Whither riots?

The verdict against the three members of Russian rock group Pussy Riot confirms that Vladimir Putin doesn’t get it. The performance artists sat in jail for five months, awaiting trial for staging a politically motivated impromptu concert in an Orthodox church earlier this year. They have now been sentenced to a two-year prison term for hooliganism and “insulting believers’ feelings”. This may be the day that Putin’s benign autocracy shifted to beginner’s despotism. Investors cannot pretend this doesn’t matter.

Ever since the start of his new presidential term in May, Putin has done the opposite of what the optimists expected after protesters took to the streets of the country’s main cities to demand free elections. Instead of embracing reform, he has deployed judges and police commandos to clamp down on the nascent political opposition, who have been prosecuted for bogus offences even though they hardly present a danger to his power.

This should not just be a matter of concern for the Russian political opponents, foreign human rights activists and artists who supported the members of Pussy Riot during their trial. Investors interested in Russia should start seriously worrying about the direction Putin is taking the country. Any hopes that he might seize the moment this year to modernise its economy and politics have surely been dashed.

Worse, Putin is taking Russia backwards. From the petty persecution of opponents to the dampening of reforms such as a once much-trumpeted privatisation programme, the Russian president seems mostly preoccupied by the strengthening of his power and the well-being of his cronies. It is hard to know what lies behind the insecurity that leads the regime to behave in such an irrational manner. But it certainly doesn’t bode well for Russia’s liberalisation and opening to the world.

The Russian president may be keeping for himself the option of granting Pussy Riot a pardon. That would at least spare the three artists their absurdly harsh sentence. But it will be too late for Russia’s reputation: Putin, the former KGB officer, has managed to create a dissident cause célèbre, and this trial was a throwback to Russia’s darkest Soviet past and political trials. This sombre social and political climate is unhealthy for investors as well.