Russian Oligarchs Take a Hit

As I said last week, the most leverage we have on Moscow is financial. This morning two reports out of Russia say the pain on the moneyed class in Moscow is increasing. $16 billion in currency reserves left Russia in one week. But as the Times reported, the reasons for Russian restraint are not just financial.

Many in Washington hope Russia will restrain itself out of its own self-interest; Moscow, for instance, does not want Iran to have nuclear weapons, nor does it want the Taliban to regain power in Afghanistan. Dmitri Rogozin, a hard-liner who serves as Russia’s ambassador to NATO, told the newspaper Izvestia this week that Moscow still wanted to support the alliance in Afghanistan. “NATO’s defeat in Afghanistan would not be good for us,” he said.

Moscow may also be checked by the desire of its economic elite to remain on the path to integration with the rest of the world. The main Russian stock index fell sharply in recent days, costing investors $10 billion — many with close ties to the circle of Prime Minister Vladimir V. Putin.

If cooler heads than both John McCain and Vladimir Putin prevail, there is no reason for restarting the cold war.

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0 Responses to Russian Oligarchs Take a Hit

  1. Brian says:

    Russia also owns $65.3 billion in U.S. Treasury securities, double the amount from 12 months ago bought with oil profits. The question is will Putin move to nationalize industry and jail more oligarchs in a return to communism or will the money crowd have enough backing to get the military to stand down?

  2. Jon Taplin says:

    Brian-There is a struggle in Russia between the Putin and Medevev factions. How it will play out will be interesting.

  3. wilco278 says:

    Just to add fuel to the fire… McClatchy is reporting that Russia has not been exploring and producing new oil fields. Russian oil money has fueled much of the growth of the oligarchy, but half of their major fields are over 60% depleted and production is expected to decline rapidly within a few years.

  4. pond says:

    Did the Americans ever stop fighting the Cold War?

    President GHW Bush oversaw the ‘end’ of the Cold War. President Clinton carried on inviting former SSRs to join NATO. President GW Bush moved actively to surround Russia and further break it up, so that she would never again pose a threat to the US world domination that Dick Cheney, Don Rumsfeld, Bill Kristol and the other neocons dream of.

    Russia might not like a Taliban-run Afghanistan, but I expect she would prefer it to permanent US military bases, with nukes, bombers, and missiles, in Afghanistan and throughout the ‘stans of Central Asia.

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