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#5
Rossiiskaya Gazeta
No. 228
November 21, 2001
[translation from RIA Novosti for personal use only]
THE ECONOMIC RESULTS OF PUTIN'S US VISIT
By Mikhail DELYAGIN, director, Institute of Globalization Problems

Paradoxically enough, Vladimir Putin's US visit has produced some important economic results.

Those pompous and somewhat incoherent official comments served to disappoint the mass media in the middle of Putin's visit. Russian society came to understand that any vague hopes concerning the restoration of Russia's great-power status without any efforts whatsoever and by a mere wave of the two Presidents' hands had been dashed.

US Congress leaders believe that the Jackson-Vanick amendment has already become obsolete. However, the Russian public at large reacted in a very cool manner to this indisputable Russian diplomatic victory for the afore-said reason. It ought to be mentioned in this connection that the Jackson-Vanick amendment had been passed more than 25 years ago, depriving the Soviet Union (and now Russia) of the most- favored nation status during its trade with the United States for restricting Jewish emigration.

The last emigration barriers were lifted over a decade ago; however, the United States keeps punishing our country for the sins of the Soviet regime, whose collapse is being hailed by Washington to this day.

What's even more amusing is that the Jackson-Vanick amendment is no longer valid, with US Presidents rescinding it by their annual decrees. This amendment, which ranks among the last Cold War relics, and which can no longer be justified, used to embody the US establishment's ill-wishing attitude and mistrust toward our country. As a matter of fact, the US elite has always felt this way, in spite of the US leadership's high-sounding statements and absolutely unjustified concessions on the part of the Russian leadership.

Congress has now altered its stand on the Jackson-Vanick amendment, thus sending out an important economic message to the US business community. Meanwhile Russian society has failed to heed this message.

This can be explained by the simple fact that we had expected too much from Russian-US cooperation. Our society, which admits that Russia kept falling behind the entire world over the entire 1992-2001 reform period, can't, nonetheless, accept the consequences of this. In other words, a qualitative gap now exists between Russia and the United States. Russia can make maximum possible concessions with regard to the United States. However, Moscow can't request anything from Washington because the latter is in no position to meet such requests; this can be explained by a combination of foreign and domestic factors alike.

As distinct from Gorbachev's USSR, Russia simply can't beg for anything. Russia can obtain only limited benefits from its cooperation with the United States. Among other things, the US leadership might change its perception of Russia, which is seen as something fleeting. Here's a simple example to prove my point. Russia aided the United States during its war against the Taliban, also allowing Washington to set up its military infrastructure in Central Asia. However, Moscow couldn't request anything definite; nonetheless, chances are that US authorities won't be prosecuting our citizens for alleged money-laundering operations.

Global oil prices continued to plunge during Putin's stay at Crawford ranch in Texas. Russia keeps facing nightmarish prospects; to cut a long story short, a barrel of oil might well cost $13-14 per barrel, rather than $23, next year.

In the obtaining situation, foreign loans and the restructuring of external debts can prevent the rouble's fast-paced devaluation. The solution of long-term Russian problems, e.g. protecting property rights, curbing the arbitrary rule of natural monopolists, reviving depression-stricken regions and reorganizing the entire bureaucratic machinery, is the only way to stave off such devaluation. However, an instant oil shock, as well as projected spending cuts (that can entail some really unpleasant political and economic consequences) within the framework of the draft 2002 federal budget, can be avoided through foreign financial support.

It goes without saying that Russia will never obtain such financial support without US assistance. The United States alone can see to it whether Russia will receive easy-term aid, or whether such aid will be channelled in exchange for a 1995-1998- style destructive policy.

Consequently, the US leadership, which should display a benevolent attitude toward President Putin, should not be tempted to provoke yet another economic crisis either. All the United States has to do is display indifference or demand another liberal-reform round for the sake of sparking off such an economic crisis.

Russian-US relations are also being complicated by our diametrically opposite interests, which seem to be an objective factor. Russia perceives the current oil-price slump as something dangerous; meanwhile that slump facilitates US economic growth to an even greater extent than interest-rate cuts.

The US leadership's current attitude toward Russia would enable us to weather the protracted global oil-price slump without any destructive upheavals whatsoever. This constitutes the main economic result of Putin's US visit.

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