News / Economy

Ukraine Strife Complicates Investment Climate in Russia

Ukraine Strife Complicates Investment Climate in Russiai
|| 0:00:00
...
 
🔇
X
Jim Randle
March 07, 2014 5:26 PM
Russia’s recent actions in Ukraine shook investors and initially sent stock prices down and gold prices up. One major investor who fled Moscow complains that Russia is already a brutal place to do business. VOA’s Jim Randle reports.
Russia’s recent actions in Ukraine shook investors and initially sent stock prices down and gold prices up.  Investors are also worried about U.S. sanctions and Russian threats to seize foreign assets. 

One expert says any impact on the investment climate may be temporary.  Foreign investors returned to Russia just a few years after the nation defaulted on debt and fought with neighboring Georgia.  One major investor who fled Moscow complains that Russia is already a brutal place to do business.

Russia’s 2008 war with Georgia drew criticism from Western nations and troubled investors.

It was fought over two breakaway regions of Georgia.

War worries investors because it creates uncertainty and greater risk.

Russia’s 1998 default worried investors even more.  Some vowed never to return to the nation that failed to repay billions of dollars in loans.  

But an expert on Ukraine and Russia at the investment advisory firm “Motley Fool,” Rich Smith, says investors eventually go wherever there is money to be made.

“U.S. oil companies were still investing in Russia, U.S. consumer goods companies were still selling things into Russia," he said. "People have short memories, big things happen in Russia and they look very big in the short term, but then things get back to normal."

The founder of Hermitage Capital Management, William Browder, once had huge investments in Russia. He now says Russia’s investment climate is terrible.  

“The rule of law doesn’t exist there, your property rights, completely non-existent," he said. "You could easily lose a lot of money before any of this stuff [the conflict with Ukraine] started happening."

Browder says his attorney Sergei Magnitsky, was beaten in prison and died there.  Magnitsky had accused Russian police of corruption.

According to Browder, corrupt officials retaliated by accusing Magnitsky and Browder of millions of dollars in tax fraud.   

The case prompted Moscow to end U.S. adoptions of Russian orphans in retaliation for Washington imposing financial sanctions on Russian officials.

Browder, now in London, says corruption is widespread in Russia.  He still faces a lawsuit and death threats from Moscow.

“Will the government create such a hostile environment for business, for geopolitics, for people that is it impossible to go there and do business," he said. "And the way it’s going right now, that could easily happen."

In the meantime, tensions over Ukraine are making the investment climate in Russia more complex and difficult.  

Washington is imposing new visa restrictions and financial sanctions on Russians and others it says threaten Ukraine.

The European Union has frozen the assets of some former Ukrainian officials, while at the same time offering the country billions of dollars in aid.

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.