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.
Until about a year ago, it was widely believed that financial shocks occur only in emerging markets. Advanced countries with ‘mature’ financial systems had discovered the secret of markets that never crash. This so-called wisdom has now been turned on its head. The United States has sneezed, and it remains as true today as it has in the past, that when the USA sneezes, the rest of the world catches a cold.