Russia’s other booming business

On today’s front page of the Wall Street Journal, Guy Chazan reports on the amazing success of the Russian stock market under President Vladimir Putin. Chazan writes:

When Mr. Putin took office in January 2000, the country’s publicly traded stocks were valued at $74 billion. Their value now exceeds $1 trillion. Russia’s benchmark RTS index rose 71% in 2006, the fourth year under Mr. Putin that the market has returned more than 50%.

Such performance has led many investors to chorus the president's praises. For instance, the WSJ quotes Mark Mobius, Templeton Asset Management Ltd.’s resident emerging-markets expert, as saying that Mr. Putin has “done a helluva of a job.” In fairness, Mr. Chazan does quote others who take a less sanguine approach toward the Russian president, and he does at least mention Alexander Litvinenko, the former KGB agent murdered in London late last year. Still, Mr. Mobius’ cheerleading is contemptuous.

While the deaths of former KGB agents via radioactive poisoning are certainly headline-grabbing events, they do overshadow what has become an ordinary fact of life in today’s Russia: the contract killing, often for commercial reasons, and often occurring at the nexus where the government and organized crime meet. This is the world where Mr. Mobius makes his millions.

Just last week, Strategic Forecasting Inc. reported on the assassination of one Valery Yakovlev, a former Russian bureaucrat, who it seems used his position as chief of the Russian Federal Real Estate Registry branch to amass for himself a little nest egg before ambling off into his career as ‘businessman.’ He was blown up in the driver’s seat of his sport-utility vehicle by an improvised bomb of some sophistication. Perhaps Mr. Yakovlev doesn’t deserve our pity—Lord knows the webs we weave—but clearly, the ho-hum, cost-of-doing-business attitude of many investors toward this type of foul activity is repugnant on so many different levels.

Perhaps Mr. Mobius, while jet-setting around the Third World, between sips of his martini, will spare a thought for Mr. Yakovlev and the others whose deaths go unremarked, whose cases are as cold as the Russian winter, for this, too, is part of the helluva job Mr. Putin is doing.