From Russia with a Christmas wish list

By bne IntelliNews December 17, 2010

<i>bne </i>staff and everyone who lives in Russia or has to deal with it -

Dear Santa,

Things are getting better in Russia and all the talk has been all about "modernisation" this year. But while we have been waiting all year for some gifts from the Kremlin, very little has appeared.

Really, the only exciting thing that happened was that Russian President Dmitry Medvedev said he wants to change the name of the militsiya to politsiya (yawn) - oh, and now we are allowed to have parties with the gays on Triumph Square, which is something I guess.

Still, without wanting to appear greedy, below is a short list of simple things we would like to get in 2011 that we think will make a big difference to living and working in Russia at almost no effort or cost. Do you think you could see your way to sorting them out with Tweedledum and Tweedledee in the Kremlin? I am sure they will listen to you, (as they seem to have a bit of problem listening to anyone else).


17 years in waiting? Enough already. Let Russia in.


Paint yellow grids over every junction in the city and then ban any driver that stops in the box for six months (use cameras at junctions to police this rather than the ravenous GAIshniki). At a stroke, you would double the flow of traffic.

Get rid of the law that demands cars that hit each other have to stand where they are until the police come (at least 30 minutes), which only causes huge jams behind them.

Increase the fine for having your car towed away from RUB100 to $100. And ban parking on the pavement (again, but this time make it stick).

Ban police from drinking beer while they driving their police cars. It looks bad.


Unilaterally drop the visa requirement for EU and US citizens entering Russia. Or at the very least allow them to get a visa at the border. If you want foreign investment, the first thing you need to do is let investors into the country. Don't wait for the EU to reciprocally drop visa requirements for Russians, as this will take a decade to organise.

Oh yes, while you're at it, put up those little poles with straps between them in the arrival hall at Domodedovo and Sheremetyevo so there is a proper queue to passport control.

Business education

Poor management skills is the biggest drag on Russia's productivity, according to several studies. So instead of wasting $3bn on setting up Skolkovo that won't really function properly for another 10 years (if the Dean Wilfried Vanhonacker's track record is anything to go by), set up a fund of say $100m and pay for 2,000 young Russian managers to take MBAs in France, UK and US every year.

There are about 50,000 significant companies in Russia and in five years you could create an army of well-trained managers. You can even make the scheme self-financing if you force the students to repay the money after their studies end.

Pension reform

Act now. Pensions and social spending already account for a quarter of the budget deficit and this is only going to get worse. What is so hard? You can take anyone one of the three Baltic state's systems (all successful, but all three taken slightly different models) and just adopt it wholesale.

Close all the shell companies that were set up in the last attempt and do nothing. Make pension investments into legitimate funds tax-free. The programme to make Moscow an International Financial Centre will fail unless pension reform is successfully implemented. Make Sberbank set up western-style mutual funds.

And while you are thinking about social issues, change the constitution to fix the amount of budget spending on education at something high like 4-8% of GDP, like the Taiwanese did.

Do a Georgia on red tape

Take a deep breath. Swallow your pride. And get Kakha Bendukidze to come back to Russia from Georgia to cut red tape. Bendukidze, who made his first fortune as a Russian industrialist, was given the power to slash the bureaucracy and chuck out stupid rules in Georgia's legislation and has made the tiny Caucasus republic the easiest place to do business in the CIS.

If Bendukidze is a bridge too far, then get someone else to this job - preferably someone Finnish, like Ilkka Salonen, former deputy chairman of Sberbank.

Proper CSD with T+3 DVP

Talk, talk, talk and no action on setting up a central securities depository. Everyone wants this and with T+3 settlement (trade plus three days), it would at a stroke greatly reduce the cost of trading and so the cost of capital. It is only a question of will and this reform will materially make everyone's life easier and cheaper.


Several top analysts we have asked all want the second case against Khodorkovsky dropped and for him to be released on New Year's Eve in an act of clemency.

And on the same note, resolve Prosperity Capital Management's row over TGK-2 in favour of minority shareholders, as you can't seriously let them get dicked over and still pretend that Russia is an "attractive investment destination."


Send a swarm of locusts to destroy Russia's entire dill crop - forever.

Lots of love

bne staff and Everyone who lives in Russia or has to deal with it


From Russia with a Christmas wish list

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.