- (December 2006)
Russia and the European expansion.
Putin's Russia is a strange beast. It does not have the
military power of the old Soviet Union, but its economy
is rapidly becoming more powerful than the economy of the
old Soviet Union. Russia's stance towards the world
is largely difficult to decipher. It mostly uses its
veto power at the United Nations, not its soldiers or
missiles, to show its presence on the world stage.
In particular, Russia has had centuries of wars and alliances with
Western Europe. The relationship between the West and
the East of Europe has always been psychologically
tormented, with Westerners looking down on Russians as some
sort of barbarians, and Russians trying to be accepted as
peers by the Western powers.
Today Russians view the expansion of the European Union as
a continuation of the old Western imperial policies.
In fact, the European Union is expanding its territory at a
pace not achieved by any Western power since the Roman
empire.
The European Union uses three tools to expand its
territory:
- it gives money to countries in return for them to
integrate their economies with the western ones in such a
way that they will never be able to secede again.
- it invades militarily (e.g., Bosnia and Kosovo)
- it fosters "regime change" (e.g., Ukraine, Serbia)
European citizens have a passion for accusing the USA of
being an imperialist power. They seem blind to the fact
that the European Union is the only political entity that
has been increasing its territory in a significant manner
over the last 50 years. Russia has shrunk after 1991. China
and India are stable. The USA has not acquired a square
centimeter of land in more than 50 years.
On the other hand, the European Union has tripled in size
and doubled in population. It has achieved in a decade the
dream of Napoleon and Hitler.
Since, de facto, the EU is run by the old powers (France,
Germany and to some extent Britain) it would be difficult
for Russians not to see this as the old western empires
attacking again its sphere of influence.
Just like in the past, Russia is weak because of
inefficiency (largely due to its size). But, for the first
time, Russia can boast more natural resources than the
western European powers (notably oil and gas, that today
count more than iron and coal). And it finally has a leader
who is loved and trusted by the people (not to mention is
sober).
Countries such as Poland and Ukraine and Lithuania see this
as the first real chance in centuries to become part of a
Europe that has historically snobbed them.
Alas, the more excited Eastern Europeans are about the EU
expnsion, the less excited the Rssians are.
The step that Russia still has to make is to see itself as
part of Europe, not as a separate continent; as a
complement, not an antagonist. This is where Putin's
reforms haev failed so far. Russia still views the western
powers s enemies, not as opportunities.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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- (August 2006)
Stabilizing the Russia periphery.
While all eyes are on Bush's military campaigns in the Middle East, the world
has forgotten that the second world power is still Russia, and Russia has
been unusually quiet by its historical standards. Putin probably believes in
the old saying that 20 years of peace and stability will make Russia the
richest country in the world, and is thus willing to wait 20 years before
reclaiming Russia's world role.
Whether it will take 20 years or just one year, the borders of Russia are
a ticking bomb. There are countless ethnic groups that do not want to be
Russian and are parts of Russia, and there are groups that do want to be
Russian and are outside Russia. Potentially the periphery of Russia is
as explosive a region as the Middle East, with the key difference that
a colossal regional power like Russia acts as a deterrent to regional wars.
The sources of friction are so many and so spread out that only a few are
famous abroad: half of Ukraine wants to be Russian, most of Belarus seems to
lean that way too, the tiny self-proclaimed republic of Transdniestra is de
facto occupied by Russia (de jure it belongs to Moldova), the tiny regions of
Abkhazia and South Ossetia belong to Georgia but are occupied by Russia,
the Kalingrad enclave (a geographical oddity) would probably prefer to be independent and federated with the European Union,
and, of course, Chechnya has been fighting a bloody war to secede from Russia,
and it is likely that other regions of the Caucasus and Siberia would rather
declare independence than report to Moskow.
The reason that Russia needs 20 years is simple: there are at least as many
regions that want to secede as regions that want to be annexed. Russia has no
interest to start a chain reaction at a time when many of its citizens would
rather not be Russians. If it destabilizes its periphery, it destabilizes
itself. Twenty years from now (especially if oil prices remain so high),
Russia will be able to provide its subjects a level of wealth, power and
security unmatched by any of the smaller neighbors. Then the bear may well
wake up.
A way for its neighbors to prepare to the inevitable clash would be to
change the silly borders that are, basically, a recipe for future conflicts.
What is better, a united Ukraine that is constantly torn between Western Europe
and Russia, or a divided Ukraine, half of which is solidly Western European and
half of which is federated with Russia? It may be a painful choice, but
do people really care so much about the size of their country or do they care
more for peace and prosperity? What if Ukraine was given membership in the
European Union and NATO in return for surrendering the ethnically Russian regions to
Russia, and, in return, Russia gave Kalingrad to the European Union?
What if Georgia and Moldova surrendered those separatist regions to Russia
and Russia in return granted Chechnya independence and, again, the European
Union and NATO accepted both Georgia and Moldova as members? Wouldn't everybody gain
something (land or peace or both) and remove an obstacle to future coexistence?
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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- (April 2006)
The giant that sleeps again.
The world seems to have forgotten about Russia. All eyes are on China, the
giant that does not sleep anymore, predicted to become the world's largest
economy in a few decades.
Russia went through a decade of sheer hell after the end of the Cold War and
the collapse of communism. But recently all the economic and political
indicators have turned positive. The war in Chechnya is not killing as many
people as it used to, and Russian security forces seem to have managed to curb
Islamic terrorism. The economy is growing about 6% a year, faster than any
other major European economy and faster than the USA economy.
Russia controls some of the largest reserves of oil and gas in the world.
Putin has also been smart enough to keep Russia out of all the international
crises, avoiding a confrontation with the USA on Iraq, Iran or North Korea.
In fact, it has played peacemaker wherever it could. Putin has let the Baltic
republics join the European Union, and it has let anti-Russian movements win
elections in Kyrgyzstan, Ukraine and Georgia. Each of these events has
weakened Russia's prestige on the international stage, but it has allowed
Russia to continue its internal process of healing without the distraction
of foreign policy. It was Putin, after all, who said "give Russia 20 years
of peace and stability, and it will become the world's superpower".
All the facts justify Putin's prediction, but few people around the world
seem to take notice. This is a country with thousands of nuclear weapons,
a relatively small population and a huge amount of natural resources.
In fact, last but not least, Russia is probably the only major economy in the
world that is fully self-sufficient, having plenty of all the raw materials
and food that it needs.
An alien visiting the Earth from another planet would not have many doubts
about which country is best poised to rule the Earth: not the USA, that is
struggling to import energy for its economy and is distracted by all sorts
of international crises; not China, that is overpopulated and still run by
a one-party regime; not the European Union, a fast declining remnant from the
past; but Russia, the country that has minimized its problems and maximized
its growth.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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- (January 2006)
The geopolitics of Russia and what happens if the world's superpower depends on other people's oil.
The Soviet Union never really had a chance against the USA. The USA had plenty
of resources, was a much more efficient economy and its people liked the system.
The Soviet Union also had resources, but the communist economy was a very
inefficient one (guaranteed to make everybody poor) and most people didn't
really like the system.
The USA demolished the Soviet through a combination of carrot and stick.
Yes, it had thousands of nuclear weapons, but it also created a much nicer
world in western Europe. At the end of World War II, it wasn's
clear at all that West Germany was going to be richer than East Germany:
the USA could afford to pump enough money into West Germany to convince
most East Germans that capitalism was better than communism. The USA did
the same in many other parts of the world, from South Korea to Italy,
where a combination of military power and higher standards of living
guaranteed that these countries would be envied by the enemy's populations,
not viceversa.
The Soviet Union is dead, but Russia is still alive, and it still has the
same resources. On the other hand, the USA is rapidly running out of the
most vital resources for its economy: oil and gas.
Putin, the president of Russia, must have realized that suddenly it is Russia,
not the USA, that calls the shots. When the world has barely enough oil and
gas to feed the growing economies of China and India, Russia happens to have
some of the largest reserves in the entire world. The USA, on the other hand,
is no longer in the top world exporters (as it used to be until the 1970s).
In fact, it is not an exporter at all.
Over the last few years several former Soviet republics have chosen to ally
with the USA: Ukraine, Georgia and Kyrgyzstan. In the old days, they would
have benefited from massive USA aid to boost their economies. These days they
get a pat on the shoulder and a vague promise of military help if threatened.
The truth is that these days Russia is no longer interested in invading
neighbors. It doesn't need to. Its neighbors heavily depend on its oil and gas,
and the USA cannot help them. Thus Russia is simply crippling their economies
by doubling gas prices. If it wanted to, it could even shut down the pipes.
One gets the feeling that the leaders of Russia understand capitalism better
than the leaders of the USA.
The same phenomenon is taking place in Latin America, where the anti-USA
socialist president of oil-rich Venezuela, Hugo Chavez, is offering cheap
oil to any country that sides with him against the USA.
The USA is now, for the first time in its history, completely helpless to
help its own friends.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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