The half-free market

8 May 2006 By Edward Hadas

Foreign investors are happy to seize the monopoly profits from Russian stateowned companies such as Gazprom and Rosneft. That makes sense while energy prices are high and the government is selling cheap. But the arrangement invites profitsapping corruption.

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Dick Cheney criticised several aspects of Russian policy in a speech last Tuesday in Lithuania. The US vicepresident said that, In many areas of civil society from religion and the news media to advocacy groups and political parties the government has unfairly and improperly restricted the rights of her people. He focused on energy and argued "no legitimate interest is served when oil and gas become tools of intimidation or blackmail ... and no one can justify actions that undermine the territorial integrity of a neighbour or interfere with democratic movements.

In response, Viktor Khristenko, the Russian energy minister, wrote in the Financial Times that, At a time when Russia has embarked on a speedy transition to market principles, we are accused of politicising the energy issue.

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