The last default from a country currently classified as not free was Russia. With Brent crude trading close to $10 per barrel, the country defaulted on about $40 billion of its local debt in August 1998, sparking a rout in the ruble that saw the currency lose more than half its value over the next six months. Eventually, out of that mess stepped a former KGB intelligence officer from St. Petersburg named Vladimir Putin.
“Obviously, investors love Russia with Putin in power," Jim Barrineau, the co-head of emerging markets debt for Schroder Investment Management, said Monday on Bloomberg TV. "It’s not necessarily the case that it’s a necessary and sufficient condition that there be democracy.”
This article was provided by Bloomberg News.