News 8 Feb

Bertelsmann Stiftung has released Who Rules the World?, a very interesting survey where people from different countries are asked: what are the Great Powers today?, what makes a country a Great Power? and which countries will be Great Powers in 2020?

Now the title of Great Power is something that is given to a country, although of course for it to be meaningful the country must possess certain pre-requisites, including but not limited to: a large population, a large, technologically-advanced economy, advanced and comprehensive armed forces and military-industrial complex, energy and mineral resources, strategic nuclear forces, geo-political position and soft power (international influence and cultural appeal). That people recognize a country to be a Great Power is both an accreditation, if you will, and a form of soft power in itself.

Thus it is encouraging that 39% of the people in the survey regard Russia as a World Power – in third place after the United States (81%) and China (50%). Furthermore, this is an increase of 12% points from their 2005 survey – the highest rate of increase amongst all other world powers. For comparison, much-hyped China and India increased by 5% and 3% respectively, while the US remained stagnant. 37% of respondents think that Russia will remain, or become, a World Power in 2020, compared with the US (61%), China (57%), EU and Japan (33%) and India (29%). Again, Russia has had the most significant increase (11%), compared with China (2%), India (5%) and the US (4%).

It seems that the voice of the people confirms our previous geo-political prediction in Towards a New Russian Century? that by the 2020-2040 timeframe the world will become tri-polar, with the US, China and Russia as its poles.

On the missile defence front, Poland is still determined to host interceptor missiles on its territory. Overtures to Russia were a case of pressuring the Americans to deliver more, i.e. a NATO base. While talk of any reorientation of Polish foreign policy alignments is pointless, it is nonetheless a welcome change from the hystrionics of the Kaczynski administration. In particular, Poland has lifted its veto on Russia joining the OECD club of (mostly) developed countries and has agreed to renewed Russia-EU talks in exchange for Russian removal of a ban on Polish meat imports.

There is a ridiculous piece in the Times – it starts off by writing “today Ukraine will be approved as a new member of the World Trade Organisation, the reward both for reforming its economy and for tilting towards the West rather than Russia”. There is little point in reading further. The fact of the matter is Russia is holding out hard for a better bargain when it does join. Foreign policy orientation or democratization have little to do with it, as implied by the presence of countries such as Saudi Arabia, Myanmar and, well, China. Finally, it is a fallacy to think Ukraine’s economy is any freer or more reformed than Russia’s – quite to the contrary, in fact, if investment ratings are anything to go by.

This rag newspaper also published a piece by rabid Russophobe Lucas on Why kowtow to brutal, cynical Russia?. He finished with:

Our biggest weakness is money. During the old Cold War, doing business with the Soviet Union was a rare and highly suspicious activity. Now bankers, lawyers, consultants and spin-doctors (and even, it is whispered, politicians) flock to
take 30 silver roubles for services rendered, even when they are privately disgusted by the source.”

Well, every Cold War needs its McCarthy, and I’m glad to see Loco Lucas has volunteered. On the subject of the detestable Lucas, he has been especially productive this week, also coming up with Katyn, in which he elegantly proves Godwin’s Law with his first sentence.

In economics, I have found a detailed breakdown of Russian growth for 2007 – here’s a summary. Market exchange-rate GDP in 2007 was 1,286bn $ (making it the world’s eighth-largest economy by this measure), up 8.1% from 2006 in PPP terms (in which Russia, as we’ve previously mentioned, is the world’s seventh-largest economy at 2,076bn $). Growth was driven by construction (16.4% to 65bn $), retail (12% to 227bn $), financial sector (11.4% to 52bn $) and various housing operations (10.4% to 114bn $). Manufacturing increased healthily (7.9% to 211bn $), as did transport/communications (7.6% to 104bn $) – however, agriculture (3.1% to 50bn $), extractive industries (0.3%) and production/distribution of water, gas and electricity (-0.3%) stagnated relatively. The Finance Minister, Kudrin, also considers that growth in 2008-2010 will be in the 6.5%-7% range (in PPP terms, of course), notwithstanding possible recessions in the US. In other news, Russia to build eight technoparks by 2012, Russia to deliver first Sukhoi SuperJet-100s to Armenia (it already has 73 confirmed contracts) and Russia, Venezuela may sign $1.4 bln contract for three subs in April.

Peter Lavelle turned out to be rightOSCE will boycott the Russian presidential elections, despite generous Russian concessions. In other Annals of Western Hypocrisy, Britain may refuse to extradite a fraudster charged with swindling 250mn $ from Sovcomflot, Russia’s national shipping fleet. It seems every last Russian crook can expect British protection if they claim political persecution.

An interesting, but not unexpected, revelation that China and Russia aren’t as cosy with each other as they pretend, or US elements watching out for a hegemonic Eurasian alignment, fear. Thirty Russian aircraft take part in exercises over two oceans. This article criticizes Russia’s procurement policies – nonetheless, it should be noted that majority of spending on military modernization in Russia today is, like in the US, focused on modernizing old models – upgrading older tank models like the T-72, pro-longing the service life of older ICBM’s, etc. The newer things the article mentions, like the Bulava SLBM, is done for the purpose of staying at the front of the arms race, while the ‘yet another combat tank’ mentioned (presumably the T-95) is Russia’s first truly 5th generation tank.

The western media rejoices over pro-Western Tadic’s win in Serbia, somehow construing it as a defeat for Russia despite the fact that a) Russia has invested zero financial/moral resources into either candidate, b) Nikolic has wide support (47% to Tadic’s 50%) due more to his populist economic rhetoric than to loud pro-Russian statements, c) both are categorically against Kosovo being recognized (as are we – it is an unwise precedent that may come back to bite its backers in the ass, i.e. with Muslims in Europe or Latinos in the southern US) and d) whatever the administration, Serbia is likely to continue a pro-Russian course, should it remain alone, join the EU or even merge into NATO. In both the latter cases, it will remain a pro-Russian voice in either organization, and in the case of NATO might even turn out to be a useful mole, like Bulgaria, to a lesser extent Greece, and now possibly Hungary.

The Times redeems itself somewhat by an inspirational story about Valentin Dikul, a paralysed man who, defying doctors’ predictions, devised a regimen of intensive physical therapy, learned to walk again and set world weight-lifting records.

  • Fedia Kriukov

    If you’re calculating Russia’s GDP in dollars using market exchange rate, then 2007 growth was not 8.1% which is the real growth in rubles, but 71% (per CIA, $1,251 bln in 2007 vs $733 bln in 2006 — 71% growth).

  • stalker

    Sorry, I meant to write 8.1% growth in PPP terms. I’ll correct this now.It’s a valid point you make, but I’d hope most readers would realize / know that growth is measured using real terms.On the other hand, considering the problems some Russophobes have with basic macroeconomics, perhaps I’m being a tad too optimistic.

  • Anonymous

    The fact of the matter is Russia is holding out hard for a better bargain when it does join.Really? They seem to be holding out an awful long time for a good bargin.

  • Fedia Kriukov

    Russia can afford it with its current export structure.

  • Oleg Nevestin

    Russia’s nominal GDP in 2006 was $950B-$1.02 trillion, depending on who is counting, not $733B (that’s 2005 number). Never use CIA info. Despite having $40B budget, these dimwits don’t even know where Chinese embassy is in Belgrade.

  • Fedia Kriukov

    When it comes to economic calculations, I think the CIA is pretty good. It’s just that when I quickly glanced through their fact book, I failed to notice that the 2006 edition contains 2005 estimates for Russia. So yes, the growth in nominal USD was not 71%. Closer to 30%? Still pretty “decent”. Reason #2 of about ten of why one should avoid using market exchange rates for economic comparisons.

  • stalker

    It’s true. 2005 = c.750, 2006 = c.1000, 2007 = c.1250. With 30% growth rates.Of course this increase in MER GDP, unlike with PPP, is down to ruble appreciation rather than real growth, which is mostly a result of high prices for hydrocarbons export.So ironically enough, there’s a sliver of truth when critics attribute most of Russia’s growth to hydrocarbons. Lol.

  • djp

    DaRussophile,how has Kosovo’s declaration of independence impacted sentiment in the Crimea. Any attempts at reunificaton soon? What is the feeling among the ethnic Russian people there?DJP

  • stalker

    “how has Kosovo’s declaration of independence impacted sentiment in the Crimea. Any attempts at reunificaton soon? What is the feeling among the ethnic Russian people there?”I do not know in particular how it has impacted local sentiment in Crimea. What it has done is created a precedent by which regions like Crimea can claim and be recognized as independent against Ukrainian claims of sovereignty.Most of the Crimean population, if polls are anything to go by, would prefer reunification with Russia. However, this is not a paramount political issue.It would probably not be a good idea for Russia to agitate for Crimean independence, at least for the time being, since it has positioned itself firmly on the side of state sovereignty (as opposed to Western ‘liberal interventionism’), and appearing to switch sides on particular cases like Crimea, Abkhazia or South Ossetia will undermine its principled stand (as seen by the international community). This is compounded by the fact that Ukraine has also hinted that it disapproves of Kosovo’s independence and has yet to recognize it.