01 June 2004

ECONOMIST RUSSIA SURVEY

It�s rare to openly praise journalists in a blog, much less those you have never met, albeit he taught my wife to salsa whilst I was traveling. However, I have to unreservedly recommend the Economist�s Russia survey to anyone even slightly interested in Russia.

Gideon Lichfield, the Economist�s Russia correspondent, has done a fantastic job of presenting a readable, accurate and balanced account of Russia today. In particular the section on the Silovki (the men of power; the ex-KGB) is as good an article as could be written by a reporter � as opposed to an interested commentator. In his Yahoo Group�s commentary he apologizes for his �inability to understand the place.� Actually his balanced, nuanced approach shows far greater understanding than his predecessor who was both a Slavophile and phobe, sometimes in the same sentence. Anyway if we understood the place what would we spend the weekend at the Dacha discussing?

I have criticisms of omission; which could be equally blamed on editors as on Gideon. The first is that he is absolutely correct to emphasize the paltry nature of real reform. That is reform that is actually implemented by the bureaucracy. But the nature of the reform deserves more praise. Without letting on how much tax I paid in 2003 the Government has agreed to pay back $6,000 of it as a result of me buying an apartment. The income tax rate is 13%. This is an intelligent policy to bring the populace into the �white� economy.

The second criticism relates to the one-sided nature of the sausage factory story. Small and medium-sized business is booming. Fredrik Ekman, my partner at Mint Capital founded Oriflame in the FSU. Oriflame is an Avon-style cosmetics business. Earlier this year it went public on the Stockholm Stock Exchange. Some 30% of its revenues and 40% of its net income is derived from the FSU, principally Russia. The numbers made good reading for its owners bank managers.

Mint�s investments in the local-economy are booming and our interaction with organized crime is zero. I have my reservations over Russia�s medium-term viability but if we can get out before Putin becomes a lame duck (which maybe a western term with no meaning in a non-liberal democracy) they will return substantially over our risked cost-of-capital.

1 comment:

Global Business said...

Hi Blogger, I am enjoying some idle time and looking to see what Residual Cash Flow will bring up. this post is certainly interesting and informative. Residual Cash Flow is a good word to bring into the conversation. Great post. Enjoy your day!

01 June 2004

ECONOMIST RUSSIA SURVEY

It�s rare to openly praise journalists in a blog, much less those you have never met, albeit he taught my wife to salsa whilst I was traveling. However, I have to unreservedly recommend the Economist�s Russia survey to anyone even slightly interested in Russia.

Gideon Lichfield, the Economist�s Russia correspondent, has done a fantastic job of presenting a readable, accurate and balanced account of Russia today. In particular the section on the Silovki (the men of power; the ex-KGB) is as good an article as could be written by a reporter � as opposed to an interested commentator. In his Yahoo Group�s commentary he apologizes for his �inability to understand the place.� Actually his balanced, nuanced approach shows far greater understanding than his predecessor who was both a Slavophile and phobe, sometimes in the same sentence. Anyway if we understood the place what would we spend the weekend at the Dacha discussing?

I have criticisms of omission; which could be equally blamed on editors as on Gideon. The first is that he is absolutely correct to emphasize the paltry nature of real reform. That is reform that is actually implemented by the bureaucracy. But the nature of the reform deserves more praise. Without letting on how much tax I paid in 2003 the Government has agreed to pay back $6,000 of it as a result of me buying an apartment. The income tax rate is 13%. This is an intelligent policy to bring the populace into the �white� economy.

The second criticism relates to the one-sided nature of the sausage factory story. Small and medium-sized business is booming. Fredrik Ekman, my partner at Mint Capital founded Oriflame in the FSU. Oriflame is an Avon-style cosmetics business. Earlier this year it went public on the Stockholm Stock Exchange. Some 30% of its revenues and 40% of its net income is derived from the FSU, principally Russia. The numbers made good reading for its owners bank managers.

Mint�s investments in the local-economy are booming and our interaction with organized crime is zero. I have my reservations over Russia�s medium-term viability but if we can get out before Putin becomes a lame duck (which maybe a western term with no meaning in a non-liberal democracy) they will return substantially over our risked cost-of-capital.

1 comment:

Global Business said...

Hi Blogger, I am enjoying some idle time and looking to see what Residual Cash Flow will bring up. this post is certainly interesting and informative. Residual Cash Flow is a good word to bring into the conversation. Great post. Enjoy your day!