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The end of Russia’s economy

The end of Russia’s economy
Article by: Vitaliy Portnikov
Translated by: Anna Mostovych

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
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