The dangers of doing business with Russia came to the fore this week, when it was confirmed that Alexander Litvinenko (Ex FSB Colonel) was poisoned by potentially a lethal dose of Thallium (a toxic metal commonly found in rat poison) according to Dr. John Henry, who has been treating Litvinenko.

Russian ex-agent poisoned whilst investigating killing of journalist Anna Politkovskaya

Litvinenko fell ill after having a meal on Nov 1st with an Italian man who claimed to have information on the killing of Politkovskaya, the investigative journalist who was gunned down Oct 7th in her Moscow apartment building. Her attackers have not been found. Politkovskaya wrote articles criticising abuses by federal and pro-Moscow Chechen forces fighting separatists in Chechnya.

He also has accused FSB agents of coordinating the 1999 apartment building bombings that killed more than 300 people. So that Putins government would have an excuse to reinvade Chechnya.

Russia has enjoyed a boom of late because of the high price of oil and resources resulting in 7% GDP growth per annum. Presenting an very attractive picture in investment terms, with plans of joining the WTO could further benefit the Russian economy, as Russian exports could increase by 50 percent after joining.

However, the risks due to political uncertainty as President Putin has stifled opposition in the country by taking a hardline against dissent both inside and now outside Russia. And recent actions targeted against Western Companies that operate in Russia such as Shells problems in the giant Sakhalin 2 project further highlight the uncertainties involved.The growth in the State, coupled with the organised crime 'Russian Mafia' running rampant mean should oil prices decline the Russian growth story could unravel quite sharply.

Therefore despite the opportunities, of a fast growing economy, the risks of investing in Russia are very high, as increasingly the country drifts towards totalitarianism - Soviet Union-lite, with little transparency or accountability.

Comments

21 Nov 06, 08:19

Re: Russian shows its true face
Russia has given up one form of collectivist totalitarian State(Marxist), for another equally collectivist totalitarian State(Fascism). I see nothing but bad times ahead for the Russian people.

Perhaps a new set of jokes will come out of this situation.

As for investing in russia ? If they do this to their own people on the soil of others, what will they do to foriegners on their own soil ! Watch out Shell ! ;)

24 Nov 06, 06:23

A Russian killed by the russians
All this fuss about one russian, an EX KGB secret police officer, killed by the russians. What about the hundreds of thousands of iraqi's killed ?

all we seem to get is shoulder shrugs.

I suppose this makes a good distraction story from the REAL ISSUES ! That Britain is responsible of thousands of dead iraqi's and the USA responsible for hundreds of thousands of dead Iraqi's !!

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