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As the times of war pass, the sectoral gaps will be quickly filled. By who?


Market Analysis


If we want to analyze the market vacuum left by the West in Russia as a response to the invasion of Ukraine, we need to take a step back and deal with the nature of the Russian economy that affects future effects and prospects.

Russia is not an economically free country, so much so that the Heritage Foundation has placed Moscow in 43rd place out of 45 European countries in the Economic Freedom Index: the only two positive indicators, which do not drag the country to 130th place at par. of Angola, are the low tax pressure and the solidity of the budget determined by a low public debt.

This indicator, however, now does not help the Russian economy as Moody’s recently cut and downgraded Moscow’s rating, stating that the decision was “driven by serious concerns about Russia’s willingness and ability to pay its debt obligations”. Furthermore, the Russian economy and state framework are oligarchic and among the least capitalist in the world, with a weak currency and a very high level of corruption within the government and administrative mechanisms.

All this makes the Russian economy defenseless in the face of the Putin tsunami: if we were already talking about a country that is not free, now in a full war economy, the market space shrinks dramatically as much of the production capacity is destined for the war effort that currently it moves across all domains, including the fifth, the cyber and IT domains.

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