NEWSLINK: Hand-wringing at dinner with Putin

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Hand-wringing at dinner with Putin – Financial Times – Neil Buckley – October 25, 2012 –

The Financial Times examines growing limitations on Russian economic prospects, and the resulting impact on the latest “Valdai Discussion Club” dinner:

… the event, and the context, has changed a lot. In Valdai’s early years, Russia was growing at 7 per cent a year. Oil prices ­ and Russia’s oil output ­ were shooting up; a consumer society was taking off. Moscow basked in its membership of the dynamically developing Brics group.

Now, growth is half its pre-crisis peak, and Russia’s intelligentsia has fallen out of love with Mr Putin. While there are pro-Kremlin voices, Valdai has become something of a forum for hand-wringing by Russian academics about the state of the country (shielded by a “Chatham House” format that guarantees their anonymity).

Last year’s event, three weeks before parliamentary elections, as experts bemoaned then Prime Minister Putin’s decision to return for a third presidential term, foreshadowed the street protests that followed.

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… Russia’s pre-crisis growth model, experts agree, is exhausted. Oil prices are unlikely to rise much, Russia’s oil output has peaked. Consumer spending is no longer exploding.

So now Russia badly needs investment, domestic and foreign. But a lousy business environment is holding back both.

Russia is losing money and people:

The poor climate is also contributing to capital flight of tens of billions of dollars a year. And lack of opportunity and stifling politics are prompting scores of the country’s best and brightest to leave. A striking poll discussed at Valdai found 68 per cent of Russians with above-average incomes wanted their children to study and work abroad, 37 per cent wanted them to live outside Russia for good.

Today’s Russia, says a prominent economist, is “exporting oil, money and people”.

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