More Conflict than Camaraderie Between Moscow and Washington
Jephraim P. Gundzik, Power and Interest News Report (PINR)
The upcoming July 15 G-8 summit in St. Petersburg will inevitably showcase Moscow’s strong foreign relations with the world’s most powerful countries — especially Russia’s amiable dealings with the United States. Beneath the surface, however, a deeply adversarial relationship between Moscow and Washington boils, highlighted by Russia’s well orchestrated foreign and economic policy assaults on the United States. These assaults are undermining Washington’s global might. Buttressed by an immense supply of natural resources and strong relations with other natural resource rich countries, Russia may begin to rival U.S. power within the next 10 years — a process which the Bush administration is unwittingly aiding.
Russia’s foreign policy has increasingly diverged from U.S. foreign policy in the past several years. During the past 18 months, conflict has replaced divergence. Moscow has assertively pursued stronger military, political and economic relations with countries whose governments have been targeted for regime change by Washington. These include Iran, Syria, Venezuela and the Palestinian leadership.
…The ruble’s gain will be the dollar’s loss as central banks jettison dollars from their reserves in the process. Moscow’s increasingly strong stance against Washington’s global foreign and economic policy dominance will lead to a further reduction in global oil supplies, forcing international oil prices ever higher. High energy prices could eventually trigger a U.S. economic recession forcing oil prices lower. However, declining global oil supplies and tight production control in Russia, Iran and Venezuela will create strong support for oil prices, preventing a price collapse.
Russia’s sway over international energy prices will ultimately control the energy-dependent U.S. economy. Simultaneously, Moscow’s multilateral foreign policy might increasingly isolate the United States, greatly weakening Washington’s influence over other countries. Within 10 years, Russia could rival the United States as the world’s dominant economic and foreign policy power.
(11 July 2006)
Politics Of the Pipelines
U.S. Seeks Ways to Route Natural Gas Around Russia
Steven Mufson, Washington Post
For a low-profile State Department official, Matthew J. Bryza gets around. A member of the bureau of European and Eurasian affairs, he frequents places such as Turkey, Georgia and Azerbaijan. This year, he’s also popped in on people in Brussels, Rome and Berlin. One key item on his agenda: persuading governments and energy companies to build natural gas pipelines that skirt Russia.
New routes that avoid Russia would “make the market function better” and enhance energy security, a senior State Department official said. “We’re sharing information and a vision.”
Russia doesn’t share that vision. The Kremlin has been conducting its own campaign to lock producing countries in Central Asia and consumer countries in Europe more tightly into Russia’s pipeline network.
The politics of gas pipelines has added friction to the preparations for the Saturday to Monday meeting of the Group of Eight industrial nations, to be hosted by Russian President Vladimir Putin in St. Petersburg. A year ago, Putin said this meeting’s “key topic” would be energy. “The country which is definitely a leader in the world market is ordained by God to deal with this issue,” he said after last July’s G-8 summit.
Despite Putin’s boast, the summit’s focus on energy will only highlight why Russia remains a troublesome issue for the West. The oil and gas industry reflects Russia’s autocratic nature, diplomats and energy experts say; it is controlled by the state, opaque to Western investors and difficult for foreign firms to enter.
(11 July 2006)
Interview with Stephen F. Cohen on US-Russia Relations (“The New American Cold War”) (Video)
Charlie Rose, PBS
(28 June 2006)
A long interview with a Russian expert, giving a more nuanced view of the US-Russia relationship than is common. Cohen said that the number one priority of the US should be that Russia’s WMDs and energy resources not be turned against the West. The primary cause of the current poor relations he ascribes to unwise policies on the part of the U.S. since 1991.
The interview starts at 30:44 within the Charlie Rose video.
Cohen wrote a long article in the July 17 issue of The Nation, now available online: The New American Cold War.
“Stephen F. Cohen, professor of Russian studies at New York University, is the author (with Katrina vanden Heuvel) of “Voices of Glasnost: Conversations With Gorbachev’s Reformers” and, most recently, “Failed Crusade: America and the Tragedy of Post-Communist Russia” (both Norton).”
-BA
Guide to Russia’s key energy clients
BBC News
Energy has become the hot topic this year in Russia’s relationship with its European neighbours.
Most depend to some degree on Russian gas and were shaken by the dispute between Russia and Ukraine in January, which led to a brief suspension in supplies.
(11 July 2006)
Exchange Union president critical of internal oil trading plan
RIA Novosti
The president of the Russian Commodity Exchange Union said Tuesday he was skeptical about the prospects for an early launch of an oil exchange in Russia.
President Vladimir Putin said in May 10 that Russia, as a leading oil exporting nation, should establish its own oil exchange to trade crude and petroleum products in rubles. The Economic Development and Trade Ministry said it would submit to the government proposals on rules and procedures for trading oil products on domestic commodity exchanges by the end of July.
“I do not believe that the oil exchange will open this or even next year,” Anatoly Gavrilenko said, adding there were too many obstacles to the project, including what he described as armchair management and wishful thinking…
On June 8, the Russian Trading System, the country’s premier stock market, started trading in ruble-denominated futures for oil and oil products, in line with President Vladimir Putin’s proposal.
(11 July 2006)
Related: Urals Futures a Drop in the Bucket
Boeing brains show Russia’s way into WTO
Dmitry Solovyov, Reuters
Russia may be about to reach a bilateral deal with the United States to join the World Trade Organisation, but for engineers at Boeing’s Moscow design bureau free trade in ideas is already a reality.
Some 1,200 Boeing contractors drawn from across Russia’s aerospace industry work double shifts in their hi-tech cubicles, designing plane parts and offering technical solutions for the U.S. aerospace giant…
Russia’s decade-old bid to join the WTO could clear its last major hurdle if presidents George W. Bush and Vladimir Putin sign a deal when they meet on Friday, eve of the G8 summit in St Petersburg.
(12 July 2006)
Russian suicide rate falling
Today Online
Russian teenagers jump into the fountain at Manezhnaya square in central Moscow, June 2006. Russia’s oil-driven economic boom is causing a steady reduction in suicides…
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“This reduction is linked to the stabilisation of life… due to oil,” the newspaper quoted Vladimir Voitsekh, a researcher into suicide at the Serbsky Psychiatric Institute, as saying.
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“But if the oil stops flowing the standard of living will again fall and the number of suicides will increase,” he said.
(5 July 2006)
