Roosting Chickens in the Bear Pit
When push comes to shove, international investors become decidedly uneasy. It hasn't helped that, in the not-so-distant past, investment in Russian industries by profit-seeking foreign investors has resulted in government take-overs. The new Russia, however, has long given assurance to investors that Russia is not a hostile, but a welcoming arena for investment, and so, greed always capable of overcoming caution, has muted suspicion.If the oligarchs can make money hand-over-fist, if Prime Minister Vladimir Putin's ex-KGB-klub can be assured of rich endowments from cushy positioning, then why not take the risk and have faith that what has been declared as dependable assurance is as good as gold? In a burgeoning oil-rich economy like Russia's what need of the government now to step in and claim property and investment not their own?
Well, there are of course, other ways in which a country - arrogantly unmindful of the soothing effects of stability in a country's political situation and their economy - can behave to startle investors and give them acute headaches. And Russia has staunchly played her traditional role as the area's headache-inducing grizzly so easily aroused to striking out at those who are incautious enough to provoke her.
Little wonder both foreign and domestic investors have decided to protect their investments, all $35-billion (U.S.) of it, leaving the Russian stock market wondering what hit it. And then of course, there's the fall-out from current global market ills, thanks to America's near financial collapse frightening the lucre-addled wits out of the international market.
And who would've guessed, given the oil-market turmoil of the past six months that oil would actually fall back to the new comfort zone of $100 a barrel? Though who knows how long speculators will be satisfied with that modest return; still enough to give aches to the hearts of motorists everywhere. Let alone the impact on economies no longer quite so ready to ship goods to far-off markets cheap, cheap.
Russia's powerful oligarchs - who despite the example set by one of their own for his temerity in politically challenging then-president Vladimir Putin, now languishing in prison, his empire claimed by the government as their own - surely have something to say for the current frail condition of their country's economy, thanks to the Kremlin's irresistible urge to stifle rebellious dissent to their regional authority.
How long can Vladimir Putin and Dmitri Medvedev blithely trivialize their violent intervention in Georgia, blaming the U.S. and E.U. for pushing it to those extremes, in the face of the damage they've themselves wrought to their country's economic fortunes, one would ask. Yes, they've "recognized" the independent viability of Abkhazia and South Ossetia, but how do they now anticipate reacting to their interior restive minorities? Take an educated guess.
President Medvedev has validated a whopping budget increase for modernizing and up-grading Russia's military, and that'll cost a mint, while having the desired effect of bringing them up to grade, roughly second in the world in military investment, still not even close to the U.S. But while the Kremlin is busy building their military machine, they've also got a shrinking domestic workforce.
Not at all helped by a steadily declining birthrate, a growing mortality rate due to the population's social investment in obviously health-deleterious habits like smoking and drinking to abandoned excess. That isn't the fault of the "saboteurs" ready to abandon the economy as a result of the Kremlin's bellicose accusations against its neighbours and the U.S., its rancour toward the U.S. and E.U.
Still, to hear Mr. Putin and Mr. Medvedev tell their tale of having been excessively wronged by an outside world ready to impose their version of an Iron Curtain around poor Russia, it isn't their fault at all. Vladimir Putin has allowed his autocratically hubristic passions to swamp his native intelligence. Power plays of the kind he's demonstrated of late will isolate him along with his country.
How honestly sincere, after all, were his plaintive assertions that Russia has no use for a return to Cold War conditions? Does President Medvedev really believe the blame he allocates unilaterally to the West is justified? Just asking.
Labels: Political Realities, World Crises
posted by Pieface @ Sunday, September 21, 2008
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