Reading List: Russia's Future

To anyone who follows Russia's plight, the country faces an increasing number of immediate and longer term economic, financial, geopolitical and social problems.

Two of the more serious longer term problems are demographic (which I mentioned in a recent post) and territorial. Both are becoming more of a threat to Russia's survival as time passes. And while both do not keep the average Russian from sleeping, both are at the forefront of worry for Prime Minister Putin. Both must also be a concern for any longer term investor in Russian capital assets. Especially of the illiquid sort.

Russia's demographic time bomb has been written about for many years. SA published an article last week putting this in an investment context. The article is sobering reading for anyone considering investing outside of St. Petersburg, Moscow or the larger/ more prosperous of the Millioniki. As investors become more aware of the depth of this problem, it will further swell an already bloated country risk premium.

For centuries Russia has faced the monumental task retaining territorial control and integrity. This task is becoming more difficult as both first and second derivative negative population growth increases, and the population centralises to core cities. Territorial threats from the West and the Caucasus have been widely reported in the media for some time. Not so widely reported is the threat posed by China to the East. The Telegraph has a good piece detailing this. It would appear that the population creep across the border has already begun.