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The Daily Vertical: They Aren't Laughing Anymore (Transcript)

The views expressed in this commentary do not necessarily reflect the views of RFE/RL.

As 2017 draws to a close, foreign investors are apparently fleeing Russia in droves.

According to a report in Kommersant, Russia stands to lose up to $1 billion due to the year-end exodus.

As 2017 draws to a close, Vladimir Putin is desperately trying to persuade Russian oligarchs to repatriate their wealth.

In remarks to lawmakers this week, the Kremlin leader called for a new amnesty program to "stimulate the return of capital to Russia."

WATCH: Today's Daily Vertical

As 2017 draws to a close, economists are increasingly talking about a looming liquidity crisis.

When Russia's Central Bank was forced to bail out Promsvyazbank, the country's ninth-largest lender, earlier this month, it marked the third major bank failure in four months.

And as 2017 draws to a close, many in the Russian elite are more than a bit jittery about what will happen in February 2018.

Because that is when a U.S. government report is due identifying Russia's most significant political figures and oligarchs -- many of whom could be subject to tough new sanctions.

At the heart of the conflict between Vladimir Putin's Russia and the West is a struggle between two normative systems: one based on transparency, the rule of law, and the sanctity of contracts; and one based on kleptocracy, cronyism, and patron-client relations.

For years, Putin's cronies have been able to have it both ways.

They accumulated their wealth in one system at home and kept it safe in another system abroad.

As 2017 draws to a close, that is coming to an end.

When Western sanctions against Russia were first announced back in 2015, many in the Kremlin elite laughed them off.

As 2017 draws to a close, they aren't laughing anymore.

Keep telling me what you think on The Power Vertical's Twitter feed and on our Facebook page.

NOTE TO POWER VERTICALISTAS: Since Russia traditionally gets pretty quiet in the week between New Year's and Orthodox Christmas, The Power Vertical will go dark next week. No Power Vertical products will appear from January 1-5 inclusive. The regular schedule will resume on January 8.