Russia, which in 2004 boasted an impressive 7.1% annualised GDP growth and a record current account surplus of $58.2bn, returned barely 8% from its equity market. Why? The answer lies in public perception.
At first glance, the events of 2004 gave the “Chicken Littles” of the world the chance to warn us all that the sky was falling in Russia. The alarmists announced that the Kremlin’s fight with oil giant Yukos was the prelude to a nationwide renationalisation campaign, that Russia’s involvement in Ukraine’s elections marked the beginning of a new Cold War and that the cancellation of elections for regional governors marked both the death knell for democracy and the advent of authoritarianism in Russia.
