No engagement policy requires this kind of twisted moral and policy thinking. Let me now turn to the prospects for Western business in Russia. For those who understood the true nature of the old Soviet political and economic institutions, it was clear in 1992 that no rapid and successful transition to an effective market economy was possible in Russia. Given the massive property transfers and other wealth transfers that a market transition involves in Russia, the struggle was bound to be messy, vicious, and chaotic. And so it will be for a long time.
Western advisors have no magic formulas allowing Russia to evade the pain.
This means, of course, that transaction costs for most business endeavors in Russia today are very high and will not soon decline. Investing in extant Russian enterprises or in building new firms will remain extremely risky. One sector, however, is an exception - extractive industries, especially minerals, and among them oil and gas top the list. They are far from risk free, but careful business deals with Russian firms in these areas offer profits. It is not greatly different from investing in weak states in Africa, Latin America, or in Asia.