"Investors didn't take it seriously because they thought it would be so self-harmful," Malik said, estimating the debt to be worth at least $500 billion at 2020 prices and possibly more. "They said 'we are not paying and even if we could, we wouldn't pay.' And that was a political statement," said Hassan Malik, senior sovereign analyst at Loomis Sayles and the author of the book "Bankers and Bolsheviks: International Finance and the Russian Revolution."ĭespite Trotsky's reminder, the default shocked the world, especially France, whose banks and citizens suffered massive losses. Just before the 1917 revolution, Russia was the world's largest net international debtor, having borrowed heavily to finance industrialization and railways.īut seeing the Tsarist industrialization drive as failing the working class, the Bolsheviks repudiated all foreign debt. These are Russia's major debt events over the past century: More than a century later, Russia stands on the brink of another default but this time there was no warning.įew expected the Kremlin's invasion of Ukraine to elicit such a ferocious response from the West, which has all but severed Russia from global financial and payment systems. He reminded them that the dismissal of Tsarist-era debt had been a key manifesto of the failed uprising in 1905. In 1918, Soviet revolutionary Leon Trotsky told Western creditors aghast at the Bolsheviks' repudiation of Russia's external debt: "Gentlemen, you were warned."
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |