The Russia Story.

Previously posted on my Facebook Page. 

THERE are a lot of stories—front, back, center, and sides—of Russia. But most of these are mysteries, hearsays, speculations, or outright biased judgments. Most are borne from the fact that Russia is the United States’ traditional antithesis. The favorite anti-hero, villain, and antagonist. Yet there are more know about this transcontinental country that spans Eastern Europe and Northern Asia, dating back to Oldowan period in the early Lower Paleolithic—than its enigmatic ruler Vladimir Putin.

       Sans the 14 republics that were part of the USSR till 1991, the Russian Federation is the largest country in the world by area, and Moscow, the capital, is the largest city entirely within Europe. But Russia’s population of 144.1 million is only ranked 9th in the world.

       More significantly, Russia is again the leading rival of the United States in Big Energy supremacy, the measure of real geopolitical power. While the U.S. is currently #1 in oil production, oil export, and natural gas production, Russia is #2 (or #3) in other categories—but #1 in natural gas export. The U.S. is only a distant #6 in natural gas sales. The other superpower China, which also a Top 5 or Top 10 producer of oil and natural gas, choose to keep their energy resources mostly stocked up for “rainy days.” But China is top oil importer and #3 buyer of natural gas.

       Finally, Moscow has realized a true rivalry in oil/natural gas with America, that could have ensued in the Middle East when oil was first discovered in the desert in the 1940s. Animosities never die though the Cold War also ended upon collapse of the Soviets in 1991. All three superpowers heavily trade with each other these days. China is the United States’ top trading partner; China is also Russia’s top business comrade.

       Yet there were speculations before Joe Biden sat in White House. Time’s Ian Bremmer wrote in 2016 that Putin will probably prove less confrontational. While he has effectively won the stalemate in Europe, and he believes he can parlay his power in Syria into an end to sanctions, a more cool mojo would benefit him most.

       But a contracting economy, rising inflation and lower oil prices will further darken the mood of life in Russia. And then here comes the Ukraine invasion 2022. President Biden has his reasons why Putin’s new aggression would benefit Washington—but the Russian strongman has his as well. Which will only unfold as the war slides on, sputters, or halts. 🇷🇺🇷🇺🇷🇺

RUSSIA is not a Top 10 world economy. But it is viewed by Washington and the West as a major threat to global security. (And now an economic “headache” due to Moscow’s oil/gas influence in the market.) Yet I don’t get the “security” paranoia. True, Moscow has the most number nuclear weapons at 6,257 against the United States’ 3,750 but seven other countries possess nukes as well—though detailed transparency is always an issue.

       Economics-wise, besides its oil and natural gas, Russia’s GDP growth rate is modest at 2.6 percent alongside a 4.4 percent unemployment rate. Chief industries (beside oil/gas): Mining, processing precious stones and metals, aircraft building, aerospace production, weapons and military machinery manufacture, electric engineering, pulp-and-paper production, automotive industry, transport, road and agriculture.

       Moscow’s top trading partners are China, The Netherlands, Germany, Belarus, the U.S. as its 5th-largest business relations. (Sure, as war rages in Ukraine, Russia isn’t a U.S. trading chum anymore.) In fact, Russia enjoys trade surplus with a number of countries, including The Netherlands, United Kingdom, Turkey, Kazakhstan, South Korea, Poland, and Finland. The U.S. also owes Russia $164 billion in (external) debt.

       Makes we wonder why countries that owe Russia money and those who buy Moscow’s energy products (like the U.K., Poland and Finland) openly sent arms support to Ukraine in its war with Russia? Politics/economics don’t mix or do they?

       Asia, notably China and South Korea, are significantly mum on the Russian invasion. A few countries, including Japan and Singapore, joined the economic sanction vs Moscow though they refused to send military equipment to Kyiv. 🇷🇺🇷🇺🇷🇺

RELATIONS between China and Russia go back to the 17th-century, when the Qing dynasty tried to drive Russian settlers out of Manchuria, but this animosity ended by the signing of the Treaty of Nerchinsk. During the Cold War, China and the USSR were rivals after the Sino-Soviet split in 1961, competing for control of the worldwide Communist movement.

       But since the end of the Soviets, the two nations gradually evolved as true friends. In 1992, Russian President Boris Yeltsin made his first official visit to China, who met with CCP general secretary Jiang Zemin. In 1996, at the end of Chinese Premier Li Peng’s visit to Moscow, Russia and China issued a joint communique pledging to build an "equal and reliable partnership." They haven’t relented since then.

       In 2001, the close relations between the two countries were formalized with the Treaty of Good-Neighborliness and Friendly Cooperation, a twenty-year strategic, economic, and – controversially and arguably—an implicit military treaty. A month before the treaty was signed, the two countries joined with junior partners Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan in the Shanghai Cooperation Organization (SCO). Still active as of 2021, the organization is expected to counter the growing influence of the United States military outreach program in Central Asia.

       In February 2022, during the 2022 Russian invasion of Ukraine, China refused to consider the war in Ukraine as an invasion, and it has blamed the U.S. or President Biden in particular for goading Putin to invade. 🇷🇺🇷🇺🇷🇺

ECONOMIC relations between Russia and China demonstrate mixed trends. Until the 2008 crisis interceded. Trade slumped back to around $60 billion in 2015 and 2016 but started to recover again in 2017. Both countries are expecting to raise the trade volume to $200 billion by 2024. In 2008–2009, when Russia experienced a financial crisis, there was a sharp increase in borrowing from China.

       Since 2010, China is the largest trading partner of Russia. Significantly, the two countries are also partners in BRICS and RIC (Russia-India-China), which cemented their economic relations. The most telling testament of the economic friendship took place in 2013—when China offered Russia to be part of Belt and Road Initiative.

       This massive project a.k.a. the “New Silk Road” is designed primarily to strengthen economic ties and cooperation and to attract investors from Asia and other parts of the world to actively participate in the creation of an economic belt that is run by the Chinese. The zone should extend from China to Europe through Central Asia and Russia, as it is an important transit logistical link between China and Europe, in which the Beijing-led Asian Infrastructure Investment Bank (AIIB) may play a significant role.

       In recent years, construction of cross-border infrastructure were stepped up. New Eurasian transport routes are being built as well, including the "Chongqing-Xinjiang-Europe" railway and the "Western Europe – Western China" route, which will pass through Russia. In northeast China and the Russian far East, both countries are actively promoting the construction of bridges, ports, and other projects.

       To fortify Beijing and Moscow’s infrastructure deal per BRI, energy agreements were signed. In 2014, they signed a $400 billion gas deal. Starting 2019, Russia plans to provide natural gas to China for the next 30 years.

       Two pipelines served this purpose: The Russian Eastern Siberia – Pacific Ocean oil pipeline and the Altai gas pipeline which would link West Siberian fields with the Xinjiang Uyghur Autonomous Region in western China into northeastern China. 🇷🇺🇷🇺🇷🇺

Photo credits: National Geographic. Corriere del Ticino. Russia Travel Specialists.