We must not forget why Yukos matters

Well, would you go back? After the treatment meted out to Yukos, any executive in whom public prosecutors were showing an interest could be forgiven for hesitating before returning to Moscow.

There is a tendency to write off Yukos's fate as an isolated case. President Vladimir Putin, it is said, has convinced investors his vendetta against Mikhail Khodorkovsky, the oil company's majority owner, will spread no further. And the booming Russian economy is simply too attractive to resist.

That is short-sighted. As Andrei Illirionov, Mr Putin's independent-minded economic adviser, remarked to the FT last month, the country risks jeopardising growth by drifting away from market reforms. If it were not for oil prices and other favourable external factors, the economy would be shrinking, not growing as it did last year by more than 7 per cent.

The Kremlin's use of the legal system to crush Yukos cannot easily be separated from the slow pace of liberal reform. Mr Putin knows he needs a strong economy to be a big global power but thinks this can be built through greater state control. He is wrong, as a fall in the oil price might one day make plain.

HERE