Oct 31, 2008

Reaganomics in Russia

Or should I say Putinomics? Either way, I'm sure the money will eventually trickle down to those who need it...

NY Times: Companies belonging to two of Russia’s richest men are among the first recipients of a $50 billion bailout program. The project, like so much else Moscow, is opaque in its details but has resulted in some of the nation’s oil windfall being funneled to well-connected Kremlin insiders.

Under the plan being put in motion this week, money is channeled through the state development bank Vneshekonombank, known as VEB, whose chairman is Russia’s prime minister, Vladimir V. Putin. The stated goal is to help Russian industrialists refinance loans to Western banks, with aid flowing quickest to those companies at risk of having assets seized as collateral by foreign owners.

Critics charge that the bailout is another example of the cronyism here and a lack of transparency.

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