Putin creates crisis for Russian economy

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Putin creates crisis for Russian economy

At the same time Russian firms went on a borrowing spree. They have increased their foreign-currency debt by some $170 billion in the past two years. Yevgeny Gavrilenkov, the chief economist at Sberbank CIB, the largest state bank, says most of this money settled offshore; only a very small part was invested in the Russian economy. Kirill Rogov of the Gaidar Institute for Economic Policy points to one of the reasons why. When a company can be swallowed by the state at any time, more debt will make it less appetising prey.

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While the state still had money, it could afford to buy out private owners, as it did in the case of TNK-BP. Now it simply wrestles oil firms away from their owners, as it is doing in the case of Bashneft, a medium-sized but fast-growing oil firm which is being expropriated from Vladimir Yevtushenkov, a billionaire who is under house arrest. Political loyalty—and Mr Yevtushenkov was certainly loyal—is no protection against raiding.

Russia’s admiration for the Gestapo

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Russia’s admiration for the Gestapo

The KGB considered the Stasi, man for man, the most effective secret police/intelligence agency ever. The Soviets never spoke openly about the Stasi but privately they were quite proud of “their Germans” (Russian dominated East Germany). It was what many Russians wished the Soviet Union was. East Germany was the most efficient communist state ever and the Stasi was the kind of secret police the KGB wished it was.