Source: UNCTAD
Financial Times reports of $26.3 billion in capital flight leaving Russia through April of this year. Arkady Dvorkovich, President Medvedev’s top economic advisor said,
The assessment by the president is that we did not have real progress in improving the investment climate. We need progress now in the short term. Investment is very low and capital flight is very high.
Conventional wisdom says uncertainty with the 2012 presidential election is making investors, both foreign and domestic skittish. But with little substantive difference between the tandem leadership, investors seem to reacting to Russia’s infrastructure.
Chris Barter, co-chief executive of Goldman Sachs in Russia, insists
Some kind of enduring reform of the financial and judicial system is needed because currently the rate of capital outflows is unsustainable.
Russian President’s chief economic advisor Arkady Dvorkovich acknowledged in a BBC interview that his country is having a perception issue. He also suggested that 1,000 years of corruption is a hard habit to kick but the authorities are looking into violations of the rule of law. Acceptance is the first step to change and Russia is in need of much change. In the latest Transparency International survey, Russia declined in ranking again this year to 154 out of 178 countries.
Perception is based on reality and a whistleblower came out today to implicate Prime Minister Putin at the top of an elaborate multiyear scheme to extract contributions from Russian businessmen. Sergei Kolesnikov, a business associate of Putin, has offered the most detailed description of how Putin has engaged in a combination of corruption, bribery and theft to amass his own personal wealth. Read the letter here.
In the open letter to President Medvedev, Kolesnikov reveals Putin’s secret funding network. This letter was delivered Tuesday to the Russian U.N. mission in New York. Two or three times a year Kolesnikov regularly briefed Putin on his personal wealth accumulated through contributions by businessmen. Washington Post columnist David Ignatius wrote today that “it’s one of the most detailed allegations I’ve seen of the links between Putin and Russia’s “crony capitalism.”
Additional reporting by Ellen Barry at the New York Times show how corruption and politics prevent uncovering the truth about the death of Sergei Magnitsky. Contradictory official statements and lack of oversight have prevented the truth to be known. President Medvedev established the Public Oversight Commission to look into the case but after an initial thoughtful review was hijacked by security forces.
These same Federal Security Service (FSB) forces also known as the siloviki are the subject of an article in the New York Review of Books which refers to them as the New Nobility in Russia. In the assessment the FSB runs the country with Putin at the top.
…the FSB focuses its efforts on protecting the Kremlin’s vast economic interests, suppressing legitimate political opposition, and ensuring the Kremlin’s control over the press and television through intimidation and violence.
