The writer is a non-resident senior fellow at the Peterson Institute for International Economics and director of the international affairs programme at the Kyiv School of Economics
Recent discussions in the US focus on potential opportunities for American companies in Russia in the event that relations between the two countries normalise. However, Russia now faces stagnation. And sanctions relief could be shortlived if the US administration changes in four years’ time, while state takeovers of companies and threats to investor rights underscore that investing in the country entails significant risks and uncertain rewards.
Nostalgists remember the glory days of the Russian market, between 1999 and 2008, when commodity prices boomed. Investors achieved extraordinary returns as crude oil prices rose from $11 per barrel in 1998 to a peak of $133 per barrel 10 years later, making the political risks seem worthwhile.