Friday, April 21, 2006

Zero Sum Game

The government of the Russian Federation continues to act as though there is no such thing as a win-win solution. The country continues to through its weight around in almost every sphere: the seizure of Georgian mineral water (see link) is just the latest in a series of heavy handed restrictions on trade with countries that the regime in Moscow doesn't like. Essentially Russia continues to believe that if someone wins in a negotiation with Moscow, then by definition the Russians must have lost. Economics has become a continuance of politics, or even war, by financial means.

This one eyed view in Moscow has led to some extraordinary situations. For example the gold collar of office of the pre-war President of Estonia remains in the Kremlin, despite the fact that the Russian Federation can have no earthly claim over it. Russia therefore still retains the treasures that their Soviet predecessors looted from other countries- whether these are jewels or, for example, the library of the University of Tartu.

The Russian company, Gazprom, is seeking greater access to the European market, and as a supporter of free trade, I do not disagree that ultimately they should have this. However, the Russians should understand that unless they learn better manners, they will continue to be mistrusted. The fact that yet another newspaper, this time Komsomolskaya Pravda, has been taken over by Gazprom in order to serve the Kremlin only adds to the growing body of evidence that Russia has abandoned democracy for the time being. It also underlines the fact that Gazprom, already the largest company in the world, is de facto an organ of the Russian State. Therefore, the discussions taking place between British Gas and Gazprom should be seen in a rather critical light. Personally, I believe that the fact that Russia continues to use Gazprom and UES, the giant power utility, as functionaries of the state should render them ineligible to invest in the European Union, at least until sufficient restructuring has taken place that allows Russian entry into the WTO. Since Russians continue to believe that economics is a zero-sum game, then perhaps we should make sure that every point of contact is now a matter for negotiation- only then may the Russians begin to understand that they must adapt a more liberal approach in business affairs as well as in international politics.

The alternative for a declining West may be that our corporate treasures end up in the Kremlin, together with all the other things that have been stolen in previous generations.

No comments: