When Vladimir Surkov talked about Russia’s ‘offshore aristocracy’ he meant that small class of rich Russians who own everything through offshore companies. They don’t pay tax in Russia, they do their IPOs abroad, and they do deals affecting millions of Russians without any regulatory body in Russia knowing what happens. Surkov wants these people to own Russian assets through Russian companies, do their business under Russian jurisdiction, with control from Russian regulators.
US Republican presidential candidate John McCain has proposed a radical new initiative. In his first year as president he would call a summit to set up a League of Democracies. The League would be equipped with a formidable military capacity, based in part on NATO, and in part on the ‘new quadrilateral security partnership’ in the Pacific between Australia, India, Japan, and the United States. Needless to say neither Russia nor China would be invited to join the League: indeed McCain would exclude Russia from the G8.
In Yeltsin’s day, reformers used to talk about ‘windows of opportunity’ for this or that reform. These windows had a nasty habit of closing before the reform was accomplished. Perhaps the Medvedev presidency, which started yesterday, offers another ‘window of opportunity’ for economic and political reform, and normalisation of relations with other countries.
Around 1930 the most famous Russian economist was undoubtedly Nikolai Dmyitreyvich Kondratieff. For years his famous ‘Kondratieff cycles – long boom-bust cycles of business activity – fascinated economists and business analysts. Then he fell out of fashion, and is now unknown. By abolishing capitalism, Stalin abolished the business cycle, and had Kondratieff liquidated. In the capitalist west, too, the business cycle disappeared in the 1950s and 1960s, as governments learnt how to ‘manage’ economies with fiscal tools and monetary tools bequeathed by John Maynard Keynes. Today, as food, energy, and raw material prices press relentlessly upwards, threatening poor-country consumers with starvation, and rich-country economies with stagnation, it is worth taking another look at what the old boy said.
The advent of the Medevedev presidency has brought into focus two opposite conjectures about Russia. The first may be called the geopolitical conjecture, the second the economic reform conjecture. They can be found equally in Russia and the West.
Don’t let economists kid you that globalization has narrowed the scope of politics. What it has done is to multiply the number of economic instruments available for the pursuit of foreign policy aims. That is why economic sanctions are such a prominent part of contemporary diplomacy. There are about one hundred sanction regimes in place round the world, all aiming to change the behaviour of states through the use of economic weapons.
How strong is the Chinese-Russian axis? This, and not Tibet, was what I wanted to discuss when I called in on the Chinese Foreign Ministry in Beijing last week –even though the response of western media to the Chinese ‘crackdown’ in Lhasa gave part of the answer to the question.
The advent of the Medvedev presidency has brought into focus two opposite conjectures about Russia. One is represented by Edward Lucas’s book ‘The New Cold War: How the Kremlin Menaces both Russia and the West’. Lucas argues that Russia is trying to rewrite the last chapter of the Cold War. Under Putin it has been using its oil and gas, its strategic alliance with China, and divide and rule tactics to regain control over the old Soviet Empire, reduce Europe to energy dependency, and shift the balance of world power in its favour.
According to much Western commentary, a new cold war is brewing between Russia and the West. Russians are coming to be seen as enemies, not partners. We are told that they are obsessed with the thought that the West is trying to strangle Russia; that they believe that Russia must stand up for its sovereignty and national identity; and that Russia, flush with oil money, now has the power to do so. This is the message of the current BBC World Service series ‘The Kremlin and the West’. ‘Russia and the West are snarling at one another … the poisoning of a dissident in London, fears over energy supplies, and talk of a new arms race have sent a chill round the world’.
In his State of Union Address of 2002, President Bush named Iran as part of the ‘axis of evil’ for ‘exporting terror’ and developing weapons of mass destruction. Since then, a ‘cold war’ has frozen relations between the two countries. I am convinced that had things gone better for America in Iraq, Iran would by now have been bombed by the American or Israeli Air Force. President Ahmadinejad has consistently met American hostility with defiance. Speaking at a rally on Monday, he again denounced western pressure.