Wow, how did this slip through the “Russia Beyond the Headlines” censors? Felix Goryunov, a Moscow-based economics journalist, viciously condemns the Putin economy and concludes it is unworthy for WTO admission, which will crush it:
Although Russia can now join the World Trade Organization, it should not do so because its economy is inherently weak and uncompetitive. Russia’s export product base is steadily deteriorating. After 20 years of talk from the Kremlin about the need to diversify and modernize the economy, Russia’s economy still relies on the extractive industries. The majority of Russian manufacturing, agricultural and service companies, to say nothing of small businesses, are uncompetitive even in the domestic market. Without strong state support, prohibited by WTO rules, they would lose even after the expiration of the transition period for full accession.
Although corruption has been condemned by the Kremlin as country’s Public Enemy No. 1, there are no visible signs it has decreased. Many high-quality domestic consumer products can‘t be marketed across the country. Two decades after the start of market reforms, there are only a handful of nationally recognized brand names of products “made in Russia.”
It’s no wonder that the unfriendly business climate causes domestic capital to flee the country. The Central Bank of Russia estimates that this year the capital outflow will reach $70 billion. This would be an addition to the approximately $1 trillion that has left the country since the mid-1990s.
It is hard to find a clearer description of attitude of the Russian political elites towards business than its comparison with the famous wisecrack by U.S. President Calvin Coolidge: “The business of America is business.” If the Kremlin could be honest, its declaration must be: ”The business of Russia is to fleece business.”
Ouch. Speaking of corruption, by the way, Russia is still dead last on the Transparency International bribe-payers index.