PRESS RELEASE
June 19, 2007
“They say that the ‘Russian Bear’ is asserting
itself and after visiting Moscow I can confirm
that it is indeed the case”, said Malcolm Moss
MP on his return from an Foreign Affairs Select
Committee (FAC) visit last week.
As part of an enquiry into UK-Russian relations,
global security and the security of energy
supplies the FAC made a two day visit to Moscow
to meet with senior members of President Putin’s
Government, experts in the energy field,
opposition politicians, journalists and members
of the media.
Since the break up of the Soviet Union the
original countries, including the Russian
Federation have gone through difficult economic
times. However since the price of oil and gas
quadrupled in the past few years, Russia has not
only paid off all its international debts, but
has a huge current account and balance of
payments surplus.
Russia is the world’s largest oil and gas
producer and controls many of the key pipelines
taking these products, particularly gas, to the
key consumers of the European Union in the
Baltic States, Austria , the Czech Republic and
Germany . As we have witnessed recently it has
flexed its muscles over prices by threatening
supplies to the Ukraine , Belarus and Lithuania
.
Moscow is becoming a modern, vibrant and
financially successful city of some 12 million
people, a virtual country in its own right. As
the sun shone and the refurbished buildings in
the Kremlin and Red Square sparkled in the early
summer sunshine one’s preconceived notions of a
deprived, drab and economically backward regime
were quickly dispelled.
That Russia has huge raw material wealth is not
in question. What matters is how and when this
wealth will be put to best use for all Russian
citizens. Recent developments of the
nationalisation of Shell’s oil interests in
Russia and the pressure being brought to bear on
BP’s activities; the closing down of all
independent TV stations and the increasing
government control of political activity and the
media do not augur well for a liberal and
transparent economy and democracy as we in the
West understand it. Little wealth seems to
filter down to ordinary people and control of
many companies and organisations is in the hands
of President Putin’s previous colleagues in the
KGB (Russian Secret Service). Huge sums of money
are laundered out of Russia into property abroad
and little investment seems to be going into
diversification of the economy and the
development of skills and know-how for a 21st
Century economy.
There is also a demographic time bomb ticking
away. The birth-rate is so low that Russia will
not have the human resources in 25 years to
carry the economy forward. It also has the
second lowest average life expectancy for men in
Europe at 59 years of age. That is not too far
removed from third world experiences.
An air of uncertainty hangs over the country
because President Putin’s second term as
president comes to an end next year and unless
the constitution is changed he will have to
stand down. Since there is no obvious process
for an orderly succession nor is the
presidential election likely to be “democratic”
the country is in a state of suspended animation
where those with control of the economic and
political levers of power are feeling very
insecure over what the future will hold.
