Article published October 05, 2008
Russia's leaders cast U.S. in recurring scapegoat role
Russia's stock market survived a near meltdown this summer and then again last week when stock exchanges suspended trading for several hours as share prices plummeted soon after markets opened - the worst financial crisis since Russia's 1998 default on loans.
Russia's figurehead president, Dmitry Medvedev, blamed the United States for "setting Russia up."
The absurdity of this accusation brings to mind Mark Twain's The Adventures of Tom Sawyer, namely the part where a little boy tried to get attention by claiming that Tom, who became unusually popular by faking his own drowning, had beaten him up a short time before.
To be sure, Russia's market tumbles in August and last week did follow market plunges in the United States.
But U.S. investment companies did not fake their problems. In fact, some of them went under, precipitating a financial crisis in the United States.
The U.S. market drop simply became the last straw for investors who were already fleeing Russia in droves in search of less volatile markets in the wake of Russian government expropriations of private companies and the Russian invasion of Georgia.On the first two working days of Russia's August war in Georgia, $7 billion of hard currency left Russia, of which $6 billion went on the first day, according to the Russian government.
Independent financial experts in Moscow immediately lowered their prediction on the inflow of foreign investment this year from $40 billion to $30 billion in U.S. dollars.
On the bright side, the U.S. and Russian financial crises made the Kremlin watchers look more closely at where the increasingly bellicose Russia stands in relation to the United States - just so we know whether to expect a new Cold War.
The broad consensus is that there is no need to worry. Russia is far too insignificant, both economically and militarily, to afford another Cold War.
No thanks to the goodwill of the Kremlin, which favors the United States as a scapegoat for domestic use. Russia simply can't afford a Cold War because its $2 trillion gross domestic product is about a seventh of the United States' nearly $14 trillion GDP, while Russia's $40 billion military budget is one-twelfth of annual U.S. military spending of about half-a-trillion dollars.
Moreover, that gap is generally expected to widen.
Nevertheless, Russian Prime Minister Vladimir Putin's "mini-me" - President Medvedev, who was obviously inspired by Russia's victorious five-day military campaign in tiny Georgia - has been issuing warnings to the free world.
Most notably, he announced last month that not only is a military solution to the standoff over Iran's nuclear ambitions unacceptable but also warned the European Union against any new sanctions on Iran.
Issuing such warnings was quite cheeky for the prime minister of a regional power, which is what Russia can be considered - at best - given that it is located between the European Union and China.
Mr. Medvedev must be drawing his confidence from America's Republican vice presidential nominee, Alaska Gov. Sarah Palin, who wants "to make sure that an eye is being kept on this very powerful nation, Russia."
But until Russia matures by focusing on economic and social growth rather than assaulting tiny neighbors, another Mark Twain quote (from his Tom Sawyer Abroad) will remain relevant:
"And look at Russia. It spreads all around and everywhere, and yet ain't no more important in this world than Rhode Island is, and hasn't got half as much in it that's worth saving."
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