“The appeal of Russian markets is eclipsing risks from president Vladimir Putin’s crackdown on political rivals,” says Jake Rudnitsky on Bloomberg. Stocks are soaring, buoyed by “the central bank’s drive to curb inflation, a conservative fiscal policy, rebounding commodity prices and the easing threat of US sanctions”. GDP should grow 3.9% this year. “With so many reasons to be bullish, investors are looking past the political situation.”
Last week’s blatantly rigged election won’t change that. The Kremlin jailed or barred many opposition candidates and used a range of dirty tricks to see off others – yet when the polls closed “it fleetingly appeared as if [its party] United Russia … might be in for a tough time”, says Felix Light in the New Statesman. Then “after a mysterious 14-hour delay, the two million votes cast as part of an online voting trial scheme were added to those cast at traditional polling stations”. United Russia “which had been polling at under 30% for months, wound up with half of all votes cast and a two-thirds parliamentary supermajority”.
Yet in the long term, the Kremlin’s “social manipulation” will spawn “a crisis of human capital”, says Andrei Kolesnikov in the Financial Times. That bodes ill for an economy that can’t rely on oil and gas forever. “What Putin and his inner circle are relying on is that there will be enough political and economic heft for the rest of their time in power. What happens after that… is of little concern to them.”
MoneyWeek
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