by user | June 6, 2005 6:18 pm
The conviction and sentencing of Mikhail Khodorkovsky, Russia’s wealthiest oligarch, for embezzlement and tax evasion has some foreign companies cancelling plans to invest in Russian and those already established there have started withdrawing their capital to the tune of $8 billion last year.
Its clear that President Putin has put economics before politics and is willing to see out the international medias outcry of Mikhail Khodorkovsky’s Kangaroo court.Oil is too much of a hard currency earner , especially in these recent years for a President with a proven nationalistic philosophy to allow it to be in the hands of Russian businessmen , particularly those who have supported opposition to Mr.Putin.
Some analysts argue that Putin acted against Mr.Khodorkovsky because of his active support to opposition of President Putin, or because he wore a turtle neck jumper (and not the regulation tie and collar) to a meeting with the President and his advisors but its more probable that Mr.Khodorkovsky knew that he and his company Yukon were a target for the Russian Governmnet from the outset and in fact garnered his support for the opposition because of this fact.
Anyway, the economic benefits outweigh Russia political costs and so expect liitle encouragement for Big Businesses in the short term but Russia will likely initiate reform again when economic prosperity in the country has stabilised. Related Articles: theIndependent
Source URL: http://www.newsinsider.org/113/khodorkovsky-prosecution-scares-western-investment/
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