1. Discuss why the Putin government decided to pursue legal action against the members of Pussy Riot.
2. What impact will the Magnitsky law have on the political and legal environment in Russia?
3. As this book went to press in mid-2015, Russia’s Economy Ministry was predicting that a recession brought on by sanctions would last into 2016. What is the current economic situation in Russia?

At the end of 2012, controversy erupted after members of feminist punk rock band Pussy Riot were arrested following a brief performance at the Christ the Savior cathedral in Moscow (see Exhibit 5-14). The band was known for its anti-Putin stance and provocative lyrics; one of the band’s songs is titled “Holy Mary, Blessed Virgin, Drive Putin Away.” Three of the band’s members—Maria Alyokhina, Yekaterina Samutsevich, and Nadezhda Tolokonnikova were charged with “hooliganism motivated by religious hatred.” After a lengthy legal process, Ms. Alyokhina and Ms. Tolokonnikova were sentenced to two-year prison terms in a remote part of Siberia. Ms. Samutsevich was acquitted. In December 2013, in the run-up to the Winter Olympics in Sochi, President Putin pardoned the women and they were released from prison.

The Economic and Political Environments in Russia
There is other evidence that the political environment in Russia is precarious. Anna Politkovskaya, a reporter for Russia’s Novaya Gazeta (“New Paper”), often filed stories critical of President Vladimir Putin. On October 7, 2006, Politkovskaya was gunned down by assailants as she returned from a shopping trip. Since 2000, more than a dozen journalists have been murdered in Russia. Observers note that Russia’s independent press suffered as the Kremlin tightened control in anticipation of the 2008 presidential election.
Revenues from the fuel and energy sectors translate into government spending that comprises a whopping 40 percent of GDP. A related problem is the fact that Russia’s energy industry is dominated by a handful of huge conglomerates. The men who run these companies are known as oligarchs; at one time, Yukos Oil’s Mikhail Khodorkovsky, Sibneft’s Roman Abramovich, and their peers were among Russia’s ultra-rich elite. However, there was widespread resentment among the Russian citizenry about the manner in which the oligarchs had gained control of their respective companies. In 2003, the Putin government sent a message to the oligarchs by arresting Khodorkovsky and several other oligarchs. In 2010, after having spent 7 years in prison, Khodorkovsky was sentenced to another 13.5 years of incarceration after a Moscow court found him guilty of money laundering and embezzlement. Many observers viewed the verdict as evidence of the Russian government’s desire to maintain an iron grip on the economy.

There are other problems as well. Russia’s entrenched bureaucracy is a barrier to increased economic freedom. Further, the banking system remains fragile and is in need of reform. Yevgeny Yasin, a former economy minister and an advocate of liberal reforms, noted recently, “The Russian economy is constrained by bureaucratic shackles. If the economy is to grow, these chains must be dropped. If we can overcome this feudal system of using power, we will create a stimulus for strong and sustainable economic growth and improve the standards of living.”