Russia's Yukos Oil defaults for $1billion - U2 Feedback

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Old 07-06-2004, 07:30 AM   #1
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Normal Russia's Yukos Oil defaults for $1billion

This is ridiculous, how can an oil company go under? Everybody wants oil! The Saudis are rolling in dough! The company blames the government, maybe they don't know how to be good capitalists yet. But it's OIL! What a shame, if they had played this right it would have really done a lot to help Russia's economy.

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Old 07-06-2004, 07:55 AM   #2
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Well, the government does have a big say in this. The owner of Yukos supported the opposition to the government. Now, he faces criminal charges (don't know which though). Suddenly, the company also gets tax bills of 3 billion dollars (for 2000), of which 1 billion is for the tax and the other 2 billion for fines, etc. They try to negotiate with the government for payment and then suddenly get another tax bill of 3 billion for 2001 due in a few days or so.
But the company also has almost no opportunity to pay the bills. It isn't allowed to sell some of its assets. And last weekend the police raided their offices confiscating computers, etc. so it's even really difficult for them to continue working.

I think that the Kremlin wants to get the company under their control. I don't think the directors of the company aren't good capitalists (whatever that means), but more that it's still an issue that the Russian government thinks they can and have to control everything, destroying those who do not agree with them.

C ya!


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Old 07-06-2004, 08:43 AM   #3
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Damn, it reminds me of the Soviet Union. Some things never change. This is screwy.
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Old 07-06-2004, 08:44 PM   #4
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Well I don't know why any of you should be so surprised. Russia is capitalist these days, after a fashion, but since when did that have anything to do with freedom and democracy?

Methinks Putin is a strongman in the classic mode, and he wants things where he can direct them with a minimum of uncertainty. Russia may hold elections but it is NOT democratic.
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Old 07-06-2004, 09:13 PM   #5
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Russia doesn't have a tradition of democracy, so when Bush I supported Boris Yeltsin, who was considered "ultra-capitalist," versus any of the moderate capitalists (think Scandinavian "socialist democracy"), I thought it was a mistake, because it was too soon too fast. So, after the turbulence of the Yeltsin-era, the people of Russia have preferred someone who has more strong-handed Soviet tactics to them, much like his desire to control Yukos Oil and the fact that he already controls all the mainstream media.

Overall, though, I won't be alarmist on this issue. As long as regular and fair elections continue in Russia, with open opposition parties and candidates, then I wouldn't be worried. The public probably finds more comfort in a strong-handed candidate who can bring stability, which is certainly foreign to us, but it's mostly what Russia knows, either through Soviet premiers or centuries of autocratic tsars.

But yeah...there is always that worry. What if Putin goes too far?

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Old 07-07-2004, 12:36 AM   #6
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Yes, many Russians feel that food to eat is worth losing a few freedoms here and there. Like melon pointed out, they like a strong leader. Many of them also feel uncomfortable with democracy. A Russian man I spoke to said that he felt it would take another generation before his country was comfortable "with so many choices."

Putin's authoritarian tendencies aside, Mikhail Khodorkovsky is hardly a saint. Politics may be involved, but he is not an honest capitalist by any means. He and his oligarch pals helped to destroy Russia's baby economy.

Putin has to walk a fine line between cleaning up the organized corruption, not destroying the fragile economy, and maintaining a democratic state. No one is sure exactly how far he will go--he wasn't nicknamed the Gray Ghost for nothing. It's interesting to watch...

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