Russia’s integration into the world economy has been based on energy. Energy is predominant both in its domestic economy and foreign trade. In 2006, oil and gas made up 40 percent of gross domestic product and 60 percent of exports. Since 2000, rising oil export revenues have been the main driver of growth, as the … Continue reading Channelling Energy in the Wrong Direction

Russia’s temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West’s romance with President Vladimir Putin’s Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good … Continue reading Coming Out Negative in the Balance

Russia's temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West's romance with President Vladimir Putin's Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good … Continue reading Shell vs. Russia: the balance is negative

By Robert Skidelsky and Pavel Erochkine Economists have started to become interested in the economics of clusters. Why do many industries concentrate in one or two locations? Why do some countries, regions and districts grow much faster than others? In the past the answer was obvious: What determined industrial location was climate or proximity to … Continue reading Clustering on the Hi-Tech Bandwagon

By Robert Skidelsky and Pavel Erochkine President Vladimir Putin used the bulk of his state-of-the-nation address to spell out measures aimed at improving the living standards of ordinary Russians. The measures will cost money — lots of money — but Russia can afford to spend as it is sitting on an ever-growing pile of cash … Continue reading What to do with the Stabilization Fund?

By Robert Skidelsky and Pavel Erochkine Is capital flight a problem for Russia? Most people would say "yes" and would regard the recent reversal of capital flight as a positive sign for the Russian economy. But there is another school of thought that believes that capital movements should be a matter of complete indifference and … Continue reading The Unresolved Debate on Capital Flight

Regime change in Iraq, probably by war, now seems inevitable "in weeks rather than months," as U.S. President George W. Bush puts it. France and Russia are unlikely to veto a United Nations resolution specifically authorizing the use of force against Iraqi President Saddam Hussein. Their argument will be that, whether or not the war … Continue reading What Are the Real Reasons for a War in Iraq?

The United States wants to remove Saddam Hussein from power; its main allies would be content with his disarmament. The United States, therefore, wants to keep the United Nations weapons inspectors out of Iraq; its allies want to get them back in. To reconcile these aims - at least formally - is the point of … Continue reading Do We Actually Need to Wage War on Iraq?

Today, capitalism is under attack for the first time since the fall of communism. Three reasons are mainly, and coincidentally, responsible. First, bear markets rule in the three main stock exchanges of the world. Whenever a lot of people lose a lot of money, they blame business. Second, a wave of scandals has hit the … Continue reading A Blind Faith in Capitalism is Being Rocked

The United States has officially demanded an immediate Israeli withdrawal from the West Bank. Israel has vowed to continue its "war for survival." Meanwhile, the peacemakers shuttle sadly round the Middle East, oblivious to the fact that no one is listening to them. All peace efforts are still based on the resumption of the "Oslo … Continue reading Try Trade for Peace, Instead of Land for Peace