At long last, America has decided to stop fighting the Cold War. On 1 December, the US Department of Defence approved a directive calling upon the American military to be ‘as effective in irregular warfare as it is in traditional warfare’. This means that the question of how best to fight ‘asymmetric conflicts’ will henceforth consume America’s military strategists as much as their more traditional preoccupation: planning WW3. This might seem like cause for celebration, but I am not so sure.
Not what the doctor ordered
Two major reports on the Russian economy were published in November by the EBRD and the World Bank. Both reports make similar diagnoses and offer the same prescriptions for Russia’s ills.
Fixing Russia’s foreign relations
Russia’s credit markets may have remained frozen these last few weeks but its foreign relations have begun to thaw. Foreign investors have yet to return after pulling out their money in the wake of the invasion of Georgia, but foreign diplomats are back.
No endgame for America
America’s current financial distress has been greeted by Russian nationalists with ill-concealed satisfaction. It shows, they say, how rotten American capitalism is: sweet revenge for the ideological defeat of communism. America’s geopolitical moment, they also claim, has passed into history: we now live in a multi-polar world, in which Russia will take its place as one of the poles. Most of this is based on wishful thinking and bad statistics.
Russia can help itself by helping the world
On 7 October, President Medvedev made his first video podcast. He had a serious message, ‘the crisis of the international financial system demands urgent joint action.’ On 8 October, standing alongside President Sarkozy at Evian, he proposed a new security pact to resolve the stand-off over Nato expansion. Both these proposals are intended to bolster Russia’s shattered reputation as a good neighbour.
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Why no one loves Russia
I have occasionally toyed with the idea of forming a ‘Friends of Russia’ club in London, but have been discouraged by the thought that its membership would be distressingly small. Nowadays the ‘case for Russia’ can hardly get a hearing in the western world; disapproval of Russia dominates the media; it rose to a crescendo with its ‘invasion’ of Georgia.
KGB humour will not reassure foreign investors
In a major speech last Thursday in NizhnyNovgorod Vladimir Putin accused the coal and steel company Mechel of price-fixing. In a phrase which reverberated round the world, he hoped its absent chief, Zyugin, would get well soon ‘or we will have to send him a doctor to clean up all these problems’. On Friday, a third of the value was knocked off Mechel’s shares, and the RTS fell by 5 per cent.
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A tragedy in Zimbabwe
Robert Mugabe is a disaster for Zimbabwe. In his 28 years in power he has reduced a former thriving British colony to a political and economic hell. He rules by massacre, torture, and intimidation. He shamelessly steals the elections he still allows. No wonder he boasts that only God can remove him from power.
It all depends on the middle class
The middle class has traditionally been seen as the source of most of the good things in modern society –its commerce, science, art, politics. In a famous analysis, the political scientist Seymour Lipset argued that the chances for democracy improve when the social system shifts from an elongated pyramid with a large lower class base to a diamond shape with a growing middle-class. ‘A large middle class’, he wrote ‘plays a mitigating role in moderating conflict since it is able to reward moderate and democratic parties and penalize extremist groups’. Thus the degree of ‘embourgeoisement’ of Russian society is the best indicator of its possibilities.
Not another great depression
How bad is the current recession in the centres of the global economy? Some pundits have claimed that it is the worst shock since the Great Depression of the early 1930s. They point to a lethal cocktail of a burst housing bubble, a credit crunch, and an explosion of energy and food prices. The prospect is for an ‘inflationary recession’ of devastating proportions.