Defuse Russia's energy weapon

[Baltic]

WASHINGTON (http://www.iht.com/cgi-bin/search.cgi?query=WASHINGTON&sort=swishrank) The recent "gas war" between Ukraine and Russia was viewed by too many in Europe and in America as a short-term crisis that raised questions about Russia's reliability as a stable supplier of energy. It's time the West ended its complacency regarding Russia's willingness to use its considerable energy resources for political blackmail.

Moscow's deployment of the "energy weapon" dates from 1990, when it cut energy supplies to the Baltic countries in a futile attempt to stifle their independence movements. It was again used against the Baltic states in 1992, in retaliation for demands that Russia remove its remaining military forces.

In 1993 and 1994, Russia reduced gas supplies to Ukraine, in part to pressure Ukraine into ceding more control over its energy infrastructure and over the Black Sea Fleet. Even Belarus, and indirectly Poland and Lithuania, suffered in 2004 from politically motivated supply reductions.

Why has the European Union, and particularly the large gas importers like Germany, the Netherlands and France, ignored the lack of France, ignored the lack of transparency and competition in Russia's energy sector? The Russian pipeline monopolies of Gazprom (natural gas) and Transneft (oil) have been given free rides in terms of the open-market requirements of the World Trade Organization and the EU's own energy charter.

The EU's agreement with Russia on its entry to the WTO gave Moscow's increasingly monopolistic pipeline and production companies' carte blanche. Russia has been able to increase its market power in Europe through the construction of the expensive undersea Baltic Pipeline System.

The West ignored Gazprom's takeover, with Ruhrgas' help, of domestic gas facilities and markets in the Baltic states. It disregarded Transneft's preventing Kazakhstan from supplying oil to Lithuania's Mazheikiu Nafta Refinery through the Russian pipeline system, even though it has the legal right to do so.

Russia has stopped all piped shipments of oil to Latvia for the past two years in an effort to control the port of Ventspils. Now, Moscow is again attempting to keep non-Russian companies from buying Lithuania's Mazheikai Nafta Refinery and the port at Butinge.

Should this use of raw energy power not be a subject for discussion within the European Commission?
Does the West believe that it needs Russian energy supplies more than Russia needs the oil and gas revenue that comes from Western markets? Russia cannot develop its vast energy fields without Western capital or technology, but there has been no inclination by either the EU or the United States to use their considerable leverage to force Russia to play by transparent, competitive rules that guide business in the West, partly because of competition by Western companies for exploration and production rights in Russia.
The Russia-Ukraine "gas war," which recently drew the world's attention to Moscow's energy blackmail, was purportedly resolved to the satisfaction of both sides on Jan. 4, but few people familiar with political and economic relations between Russia and Ukraine believe that this agreement will last very long.

Moscow's requirement that all gas to Ukraine be contracted by the nontransparent company RosUkrEnergo, the direct successor to the even less transparent EuralTransGas, raises questions about the reliability of future European gas supplies that originate in Central Asia.
Russia's political agenda in using gas prices to punish the pro-Western government of President Viktor Yushchenko is clear from statements made by Russian supporters of Gazprom's hard line and from remarks by Russia's few remaining reformers.
Ukraine's politicians, however, deserve some of the blame for the present situation. Kiev has allowed corrupt oligarchs to continue to control gas deliveries from Russia. More damaging in the long run is the Yushchenko government's lack of movement in developing a level playing field for domestic and foreign energy investors.
Ukraine could substantially reduce its dependency on Russia through rapid reforms that permit open tenders for exploration rights and a welcoming atmosphere for legitimate foreign energy investors. Instead, the cozy relationship between Russian and Ukrainian energy interests persists, even after the New Year's Day reduction of gas supplies.
The West has the economic and political leverage to force Russia to become more transparent and commercial in its foreign energy policies. It cannot allow Moscow to threaten the security of Europe, particularly the new democracies of Central Europe, through neglect or unwillingness to face down the new imperial mindset in the Kremlin.
(Keith Smith, a senior associate at the Center for Strategic and International Studies in Washington, was U.S. ambassador to Lithuania from 1997 to 2000.)

[Lurps]

Good that people are becoming more aware. woot

[Esszett]

Interesting.
Proves once more how important it is to become independant from natural resources such as oil or gas.
For the US as well as for Europe.
See here: http://www.militaryphotos.net/forums/showthread.php?t=69679
(If you didn't already)

[GazB]

Ukraine could substantially reduce its dependency on Russia through rapid reforms that permit open tenders for exploration rights and a welcoming atmosphere for legitimate foreign energy investors.

Yeah... the solution is to let foreign (western) companies to come in and have a look around the Ukraine for some oil or gas resources... and then let presuambly europe get this material at a cheaper rate, while all the Ukraine gets out of it is tax money... Perhaps the Ukraine should look at Irans experience in the matter before they agree to such a suggestion... a crooked leadership installed by the CIA gathering money from western oil companies for taking away Irans oil as fast as they could, while the average Iranian on the street got nothing. At least now with the oil nationalised they get free health and education.

[Son_Of_Suvorov]

The West has the economic and political leverage to force Russia to become more transparent and commercial in its foreign energy policies.

Translation: either you'll give up your natural resources voluntarily, or we'll take them from you.

[Lurps]

Translation: either you'll give up your natural resources voluntarily, or we'll take them from you. Talk about paranoid :roll:

[Thor]

Yeah... the solution is to let foreign (western) companies to come in and have a look around the Ukraine for some oil or gas resources... and then let presuambly europe get this material at a cheaper rate, while all the Ukraine gets out of it is tax money... Perhaps the Ukraine should look at Irans experience in the matter before they agree to such a suggestion... a crooked leadership installed by the CIA gathering money from western oil companies for taking away Irans oil as fast as they could, while the average Iranian on the street got nothing. At least now with the oil nationalised they get free health and education.
Yup, everyone knows that the west is a bunch of crooks and that you find the good guys in Moscow... :cantbeli:

[Son_Of_Suvorov]

Talk about paranoid :roll:

There's no conspiracy theory here. The US State Department is putting pressure on Russian companies to sell energy resources to former Soviet republics at fractions of market prices. Since buying goes by the bulk, this is nothing short of theft.

[Kilgor]

There's no conspiracy theory here. The US State Department is putting pressure on Russian companies to sell energy resources to former Soviet republics at fractions of market prices. Since buying goes by the bulk, this is nothing short of theft.

No they arnt.

The US and the EU are telling russia nothing of the sort. They are telling you not to manipulate and use the gas as a political tool.

[maybee]

Here's an interesting fact. In one of Putin's speeches he carfully doesn't say something about the US.
http://president.kremlin.ru/eng/sdocs/speeches.shtml?type=70029
He also tries to explain and I think cover up why they went to world market with their energy in one of the speeches. It kind makes good reading if you don't like sleeping at night.:-*$ :cantbeli: :backhand:

[Smersh]

Lets not forget that Russia was providing the Baltic states and Ukraine Gas at much lower than market prices. As soon as it attempts to charge the market rate towards nations, that are hostile to it. It becomes a crisis, and a weapon to some people. I thought you guys where for the market and free competition deciding prices, and not Soviet-era subsidies.

[Teufel_]

No they arnt.

The US and the EU are telling russia nothing of the sort. They are telling you not to manipulate and use the gas as a political tool.dont want it? about 5 years until pipelines to china open and we cease giving one tiny **** about your opinions on anything

[sferrin]

dont want it? about 5 years until pipelines to china open and we cease giving one tiny **** about your opinions on anything

LOL. And how many years until China decides it needs to add Siberia to it's game bag?

[Smersh]

great friendly comments. without addressing any real issues.

[Brute]

Talk about paranoid :roll:

Talk about naive... :bash:

[Brute]

LOL. And how many years until China decides it needs to add Siberia to it's game bag?
Only as many as necessary for China to start feeling suicidal. In other words - they won't, if they know what's good for them... :slap:

[CyberSpec]

Russia and Iran lead the new energy game
By Pepe Escobar

Whatever the West may have thought about it, Russian President Vladimir Putin has already spectacularly preempted this weekend's Group of Eight (G8) summit in St Petersburg with his own bit of Pipelineistan news. Putin announced in Shanghai on June 15 that "Gazprom is ready to support the construction of a gas pipeline from Iran to Pakistan and India with financial resources and technology".

He was referring to a fabled US$7 billion, 2,775-kilometer, 10-year old project - an Iranian idea - which should now be finished by 2009, developed by Gazexport, a Gazprom subsidiary. As a result, by 2015 both India and Pakistan should be receiving at least 70 million cubic meters of natural gas a year.

Thus the two top global gas producers - Russia and Iran - reached a strategic partnership abiding not only by their own interests but the interests of India, Pakistan, China and part of Central Asia, something that spells nothing less than an auspicious economic future for a great deal of Asia - independent from any American interference. Washington was not amused.

Not surprisingly, everyone else in the region begged to differ. For Iran this represents the coveted Pipelineistan way to the east. India will save at least $300 million a year. Pakistan will receive as much as $600 million a year in transit fees. The pipeline will inevitably be extended to Yunnan province in China. No wonder the announcement was made at the annual meeting of the Chinese-inspired Shanghai Cooperation Organization (SCO).

The Russian masterstroke is to divert the bulk of upcoming Iranian gas exports to Asia - while Russia is still negotiating a very complex and very lucrative deal with Brussels to supply the European Union. Tehran and Moscow have reached a remarkable agreement. Putin and Iranian President Mahmud Ahmadinejad will be working in tandem. In Shanghai they all but decided to consult on all matters regarding gas prices and the new routes of Pipelineistan. Control of prices plus transportation routes obviously spell out a gas OPEC (Organization of Petroleum Exporting Countries) just around the corner (Putin though was careful to dub it just "a joint venture", not a cartel).

Now, a decade and a half after the end of the Cold War, the US and Russia's lines of friction are startlingly similar: Eastern Europe, the Black Sea basin, Ukraine, Moldavia, Georgia and Iran. Sixty years ago, the Soviet Union offered Iran an energy partnership. Now Moscow is offering not only a nuclear partnership - building the nuclear reactor in Bushehr - but still an energy partnership, in the manner of selling its own gas wealth the most profitable way for both sides.

Putin is an accomplished chess player. Accusations of heavy-handedness - on civil liberties and on energy policy - aside, the Kremlin does not need a confrontation with the "colonialist" West (the qualification is Putin's). What it needs is to find the best use for the massive financial flows that are pouring over Russia.

The Russian weekly Vlast identifies "a new Russophobia in the West, hypocrite and erroneous". The Russian response is to challenge the West to accommodate to its own terms. The Kremlin calls its own internal experiment "sovereign democracy". As the Kommersant daily put it, "the West must answer to a series of ultimatums posed by Russia, including its refusal of European rules on the energy market, it particular position regarding Iran and the assurance of non-intervention on Russian internal affairs".

Putin's message to the G8 is loud and clear: we're back. And this Gazprom nation, also reveling on oil at $75 a barrel, and rising, is doing things its own way - like exterminating, with perfect timing, public enemy number one, Chechen rebel leader Shamil Basayev, or banishing homeless people, street vendors, intellectuals and opposition voices from St Petersburg ahead of the G8 summit. There's virtually nothing the West can do about it. Russia is not struggling to be part of "the West" anymore; it has evolved its own system, and not unlike the Middle Kingdom, at the center of the system lies the Kremlin.

Preemption is the (Russian) name of the game. Russia's strategic partnership with China has been solidified via the SCO. On the ultra-sensitive Iranian nuclear dossier, Moscow's game is extremely flexible, and all about nuance, as are Russia's relations with the Islamic world. It is charging market prices to both Ukraine and Georgia for its gas. And sooner - rather than much later - the gas OPEC with Iran and Central Asia may be a done deal.

[Lokos]

LOL. And how many years until China decides it needs to add Siberia to it's game bag?

Roughly the same number of years as that until the rise of Greater Mexico...

Foolishness.

Pure and simple.

Lokos

[Teufel_]

LOL. And how many years until China decides it needs to add Siberia to it's game bag?
current russian doctrine is very, very simple: any invasion is met with nuclear strikes.

get out of your wet dream

[Smersh]

important words keep this in-mind:
It is charging market prices to both Ukraine and Georgia for its gas

[Kilgor]

Roughly the same number of years as that until the rise of Greater Mexico...

Foolishness.

Pure and simple.

Lokos

China already is a economic superpower, it wont be long before they catchup and surpass Russia's military (if not already). They already spend more on their armed forces, and certainly have access to millions of engineers and manufacturing.

The biggest laugh here is that Russia's current GDP is about that of mexico.

[TR1]

China already is a economic superpower, it wont be long before they catchup and surpass Russia's military (if not already).


haha,if by close to catching up you mean another 50-100 years, then yes, i agree with you. and even then Russia's NBC arsenal will make quick work of China....if it ever tries to bite off some territory...which it wont.....because being allied with Russia is far more lucrative to China than competing with its neighboor.

[Teufel_]

russia's GDP is $500 billion higher than mexico's...

[CyberSpec]

The chances of Russia and China going to war in the foreseeable future are close to ZERO. If anything they are strategic partners
(see article below...only for geopolitical junkies!)

Kilgor, a lot has changed since 1991 you know. You should update your figures before taking jibes at people.


-------------------




China and Russia embrace the Shanghai spirit
By M K Bhadrakumar

Foreign Affairs magazine last autumn featured an essay titled "China's search for stability with America", in which it addressed the "cauldron of anxiety about China".

Naturally, it evoked much discussion in intellectual and diplomatic circles, and raised the question of whether the "Chinese dragon will prove to be a fire-breather", to use the words of Robert Zoellick, US deputy secretary of state.

Its author was Wang Jisi, dean of the School of International Studies at Peking University and director of the Institute of International Strategic Studies at the Central Party School of the Communist Party of China.

In any contemplation over China and the Shanghai Cooperation Organization (SCO), which is meeting in Beijing this week, what invariably comes to mind is a passage in Wang's essay about the equilibrium of China-US-Russia equations in the international system. Wang wrote:
It helps to understand US power and Washington's current global strategy. Here is a Chinese view: in the long term, the decline of US primacy and the subsequent transition to a multipolar world are inevitable; but in the short term, Washington's power is unlikely to decline, and its position in world affairs is unlikely to change ... For a long time to come, the United States is likely to remain dominant, with sufficient hard power to back up aggressive diplomatic and military policies.

A pattern of cooperation and coordination among the world's major powers, institutionalized through the G8 [Group of Eight] , has taken shape, and no great change in this pattern is likely in the next five to 10 years. To be sure, some of the differences between the United States and the EU, Japan, Russia and others will deepen, and Washington will at times face coordinated opposition ... But no lasting united front aimed at confronting Washington is likely to emerge. It would be foolhardy, however, for Beijing to challenge directly the international order and the institutions favored by the Western world - and, indeed, such a challenge is unlikely. Wang introduced yet another fascinating thought in his essay regarding the "paradox" of Sino-American relations. He argued that only a decline of economic strength would erode US military muscle, which in turn could ease the strategic pressure on China.
But any such slide would also hurt China's economy. Again, any decline in US influence could trigger regional instability - but any increased religious fundamentalism and terrorism in a region such as Central Asia could threaten China's own security, especially along its western borders, "where ethnic relations have become tense and separatist tendencies remain a danger".

Similarly, in the field of energy, while Washington could be "eyeing Central Asian oilfields near China's border", Wang recommended that Beijing and Washington "should try to make sure that the other side understands its intentions and should explore ways to cooperate on energy issues through joint projects such as building nuclear power plants in China".

The point Wang was making in all these shrewd observations was that "history has already proved that the United States is not China's permanent enemy".

The complexities of China's equations with regard to Russia are no less relevant to an understanding of the SCO. As China would see it, already in the latter part of the presidency of Boris Yeltsin, Russia began rediscovering where its national interests lay and Russian diplomacy began moving away from an exclusive Euro-Atlanticist outlook. (Interestingly, this coincided with the first appearance of the "Shanghai spirit".)

In the Chinese estimation, President Vladimir Putin after his election in 2000 gave a sense of direction to these nascent tendencies - "putting the national interests at the core, making economic revival the top priority, installing national spirit as the driving power, instituting powerful political mechanisms as the nation's political basis ... using historical lessons as a mirror, taking fully into account Russia's specific situations in charting the development road, creating a favorable international climate for the country and trying to reinstate Russia as a first-class world power", to quote Yu Sui, a Chinese scholar at the Research Center of the Contemporary World in Beijing.

China estimated the main impulse of Putin's foreign policy to be one of implementing all-around diplomacy geared to maintain global and regional balance. Clearly, Beijing realized that Russia's diplomacy of independence was driven by the principle that national interests overrode everything else.

As Yu puts it, "In the face of accelerating globalization and bearing the brunt of the US's unilateralism, Russia is in a disadvantaged position." Within this paradigm, Yu identifies Russian diplomacy's principal characteristics as pragmatism laced with an occasional "toughness"; balancing or maneuvering between the East and West; a shying away from "confrontations and making enemies"; and maintaining a low profile without making a "loud noise" about its goal of reaching world-class power status.

What emerges is that China is not laboring under any illusions that either by itself or in cooperation with Russia, the SCO can be turned into an alliance for confronting Washington.

Most Western observers ignore this aspect - unwittingly or otherwise. From China's point of view, the SCO embodies a close but unaligned partnership (also described in Chinese commentaries as "partnership and non-alliance") with Russia. (The SCO also includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.)

Chinese President Hu Jintao told journalists in Beijing recently that the SCO followed the "principle of non-alignment".

An intriguing thought, indeed. But, shorn of verbosity, the so-called "Shanghai spirit" actually embodies a new security concept, which calls for "mutual trust and common security, partnership and non-alliance, openness and transparency, equality and consensus, mutual benefit, and not being against any third country or regional groups".

No wonder, as Putin wrote this week, it needed "persistence, commitment and endurance" to make the SCO work so far. What it adds up to is that the SCO is the sum total of the very minimum that at any given point its member countries can come to agree on.

On the positive side, such a protean form gives enormous maneuverability to the SCO. Consider for a moment that in the formalization of the two momentous decisions impacting on the Central Asian region's security and stability in the past 15 years of the post-Soviet period - the establishment of US military bases in the region after the September 11, 2001, attacks on the US and the overthrow of the Taliban regime in Afghanistan - the SCO did not even figure as a protagonist.

Again, the SCO could do nothing to prevent the "Tulip Revolution" in Kyrgyzstan or the uprising in Andizhan in Uzbekistan, though they were unfolding incrementally.

Yet it was the SCO that finally drove home the point that the United States cannot take for granted that its military presence in Central Asia will continue for ever. Here too the SCO did not have any enforcement mechanism when it sought a timeline for the withdrawal of US troops from Central Asia.

Surprisingly, it wielded a moral authority that took most observers by surprise - including Washington. Similarly, it is debatable whether Uzbekistan could have withstood US attempts for regime change without the shade offered by the SCO umbrella.

Even more fascinating is the ease with which the SCO exposed the hollowness of "color revolutions", thus reassuring the besieged leaderships in the region consumed by the fear of revolutionary change - and of its aftermath.

The SCO simply, adamantly, insisted that the packaging, exporting and spreading of democratic revolutions like a module across a broad array of settings full of local circumstances was not acceptable. Color revolution as a constructive strategy of regime change had to withdraw quietly from the Central Asian political landscape.

Thus, despite its visible lack of tooth and claw, the SCO indeed is, as Putin described, "a reality both in regional and global politics", and it plays "a significant role in ensuring stability in the vast Eurasian territory".

Born into crisis
The SCO was born in a situation of near-crisis proportions when it became obvious to both Russia and China by the late 1990s that urgent coordinated efforts were needed in tackling the new centers of international terrorism, separatism, as well as national and religious extremism in the region - what China calls the "three evils". (It is important to bear in mind that the creation of the SCO preceded September 11 and the establishment of a US military presence in Central Asia.)

In the late 1990s, Russia, China and the Central Asian states faced multiple threats. Taliban-ruled Afghanistan had become a revolving door for militants from Chechnya, Xinjiang, the Ferghana Valley, Kashmir, etc. As Putin said, "We [SCO member countries] recognized that it is only through multilateral partnership that we can ensure peace and economic development in our vast region."

Hu Jintao also said recently, "It is the original intention as well as the key mission of the SCO to jointly maintain peace, security and stability in the region ... The SCO is one of the earliest international organizations to hold up the banner of fighting against terrorism, and has played an important role in coordinating anti-terrorism cooperation among member states".

But at this point, the Russian and Chinese approaches to the SCO begin to display some subtle distinctions. Having in effect come on top of the fight against the "three evils", the SCO must certainly move forward.

Putin has suggested the SCO should coordinate its efforts and develop "common approaches toward guaranteeing security in the Asia-Pacific region". He said this could be achieved by establishing close relations with the regional organizations and structures that are already functioning.

In Russian thinking, "Such a network of partners will allow us [SCO] to avoid unnecessary duplication and operating in parallel, and to act in the common interest without creating exclusive clubs or divisiveness."

China, in comparison, puts emphasis on the strengthening of cooperation and coordination within the SCO on major international and "hot spot" issues and on concerted joint efforts in pushing for the establishment of a new political and economic world order.

The Chinese approach is far more sweeping than what Russia has in mind. China emphasizes that the SCO adopted a common position on the Afghan situation and expressed common views on multipolarity in the international system, democratization of international relations, economic globalization, multilateralism, etc. Surprisingly, Putin in an article on the SCO summit, "SCO - a new model of successful international cooperation", does not even touch on these aspects.

Russia originally visualized the SCO against the backdrop of the security threats to the region. But China had a conceptualization of the SCO against the vast backdrop of economic globalization and political multipolarity in the world order. China probably didn't want to clutter the minds of the other member countries with its grand vision. The fight against the "three evils" was indeed the pressing issue. The current controversy over Iran's possible membership has parted the veil over these nuances.

These nuances also appear in the SCO's economic agenda. It was at the prime-ministerial-level meeting of the SCO member countries in Beijing that China got the guidelines on multilateral trade and economic cooperation formalized.

Accordingly, it was decided that through trade and investment, by the year 2020 the SCO member countries would achieve free flow of goods, services, capital and technology. As a follow-up, 127 projects have been identified for cooperation in various fields, such as trade, transportation, energy, telecommunications, technology, etc.

Going by the patchy record of the Commonwealth of Independent States, Russia would have doubted whether these proposals would ever be realized.

But the actual record speaks otherwise. Xinhua news agency reported that US$2 billion worth of business contracts and loan agreements would be signed during the current SCO summit.

These include a highway project connecting Tajikistan and Uzbekistan, two transmission lines in Tajikistan, a cement plant in Kyrgyzstan with a daily production of 2,500 tons, and a hydropower station in Kazakhstan.

In a gesture that makes Western (and Russian) economic diplomacy look pathetic, China of its own accord offered an export credit package of $900 million for Central Asia. (At the SCO heads-of-government meeting in Moscow last October, Prime Minister Wen Jiabao pledged that China was willing to expand its program of credit loans to Central Asian countries.)

In March, a bilateral credit agreement worth $269 million was signed with Tajikistan. According to reports, discussions are under way on Chinese funding for the restoration of the Dushanbe-Khujand-Buston highway along the Tajik-Uzbek border. Again, in April, China's CAMC company and the Chinese Export-Import Bank signed a contract for building a new cement plant in the southern Kyrgyz town of Kyzyl-Kiya, costing $80 million.

The project will create about 1,000 jobs and generate much-needed revenue for the Kyrgyz government - just the sort of economic activity that Central Asian countries desperately need at this juncture.

China's agreement in April with Turkmenistan for the supply of natural gas from 2009 involves the construction of a pipeline via Uzbekistan and Kyrgyzstan, which Beijing has undertaken to fulfill. An interesting salient here is the ease with which China is able mutually to complement its SCO networking with the Central Asian countries and its bilateral cooperation with them.

This came into full view last Friday. When Russia was getting ready to host a meeting of the G8 finance ministers in St Petersburg on that day, Beijing had a meaningful diplomatic event too. Hardly four days ahead of the SCO summit that he was scheduled to attend, Kyrgyz President Kurmanbek Bakiev paid a two-day state visit to China.

Thirteen agreements were signed during the visit. The joint statement on the visit said the two countries would work on the technical evaluation and financing for the construction of a railway line that would also link Uzbekistan.

President Hu accorded a red-carpet welcome to Bakiev at the Great Hall of the People in Beijing. Bakiev's visit is a good case study of why China's diplomacy has met with such phenomenal success in Central Asia.

Would Moscow schedule a state visit from Armenia or Mongolia on July 10, just ahead of the G8 summit in St Petersburg? But for China, there can be nothing more important in its international diplomacy than seizing an opportunity to consolidate friendship with a neighbor with which it shares a 1,000-kilometer border.

For those in the West who raise eyebrows about the SCO or worry about the dramatic expansion of China's "soft power" in the Central Asian region, Bakiev's state visit to Beijing should be an eye-opener. The fact that the SCO is the first-ever intergovernmental organization to be based in China shows how seriously China views the potential of the body.

There are two reasons that the SCO has gained traction within its short life span of five years. First, as Hu said, "Though there are big differences among the SCO member states in ideology, culture and level of economic development, the reason why the SCO has made such rapid progress and outstanding achievements lies in our insistence on the 'Shanghai spirit'."

Second, to quote Hu again, China-Russia relations have reached an "unprecedented" level and are embedded with an "obvious strategic ingredient". Chinese diplomacy has been vigilant not to tread on likely Russian sensitivities. This leaves the SCO's detractors with hardly any scope to exploit Sino-Russian contradictions on the Central Asian steppes.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for more than 29 years, with postings including ambassador to Uzbekistan (1995-98) and to Turkey (1998-2001).

[Abolith]

russia's GDP is $500 billion higher than mexico's...


no it's not.


Mex is sitting at 743.07 Billion for 2006
Rus is sitting at 863.55 Billion for 2006


Russia is higher, just not 500 Billion higher.

[Teufel_]

ever heard of PPP?

[Kilgor]

Kilgor, a lot has changed since 1991 you know. You should update your figures before taking jibes at people.

The table below includes data for the year 2005 for all 180 members of the International Monetary Fund, for which information is available. Data are in millions of current United States dollars.

— World economy 44,433,002
— European Union 13,446,050
1 United States 12,485,725
2 Japan 4,571,314
3 Germany 2,797,343
4 People's Republic of China 1 2,224,811
5 United Kingdom 2,201,473
6 France 2,105,864
7 Italy 1,766,160
8 Canada 1,130,208
9 Spain 1,126,565
10 South Korea 793,070
11 Brazil 792,683
12 India 775,410
13 Mexico 768,437
14 Russia 766,180
15 Australia 707,992

[CyberSpec]

I've got different figures for 2005.

GDP (purchasing power parity)

11. Russia $ 1,589,000,000,000 2005 est.
14. Mexico $ 1,067,000,000,000 2005 est.

[Smersh]

Kilgor do you intentionlly try to insult and offend people. comment on the topic. the ridicilous myth of "energy as a weapon", not some illogical Russia- mexico comparison.

I'm not even sure what the numbers you listed are (edit:kilgor)? and yes according to cia world factbook, a obvious pro-russian source :), the GDP between russia and mexico is slighty over 500 billion.

[Violet Fashion by Mindy]

Just remember with Russia that many companies still run as if it was in the USSR. IE there is profit/loss and expenses are shared across the board. Thus deflating the economy.

[Smersh]

you don't even need to explain or defend the russian economy. Has nothing do with this thread. as always some people take random neo-cold war pot shots at Russia and the former soviet union, that are usually way off-topic.