Back to the old ways in Moscow

Moscow Times. Platon Lebedev, arrested three weeks ago on charges arising from a 1994 privatization deal, was arrested as a warning shot to the oligarchs who now own Russia. The head of Yukos oil, Mikhail Khodorkovsky is really the target, as he is a multibillionaire with suspected political ambitions, but by arresting another they can send a message without having to really address an issue. Russia has been doing much better of late, thanks in large part to higher oil prices. In some ways, the whole country has its fortune tied up with oil as there is little else in the Russian economy (besides weapons) that are generating any foreign currency. And speaking of foreign currency, the Moscow Times also talks about a possible currency flight underway in Russia. “”The first week of Lebedev’s imprisonment cost the country $200 million in foreign exchange reserves, and the second week cost it $900 million — the biggest one-week drop in more than a year. The Central Bank posts its reserves for the previous week every Thursday, so the big question economists are asking now is, how much did week three of Lebedev’s arrest cost?”” And people wondered why the Russians wanted a client like Saddam in power in Iraq.]]>

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