Today’s EU-Russia summit in Rome will certainly broach the subject of the arrest and imprisonment of Mikhail Khodorkovsky. President Putin will say that the law is taking its course, that he cannot interfere. EU leaders will not believe him, but will probably be too polite to say so. The arrest of Yukos’ chairman and the … Continue reading What the arrest of Mikhail Khodorkovsky says to the world

In today’s global economy prudential barriers have largely replaced legislative barriers to the free movement of capital. Private agencies award countries credit ratings which are designed to inform often ignorant capitalists about the degree of risk attached to investing in a particular country. In fact, this practice dates from the 19th century, when the French … Continue reading Mr Moody and Mr Berezovsky

Post-Communist Russia has repeatedly said that it bases its foreign policy on respect for the UN Charter. This is understandable. For the Soviet Union, the ability to veto Security Council resolutions was irrelevant, because it had real power to stop the United States doing things it disliked. Today, the veto gives Russia at least the … Continue reading Russia Must Support the UN

What effect does government have on the growth of the economy? The orthodox view in Russia seems to be: overwhelmingly bad. Andre Illarionov, chief economic adviser to the president, says that to meet Putin’s target of doubling Russian GDP by 2010, government spending should be halved from 36 to 18% of GDP. It is difficult … Continue reading Standards are more important than size

President Putin's target of doubling Russia's national income by 2010 requires that the economy grow by 7-8 per cent a year. Since the collapse of 1998, Russia’s economy has been growing at an average of 5-6 per cent a year. So it needs to grow faster, though not much faster, to meet Putin's target. But … Continue reading The economic choices facing Russia

The global oil situation is particularly interesting at the moment. At $30 a barrel of crude, the oil price stays high even though world demand is low. The previously fashionable view that the American seizure of Iraqi oil resources would break OPEC and send the price of oil plummeting has turned out to be nonsense. … Continue reading Russia’s oil stabilization fund is good news

Amidst all the Iraq-dominated news and comment, one question little asked is: what effect will the warlike turn in international relations have on globalisation? Till quite recently, it was widely assumed that increasing economic integration was inevitable. Technology and economics, it was said, were welding the world into a single unit. The challenge was to … Continue reading Security before Prosperity

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