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The issue is that business succeeds in America because, generally speaking, there are few barriers here and wonderful protections. In America, the idea that th
by mdasen 17y ago
The issue is that business succeeds in America because, generally speaking, there are few barriers here and wonderful protections. In America, the idea that the government would simply take something you made is abhorrent. Even when things like eminent domain are called upon, there is compensation provided (and compensation that can be challenged in courts). So businesses and investors feel safe that what is their's is actually their's.
Likewise, there are few barriers. Censorship is near non-existant in America and that's important for a lot of technology companies. Likewise, there are few administrative hassles - especially compared to economies that thrive on bribes.
There just isn't enough safety and security and too much hassle and you can't just decide to build that. It takes time to change the culture around that. And you have to prove that it's a durable stability. Many countries try to lure in foreign businesses with tax credits and the promise of stability and once profits are seen and businesses created, that stability is yanked away and assets eroded. America just has a long history of defending property rights in a way that actions over the past decade speak differently of Russia.
And, with that in mind, money going into Russia will demand much more favorable terms (since there's more assumed risk). The more favorable the terms, the worse a deal it is for Russia and the more incentive there is to yank the deal later on. Remember, politicians have maybe 20 years or so. They want their results quick. They often don't care about creating stability and responsibility that will leave their country in an advantageous position while the current voters vote them out of office.
What Russia really needs is a commitment to the rule of law and the enforcement of that law whether it's in the government's interest (or anyone's interest) or not. That's what really attracts money and prosperity - when the rules are just and enforced fairly against all parties.