Russian capital markets: Climate change

WHEN RUSSIAN PRESIDENT Dmitry Medvedev announced on March 30 that ministers would have to step down from the boards of state-controlled companies within four months, it prompted a flurry of speculation. Was it part of the purported power struggle between Medvedev and his mentor, Vladimir Putin, ahead of next year’s presidential election? Was Medvedev flexing his political muscle by replacing key Putin ally Igor Sechin – the first to quit – as chairman of Rosneft? Or was the guiding hand in fact Putin’s, punishing his associate for embroiling him in the BP-Rosneft debacle?

Few paid any attention to Medvedev’s claim that the move was intended to improve the investment climate. Given the perennial disconnect between rhetoric and reality in Russia, such scepticism is unsurprising – yet there are signs that, for once, the cynics might be wrong. Over the past 12 months, the regime’s public commitment...