Risk in Russia

Author: | Published: 1 Aug 2007

Sam Jones
Staff writer

Which direction is Russia heading in?

Russia doesn't really deserve to be called an emerging market. Seventeen years after the rocky transition from soviet-communism, its economy is developing sophistication and wealth that puts it leagues ahead of its developing neighbours. Two years after the Yukos scandal foreign investment in Russia is soaring. And international law firms are growing their practices as fast as they can.

But there is a strange disconnect between the high-profile politicking portrayed in the media and the phenomenal growth in foreign investment touted by the government and many law firms. Counsel should take care not to pay too much attention to either side.

Yukos

Two and a half years ago, on December 18 2004, one of Russia's largest companies – the $9 billion Yuganskneftegas – was bought at a two-man auction.

Via mobile phone a company no one had ever heard of, with billions of...