Foreigners' property to be nationalized in Russia

In Russia, there is talk of returning to a planned economy and confiscating the property of Western companies. The right road to Moscow is straight to the bottom.

For example, the head of the Russian Central Bank, Elvira Nabiulina, argued with the Minister of Economic Development, Maxim Reshetnikov.

He said that “the Russian economy managed to avoid the most negative scenarios at the expense of public investment.” And Nabiulina believes that the main factor was the rapid adaptation to the new realities of many “thousands” of Russian enterprises, which proved to be “very flexible.” Moreover, she warned against excessive reliance on the role of the state if Russia does not want to return to a “planned economy.”

“The temptation to manage the structural reorganization of the economy can lead to the fact that we will suppress private initiative, not to mention the risks of, at the very least, restoring the planned economy,” the head of the Russian Central Bank said.

“Nabiulina is right to sound the alarm. According to the Financial Times, the Russian Federation is considering options for the possible nationalization of Western companies that do not agree to play by Moscow's rules.”

In particular, the FT writes that the Kremlin has secretly ordered the adoption of a law that allows for the appropriation of Western assets at low prices, and is also discussing the possibility of full nationalization of subsidiaries of Western companies.

According to the newspaper, last week Putin signed a confidential decree authorizing the government to buy Western assets at a significant discount and resell them. The decree also allegedly instructs the Russian government to ensure that all private buyers of Western assets are Russian citizens, or, if they are legal entities, that there are no foreign companies among their shareholders, or at least that the procedure for withdrawal of foreign companies from the shareholders has been initiated. There is also a requirement that the new owners place at least 20% of their assets on the Russian stock market.

“Thus, Russia is actually preparing for isolation from the world. Probably hoping that Chinese goods, technology, and money will be enough to compensate for the losses.”

However, China's resources and market capacity, despite traditional perceptions, are quite limited. This has already become evident in the oil and gas markets; the situation will be repeated in others.

Source

About the author. Rostyslav Pavlenko, Ukrainian politician, political scientist, political strategist, teacher, former lawmaker. 

The editors don't always share the opinions expressed by the authors of the blogs.