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Part 4
In 1991, Gorbachev sent a 3word message to John Major, UK PM & then head G7
"Dear John, Help"
The West sympathised, gave lectures on freedom & did jack shit
USSR disintegrated days later
The situation when Putin took over was as dire
Russia was now a beggar nation https://twitter.com/IndradeepKhan/status/1252610224088743936
In 1991, Gorbachev sent a 3word message to John Major, UK PM & then head G7
"Dear John, Help"
The West sympathised, gave lectures on freedom & did jack shit
USSR disintegrated days later
The situation when Putin took over was as dire
Russia was now a beggar nation https://twitter.com/IndradeepKhan/status/1252610224088743936
There was complete economic chaos
When USSR fell in 1991, per person GDP was $3,485
When Putin took over in 1999 it had fallen 70% to $1,330
One reason was that while normal people suffered, the economy was taken over by a group of Oligarchs
When USSR fell in 1991, per person GDP was $3,485
When Putin took over in 1999 it had fallen 70% to $1,330
One reason was that while normal people suffered, the economy was taken over by a group of Oligarchs
How did this happen?
Yeltsin borrowed from the Oligarchs, using shares in Pubic companies as collateral
The Oligarchs lent money knowing that a bumbling Yeltsin wouldn't be able to repay
When the Russian state defaulted, the oligarchs became multi-billionaires overnight
Yeltsin borrowed from the Oligarchs, using shares in Pubic companies as collateral
The Oligarchs lent money knowing that a bumbling Yeltsin wouldn't be able to repay
When the Russian state defaulted, the oligarchs became multi-billionaires overnight
The BIGGEST was Mikhail Khodorkovsky
MK lent $159Mn for a 45% share of Yukos. As expected Russia defaulted. MK later bought 33% more for $150Mn
At that time, this 88% was worth $3.5Bn
By 2002, Yukos was valued at $50bn & MK was the 16th richest person in the world
MK lent $159Mn for a 45% share of Yukos. As expected Russia defaulted. MK later bought 33% more for $150Mn
At that time, this 88% was worth $3.5Bn
By 2002, Yukos was valued at $50bn & MK was the 16th richest person in the world
What did Putin do with the Oligarchs?
Putin was a realist
Instead of unwinding the past
He made a deal
"I will ignore past crimes, if you behave going forward"
Most did, including Roman Abrahamovich the Chelsea owner, who made his similar fortunes from Siberian Oil
Putin was a realist
Instead of unwinding the past
He made a deal
"I will ignore past crimes, if you behave going forward"
Most did, including Roman Abrahamovich the Chelsea owner, who made his similar fortunes from Siberian Oil
MK didn't
He started interfering in politics and started funding Putin's opponents
He believed his enormous wealth of $20Bn would insulate him & the stage was set for an Epic Clash
MK however discounted one thing
He was a Jew
He started interfering in politics and started funding Putin's opponents
He believed his enormous wealth of $20Bn would insulate him & the stage was set for an Epic Clash
MK however discounted one thing
He was a Jew
A Ruthless Putin, building on deep anti-semitism present in Russian Society, embarked on a campaign that not only took away all MKs wealth, but also put MK in jail for a decade
The West howled
Putin, Just Did Not Care
The West howled
Putin, Just Did Not Care
Also on the carcass of MK's company, Yukos, Putin took the first steps to became the richest man in the world
An unknown Baikal Finance Grp, w/ $349 Capital & incorporated 14 days back, bought the assets for $9.7Bn at an auction
The only other bidder was a Gasprom subsidiary
An unknown Baikal Finance Grp, w/ $349 Capital & incorporated 14 days back, bought the assets for $9.7Bn at an auction
The only other bidder was a Gasprom subsidiary
Unbelievably it turned out that the same Gasprom, the state owned gas subsidiary, had loaned the bid amount to Baikal
Baikal then sold the asset to ANOTHER state entity, Rosneft, who got the cash, by securitising the FUTURE cash flows of supply agreement w/ a Chinese company
Baikal then sold the asset to ANOTHER state entity, Rosneft, who got the cash, by securitising the FUTURE cash flows of supply agreement w/ a Chinese company
Who was behind Baikal, nobody actually knows
But the anecdotal ties to Putin & his friends are very very strong
This was the the start of many similar structured buy-outs of tainted assets
However in all cases, Putin never compromised the ultimate asset or transaction logic
But the anecdotal ties to Putin & his friends are very very strong
This was the the start of many similar structured buy-outs of tainted assets
However in all cases, Putin never compromised the ultimate asset or transaction logic
Putin economic vision actually toggled between
Liberalism & Statism
His liberalising reforms included
a) Cutting corporate tax from 35% to 24%
b) Lower taxes for Russians w/ the caveat that they would have to pay it
c) Remove legal uncertainties to reduce corruption
Liberalism & Statism
His liberalising reforms included
a) Cutting corporate tax from 35% to 24%
b) Lower taxes for Russians w/ the caveat that they would have to pay it
c) Remove legal uncertainties to reduce corruption
However when it came to the vast natural resources Russia had, Putin had a 2 pronged Statist approach
1)Bring O&G under quasi-state control
2)Use O&G to further national security
He spent $160Bn consolidating, until major production share lay with 2 firms
Rosneft &
Gasprom
1)Bring O&G under quasi-state control
2)Use O&G to further national security
He spent $160Bn consolidating, until major production share lay with 2 firms
Rosneft &
Gasprom
Production soared from 6Mn barrels in 1999 when Putin took office to 11Mn in 2009
Russia that year surpassed Saudi Arabia to become the worlds largest Oil producer
In the process, Rosneft like ARAMCO had the 5th largest IPO in 2006
Russia today has $150BN in a Oil saving fund
Russia that year surpassed Saudi Arabia to become the worlds largest Oil producer
In the process, Rosneft like ARAMCO had the 5th largest IPO in 2006
Russia today has $150BN in a Oil saving fund
On the political side, Putin objective is to restore Russia to its Tsarist Glory
In fact a great comparison can be made with Great Britain post WW2
Great Britain due to incompetence allowed all its power to wither
Putin was determined not to go down that path
In fact a great comparison can be made with Great Britain post WW2
Great Britain due to incompetence allowed all its power to wither
Putin was determined not to go down that path
At a very broad level, the strategy involved limiting US power
At the tactical level it involved
a) Limiting EUs eastward expansion
b) Integrating Russian speaking areas in near countries like Ukraine & Georgia
c) Pushing its military influence into the nearby Middle East
At the tactical level it involved
a) Limiting EUs eastward expansion
b) Integrating Russian speaking areas in near countries like Ukraine & Georgia
c) Pushing its military influence into the nearby Middle East
Putin did this through Peace and War
For the peace part, Putin got help from an unusual source
The European Green movement. They wanted Coal Plants to be scrapped
Q: How do you replace Coal?
A: Use natural gas
Q: Who has natural gas in Europe?
A : Vladamir Putin
For the peace part, Putin got help from an unusual source
The European Green movement. They wanted Coal Plants to be scrapped
Q: How do you replace Coal?
A: Use natural gas
Q: Who has natural gas in Europe?
A : Vladamir Putin
The huge discovery of Gas in Western Siberia by Gasprom, made Russia through an elaborate set of pipelines, the primary supplier to Europe
Russia got unprecedented leverage by its ability to switch of European lights
& on back of this leverage, Putin flexed its military muscle
Russia got unprecedented leverage by its ability to switch of European lights
& on back of this leverage, Putin flexed its military muscle
In actions unprecedented in modern times, Putin, through an elaborate set of proxy military acts,
- Annexed Crimea from Ukraine
- Tore away from Georgia, Russian Speaking provinces of Ossetia and Abhkhazia
- Annexed Crimea from Ukraine
- Tore away from Georgia, Russian Speaking provinces of Ossetia and Abhkhazia
In both cases, Putin was shrewd enough to
a) attach areas which were Russian speaking & integration had wide support
b) Use Military power through deniable Proxies
He ran rings around a hapless Obama
In fact the only leader who has been able to deal w/ Putin has been Merkel
a) attach areas which were Russian speaking & integration had wide support
b) Use Military power through deniable Proxies
He ran rings around a hapless Obama
In fact the only leader who has been able to deal w/ Putin has been Merkel
This brilliant use of military proxies, Putin carried into the Middle east
The original setting for the great game
Using limited military power & shrewdly backing the group that could out muscle the competition, Putin has created unprecedented spheres of power in Syria & Libya
The original setting for the great game
Using limited military power & shrewdly backing the group that could out muscle the competition, Putin has created unprecedented spheres of power in Syria & Libya
With the West it has played the Anti Isis card while at the same time, propping up the Shiite hordes of Iran
& Hezbollah against the traditional Sunni powers of Saudi Arabia & Turkey
How when the USA, trillion dollars down, has failed so miserably, does Putin do it so adroitly?
& Hezbollah against the traditional Sunni powers of Saudi Arabia & Turkey
How when the USA, trillion dollars down, has failed so miserably, does Putin do it so adroitly?
Ans:
Russian Mercenaries on the ground (paid privately by the hosting dictator) and Russian Jets in the air
By doing this he has establishing itself as a rare broker that is on good terms with all of the region’s feuding powers
The west HAS to hold its nose and deal w/ him
Russian Mercenaries on the ground (paid privately by the hosting dictator) and Russian Jets in the air
By doing this he has establishing itself as a rare broker that is on good terms with all of the region’s feuding powers
The west HAS to hold its nose and deal w/ him
Let me give you a close to home example
The Maduro regime in Venezuela has been propped up by Putin
Its oil industry devastated, got huge funds from Russia
However it was not finding buyers for its oil due to US sanctions
Normal buying countries were vary
The Maduro regime in Venezuela has been propped up by Putin
Its oil industry devastated, got huge funds from Russia
However it was not finding buyers for its oil due to US sanctions
Normal buying countries were vary
So what did Putin do?
He got Rosneft to BUY the bankrupt Essar Oil which was not finding ANY buyers
Through Essar Oil he made India (who is more immune to sanctions) a buyer of Venezuelan Oil
This made Maduro happy and Rosneft RICH
He got Rosneft to BUY the bankrupt Essar Oil which was not finding ANY buyers
Through Essar Oil he made India (who is more immune to sanctions) a buyer of Venezuelan Oil
This made Maduro happy and Rosneft RICH
Putin has made Russians relatively well of
Per capita income is $12,000
Hungary is $6,000
Portugal is $15,000
He has also got the world to respect Russia
He is great imperfect genius, absolutely what Russia needed
(and dont let the newyork times tell you otherwise!)
Per capita income is $12,000
Hungary is $6,000
Portugal is $15,000
He has also got the world to respect Russia
He is great imperfect genius, absolutely what Russia needed
(and dont let the newyork times tell you otherwise!)
