsuits he will be facing HUGE amounts of $$$ in claims, enough to bankrupt Dwarfstan.