Re: analiza strategjike dhe gjeopolitike
Frightening Foreign Investors Makes Economic $ense By Khakjaan Wessington, Special business correspondent
The standard theory expressed in the English-language business press is that the Siloviki are crudely seizing Yukos in a Soviet style crackdown and that Putin is punishing Khodorkovsky for entering politics. Now that the Siloviki have consolidated control over the upper layers of the Russian state (marked with Putin's second election victory and subsequent media crackdown), their next step is to revisit all privatizations from the 1990s. Under this theory, Putin is leading Russia back to the inefficient Soviet days. Foreign investment will flee and we'll see a repeat of 1998.
A frightening image: do Kremlin economists use this to encourage capital flight?
At the same time, the English-language media, such as The Wall Street Journal, The New York Times and the Economist (among many), warns that Russia's oil boom puts Russia at risk of natural resource dependency. The fashionable theory argues that resource-rich economies encourage the natives to fight over resources instead of creating new wealth. So the economy suffers from more dollars than it has mechanisms to properly invest. Thus the twin specters of inflation and currency appreciation loom in their estimation, disincentivizing foreign and domestic investment. Under this scenario, Russia's industry continues to atrophy, because the ruble becomes overvalued. Because of a rise in inflation under this scenario, asset depreciation accelerates. Thus the inherited Soviet industrial base will utterly rust away, turning Russia into a Eurasian Brazil.
Both scenarios pose some legitimate risks, which is why it's surprising that the English-language press hasn't identified the most important motive behind the Kremlin crackdown on Yukos: the Siloviki want to scare off foreign investment. Why would the government want to encourage more liquidity, when they're already choking on too many petrodollars right now? That's why there's so much currency flight from Russia — most of the good investments have been snapped up. In fact, the English-language media advising Russia to encourage foreign investment despite its overheating economy strikes me a bit like giving one's chess foe advice on his next move.
The last few times Russia listened to the English-language media it got *** -raped by the global markets. See, the English-language media confers legitimacy to bad ideas which most sane people would never listen to. So when Yegor Gaidar said that liberalization would help modernize the economy, it seemed like a pretty good idea to those who couldn't tell good advice from bad. Gaidar's liberalization instead led to the hyperinflation that lost Russians their Soviet savings. In fact, after such a disaster, one might think that Russia might've had enough with the English-language media's advice at that point... but one would be wrong.
According to the mainstream Anglo-American press's reasoning, Russia didn't push its reforms far enough and it's only fair the dirty ex-commies got hyperinflation, or at best, it was a "necessary dose of medicine" that they needed to swallow in order to "heal" — even though the medicine was poison. Never ones to let empirical evidence get in the way of theory, the IMF, the World Bank, and the US Treasury Department all decided a few years after Gaidar's programs that Russia had to make a few more reforms before it could join the other seven major modern economies. So those not electrocuted by shock treatment got loans-for-shares. It seems obvious now that such a scheme couldn't have worked, considering the Russian government couldn't even protect basic property rights. But remember history ended in the 1990s and little things like third party appraisals weren't important at the dawn of hyper-capitalism. After all, the English-language press said so.
Sure people were starving, shooting, freezing, and drinking themselves to death, but it's like I tell panhandlers, change comes from within... and sometimes change is painful. But the Anglo-American press and pundits didn't admit they made a mistake - after all, this was before 1998. I hear Russians discovered spices other than horseradish, dill, and sour cream during that period as well, so one can't say real progress wasn't made. And since Russia was cranking out the billionaires, they thought it was on the right track. Even after 1998, the English-language press refused to accept that its advice had been wrong the whole time. Instead, they blamed Russian laziness and corruption for the mess. In fact, they blamed the Russian default for triggering the global crash of 1998. Odd, considering how most of the world was following IMF, World Bank, US Treasury Department, and English-language media's advice at the time. It was like the Cold War — blame it all on the Russians!
After 1998, the Russian economy started to recover. Not in dollar terms (the only thing the Anglo-American media cared and cares about anyhow), but in ruble terms. Import substitution stimulated manufacturing. When that slowed down, oil and commodity prices started to climb. The oil boom injected new life into the Russian economy. This in itself stimulated manufacturing on all levels. But most importantly, since 1998 the Russian government has been steadily paying off its foreign debt and increasing its currency reserves. According to the Central Bank of the Russian Federation, external General Government debt ($93.5 billion) is currently less than its foreign currency reserves, which hit $100.1 billion October 15, 2004... not including funds from the stabilization fund and any other secret asset stashes and slush funds they've got hidden away. So the Federal government is finally in the black.
Well, what about private liabilities and monetary authority debt you say? That totals $98.5 billion according to the CBRF. Since citizens alone have an estimated $60-$100 billion in mattress money, as well as the $100-$300 billion figure of cash stashed overseas means Russia is a creditor nation — not something you ever hear from the English-language business press when they make their dire prognostications about Russia's oil future. Not that Russian policymakers are listening to them anymore.
The Kremlin has a blueprint for growth and it borrows more from the Chinese than it does from the Anglophone world. Anglophone nations had their chance to help Russia and instead, helped loot it. Now the English-language media is irrelevant in Russia and they'll have to face facts just like the rest of us.
