Turning Russia Into a Global Citizen

[Neilikka]

The government is sitting on a giant pile of cash that it plans to invest in foreign assets. It began to flex its economic muscle this week, when the prime minister of Iceland announced that Russia may lend it 4 billion euros ($5.4 billion) to shore up its teetering financial system. Who would have thought that, given the chaotic Russia of the 1990s, a mere 10 years later it would be in the position to bail out a developed country and NATO member? Even more surprising is the fact that this helping hand for Iceland comes at a time when the domestic stock market is in a free fall and trading on the Moscow stock exchange is routinely halted.

The Kremlin thinks that now is the time to buy assets cheaply, using the current financial crisis to emerge as a powerful global economic player. As Prime Minister Vladimir Putin remarked at a recent meeting with the CEO of state-owned bank VTB, "Perhaps we should buy something [abroad]? Something that is up for grabs?" According to Arkady Dvorkovich, an economic aide to President Dmitry Medvedev, the government will support -- both diplomatically and financially -- the expansion of Russian companies abroad.

Following the Russian-Georgian war, the West is scared that the Kremlin will use its cash not just for economic purposes, but as an aggressive foreign policy tool as well. Should the West really consider blocking Russian investments abroad as a way to influence Russia?

Trying to erect an Iron Curtain around Russian funds and businesses will prove counterproductive. Indeed, a large-scale "invasion" of Russian business would be a positive development, because it would foster economic interdependence. This is true even if the economic expansion is led by state-owned companies and by Russian wealth funds. By investing in U.S. and European assets, Russia's government and business elites are buying a stake in the global economy. This should bring better mutual understanding and a more rational and accountable foreign policy.

Paradoxically, despite recent hits to the country's stock market, Russia remains awash in cash. The government just rolled out a $130 billion bailout plan for the country's ailing banking system. As a percentage of gross domestic product, this would be equivalent to about $1.3 trillion in the United States -- almost double the plan designed by U.S. Treasury Secretary Henry Paulson. Yet, even this package has not significantly eaten into Russia's wealth funds and the world's third-largest currency reserves.

The government's Reserve Fund, created to cushion the economy from a fall in oil prices, stands at $140 billion, and the National Welfare Fund, intended to invest in high-return vehicles, holds another $30 billion. Although the National Welfare Fund is not officially a "sovereign wealth fund," it is already among the 10 largest such funds, rivaling the Brunei Investment Agency.

The Reserve Fund and the National Welfare Fund combined rival Singapore's Temasek Holdings, currently sixth in the world, and lag just behind the China Investment Corporation. By design, this money is intended to be invested outside Russia. As today's financial crisis has made many Western assets cheap, they are now within reach of the country's government and leading companies.

Russian private and state-owned companies have already invested abroad extensively, often buying stakes in large foreign companies. Overall, the top 25 Russian companies hold $59 billion in foreign assets and are the third-largest investors in emerging economies, following Hong Kong and Brazil. Even though the financial crisis has wiped out the Russian stock market, some of the best-run companies have endured a softer blow than their Western counterparts and will therefore be shopping in the global market next year.

Russian corporations' foreign investments have already generated a heated debate in both the United States and Europe -- even when investment was made by a private company. The largest controversy surrounded a merger that Russian steel giant Severstal sought with Luxemburg-based Arcelor. Severstal was rejected in favor of Mittal Steel, with some commentators claiming that the decision was made on political grounds. But no investment by a private Russian company has, so far, been vetoed by Western governments.

Yet hostility toward investment by Russia's government (and government-linked companies) has been almost universal until recently. U.S. and European policymakers do not believe that foreign governments -- and their sovereign wealth funds -- invest solely on business grounds.

But the financial crisis is making the West happy to find friends with cash. During his visit to Russia in June, Paulson emphasized that the United States is interested in welcoming Russian investment, including investment by the country's wealth funds.

But Moscow still needs to set up a transparent and accountable structure to manage its sovereign wealth. Doing so will also help to convince other countries that the government's agenda is economic, not political.

Russia may be advancing that goal by taking initial steps toward improving corporate governance in state-owned companies. In an unprecedented move, the government replaced a large number of bureaucrats on the boards of these companies with independent directors, including a couple of foreigners. While it is unlikely that Russian sovereign wealth funds and state-owned companies will change overnight, they will certainly become more transparent and efficient in the near future.

Russia's foreign investment helps the country become a global citizen. Consider Russia's elites, who buy houses in London, ski in the Alps and educate their children in Switzerland. They have too much to lose from a worsening political climate between Russia and the West. It is time to make the country's big business -- and its government -- stakeholders in the world economy.



Sergei Guriyev is rector of the New Economic School in Moscow. Aleh Tsyvinski is a professor of economics at Yale University.

Moscow Times

[Lucker]

The truth of the matter is that Russia is now in very big trouble and is desperate to hide the truth from its citizens .
The economy is over dependent on Oil and Gas and heavily falling prices have halted all expansionist plans .
Russians withdrew 37 billion roubles from the private banking sector last month as whispers and rumours abounded . That position has since worsened .
The Oligarchs have lost an estimated $230 billion in value since May when the financial market began to run downhill --- over 60% down versus May .
The outflow of investment has been huge and accelarated when Russia stupidly upset everybody with their antics in Georgian territories .
They may have overwhelmed a very small Army but the price for this victory has been catastrophic .
Internally Russia has disastrous health problems . Their declining birth rate is hurting the military and that is why the awful conscription system is being thrown out .
Tubercolosis is rampant as are heart related problems ( see World Health Authority figures ) and both of these problems relate to the levels of alcohol related problems .
Finally , Aids and HIV are close to being out of control with over 1 million testing positive .
The situation in Iceland is partly one of self help -- Russian investment in Icelandic institutions has collapsed .
I am afraid Russia's situation is very grave .
However , having said all that I have , everybody these days is interdependent and that includes Russia , US and even little Team GB .
Whatever spin people like this loony try to spin , we need each other in geopolitical terms .

[Neilikka]

It seems as if you had no mercy to any of us, Russians .

[alpine-frolic]

Applying same economic rules at east or west and you'll have only same problems.

[Lucker]

Bella , Stop playing the victim
The article has almost certainly been written with Kremlin encouragement and most people in ALL countries do not know and do not want to know about boring , complex financial matters .
I have just thrown in a few Fact Bombs to show you what absurd nonsense the article's author was trying to trick you with .

[Neilikka]

Aleh Tsyvinski is a professor of economics at Yale University?
Oh, yes! He can play ticks on Russians. Those professors from Yale got used to it!

[kentuckydan]

Aleh Tsyvinski is a professor of economics at Yale University?
Oh, yes! He can play ticks on Russians. Those professors from Yale got used to it!

Since when did being a Yale Proffessor exclude being a Marxist???
:mmph:

[sliver]

Since when did being a Yale Proffessor exclude being a Marxist???
:mmph:

but what does marxism have to do with present-day russia? :rolleyes::lol:




ramon, what are you talking about? the topic was about russian investment )))

[Lucker]

Sliver
How can you expect me to remember a Topic Title when I am in full flow ?
Do you want cake AND jam on top ?

[dzerassa]

but what does marxism have to do with present-day russia? :rolleyes::lol:



for them all russians r communists. i remember in greece when a greek guy learned i was from russian he showed me his tattoo with che gevara saying something like "no passaran" :)

[IamKeenan]

It seems as if you had no mercy to any of us, Russians .


And neither does your Goverment;)

[dzerassa]

And neither does your Goverment;)

interesting that we don't care so much how amercian government treats american people or british governemnt treats british people, why do they care so much gow russian government treats russians people ? :)

[kentuckydan]

interesting that we don't care so much how amercian government treats american people or british governemnt treats british people, why do they care so much gow russian government treats russians people ? :)

Because

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

[beezneesman]

Because

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

Unless they're Black;)

[kentuckydan]

Unless they're Black;)

We fought a War over that a lot of Americans died to Free the Slaves

But I forget your knowledge of world events or at least as it pertains
to America, get a little foggy going back past when you were 14

Hmmduring that period how was the British Empire's record on self determination
in it's conquered territories?

Put America to shame did you?

[kentuckydan]

We fought a War over that a lot of Americans died to Free the Slaves

But I forget your knowledge of world events or at least as it pertains
to America, get a little foggy going back past when you were 14

Hmmduring that period how was the British Empire's record on self determination
in it's conquered territories?

Put America to shame did you?


Wearing of the Green (http://www.ireland-information.com/downloads/midi/thewearingofthegreen.mid)

[beezneesman]

We fought a War over that a lot of Americans died to Free the Slaves

But I forget your knowledge of world events or at least as it pertains
to America, get a little foggy going back past when you were 14

Hmmduring that period how was the British Empire's record on self determination
in it's conquered territories?

Put America to shame did you?

Never said the British Empire was perfect but certainly not put to shame by America. Slavery was abolished in the British Empire before it was abolished in America.

IIRC the American Civil War was not only about slaves. The Union side actually seemed quite indifferent to them as far as I can see. In fact in the election prior to the start of the war Abraham Lincoln only campaigned on the basis of not expanding slavery beyond the states in which it already existed. Hardly the kind of prospectus to set the ardent anti slavery campaigners hearts on fire eh.

The USA was founded by wealthy large scale slave owners who talked a lot about liberty (then went home to whip their possessions while breeding new stock).

Interestingly, during the American revolution the Blacks overwhelmingly sided with the British against their masters. I wonder why that was.

[beezneesman]

Wearing of the Green (http://www.ireland-information.com/downloads/midi/thewearingofthegreen.mid)

Just in case you're going to start quoting bullshit Fenian propaganda about brutal British oppression in Ireland you ought to know that I'm Anglo Irish, I used to live in Ireland and have some personal experience of the more gritty end of Irish political 'criminality'.

[dzerassa]

Never said the British Empire was perfect .


"not perfect" u mean not the whole world was conquered just part of it?

[beezneesman]

"not perfect" u mean not the whole world was conquered just part of it?


Unfortunately, the First World War put a stop to that ;)

[RiverRock]

Interesting that we don't care so much how amercian government treats american people or british governemnt treats british people, why do they care so much gow russian government treats russians people ?


And because some of us like Russian people and want them to be free and prosper.

Why don't you care how American or British government treats its people?

[dzerassa]

Unfortunately, the First World War put a stop to that ;)

at least something good from world wars :)

[beezneesman]

at least something good from world wars :)

It also buggered your Tsarist Empire - do you see that as good or bad? I am guessing good judging by your profile pic! :)

[dzerassa]

And because some of us like Russian people and want them to be free and prosper.

Why don't you care how American or British government treats its people?

maybe "don't care" is not quite right. we don't teach and don't repeat how bad your government is in treating u. finally u elected this government. russia doesn't need all sorts of orchestraed "democratic revolutions" which some countries practice to promote in the former su states.

[dzerassa]

It also buggered your Tsarist Empire - do you see that as good or bad? I am guessing good judging by your profile pic! :)


this is discussible issue. what is for sure good is to stop expansion of the british empire :)

[beezneesman]

this is discussible issue. what is for sure good is to stop expansion of the british empire :)

Don't be silly you would be thanking us now for introducing you to such civilized pursuits as cricket and the consumption of warm beer and crumpets (not at the same time obviously)

[dzerassa]

Don't be silly you would be thanking us now for introducing you to such civilized pursuits as cricket and the consumption of warm beer and crumpets (not at the same time obviously)

i thought first u should have said about your gorgeous men. obviously they don't worth mentioning? :)

[beezneesman]

i thought first u should have said about your gorgeous men. obviously they don't worth mentioning? :)

Sorry Dzerassa I don't think very much about gorgeous British men! Well not as much as you it would seem!!:)

[dzerassa]

Sorry Dzerassa I don't think very much about gorgeous British men! Well not as much as you it would seem!!:)

oh this english humour :)

of course to introduce your country with warm beer and crumpets is easier than with worthy men :)

[sliver]

And because some of us like Russian people and want them to be free and prosper.

Why don't you care how American or British government treats its people?

Because we think that you should be free to think and choose your own way to be prosper. We cannot obtrude you our ideas. You have the right to have yours :rolleyes:
So we are more democratic than you are )))

"никогда не оказывай услуг, о которых не просят" (с) Бальзак
'never render a servise if you are not asked about it' (Balzak)
btw, this idea also is in "Conversation with God" by N.D. Walsch

[RiverRock]

"никогда не оказывай услуг, о которых не просят" (с) Бальзак
'never render a servise if you are not asked about it' (Balzak)
btw, this idea also is in "Conversation with God" by N.D. Walsch

If you are talking to your neighbor and see behind them (where they can't see) that their house has caught on fire, do you tell them or wait for them to ask is my house on fire? Of course, I wouldn't help them put out the fire unless they put forth effort themselves and asked.



Because we think that you should be free to think and choose your own way to be prosper. We cannot obtrude you our ideas. You have the right to have yours
So we are more democratic than you are )))

Everyone should be free to think and choose for themselves. It is the duty of the governed to fight for and create their own government.

It is only idiot Bush and idiots like him, who think forcing Iraq to become democratic by an illegal war, is a good thing to do. (Although, most Iraqi's and especially the Kurds are very happy to not be under Saddam Hussein anymore)



So what are Russia's ideas? What do the Russian people want? Do they want to be free individuals or collective workers? Do they want to take care of themselves or be taken care of by government? Do they even know, or is the only idea... it is the west's fault?

[sliver]

So what are Russia's ideas? What do the Russian people want? Do they want to be free individuals or collective workers? Do they want to take care of themselves or be taken care of by government? Do they even know, or is the only idea... it is the west's fault?

you really want to know? then try to listen and hear what russians say (and in this forum too)
we have already expressed our desires by votes and electing ;)

[sliver]

If you are talking to your neighbor and see behind them (where they can't see) that their house has caught on fire, do you tell them or wait for them to ask is my house on fire? Of course, I wouldn't help them put out the fire unless they put forth effort themselves and asked.


and one more little remark: if we don't consider that we are 'in fire'.. you should apreciate our opinion but not ignore it

<<Why don't you care how American or British government treats its people?>>
you would call it invasion )))

RR, gosh, you are 'in fire'? then we are coming to you.. nice loving bears (c) :cool:

[RiverRock]

sliver: RR, gosh, you are 'in fire'? then we are coming to you.. nice loving bears (c)


I will just call you the care bears. :)

http://img369.imageshack.us/img369/7961/carebaresaaaagl6.jpg

[RiverRock]

I actually found a communistic care bear :lol:

http://img360.imageshack.us/img360/6905/commiebeardm9.gif

[Hoopy]

I actually found a communistic care bear :lol:

http://img360.imageshack.us/img360/6905/commiebeardm9.gifComrade bearski :lol:

[dzerassa]

Although, most Iraqi's and especially the Kurds are very happy to not be under Saddam Hussein anymore

most of the iraqis told u this themselves?

[Lucker]

most of the iraqis told u this themselves?

Yes is the answer .
And they have their own Parliament and with their own elected MPs .
Totally opposite to Russia where they have not had a fair election in living memory and have no opposition whatsoever ---, a few minimum size parties were created by Putin and his pals to deceive the West plus a few others which are broken up and / or deceived when it comes to elections .

[kentuckydan]

most of the iraqis told u this themselves?

Actually they did or at least the Kurds have

NyrStaIoh-w

VO NARRATOR:
Saddam’s goal was to bury every living Kurd…
He failed.
KURD CITIZENS:
“Thank you.”
“Thank you, America.”
“Thank you.”
VO NARRATOR:
The Kurds of Iraqi Kurdistan just want to say ‘thank you’…
for helping us win our freedom.
KURD CITIZENS:
“Thank you for democracy.”
“Thank
KURDISH HERO GIRL:
“Thank you.”

[kentuckydan]

I don't think we have lost a single GI in Kurdistan

[kentuckydan]

Iraq the Model (http://iraqthemodel.blogspot.com/2003_11_01_iraqthemodel_archive.html)

Monday, November 17, 2003

YOU OWE US AN APOLOGY
I don’t know really know why Saddam’s regime lasted for over three decades, but I am sure as an Iraqi who survived that period that there’re no legal or moral justifications
for it to remain.
I was counting days and hours waiting to see an end to that regime, just like all those who suffered the cruelty of that brutal regime.
It’s been really a disgrace chasing the world ,the world of the 21st. century, reminding it how incapable it was to aid the oppressed and to sue those who dispised all the
values of humanity.
Through out these decades I lost trust in the world governments and international committees.
Terms like (human rights, democracy and liberty..etc.)became hallow and meaningless and those who keep repeating these words are liars..liars..liars.
I hated the U.N and the security council and Russia and France and Germany and the arab nations and the islamic conference.
I’ve hated George Gallawy and all those marched in the millionic demonstrations against the war .It is I who was oppressed and I don’t want any one to talk on behalf of me,
I, who was eager to see rockets falling on Saddam’s nest to set me free, and it is I who desired to die gentlemen, because it’s more merciful than humiliation as it puts an end
to my suffer, while humiliation lives with me reminding me every moment that I couldn’t defend myself against those who ill-treated me.
What hurt me more and kept my wound bleeding was that they gave Saddam a tribune so the skinner can talk, and offered him a diplomatic representation almost all-over the world to broadcast his filthy propaganda and sprinkle Iraq’s wealth on his supporters.
I really didn’t understand those countries demands to take away our misery. Did they really think that the sanctions were the cause?

We were not even human, Saddam wiped off our humanity , we were just numbers and a lot of Identity cards that we had to show wherever we went.
The Baath idea was this:
YOU’RE A CITIZEN , THEN YOU’RE A SUSPECT
Believe me , we were living in the” kingdom of horror”.
Please tell me how could the world that claims to be civilized let Saddam launch chemical weapons on his own un-armed people?
Shame..
Can anyone tell me why the world let Saddam remain and stood against America’s will to topple him?

Till when will the charts of human rights remain incompulsory , cancel them, because they remind you of your big disgrace.
Keep giving time and tribunes to regimes like those in Syria, Yemen, North Korea and Libya to justify their presence.
To me I don’t recognize your committees and I have no time to listen to that nonsense, I’ve got along way to walk building my country and helping my people forget the days of abasement.
You all owe the Iraqi people an apology.
What happened in Iraq was worse than the holocaust.