Russia: What, no Evian for Putin at G8's table?

Asia Times ^ | Apr 18, 2003 | Peter Lavelle

[Ernest_at_the_Beach]

MOSCOW - Looking back, it was never really made clear why Russia was invited to become a member of the G7 in 1998, transforming this exclusive group into the G8. Was it a token of respect recognizing Russia's former great-power status? Was it a personal favor from Bill Clinton to bolster Boris Yeltsin's hopes to reform Russia during its rough and tumble experience with both democracy and capitalism? Asking the question why Russia is part of this group of countries never really seemed important until a few weeks ago.

About a year or so back, Russia's ambiguous relationship with what was then the G7 appeared to be normalized. Even after being invited to join the club, Russia had remained outside the decision-making process that concerned financial issues, the rationale being that the original seven members had come together because of their economic wealth and that, though Russia is rich, its economy remains underdeveloped. For the most part, this deficiency was put aside during the Kananaskis summit held last year.

This was possible for at least two reasons. First, what was called the G7 does not really have a formal application process for membership. It is a private club and has its own internal list of rules and regulations. Second, it appears that the most powerful member of the group simply decided that it was time to let Russia in. After all, George W Bush's newfound comrade-in-arms in the war against terrorism was present - Russian President Vladimir Putin. Looking back to one year ago, the reason that Russia was invited to the club in the first place starts to make sense. It had little to do with Russia's economic condition: Its political attitude toward the United States appears to have been the litmus test. The same test - though possibly with a different outcome - appears to be operative again today due to the differences Washington and Moscow have had with respect to the war in Iraq.

Over the past few weeks, several international media outlets have reverted to using the name G7 again, particularly in reports ahead of the meetings of finance ministers in Washington little over a week ago. It was then that US Secretary of the Treasury John Snow distinctly referred to the G7 within the framework of financing the rebuilding of Iraq. At almost the same time, and halfway around the globe, Putin specifically referred to the upcoming meeting of G8 leaders, which is due to be held in Evian-les-Bains in France at the start of June. He was speaking at a news conference after meeting with German Chancellor Gerhard Schroeder just prior to a dinner engagement between the two leaders and France's President Jacques Chirac.

The message coming out of Washington could not be clearer. While it appears that no one really desires to part with the improvement in US-Russia relations we have seen over the past 18 months, it is also obvious that few on Capital Hill are in a mood to do Russia any favors in the short term. The Bush administration seems to have delegated some members of Congress to express displeasure with Putin and even threaten Russia by revoking its status in the G8, while core issues like US-Russia energy dialogue, international security regarding the Caucasus and proliferation of weapons of mass destruction will move forward unhindered.

The US Congress has the power to hit Russia hard - and senselessly. With Bush's undoubted approval, there appears to be little hope in the short term of changing US legislation that would fast-track Russia's integration into the global economy and removing trade barriers and long-standing, out-dated amendments like the Jackson-Vanik that have serious implications before Russia can be granted "most-favored-nation status" for bilateral trade.

American threats against Russia in the realm of economic relations are a mistake. American attempts to punish Russia's economic development because of its stance against the Iraq war are patently counterproductive for both American and Russian business interests. Mutual engagement is in both countries' longer-term economic and political interests.

The International Monetary Fund and the World Bank are both right (for a change) when they observe that Russia's economy is bursting at the seams, with first-quarter growth of up to 8 percent due to the influx of petro-dollars - because of which real reform of the economy has been allowed to be conveniently ignored by the government of Prime Minister Mikhail Kasyanov.

US engagement of Russia can help force Kasyanov to rethink his priorities. As things stand now, because there is no compelling reason to do otherwise, Kasyanov's vision for Russia is a replication of the South Korean chaebol economic order, with foreign investment in the country aimed only at a very quick return on the dollar on the back of quick and dirty asset plays. Decisions made by the US Congress can help Russia enter the world economy in a way that will make long-tern investment in the country's booming economy not only profitable for all involved, but also legally sound. This is the crux of meaningful international economic integration.

Russia's continued G8 membership could still make this happen - eventually. Perhaps Russia did become a member of this exclusive group of powerful, rich countries for the wrong reasons. But denying its place among the VIPs of the world now would be an even a bigger mistake. Not serving Putin his glass of Evian at the upcoming summit would be an exercise in petty revenge due to emotive events of the moment.

Anyway, considering the circumstances, why should Bush himself expect to be presented with this simple liquid of French entrepreneurial genius? Russia is developing a sober view of the world - can that be said of the United States?

Peter Lavelle is a Moscow-based analyst and author of the weekly e-newsletter "Untimely Thoughts".

[Ernest_at_the_Beach]

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[Steel Wolf]

They need our business a lot more than we need theirs. While it would cost us some to keep them on the outs, I see no need to reward their treachery. I'd much rather take a little economic hit to ensure that they feel sharply what their backstabbing has done to our relations.

[Steel Wolf]

They need our business a lot more than we need theirs. While it would cost us some to keep them on the outs, I see no need to reward their treachery. I'd much rather take a little economic hit to ensure that they feel sharply what their backstabbing has done to our relations.

[Nick Danger]

I dunno, I kind of agree with this guy. Russia is not out of the woods yet, and it is in no one's interest to see it slide back into communism and despotism. They still have all those nukes.

I saw the move to invite Russia into the G8 as a way of welcoming them to the family of capitalist nations... and a not-so-subtle way of encouraging them to stay that way. I don't think that job is completed yet... one bad recession and we'll once again hear, "Bah! Things were better under communism!"

There are plenty of ways to remind Putin that France is not the big dog no matter how loudly it barks. That's not a mistake he's likely to make again.

I was really disappointed in Putin's behavior in regard to Iraq. When the Soviet Union collapsed, I thought the behavior of the Russian people was the coolest thing I'd ever seen. For all intents and purposes, their government was gone. And because of their economic system, that meant that for most of them, their employer was gone as well. What could have happened in that country was Baghdad Looting on Steroids. And it could have gone on for months, with warlords appearing even fifty miles outside Moscow. Instead we saw a relatively orderly transition to something -- anything -- that looked like a low-violence way to keep the trains running.

In the long run, if we can ever get the Russians far enough away from the stupid Marxist ideology, we can trust people who would act like that in a crisis. Not that they would ever be our best buds (although that might happen, who knows) but they aren't nuts. These days, just finding that is a pleasant surprise.

[gcruse]

I kind of agree with the guy, too. Russia is too important to be left out of the G7. Maybe it is being called G7 because of Canada being dumped. There's an economy too small to matter and who has cut their American coattails that gave them what stature they had.

[McGavin999]

I tend to agree with Condolizza. Forgive Russia (let Putin root out the traitors in his midst), ignore Germany (no new investment and move out the troops), and punish France.

If Putin is smart, he'll exploit the treachery of some of the old guard and will come out even stronger. He should let his people know how they were "duped" into backing Iraq. He can mold public opinion in Russia and the first thing he has to attack is anti-Americanism. If he does that we'll talk.

[SamAdams76]

The article never tells us why Putin no longer has Evian at his table. Frustrating. Maybe he is boycotting the French. If that is the case, I recommend Pellegrino water - from Italy. Good stuff.

[ffusco]

Cutting the Russkies some slack will just perpetuate the problem. Massive foreign aid, complete amnesia about Russia's history, and giving them the pre-tense of still being a major power got us here. They simply have no compelling reason to change their behavior if you reinforce bad behavior.

We should stop all aid, technology transfer and access to world credit, kick them out of the G-8 until they radically change their behavior

[Southack]

I'm reasonably (but not firmly) convinced that Putin simply used the War on Iraq to marginalize his own internal political opposition (i.e. the diehard Marxists who wish to oppose the U.S. at all costs).

But after seeing the U.S. military swat away the ex-Soviet military advice in use by Hussein's Iraq as if it was just another desert fly, who back in Moscow is going to take *any* ex-Soviet seriously today?!

So Putin followed the advice of those in his Marxist opposition, and now those Marxists are marginalized because no one can take them seriously any longer due to their poor advice over Iraq.

By default or by design, Putin is stronger and his Marxist political opposition in Russia is weaker today due to Iraq.

So do we punish him or reward him?

Well, do we think that Putin is dumb-enough to make the same anti-U.S. mistake twice, or not?

And therein lies our answer.