The prospect of deprivations will have a negative impact on investments by managers of privatized firms. If the government decides for whatever reason they want to come up with that the sale was not legal, the transaction of the sale would be reversed. The managers of these firms mat get their initial investment returned but what about all the other costs hey may have incurred since acquiring the business?
With no set legislation to incorporate whether a prevarication may be reversed, managers may not choose to invest into companies that may be lost to them eventually anyway. 2 What effect will deprivations have on foreign investment in Russia? Investments in Russia will decline drastically if investors are going to have to be concerned with a company they are trying to buy becoming deprivation. The investors won’t want to waste their time and money on a project that may be revoked or never even go through.
The investors can choose to invest in companies in other entries who do not have deprivation legislation and will therefore hurt the overall economy of Russia. With no rhyme or reason to reversing prevarications, investors will not want to take the risk. 3 Do you think that mass deprivations is in the long-run best interests of Russia? I think deprivations is not in the best interest of Russia in the long run. Prevarication was initially started to help the economy grow and bring outside funds into Russia. It gave more options to companies for expansion and growth including creating more jobs and better pay.
If the country decides to deprivation, all business would go back to government control and therefore limit growth and development. It would also give the government control over production and consumption of goods when the country was trying to move towards a market system. 4. Who gains from deprivations? Who loses? The government will gain from deprivations. Government officials will gain control back of what companies can produce, how goods will be produced, and who can have the final products. The government will have control over the economy and everyone employed will ultimately be a servant of the government.
If all the companies are run like this, it will be a country run on auto pilot. It won’t matter where you work because it’s all controlled by government officials. Everyone else loses. The economy loses because without foreign investments, growth and expansion are limited. This also means the ability to create new products is limited too. The people of Russia lose because they are only able to consume the products that the government is allowing the companies to produce.
