"No less important is the way the verdict cements Russia’s reputation as a terrible place for entrepreneurs and investors. To convict Navalny, the court had to interpret as theft a normal business transaction, in which trading firm VLK purchased timber from state-owned company Kirovles then sold it at a higher price. Evidence that VLK had paid the going market rate had no effect. The decision gives corrupt authorities throughout Russia a new tool to extract bribes from businesses: Pay up, or we’ll put you in jail for making money. Russia’s economy can go a long way on high oil prices, but in the longer run, the dismal business climate will tend to undermine the relative prosperity on which Putin has built his popularity. At the extreme, economic malaise has the potential to produce a revolt much more pervasive and virulent than last year’s largely middle-class demonstrations in Moscow, and could bring to power people willing to pander to the masses’ basest tendencies."
Posted on: Thu, 18 Jul 2013 19:37:54 +0000
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