Russia Was A Better Investment Than the USA In The Last Decade

Friday, August 06, 2010

Russia may make headlines these days with its grain export ban, but actually the resource-richest country in the world has become an economic champion overlooked by investors.
This is what the Economist forecasted in 1998:
  • Russia would see inflation hit 10,000%
  • GDP would collapse by at least 20%
  • Communist rioters would storm the Kremlin
  • Russia would break up into four heavily armed mutually antagonist regions
  • Civil war would ensue
And this is what really happened since 2000 according to Russian investment house Otkritie:
  • GDP growth averaged 7.5% p.a.
  • Forex reserves reached $600 billion
  • 15-fold increase in pensions
  • Sharp decrease in poverty
  • Demographic stabilization, unprecedented political stability
  • World's best debt and equity markets since 2000
For a view from Russia check out this Otkritie presentation from late July that made it to my inbox.

While I have my reservations about the style of political stabilization under Czar Vladimir Putin one fact remains undisputed: Russia's resources will become a major political factor in Eurasia in the times to come when China and Europe will compete for it.


Wikinvest Wire