Russian Nightmare for Investor
About two weeks ago while babysitting, I read an article in a magazine about Russian business people fleeing from their homeland. It said that Russian police had grown so corrupt that companies, and successful entrepreneurs lives, were in danger. The article was interesting, but forgettable.
The above linked interview, featuring Fareed Zakaria and investor, and CEO of Hermitage Captial Mgmt., William Browder, on the other hand is mind-blowing. By the end of the 15 minutes, I had run through almost every emotion I can name. This story would make an incredible movie, tragic ending and all.
Near the beginning of the video, Mr Browder briefly touched upon a significant point that I believe deserves special mention. It is in regards to why Russia is experiencing such a high level of corruption in it's police force, and government. Using the analogy of a poorly constructed house, he explained how Russia's conversion from communism to capitalism was not well designed. Russia rushed into captialism without developing the necessary laws and regulations to protect private entrepreneur's and their investments.
Oddly, this is almost exactly what I had thought when reading the article babysitting. The police force and government are still working out of a communist mindset, even though the private sector has embraced Western style business practices.
Why is this important? I think that it is essential that we analyze, and learn from, Russia's mistakes when spreading democracy and capitalism throughout the world. The most current case and point of how this knowledge can be practically applied is in Iraq. Has the government and law enforcement personal truly accepted the changes the US and its allies have pushed for? If not, the business sector is sure to suffer as well, as the Russian example shows.
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