Quite good and independent article analyzing Russia's energy policy. Not biased with the Western propaganda bullshit that are usually full of cnn/bbc and similiar.

quote:

PART 2: Corporate gigantism By W Joseph Stroupe (For Part 1 in this series, Promises that can't be kept, click here) At the Valdai Club meeting, Russian President Vladimir Putin exclaimed: "We're not behaving like an energy superpower!" Is that a true statement? In a strictly confined context it is, but in a much larger and more meaningful context it is entirely a false statement. How so? In the Ukraine gas dispute, for example, Russia watched very warily as the United States and its European partners instigated a series of "colored" revolutions inside states strategically located on Russia's perimeter, trying to cut deeply into Russian political and economic power and threatening Russian stability and even its territorial integrity, all the while arrogantly expecting Russia to continue to provide extremely cheap, far-below-market-price energy to the new anti-Russian regimes that had been set up with Western clandestine and overt support. Only an idiotic Russia complicit in its own weakening and disintegration would have continued to supply cheap energy under such conditions and circumstances. Russia is neither idiotic nor will it be complicit in its own disintegration at the hands of the duplicitous West. Ukraine constituted the red line for Russia. The Kremlin decided to give the West a strong dose of the bitter consequences of its own foolish foreign policies with respect to Russia. It used its powerful energy leverage to demand that Ukraine pay closer to fair market prices for its gas, but more importantly it served notice that the US and certain of its European partners will not be given any further free ride, as it were. If they insist on pushing Russia too far then there is a heavy price to be paid, and Russia will not shrink from pointedly exacting that price. After all, what was Russia supposed to do? Simply collapse in the face of the Western onslaught obviously aimed at carving away at Russian influence, Russian territorial integrity, Russian economic stability and other entirely legitimate core Russian interests? Russia will never simply hand over to the West what it keeps seeking by hypocritical and underhanded means. But while Russia has acted largely in a legitimate fashion in the Ukraine context, in a larger and more meaningful context it already gives powerful evidence of beginning to behave "like an energy superpower". There was a time when the US superpower could throw its irresistible economic and political weight around virtually to guarantee that it came out on top of any negotiations with its allies and rivals alike. All understood that the costs of angering the US were far greater than any short-term (at best) economic or political advantages that might be gained by standing up to it in opposition. The US didn't hesitate to "behave like a superpower" and use its unmatched strength, whether implicitly or explicitly, to secure significant advantage for itself. Of course, those days of unquestioned US strength and dominance are now past. Yet the US still attempts (mostly unsuccessfully) to get its way by force, whether economically or even militarily. Russia has begun to do similarly by virtue of its mounting energy leverage. In the direct aftermath of the Ukraine gas crisis, Russia either cut off gas or threatened to do so to a number of other Eastern European customers, including Bulgaria, Romania and others, and has thereby secured for itself terms more to its liking. It has threatened Europe with accelerated diversification of its exports to the East if Europe fails to open its markets to rapidly advancing Russian investment and acquisition of downstream assets. It has abruptly changed existing contracts and agreements and forced Western oil majors to take much smaller stakes in its oil and gas projects (or denied such stakes entirely) and has sued in court to halt projects headed up by Western oil majors. It has cut off oil shipments to Lithuania and gas shipments to Georgia. Russia increasingly plays hardball very much like an energy superpower would be expected to play. The energy weapon is irresistibly effective and Russia already shows signs that it enjoys the exhilaration of its energy-based successes. Additionally, a new but profoundly significant trend has come to light - the policy of "corporate gigantism" via consolidation of Russian companies, especially those related to strategic resources. According to a September 12 report by Russia-based RBC News, Russian companies are actively being urged to consolidate into gigantic conglomerates that can exercise radically increased leverage on the global markets. What is significant about the new strategy is that by consolidating Russia's own resources-related industries into gigantic conglomerates that either approach, or actually achieve, the status of global monopolies, it often isn't necessary for Russian companies to sell their shares to foreigners in an effort to expand their global reach and leverage. Instead, what are formed are gigantic corporate concerns possessing powerful global leverage within and over the markets without having to forfeit any measure of autonomy via the selling of assets to foreigners. RBC News states: Gas giant Gazprom's plans to buy pipelines in Europe, SUAL's acquisition by Russian Aluminum, as well as Roman Abramovich's initiative to consolidate Russian steel companies [all constitute] a sign of a new trend in the Russian economy - the creation of giant companies able to claim the lead on world markets. Reports from RIA Novosti on September 14 also indicate that Russian steel giant Severstal is actively looking to consolidate with an as-yet-unnamed "big industry partner". Alexei Mordashov, board chairman of Severstal, is quoted as saying, "We need consolidation - it is a sound and useful process for the industry." In effect, Russia has found a way to increase radically its global resources-based economic and political leverage while sidestepping the costs and accountability normally faced by Western corporations and conglomerates that must render an account to their shareholders. While Russia will undoubtedly pursue a mixture of both the traditional Western-style capitalization by initial public offerings and the Russian-style corporate gigantism by consolidation, the fact that it is embarking on the new strategy of corporate gigantism sounds an ominous warning for the West. The global strength and powerful leverage of Russia's new gigantic corporate concerns will be difficult for the West to offset or to limit because Russia can move much faster down that path than can the West, thus enhancing its global market leverage, and even achieving monopoly status, in key resources-related areas before the West can react in a meaningful way. At the same time, key Russian corporations positioned very close to the Kremlin continue to purchase significant stakes in, and assets of, Western corporations and industries related to energy, steel, aviation and other strategically important industries. Additionally, Russian companies continue to advance down the road of entering carefully selected joint ventures with certain of their counterparts in the West, thereby further binding the fortunes of such Western companies to cooperation with Russia. All such activities and strategies on the part of Russia work to compound its global economic and political leadership, influence and leverage deep into the West. That is, in fact, the precise goal of such activities and strategies. Russia's very strong suit is its industries related to strategic resources and other key industries that rely heavily on such resources, such as aviation, space, steel and shipbuilding. The Russian Federation is positioning itself in the global markets to capitalize massively on, even monopolize, such key industries. It has embarked on a clear strategy of ensuring a central role for itself, and of consolidating its global position in such a way that it cannot be shifted aside and must be reckoned with on its own chosen terms. It is already beginning to "act like a strategic-resources superpower". Also of great importance along these lines, Russia, by actively taking leadership in defining and drawing the circle of international energy security, is "behaving like an energy superpower" by laying the comprehensive global basis for a new definition of energy security and the political and economic groundwork for a new global energy security arrangement with itself at the center, one that is quite able to include into the circle those powers that take a favorable stance toward Russia while simultaneously excluding to a significant degree those powers that do not take such a favorable stance. As instability mounts in the oil-rich Middle East and Africa, Russia's global energy leverage only increases, and its global energy leadership is only more firmly consolidated. Russian leaders see clearly that geopolitical developments are rapidly ushering Russia into the key global energy position, and they are flush with more than mere cash - they are becoming flush with the power that accompanies Russia's key position. As such, Russia can be expected to ever more fully act the role that it is progressively positioning itself for and that it is being handed - that of energy superpower, notwithstanding Putin's disarming claims to the contrary. The West and the rising East are locked into competition for control of strategic global resources. There are high stakes and the rules of the revived Great Game.

The Hungry Bear

Its only 1 of 5 articles published there unveiling the political and economical situation in Russia. Following the links you could easily find others.

Last edited by star-traveller on Oct-23-2006 at 15:14