Sunday, January 31, 2010

Is Russia Becoming A Third World Country?

A Time And A Place For Russia -- Mikhail B. Khodorkovsky, New York Times

For Russia, the past decade started out on an optimistic note. The country was emerging from a severe financial crisis and the political upheavals of the ’90s. Industry and agriculture were rapidly recovering and the financial system had been rescued and strengthened. Business attracted millions of people to apply their efforts and talents. The institutions of state had begun to work more reliably and the structures of a real civil society had begun to form.

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My Comment: When Gorbachev change the law to permit easy travel in/and out from Russia, I was one of the first to take advantage of this openness to visit my relatives. On a number of my trips .... and because a number of my relatives had contacts within the government (and were in government) .... I was offered numerous business opportunities to invest in Russia.

I did not take any of them. Many of the deals were too good to be true. Prime real estate at pennies on the dollar. Investments in the resource sector were even cheaper. Factories and engineering firms that employed thousands could be bought for a small bribe. Everything and anything could be bought cheap and quickly.

The reason why they were so many opportunities was because the bureaucrats and managers who Ok's these sales (and accepted the bribes) always felt confident that in the end the state would take over these interests (again), and kick out these speculators. Mikhail B. Khodorkovsky was one of these speculators/pirates .... buying huge swaths of Russia's oil industries at unbelievably low prices.

But surprise .... surprise .... in the beginning the state did not move to stop these privatizations .... privatizations that were corrupt in every way. It took President Putin and the power of the state to finally bust up these oligarchs .... and to put people like Mikhail B. Khodorkovsky in jail ... where he does belong.

So back to the question .... Is Russia becoming a third world state? Absolutely not. Is Russia having problems .... absolutely yes. But these problems are puny in comparison to what Russia has gone through in the past few centuries .... a state of affairs that I can assure you that many Russians prefer than the world that Mikhail B. Khodorkovsky prefers.

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