Game without rules

It can be discussed for a long time about the political or economic factor more affected the catastrophic fall of the Russian stock market. It is clear that both played their role. Moreover, speaking of the influence of the political factor, I would unite both the Mechel case and the Georgian events together.

At first glance, a negative market reaction seems excessive. Indeed, usually investors take into account direct risks, say, tightening hostilities or the adoption of sanctions. But the military operations seemed to be over, and there were no sanctions, and the markets collapsed. In fact, the logic of investors in this case is completely different. And in order to understand it, it is worth taking into account that the main trend in the global economy, which has formed over the past decades, is globalization.

If earlier each country specialized in its own products, now production is divided into chains of added value, which are scattered into different countries, and this requires a very close coordination of the economic rules of the game between states. One of the most important world platforms created to coordinate these rules is, in particular, the World Trade Organization.

Russia, on the one hand, demonstrates a desire to play according to general rules. In recent years, a lot has been done to integrate into the world economy. For example, the ruble has become completely convertible, and domestic legislation is largely brought into line with the norms of the WTO.

But at the same time in Russia the opposite trend gained strength. This began with conversations about the “sovereign democracy”, which came down to the fact that it was worthwhile for us to accept other people's rules. However, in the framework of the modern division of labor, it is not at all necessary to passively accept other people's rules. For example, China has established very specific rules for investors, but they are clear and stable. But with our “sovereign”, or, if translated into Russian, this did not work out with autocratic democracy. Our rulers wanted to be both democrats and autocrats within their territory. This led to an increase in conversations that we are surrounded by enemies from all sides.

Georgian events and the Mechel case showed that we are not ready to comply with uniform rules. On the contrary, we are ready to instantly abandon any rules if they can somehow restrain our behavior. But investors cannot work in conditions when any agreements for the sake of the political situation can be instantly sent to a landfill. And their current panic reaction is not the result of an assessment of military risks, but a fear of playing on a field where there are no rules.

It is wrong to bring all our troubles on the global financial crisis in the fundamental crisis. More recently, our leaders proudly said that Russia is a “quiet harbor” for investors. And then, after Mechel and Georgia, the stock market fell 50%. Therefore, I think, from the part of the authorities it would be more correct not to attribute the reasons for such a fall to external factors, but to try to take some strong steps in order to keep investors from further flight.

But these steps should not be in the spirit of the notorious freezing of prices, as it was last winter. The simplest and most dangerous is to launch the funds of the National Welfare Fund for the purchase of shares of Russian companies. Then their quotes seem to crawl up, but in fact the positive effect will be temporary. And then investors will run with even greater force, because they will perceive such an intervention of the state as a measure that goes against ordinary rules, and therefore against the market.