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. Last Updated: 07/27/2016

For Business, Crime Waves Don't Pay

The crime wave in Russia should be a disincentive to doing business here. Yet foreigners continue arriving to set up shop and invest in this country. and a recent informal survey by this newspaper indicated that companies already here do not intend to pull out.


The reason for this is clear: There is money to be made, and prospective gains still outweigh the risks. But for how long?


Several factors must be considered. First, many business people here are still in the investment stage. They are here because they recognize that Russia, with its vast natural resources and pockets of manufacturing and scientific expertise, is simply too great an opportunity to ignore. But if the crime wave puts their potential profits in jeopardy, they will pull out.


Other business people are here to protect their position against competitors who have come to Russia. Still others provide services -- legal, accounting, consultation -- for the foreign firms of the first two groups. and then there are those businesses -- food shops, consumer outlets -- that are here primarily because the growing foreign community here wants Western-style services and will pay tor them.


It is a delicate structure subject to regular scrutiny, and if the principal players -- foreign business people -- decide the risks are too great, the whole thing could collapse.


At the moment, business people view the risks as tolerable. But with crime against foreigners up 43 percent during the first seven months of this year, and with a spate of criminal attacks on business leaders, a chill has shaken the foreign business community.


The car bomb killing Friday of a Greek travel agent was not reassuring. Nor were the mob-style assassination of the director of the Tren-Mos restaurant and the stabbing death of a British businessman in the Mezhdunarodnaya Hotel. Add to this a shootout in an Italian joint venture auto showroom, a bombing at a German joint venture and murders and attacks against Russian businesses, and you have a disturbing summer of anti-business violence.


There is nothing peculiar to Russia about this. West Germany suffered through the years of the Red Army Faction and its kidnapping of the country's top executives. Mafia groups from Italy to South America via Brooklyn engage in violence that often targets the business community.


But Russia is a special case in other respects. For all the exciting opportunities here, business or otherwise, this country does not yet offer the kind of lifestyle to which most Westerners are accustomed. To come here and stay here, they need incentives that outweigh the disadvantages. The crime wave is weighing increasingly heavily on the negative side of the balance sheet.