Several countries including the US and the UK announced yesterday that they are moving to confiscate the personal assets of a number of wealthy Russian oligarchs. While the logic is clear and the cause is just, it raises a troubling question about property rights and the rule of law.
It may set an uncomfortable precedent that property rights are only inviolate when its suits a particular government in whose country those assets reside. It signals that if politically expedient, foreigners' rights may be abrogated.
There has always been political risk in investing abroad, but it was general accepted that in Western democracies that were upholders of the international rules based order, property rights would be upheld. But by abandoning this principle, it will be harder for those countries to protest when their citizens' assets are confiscated in other countries; what a "just cause" is that makes such seizures legitimate depends to some degree on ones point of view.
This increase the uncertainty for companies and individuals investing abroad and that may have negative implications for the global economy. Of course one might argue that it has always been so; Israel has been stealing land from the Palestinians with impunity for years (although that's the only example that immediately comes to mind).
No comments:
Post a Comment