One of the curious trends of recent years has been the Western business community’s enduring love affair with the unlovely Russia. With every passing week, it becomes clearer that this is a country run by and for people little different from gangsters. The tanks rolling into Georgia have reminded us that they are gangsters with keys to a big arsenal.

The largest Western companies, Shell and BP included, have been bullied, intimidated and forced into concessions by the Kremlin and its cronies. This week a Moscow court joined in the harassment, targeting the head of BP’s troubled joint venture in Russia.

This is a country that defaulted on its overseas debts less than ten years ago; a country that, after its journey from feudalism to kleptocracy via totalitarian communism, has little truck with Western-style capitalism; a country alive with corruption and not averse, it has been suggested, to the occasional state-sponsored murder. Hardly the ideal recipient of Western capital, you might think.

But Western companies have rushed to throw money at Russia, both in direct and indirect investment. The push by City bankers into Moscow and St Petersburg is matched only by the flood of billionaire oligarchs taking money out. There’s perhaps a lesson there. I’d back the oligarchs to make the shrewder investment call.

The passion for Russia shows no sign of abating. Last week Merrill Lynch polled 200 fund managers responsible for $600 billion. Their favourite emerging market was Russia, ahead even of fashionable economies such as Thailand, Turkey and Brazil. Mark Mobius, the emerging markets guru at Templeton, went so far as to say yesterday that the Georgian invasion was “a minor event” and was Georgia’s fault anyway. He is as keen on Russian stocks as ever.

When the fighting in South Ossetia was at its height last week, one City analyst was raving about Russia’s spectacular growth. Had I seen the latest car sales figures? Sales were up 41 per cent, making it the biggest consumer of cars in Europe, ahead of Germany.

These are astonishing figures, it is true. And Russia’s tremendous reserves of gas and other commodities make it difficult to ignore. Companies can’t afford to be too fastidious about their business partners. But the idea that Russia can be seen as just another economy, and its businesses assessed purely in terms of dry p/e ratios, is folly.

There’s an echo of Robert Maxwell in the 1980s. Everyone agreed he was a monster, everyone heard rumours of his crookedness. And everyone, from Goldman Sachs downwards, was desperate to do business with him. Mr Maxwell had no scruples about betraying his shareholders and stealing from his pensioners. Western investors are mistaken if they think that Vladimir Putin would hesitate to expropriate their assets if it suited him.

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