Thomas, I agree SI is the best place to talk investments so I joined up full time.
I agree with you, talk is cheap. The new cabinet has surprising decided to act instead of posture IMHO.
The way I see Russia is as follows: Russia has a lot of money, but it is in all the wrong places and inefficiently used. All of these "I won't pay taxes, because you owe me" and "I will not pay taxes because I am not being paid" attitudes are killing the economy. So, Sergei K. and pals have decided to break the cycle. They have put their foot down and decided that taxes must be paid and they will accept whatever short-term pain happens because of the policy shift.
I think they are making progress. Gazprom is a good example. What really opened my eyes to the situation was that when they went after tax deadbeats, the top two names were the biggest corporations in the country (Gazprom and UES). To me that means there is going to be a BIG surge in tax revenue that will last several months. The finance minister is a billionaire and does not need his job. So he has no political reasons to not continue with tax raids and whatever is necessary to get the job done.
Once the budget is balanced and the threat of ruble speculators is squashed, the government can start paying back wages. This in turn should help get the economy out of its doldrums.
This is maybe a little optimistic, but that is my two cents.
I am intrigued by the fact that the current crisis is a result of several things coming together (structural problems, low oil prices, asian flu). For that reason, I think this is a rare opportunity to buy Russian stocks super cheap.
Also note, that if much of the business is still barter, and many individuals don't pay taxes, the GNP maybe VERY understated. |
