A Capitalist in Red Square

by Dean LeBaron

Russia still hasn’t gotten the hang of capitalism and democracy, but that doesn’t mean it’s a backwater when it comes to investment opportunities. Dean LeBaron counts himself among the optimistic few, having observed the country firsthand for years. He predicts that Russia’s growing middle class will spark rapid economic expansion once oil and natural gas prices resume their inevitable climb. Russia is a country of great contradictions. Lavish new office towers reflect its ambitions to become a modern superpower, but its economy is constrained by its Communist past. Industrial production has been weakening ever since the collapse of the Soviet Union, but Russia’s enormous reserves of oil and natural gas obscure the shrinkage. Its leaders talk endlessly of economic modernization, but nothing seems to change. Critics contend that real change won’t come until the country is run by a new generation, one that hasn’t lived under a Communist system. Even so, Russia is not bereft of investment opportunities, and as real progress finally takes hold in the years to come, those opportunities will multiply. As for the here and now, the $280 billion stimulus package rolled out in response to the global financial meltdown of 2008 has helped to shore up Russia’s domestic economy and stabilize the ruble. Foreign investors see rebounding oil prices as a good reason to be optimistic about Russia’s near-term future.

Hardcover

First published January 1, 2009