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Despite optimism from special envoys of U.S. President Donald Trump regarding potential business opportunities in Russia after the war in Ukraine, many experts remain skeptical, reports the Wall Street Journal.
Trump’s envoys, Steve Witkoff and Jared Kushner, reportedly view Russia as a resource-rich country with opportunities for American investors. They argue that reintegration of Russia into the global economy could generate profits and help stabilize relations with Ukraine and Europe.
However, U.S. financiers and analysts warn that even if sanctions are lifted, Russia remains high-risk due to political instability, lack of rule of law, and the possibility of authorities reneging on agreements or seizing assets. Geopolitical risk analyst Charles Hacker, with over 40 years of experience in the USSR and Russia, noted that the Russian economy is far from an “Eldorado,” and potential rewards for investors are likely overstated. He stressed that even a resolution to the war in Ukraine would not end Russia’s cycles of hostility toward the West.
Economists highlight structural weaknesses in Russia’s economy: low long-term growth prospects, a shrinking population, depletion of easy-to-extract oil reserves, and heavy reliance on the energy sector. Russia’s economy, valued at around $2.5 trillion, is roughly comparable to Italy’s. Former Russian Central Bank official Alexandra Prokopenko said expectations of a massive return of foreign companies are exaggerated; mostly exporters not requiring significant investment might come back if sanctions are lifted.
Investors also warn of the risks of renewed sanctions and personal safety concerns. Michael Calvey, former head of Baring Vostok who was imprisoned in Russia after a corporate dispute, does not expect major long-term investments even if relations formally improve. The WSJ notes that since the start of the full-scale war, the Kremlin has tightened economic control, confiscating tens of billions of dollars in assets from both foreign and domestic investors and reallocating them to politically loyal businessmen.
