Russia runs on crude oil rather than slave labor
By BOGDAN KIPLING
MCCLATCHY-TRIBUNE
WASHINGTON — When the authoritative Kiplinger Letter starts asking, “Is Russia reverting to its darker past? Recent trends look like red flags,” you can be sure Middle America is beginning to worry.
Editors of the 84-year-old weekly newsletter are no conspiracy freaks. Realists to a fault, they try to spot trends and likely future developments in business, politics and economics. When a foreign country gets feature treatment, as Russia did in the Oct. 12 edition, it’s fair to say Kiplinger’s editors have judged it’s time to ring the alarm bell.
It makes no difference that Russian President Vladimir Putin has told the world about the kind of government he likes. He acted like an autocrat in the traditional czarist — or Stalinist — mode from the start.
President Boris Yeltsin resigned on the last day of 1999. As Russia’s constitution allows, he appointed Putin as acting president. Losing no time, Putin pushed forward to March 2000 the presidential election scheduled for August.
Once that was in the bag, the renamed old KGB resurfaced in full glory and President Putin was ready for the white horse.
Putin, a former KGB officer, glorified the KGB’s past, which should have been enough to put anyone en garde.
Under Putin’s increasingly totalitarian regime, leading journalists like Anna Politkovskaya have been murdered, prominent entrepreneurs like Mikhail Khodorkovsky sentenced to languish in Siberian gulags, and the voices of political dissidents all but silenced.
Some questions
Where is Russia going and what does it matter to us? Should we worry or shrug our shoulders? Do we start preparing for a new confrontation with Moscow or do we drift, hoping for the best?
These are not idle questions, especially for Canada, the country in the middle. Russia is just over the North Pole and the United States is where it always has been.
The frozen ocean that used to keep our continents apart stopped being an effective barrier decades ago. Long-range bombers and missiles bridged the space and the warming of the Arctic is opening the ocean.
In fact, Canada recently stationed several fighter jets at an air base in central Labrador to intercept expected intrusions by Russian bombers conducting reconnaissance missions.
There’s oil and natural gas under the waters, and an active struggle for control of resources is but a matter of time. The only thing that could slow down the confrontation would be the Arctic refreezing. But the clash of oil interests between an assertive Russia and a defensive, I think, United States will continue. Like missile technology in the past, new drilling and mining technology will see to that.
George W. Bush and his successor in the White House will have to deal with a Russia that is increasingly emboldened as oil and natural gas revenue pours into its coffers.
Nine years ago, Russia defaulted on its debt. It was bankrupt. Today Russia is swimming in money. It earns at least half a billion dollars a day from exports of crude and crude oil products alone. And then there is natural gas.
That kind of wealth is intoxicating, and more oil wealth is in Russia’s future. Demand from China and India alone ensure as much. But if rising demand is a natural hoist for the price of oil, the phenomenal rate of increase doesn’t seem to be.
Put most crudely — please pardon the pun — I wonder if Putin is helping to keep the Middle East boiling. That’s where much of the oil on the world market comes from, and that’s where its price is lowered or driven ever higher.
So, it’s back to the eternal question: Cui bono? Who benefits? That’s where The Kiplinger Letter should have started.
X Bogdan Kipling is a columnist for The Halifax Chronicle Herald. Distributed by McClatchy-Tribune Information Services.