Russian citizens took more than $500 billion out of the country in the decade since Putin rose to power, according to a new report from Global Financial Integrity, significantly hurting the economy and pre
venting even stronger growth.
As Russians grew wary of how their money would be handled at home, they took out more than $50 billion per year between 2000 and 2009. According to GFI economist Sarah Freitas, this trend is not likely to be reversed any time soon:
In a country where tax evasion and transfer pricing are commonplace pastimes, Russia is finding that its revenues are not quite up to par for debt repayment – especially when one considers the projected drop in oil prices. A global recession has caused investors to look to the dollar as a safe haven, implying a fall for weaker currencies like the ruble.
GFI points out that with growing income inequality, Russia cannot continue to hemorrhage scarce capital without serious consequences and recommends that the citizens demand, among other grievances, that their government strengthen anti-money laundering laws and fight tax avoidance to mitigate this phenomenon.
