It is an assertion that rings true enough to make one wonder if the Western business community has a leg to stand on when criticising Vladimir Putin and his liege for engaging the Yukos question with tactics that look, well, medieval.

It would be marvellous if Russia and all the other former Soviet and command economies went from decrepit feudalism to fully fledged politically, socially and financially competent market economies in a trice. It would be good if that process had been achieved in the 15 or so years since the fall of the Berlin Wall marked the start of what was always going to be a difficult conversion. But it is simply unrealistic to expect that Russia will adopt the democratic capitalist mores of the West — such as they are — in such a short time.

It took the Western world hundreds of years to graduate from piracy to spawn fully functioning, fair, accountable, regulated and inclusive commercial infrastructures. The odds were always that the transition would take place over decades in Russia. Russia, it could be said, is doing remarkably well to be progressing as fast as it is.

This is not to condone the actions of President Putin. He says that it is quite justifiable for the state to ride roughshod through the renationalisation of Yukos because the oligarchs took the state for a roughshod ride when the oil giant was denationalised in the early 1990s.

This may be forgivable but it is mistaken. It is mistaken for the simple reason that two wrongs do not make a right. And it is mistaken because it sends all the wrong messages to those Western enterprises and investors that could provide invaluable assistance to Russia in its attempt to convert from command economy to market economy. The Chinese example indicates that it is possible to proceed in a calmer, steadier and more predictable fashion.

It is regrettable that Russia cannot emulate the Chinese model. Life would be much easier if it did. Russia is well characterised as the Wild East, a frontier land that evokes comparisons with the nineteenth and early twentieth century gold and oil rushes that did so much to shape North America, southern Africa and Australia. Risk needs to be measured on a wholly different scale. Black market practices are rife. Gold bars and gun metal — not trust and the laws of contract favoured in the West — dominate commercial experience.

The key question, however, is whether this makes Russia a difficult place to do business or an impossible place to do business. It would be impossible if, say, it were inevitable that Western companies could progress only by crossing innumerable palms with formidably large amounts of silver. It would be impossible if the state — or the agencies of the state — proved themselves to be serially untrustworthy.

In circumstances such as those evinced by the Yukos imbroglio it is understandable that British companies put Russian investment ideas firmly on the back burner, if they are prepared to entertain them at all. But it would be a mistake to ditch all Russian investment simply because the Yukos debacle makes it look impossible to do business east of the Urals.

It may be impossible to undertake business in terms that would be acceptable to Western standards that are, for the most part, high. But that does not mean it is impossible to do business in Russia. It may be difficult to operate while maintaining adequate standards — standards that preclude the use of shady or criminal tactics. It may, in addition, be more risky and time consuming. But such is the mineral wealth, and such is the potential in the welleducated Russian population to consume everything from chocolate to financial services, that it would be wrong to dismiss Russia on the grounds that the Yukos dust-up looks much more piratical than progressive.

Testing time for the euro

THREE weeks ago, after the dollar had fallen by 10 per cent against the euro in ten weeks, traders shied away from testing the $1.35 level. Jean-Claude Trichet, President of the European Central Bank, expressed magisterial disapproval. Behind him, some eurozone ministers and business organisations called for intervention. Even those claiming to be relaxed argued that the eurozone’s faltering economic recovery and stagnant export trade would suffer badly if the single currency rose above a key level of $1.35.

Nothing was done to back up M Trichet’s penetrating stare but once the euro exchange rate reached $1.3456, traders took profits and went away. Yesterday, the raiders returned and briefly breached $1.35.

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