The great deleveraging

Author: | Published: 1 Dec 2008

In this investment climate, two months can seem like a very long time. As in the rest of the world, the investment climate in Russia has changed dramatically since July 2008. And yet, in the months leading up to the great deleveraging, plenty of commentators were willing to speak of emerging markets like Russia being, to one degree or another, decoupled from western markets. Rising commodity prices, an emergent middle class and banking system, combined with high growth rates, seemed to make Russia look like a safe haven compared to those developed markets suffering the effects of an emerging banking crisis. As if to confirm this, investment funds investing in Russia and the CIS had been producing consistently high returns corresponding to the economic surge ushered in with the Putin years.

In July 2008 the climate began to change: concerns over Russian government involvement in private businesses, increased political tensions...