x Abu Dhabi, UAE Thursday 20 July 2017

From the desk of Frank Kane: From Russia with votes

International investors who have been concerned about political instability in the resource-rich country of Russia will probably be reassured by the election results, writes Frank Kane.

Congratulations to Vladimir Putin on his surprisingly big win in the Russian presidential election.

His 63 per cent of the vote was almost the "Goldilocks" result: not so big that it would have cast doubt on the electoral process in Russia; and not so small as to have undermined him. It was so spot-on for the former KGB man that you might be tempted to say he wrote the result himself.

Some thousands of demonstrators did say exactly that in central Moscow in protests at what they claimed was a rigged election (surely not, in Russia?) and were arrested in droves for their complaints.

International investors who have been concerned about political instability in the resource-rich country will probably be reassured. The opposition was unelectable, really: old communists; rabid nationalists; and the peculiar Mikhail Prokhorov, a billionaire turned democrat who got about 7 per cent (or nearly 20 per cent, according to estimates by the international observers in the country to assess the voting process.)

There might be one surprise beneficiary of the win. With Mr Putin back for another four years at least, he might just feel confident enough to do something about poor Mikhail Khodorkovsky, a former oil billionaire still languishing in a Siberian jail after rashly challenging Mr Putin many years ago. The talk in Moscow is he might be freed as a signal that Mr Putin truly wants to rebuild his relationship with the oligarchs he has fallen out with over the years.

If Mr Khodorkovsky does get his freedom, he will be one of the few to escape the full rigours of the Russian penal system. In the past, very few slipped through the net.

Under Joseph Stalin in the 1930s, the story goes that Raskolnikov, an old Bolshevik who had taken part in the 1917 revolution, was walking the corridors of the Kremlin one day when he bumped into Uncle Joe.

"Comrade Raskolnikov, are you still here?" said the leader genially. "I thought I had you shot years ago."

Maybe it was Stalin's own special brand of humour. In comparison, Mr Putin seems sadly lacking in the joke department.

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I recently had the pleasure of interviewing Jim O'Neill, the Goldman Sachs economist who invented the "Bric" term for the economic group of Brazil, Russia, Indian and China.

While most of the conversation was a serious but fascinating exchange about the global economy, Mr O'Neill strayed from the script on to his hobby, even obsession: football and Manchester United.

We were speaking before his team's encounter last Sunday with mine, Tottenham, and he was quietly confident, especially when he saw some of our best players were injured. His optimism was well placed, as United ran out 3-1 winners. Bad day at the office for me, good for Mr O'Neill.

Later, he offered me his thoughts on football through the prism of the global economy. In particular, with relation to the soaring price of oil, he said: "A couple of [English] Premier League football clubs owe their largesse to its strength over recent years.

"Those fans will be among those who believe high and rising oil prices are a good thing … I'm tempted to add that a number of other Premier League football supporters may wish that, just as with a number of commodity-rich nations, those couple of clubs also suffer the consequences and develop symptoms of the well-known 'Dutch disease' of waste and missed opportunity from what temporary terms of trade improvements can offer."

Whatever does he mean? Surely it couldn't be a reference to Abu Dhabi's own Manchester City (United's deadly rivals)? Or to Chelsea, top contenders for a long while under the resource-rich ownership of Roman Abramovich, who owes a lot of his billions to the strength of the Russian energy sector? If so, it puts Mr O'Neill's dire predictions of an imminent fall in the global price of crude in an entirely new light.

fkane@thenational.ae

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