Last month, one of the “Big Three” U.S.-based ratings agencies noted deep concern with what appeared to be civil unrest with the government, more specifically Prime Minister/soon-to-be second-time President Vladimir Putin. Little has happened in the interim to paint the Fitch decision to downgrade its long-term prospects as outside the line, as so many ratings agency downgrades have been criticized.
Though Putin's likelihood to regain his post as president after elections in March is all but guaranteed, there is widespread evidence of unrest in the form of in-country blogging and public demonstrations stemming from alleged deep corruption in Russian politics. The growing, and surprisingly brazen unrest has not been so public since the fall of the Soviet Union. To wit, this week there was what amounted to an organized, 500-car protest parade around Moscow’s “Garden Ring,” a stretch of road in the city that passes by the Kremlin. It was described in some ways as an opening act to bigger protests planned in February and it garnered worldwide attention.
It can best be described as "unprecedented,” said various credit professionals familiar with Russian political and business happenings.
The questions yet to be answered are how big and unified will the populous protests become, what type of measures Putin, typically quick to dismiss decent, will take and what impact this could have on business. The worst-case scenario is Russia’s own version of “Arab Spring,” though even those calling for reform say remains highly unlikely. Still the developments are worth note to anyone doing business in Russia.
FCIB will present a "Doing Business in Russia" webinar in March. For more information or to register, visit the events section of their website at www.fcibglobal.com.
Brian Shappell, NACM staff writer