Is Iron Curtain Enclosing Russia? - 8 April, 2003

The economic forum in London on which members of the Russian business elite and some of the high-ranking officials usually pin great hopes seems to have brought distressing news. And it is no wonder. Washington and London are obviously dissatisfied with the position of Russia's Foreign Ministry concerning the Iraqi problem despite several foreign policy manoeuvres President Vladimir Putin has recently made to improve the situation. Apparently, a new policy with respect to Russia is currently being formed in the USA, the "Iraqi factor" is taken into consideration at that. This new policy may result in a prohibition to accept Russia into the World Trade Organization.

Meanwhile, the Russian political and economic elite has failed to make up a common position concerning Russia's incorporation into the WTO. We all remember Russian aluminum oligarch Oleg Deripaska criticizing the Russian Minister for Economic Development and Trade, German Gref for placing the problem of Russia's WTO membership among the top-priority objectives of the government. Another Russian oligarch, a champion of Russia's incorporation into the WTO, Mikhail Khodorkovsky plunged into polemics with Deripaska in the press. It was Russia President Vladimir Putin who closed the polemics. He said that Russia wouldn't give up its natural advantages even for the sake of WTO membership, he added that we would enter the organization when it was advantageous for Russia itself. For the time being, it seems that neither the disputes concerning entering the organization, nor Russia's desire or unwillingness to enter the WTO are of any importance now. If some time ago it was clear that Russia wasn't expected in the WTO, now the problem concerns a date when the negotiations will cease.

Igor Yurgens, the vice-president and executive secretary of the Russian Union of Businessmen and Industrialists is skeptic about entry of the country into the WTO. He also participated in the economic forum in London and later told journalists his ideas on the problem.

He says, we shouldn't leave out the variant of freezing the negotiations on Russia's incorporation into the WTO. Russia allowed rather strict criticism of the USA in connection with the Iraqi war, that is why the US authorities won't fail to toughen the position concerning Russia on the whole and especially its incorporation into the WTO. Igor Yurgens says, we will see already in May to what extent the scenario of relations between Russia and the USA is going to be strict.

The vice-president of the Russian Union of Businessmen and Industrialists reminded that when China's Air Force had intercepted an American spy plane and forced it to land on a Chinese military base, the negotiations on incorporation of China into the WTO were suspended for two years without explanation of the reason. And that occurred at the time when China and the USA had no considerable misunderstanding; what is more, no statements in China's address followed the suspension of the negotiations. The very attempt of diplomatic opposition at a crucial moment of the Iraqi war is treated by Washington politicians as deserving "public thrashing".

We should keep it in mind that by beginning of the year the American political establishment has developed a new instrument of economic pressure to be exerted upon Russia. Already in January, senator Max Baucus of Montana and Congressmen from the House of Representatives Charles Rangel and Sandy Levin suggested a scheme for amendment of the notorious Jackson-Vanik amendment that would impose serious commercial restrictions upon Russia. In accordance with the scheme, if the US Congress cancels the amendment, it gets in exchange (upon Russia's consent) an opportunity to completely control the process of Russia's incorporation into the WTO. In other words, the American Congress wanted to get a right to consider or reject terms of Russia's incorporation into the trade organization and settle the problem by voting within the Congress, not in the WTO administrative board. As it is traditionally done, the senators explained the new suggestion with concern about the interests of American workers, farmers and businessmen. But in fact it is perfectly obvious that their main objective is to strengthen economic control over Russia.

Now, because of Russia's strict position concerning the Iraqi problem, the USA won't need even Russia’s formal consent to interfere into its economic policy. Germany's Die Zeit mentions in its article "Putin Wanted to Lead Russia Westward, But Failed": "Russia is still dependent upon Washington in the  sphere of fighting with terrorism coming from Central Asia, in liquidation of weapon plutonium and chemical weapons, even in distribution of quotas for steel import." The newspaper draws a very cynical conclusion at that: Russia's relations with the USA are inessential although these relations are practically the only hope for weak and poor Russia.   

It's highly likely that none of the Russian high-ranking officials will agree with this fact. The economic policy of the government within the several past years was focused on one objective, by any concessions to get from the USA at least a partial status of an economic partner.

Now Igor Yurgens is sure that Russia won't be able to incorporate into the WTO neither this year, nor later without political will of the USA and Great Britain. In other words, we have to appeal to the aggressor waging the Iraqi war with a humble request to get a permission for entering "the friendly family of civilized nations."

Igor Yurgen hopes that the Russian party will manage to de-politicize the negotiations on WTO incorporation. It's clear that armies and wars come and go, but common economic interests of Russia and western countries still remain. Our opinion is that this fact disagrees with today's reality. In fact, the western world actually has economic concerns on the Russian territory. However, these concerns are not among the top-priority objectives so far. In addition, none of western politicians had an intention to promise that Russia would be asked for a permission.

The present-day situation is favorable for this approach as never before. What is more, the fact that Russia obviously lacks a long-term strategic development project is also favorable for this approach. The lack of a strategy may serve the only explanation to the absurd inconsistency between the actual economic concerns and Foreign Ministry's diplomatic demarche. The only fact that the whole of the RF Central Bank's gold and FOREX reserve is kept in the securities of the US Treasury and in American banks might seem to be enough to avoid any political disputes between Russia and the USA.

Igor Yurgens says that toughening of the US's position towards Russia is obvious already now. In particular, the US Congress is trying to prohibit American companies that may participate in post-war restoration of Iraq to conclude contracts with enterprises from Russia, France and Germany. If this policy prevails, the vice-president of the Russian Union of Businessmen and Industrialists says that more complications may arise at negotiations on Russia's membership in the WTO, or the negotiations may be suspended at all.

Akhtyam Akhtyrov

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Author`s name Michael Simpson