IEPLus: Russia’s investment adventure relived

In From the Cold: The Rise of Russian Capitalism, edited by ATON’s Peter Westin, describes Russia’s journey to a free market through a collection of honest and colourful personal accounts written by foreigners. Anna Fedorova, InvestmentEurope’s Russia correspondent, recounts the journey

In just over 20 years, Russia has undergone a monumental journey from a communist state to a fully functioning capitalist economy.

Reforms are now under way to privatise state-controlled companies and make Russia more investable, with plans to turn Moscow into an international financial centre by 2020. But corruption, poor governance and a lack of financial and economic education continue to hinder Russia’s development.

Peter Westin’s book provides an insight into Russia’s journey to its current state through the eyes of foreign investors, who saw an opportunity to pick up the pieces after the collapse of the Soviet Union, and through personal accounts written by journalists and financial experts who were actively involved in the Russian story of the early 1990s.

Westin, chief equity strategist and economist at Aton, one of the oldest investment companies in the country, has himself had a long and fruitful relationship with Russia. He first arrived in Moscow in July 1998, just a month before the famous crisis hit Russia on 17 August, devaluing its currency by 70%.

Since then, he has worked at the Stockholm Institute for Transition Economics in Moscow and the Russian-European Centre for Economic Policy, and acted as adviser to both the Russian and Swedish governments. “I felt very strongly that Russia’s investment adventure of the past ten years must be told, and that the people most suited to broadening our understanding of this period are prominent figures from Russia’s financial services industry,” Westin writes.

Four of the contributors to the book are Swedish, highlighting the significant contribution of the Nordic states to Russia’s financial development. Apart from Westin, there is Matthias Westman, the founding partner of Prosperity Capital management, who has been investing in Russia since 1993; Peter Elam Håkansson, founder and chairman of East Capital in 1997; and Johan Elmquist, co-founder of Tundra Fonder. The Swedes have been engaged with Russia’s finances for a while, and now around 700,000 of the nine million people living in Sweden hold Russian shares.

The book is a collection of 12 essays, divided into two parts. The first half tells the story of Russia’s economic transformation, positions the country in the context of the other members of ‘the BRIC club’ and points out its unique benefits and shortcomings.

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