Vladimir V. Putin’s rule may extend longer than Brezhnev’s and almost as long as Stalin’s, but it will be good for business. Mr. Putin declared his candidacy for the presidency at a pro-Kremlin party congress in Moscow on Saturday. He is virtually certain to prevail in tightly controlled elections in March.
Both Leonid I. Brezhnev, who ran the former Soviet Union for 18 years until his death in 1982 and Joseph Stalin, who ruled for 25 years until 1953, were leaders of a Russian economy that grew in a modern fashion despite a much more Marxist-led economy as compared to the West. Now Putin rules over a Russian economy fully integrated in the flat system throughout the majority of the world.
With the announcement that Putin likely will return to being Russia’s President, the world will be a less volatile place to do business, as Russia’s influence extends in many regions throughout the world and the state maintains a transparent policy of stability for financial agreements and civil order. Unfortunately, Russian holdings in the North, however, uniquely postion the country to be negatively biased towards global warming. On the other hand, Putin can be seen as a cooperative choice for agreeing with the United States based on past agreements between the two countries. Time will tell whether Putin can lead Russia as well as maintain his personal toughness.
Update: October 1st, 2011
No news is good news in the Middle East…
Palestinian Authority officials said over the weekend that while the proposal contained “encouraging elements,” they want the Quartet members – the US, EU, UN and Russia – to provide further clarifications regarding the “terms of reference” for the peace process and the issue of construction in the settlements.
Putin’s announcement to resume the most powerful leadership position in his country, and its sphere of influence, will not only make him more credible a source for Jews and Arabs alike in the Middle East, but also present a stronger suite of hand in political-relationships with American counterparts in the Obama administration, which is ending next year. Putin’s term lasts six years. And there is no constitutional limitation on the number of terms he can serve. My thesis is that buying Russian made commodities will be successful in a focussed investing strategy. Transportation, currency derivatives, and ETFs in Russia could be a positive overweighting for a portfolio manager during the next few weeks (or years). On the ground due diligence in Russia would be ideal to really get the best idea of how business is operated over there these days.
Here is a profile of one such investment idea I had, and would visit if I could just find some time for travel to Russia:
Open Joint Stock Company Gazprom engages in the geological exploration, production, transportation, storage, processing, and marketing of hydrocarbons in the Russia Federation and internationally. It produces gas, gas condensate, and oil. The company also generates and markets heat and electric power, as well as leases assets and provides construction services. It has 6,806 operating gas-producing wells and 5,941 operating oil-producing wells in Russia; 161,700 kilometers of trunk pipelines in Russia; and 36 GW installed capacity of 82 power stations in Russia, as well as operates 1,596 gasoline stations. The company was founded in 1993 and is based in Moscow,