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. Last Updated: 07/27/2016

Vote's Market Effects

On Feb. 22, a round-table discussion devoted to the relevant issues of privatization and investment in Russia was conducted at the Central House of Journalists. Deputy State Property Committee Chairman Alfred Kokh's appearance drew the most attention. In his address, Kokh laid out two scenarios for the further development of Russia's economy, in consideration of the possible outcomes in June's presidential vote.

The first is positive and likely if the advocates of market reform come out the victors. They would prevent large-scale renationalization of already privatized enterprises. In this event, Kokh predicts rapid economic growth and, most importantly, an inflow of Western investment. And in as much as Russia's joint-stock companies will be releasing second issues of their shares at that time, this investment will go directly into production.

In Kokh's negative scenario -- should an anti-market candidate win -- there would be no economic boom or increased investment activity in the fall. And even if large-scale nationalizations were not conducted, the stock market would be cut back to two or three deals a week. Funds that might have made their way to Russia will be directed, as before, to Latin America and Southeast Asia.

Round-table participants expressed dissatisfaction over gaps in market legislation and the absence of standard market institutions in Russia, but were unanimous in their opinion that foreign investors are more startled by political instability.