The Russian bear really a paper tiger
Sep 11 2008 by Peter Jackson, The Journal
THIS is a great time for those Life on Mars fans who are nostalgic for the 1970s. We have trades unions flexing their muscles, a Labour Government presiding over economic and fiscal meltdown – and a return to the Cold War.
Russia has sent its tanks into Georgia, is clearly unmoved by the West’s expressions of outrage and drops heavy hints that, if it feels so inclined, it may do the same in the Ukraine or anywhere else with Russian minorities.
Oh, and just for good measure, it may nuke Poland.
Lying behind this are the perceived slights at the hands of the West since the collapse of the Soviet Union, a fear of encirclement by old enemies and new-found wealth from oil and gas revenues which allow it to once more strut the world stage.
Russia’s economic turnaround since Yeltsin so entertainingly presided over a basket case has been remarkable. Government revenues are in surplus to the tune of about £60bn, whereas Mr Darling must gloomily contemplate a deficit of about £50bn. Our Government owes about £600bn but Putin has net assets of about £250bn to play with.
Add to that, of course, the fact that Russia’s oil and gas is so desperately needed by energy-poor Europe, terrified that Ivan will turn the taps off, and we do seem pretty helpless in the face of the Russian threat.
But this is an illusion; in reality, the bear is a paper tiger.
True, they have the energy but that’s worthless without buyers and our dependence is mutual. Furthermore, the economic downturn will bring lower demand, lower prices and therefore lower revenues for Russia. They are, as I recently heard a US politician describe them, ‘Saudi Arabia with trees’.
Russia is not a serious player. The EU’s GDP is US$17 trillion, that of the US is US$13 trillion and Russia’s is US$2 trillion. The EU’s population is 500 million, the US has 300 million and Russia’s population is 141 million and falling by 800,000 a year.
If we want to get really serious, the combined annual defence spending of the US, UK, France and Germany is about US$750bn; Russia’s is a paltry US$50bn.
If Russia wants another Cold War, it should remember who lost the last one.
