Sceptics who refused to believe that Russia was a new power in the commercial world were sent packing in 2003. Russian business leaders showed that they had plenty of ambition outside their home turf while western executives demonstrated they were willing to plough large sums of money into the power behind the former Soviet Union.
Roman Abramovich made the most flamboyant gesture buying up one of England’s most glamorous football clubs, Chelsea.
The return favours were done by BP and Shell which demonstrated growing confidence in what some still believe is the ”wild east” by making the biggest ever foreign investments there.
But the single event which produced the greatest number of newspaper column inches in both eastern and western media was the jailing of Russia’s richest man, Mikhail Khodorkovsky.
This was interpreted as Russian president Vladimir Putin flexing his muscles ahead of this year’s elections: warning off potential political rivals emerging from the commercial class. Moscow’s stock market has been badly dented by the uncertainty.
No such jitters worried Ken Bates when in July he agreed to sell off his holding in Chelsea for R1,5-billion to Abramovich, a regional political governor in Russia as well as the owner of Siberian oil group Sibneft and a host of other commercial assets.
The soccer enthusiast, who has since spent about R1-billion buying new players for the Blues, later sold Sibneft to Yukos, the company where Khodorkovsky was chief executive.
This deal has since been abandoned amid the chaos which followed Khodorkovsky’s incarceration on tax fraud allegations. Again, Putin’s hand is seen by many in Abramovich’s decision to scrap the merger.
Ahead of this turbulence, BP had shown itself willing to tread where no others had by buying up Russian oil group TNK in an R56-billion deal. This was followed by Shell deciding to invest about R70-billion in its Sakhalin island gas schemes in the east of the country with ExxonMobil also pressing ahead with developments in the same area.
Since then ExxonMobil, Total and ChevronTexaco have all had their names linked with possible takeover moves of Russian oil firms.
The recent parliamentary elections to the Duma brought huge advances to those loyal to Putin, putting him in a seemingly unassailable position for a new term as president.
Critics fear he is becoming increasingly autocratic but this is unlikely to deter further Western investment given the kind of political and commercial stability he has brought to what was once considered off limits. – Guardian Unlimited Â