Between 1993 and 2018, Russia had massive trade surpluses:
approximately 10% of GDP per annum on average for 25 years, or a total in the rage of 250% of GDP (two and a half years of national production). In principle that should have enabled the accumulation of the equivalent in financial reserves. This is almost the size of the sovereign public fund accumulated by Norway under the watchful gaze of the voters. The official Russian reserves are ten times lower – barely 25% of GDP.

Where has the money gone? According to our estimates, the offshore assets alone held by wealthy Russians exceed one year of GDP, or the equivalent of the entirety of the official financial assets held by Russian households. In other words, the natural wealth of the country, (which, let it be said in passing, would have done better to remain in the ground to limit global warming) has been massively exported abroad to sustain opaque structures enabling a minority to hold huge Russian and international financial assets. These rich Russians live between London, Monaco and Moscow: some have never left Russia and control their country via offshore entities. Numerous intermediaries and Western firms have also recouped large crumbs on the way and continue to do so today in sport and the media (sometimes this is referred to as philanthropy). The extent of the misappropriation of funds has no equal in history.

Rather than apply commercial sanctions, Europe would do better to finally go for these assets and to address Russian public opinion. Today post-Communism has become the worst ally of hyper-capitalism: Marx would have appreciated the irony but this is not a reason for putting up with it….Capital in Russia

Book Review: ‘Putin’s Kleptocracy’ by Karen Dawisha

Arend van Dam
www.w-t-w.org/en/arend-van-dam/