Two stories, happy and gloomy, are told about the Russian economy. At first glance, a big initial public offering (IPO) in London on February 9th by Sistema, a Russian conglomerate, suggests that investors have decided to believe the happy one. The optimistic narrative involves broadly sound macroeconomic policy, with growth of 7.1% last year (according to the government, at least); investment-grade credit ratings from all the main agencies; and plans to rein in tax officials. The gloomy version involves corruption, stalled reforms and the ongoing saga of Yu-kos, once the country's biggest oil company, crippled by enormous tax demands and the arrest of its boss, Mikhail Khodor-kovsky. Menatep, Yukos's majority owner, this week sued Russia's government, claiming $28.3 billion in damages. Mystery still surrounds the forced purchase of Yu-kos's main production arm.
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