In Equity Russia's
latest post, there was an article that I wanted to highlight. Since his posts are long and cover several topics, you might have missed the link to this article even if you read the post. Ruchir Sharma (head of emerging markets at Morgan Stanley Investment Management) wrote the article
A Tale of Two Russias for Newsweek international. A quote from the article:
Quote:
The key rule one should keep in mind when operating in Russia is this: whatever is being said about the country, the opposite is also true...
Many in the international media have conjured up an image of Russia as a hyper petro-power run by an authoritarian regime with a cold-war vision for the country. While there's more than an element of truth in such a portrayal, it would also be fair to say that Russia has been working hard to reduce its dependence on oil, the Kremlin has rarely mattered less for the people on the street and capitalist fervor continues to sweep the economy.
Russia is increasingly turning out to be a tale of two different countries. At one level, the state is becoming more assertive and is seeking to broaden its influence in the "strategic" sectors of the economy as it looks to use oil as a weapon. This is undoubtedly undermining the investing environment and preventing the country from realizing its full potential in the natural-resources sector. But the rest of the economy is caught up in one of the most powerful domestic-demand booms in the emerging-market universe.
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